Tapping tacit local knowledge in emerging markets - the Toyota way. Knowledge Management Research & Practice 2008 Vol.6 No.3 pp.173-186

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This paper presents insights from two case studies of Toyota Motor Corporation and its way of global knowledge creation. In 2004, Toyota announced an initiative to increase the self-reliance of overseas manufacturing facilities, especially in emerging markets. In 2005, Toyota Peugeot Citroën Automobile, an international joint venture between Toyota and Peugeot in Kolín, Czech Republic started the production of small compact vehicles in order to react to the changing European customer market. We will show how Toyota's knowledge creation has changed from merely transferring knowledge from Japan to subsidiaries and affiliations around the globe to a focus of creating knowledge and tapping tacit local knowledge in foreign markets by local staff. In fact, Toyota's new strategy of 'learn local, act global' for international business development and its knowledge-based approach to marketing proved successful for tapping rich local knowledge bases, thus ensuring its competitive edge and global lead in the automotive industry.

The sure thing that flopped. Harvard Business Review 2008 Vol.86 No. 7-8 pp.29-32

The Contradictions That Drive Toyota's Success

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Toyota has become one of the world's greatest companies only because it developed the Toyota Production System, right? Wrong, say Takeuchi, Osono, and Shimizu of Hitotsubashi University in Tokyo. Another factor, overlooked until now, is just as important to the company's success: Toyota's culture of contradictions.

TPS is a "hard" innovation that allows the company to continuously improve the way it manufactures vehicles. Toyota has also mastered a "soft" innovation that relates to human resource practices and corporate culture. The company succeeds, say the authors, because it deliberately fosters contradictory viewpoints within the organization and challenges employees to find solutions by transcending differences rather than resorting to compromises. This culture generates innovative ideas that Toyota implements to pull ahead of competitors, both incrementally and radically.

The authors' research reveals six forces that cause contradictions inside Toyota. Three forces of expansion lead the company to change and improve: impossible goals, local customization, and experimentation. Not surprisingly, these forces make the organization more diverse, complicate decision making, and threaten Toyota's control systems. To prevent the winds of change from blowing down the organization, the company also harnesses three forces of integration: the founders' values, "up-and-in" people management, and open communication. These forces stabilize the company, help employees make sense of the environment in which they operate, and perpetuate Toyota's values and culture.

Emulating Toyota isn't about copying any one practice; it's about creating a culture. And because the company's culture of contradictions is centered on humans, who are imperfect, there will always be room for improvement.

Knowledge-Creating Company. Harvard Business Review Classics 2008

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In a world where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. The best companies survive by consistently creating new knowledge, disseminating it widely throughout the organization, and quickly leveraging it in their business processes and their products. In The Knowledge-Creating Company, Ikujiro Nonaka shows how your company can exploit its knowledge to continually innovate and reinvent itself in the face of relentless change.