The theory of the knowledge-creating firm: subjectivity, objectivity and synthesis. Industrial and Corporate Change 2005 Vol.14 No.3 pp.419-436

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The theory of the knowledge-creating firm explains the differences among firms not as a result of market failure, but as a result of the firm's visions of the future and strategy. This paper proposes a framework to capture the dynamic process of knowledge creation in which knowledge is created through the dynamic interaction between subjectivity and objectivity. Knowledge is created through the synthesis of thinking and actions of individuals, who interact with each other within and beyond the organizational boundaries.

The Theory of the Knowledge-creating Firm; Subjectivity, Objectivity and Synthesis. Industrial and Corporate Change 2005 Vol.14 No.3 pp.419-436

More

The theory of the knowledge-creating firm explains the differences among firms not as a result of market failure, but as a result of the firm's visions of the future and strategy. This paper proposes a framework to capture the dynamic process of knowledge creation in which knowledge is created through the dynamic interaction between subjectivity and objectivity. Knowledge is created through the synthesis of thinking and actions of individuals, who interact with each other within and beyond the organizational boundaries

Strategic knowledge creation: the case of Hamamatsu Photonics. International Journal of Technology Management = Journal International De La Gestion Technologique 2005 Vol.30 No. 3 pp.248-264

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Strategic management can be viewed as a mechanistic or an organic process. In the former, strategic formulation is based on environmental analysis. In the latter, managers are advised to frame strategies on the unique inimitable internal resources. While both heuristics are feasible, the ontological and epistemological foundations of strategic management can be elaborated. A knowledge-based view posits that both indigenous and exogenous factors need to be considered in strategy formulation because companies are in a dialectic environmental interaction. The integral components of the knowledge-based strategy are knowledge vision, driving objectives, dialogues, creative routines, and shared context of interaction (Ba). The space-time specific interaction of these components is illustrated in the example of Hamamatsu Photonics, Ltd., a Japanese company that has recently received attention for its production of the large photoelectron cell. Professor Koshiba was awarded the 2002 Nobel Prize in Physics for his research aided by the photoelectron cell.

Monthly Residual Income Valuation Analysis

Justification Effects on Consumer Choice of Hedonic and Utilitarian Goods. Journal of Marketing Research, 2005 Vol.42 No.1 pp.43-53

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People want to have fun, and they are more likely to have fun if the situation allows them to justify it. This research studies how people's need for justifying hedonic consumption drives two choice patterns that are observed in typical purchase contexts. First, relative preferences between hedonic and utilitarian alternatives can reverse, depending on how the immediate purchase situation presents itself. A hedonic alternative tends to be rated more highly than a comparable utilitarian alternative when each is presented singly, but the utilitarian alternative tends to be chosen over the hedonic alternative when the two are presented jointly. Second, people have preferences for expending different combinations of time (effort) and money for acquiring hedonic versus utilitarian items. They are willing to pay more in time for hedonic goods and more in money for utilitarian goods. The author explores the topic through a combination of four experiments and field studies. By nature, people are motivated to enjoy themselves. However, having fun also raises such issues as guilt and need for justification. Therefore, people will be more likely to consume hedonic goods when the decision context allows them the flexibility to justify the consumption. This research examines how hedonic versus utilitarian consumption can vary in typical purchase situations, depending on the decision context. Hedonism and utilitarianism are not necessarily two ends of a one-dimensional scale (Voss, Spangenberg, and Grohmann 2003). Different products can be high or low in both hedonic and utilitarian attributes (Crowley, Spangenberg, and Hughes 1992). This research takes a more holistic approach and conceptualizes hedonism and utilitarianism as summary constructs. I characterize hedonic (utilitarian) alternatives as being primarily or relatively more hedonic (utilitarian). This approach is consistent with work by Dhar and Wertenbroch (2000) and O'Curry and Strahilevitz (2001) and is more appropriate for the topic of the research. I do not examine the measurement of hedonism and utilitarianism per se but rather study how the aggregate perception of a good as either hedonic or utilitarian affects behavior in ways that are theoretically explainable and predictable. A similar but different pair of constructs to hedonism and utilitarianism is the "wants" and "shoulds" (Bazerman, Tenbrunsel, and Wade-Benzoni 1998). The wants are more affectively and experientially appealing than the shoulds, just as hedonic alternatives are more affectively and experientially appealing than utilitarian ones. However, the difference is that Bazerman, Tenbrunsel, and Wade-Benzoni (1998) conceptualize the wants as vices, exemplified by risky sexual behavior, smoking, and drinking, which infers a strong link between an immediately gratifying payoff and an obvious harm that can be reasonably anticipated in the long run. In his research, Wertenbroch (1998) takes a similar approach and uses the term "vices," which by definition connotes negative payoffs, and compares them with "virtues," which connotes positive payoffs. The distinction made in the current research is that hedonic and utilitarian alternatives are both goods, in the sense that both are expected to offer benefits, and neither is reasonably expected to directly cause any obvious harm. This is consistent with Dhar and Wertenbroch's (2000) conceptualization, in which both hedonic goods, such as audio tapes and apartments with a view, and utilitarian goods, such as computer diskettes and apartments close to work, are expected to deliver positive payoffs, but of different types. Hedonic (utilitarian) alternatives can be likened to relative vices (virtues). However, a fundamental difference is that the payoffs from both hedonic and utilitarian consumption lie primarily in the gain domain, and any harm that may ensue in the future is speculative, ambiguous, and indirect. In contrast, the payoffs from consuming the wants (vices) versus shoulds (virtues) explicitly straddle the gain and loss domains. Differences in judgment and behavior in the gain versus loss domains are well documented (Kahneman and Tversky 1979; Thaler 1980; Thaler and Johnson 1990). Furthermore, the wants and shoulds (vices and virtues) are defined explicitly in terms of the temporal trade-offs of benefits and costs. In contrast, although there may be a difference in the timing of the accrual of benefits for hedonic versus utilitarian goods, the temporal element is not critical in the definition. Between the wants and shoulds (vices and virtues), the costs and benefits that accrue in the future may be less salient, but after they are considered, the shoulds (virtues) emerge as the superior choice. That more reflection, and thus contexts that encourage more reflection, would result in a relative preference for the shoulds (virtues) is therefore intuitive. Between hedonic and utilitarian goods, however, there is no superior choice, even after all the costs and benefits are considered. Therefore, how the relative preferences for each differ across contexts requires a stronger explanation, which I propose is justification. Although reflection is the main explanation for the reversal of relative preferences for the wants and shoulds (vices and virtues), my justification-based theory can apply to those cases as well and make the same predictions. Both hedonic and utilitarian goods offer benefits to the consumer, the former primarily in the form of experiential enjoyment and the latter in practical functionality (Batra and Ahtola 1990; Hirschman and Holbrook 1982; Mano and Oliver 1993). Because of this difference, there is a sense of guilt associated with hedonic consumption (Kivetz and Simonson 2002a, b; Strahilevitz and Myers 1998). In part because of this guilt, it is more difficult to justify spending on hedonic goods and easier to justify spending on utilitarian goods (Prelec and Loewenstein 1998). Intuitively, guilt and justification are interrelated concepts, not competing theories for explaining the choice of utilitarian over hedonic goods. A sense of guilt may arise in anticipation or as a result of making an unjustifiable choice. An alternative may seem unjustifiable if there is a sense of guilt associated with it. The premise of this research is that people are motivated to consume hedonic goods but will be less likely to do so when the situation makes it difficult for them to justify it. I analyze how this drives two effects that are observed in typical purchase situations. First, I demonstrate a reversal in the relative preferences for hedonic versus utilitarian alternatives. When a hedonic alternative and a utilitarian alternative of comparable value are each presented singly for evaluation, the hedonic alternative tends to elicit a higher rating. However, when the two are presented side by side, the utilitarian alternative is more likely to be chosen. If a consumer sees a new DVD player with a built-in MP3 player in a store, he or she might buy the DVD player before buying a new food processor. However, if the consumer goes to an electronic appliance store with $100 to spend and can buy either the DVD player or the food processor, he or she may end up purchasing the food processor. Second, the difference in the need for justification also affects the combination of time (effort) and money that people choose to expend to acquire hedonic versus utilitarian items. I demonstrate that people have a relative preference to pay in time for hedonic goods and in money for utilitarian goods. In general, consumers pay a premium for convenience and go the distance for a bargain. Given a choice between paying in time versus money, consumers are more likely to go the extra mile and find a good deal on the DVD player (i.e., pay in time) and more likely to pay the higher price at a convenient location for the food processor.