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Abstract: Knowledge is a source of firm's competitiveness and is created, diffused, and standardized within a company's knowledge network. The knowledge network of Toyota Motor Corporation in Japan comprises multiple automotive plants, the Operation Management Consulting Division (OMCD), and the Global Production Center (GPC) as nodes on that network. Knowledge is created on a manufacturing plant floor and diffused between multiple automotive plants through a direct interacting network without standardization. The OMCD diffuses both standardized and unstandardized knowledge. The GPC's important function is knowledge standardization. In conclusion, Toyota's domestic knowledge network maintains a balance between the diversification and standardization of knowledge created on the production floor through a mix of nodes at various standardization levels.
Keywords: knowledge network, Toyota production system, diversity of knowledge, knowledge transfer, kaizen
Introduction
Many studies have emphasized the idea that knowledge of a firm is a source of competitive advantage (Chini, 2004; Grant, 1996; Kogut & Zander, 1992). To acquire knowledge that can become a source of competitiveness, there is a method of creating knowledge within an organization and gaining knowledge from external sources. Nonaka and Takeuchi (1995) stated that knowledge creation is a dynamic circulation process of tacit knowledge and explicit knowledge through four conversion modes. Cohen and Levinthal (1990) used the concept of absorptive capacity to explain ways in which companies evaluate, interpret, and apply external knowledge. While transferring knowledge to the required location and using it is important, knowledge transfer has cost issues, namely its stickiness (Szulanski, 1996, 2000; von Hippel, 1994). Knowledge network theories have developed to explain the process of gaining, diffusing, and transferring knowledge. Within the field of knowledge network theory, research has focused on the strength or weakness of ties (Hansen, 1999, 2002), network scope (Ernst & Kim, 2002), center of network (Ernst & Kim, 2002; Tsai, 2001), and the directionality of transfer (Chini, 2004; Kim, 2015). However, few detailed studies have explored how knowledge within networks is created, diffused, and standardized.
This study comprehensively analyzes the case of Toyota Motor Corporation (Toyota) to investigate the creation, diffusion, and standardization of knowledge within a corporation. In particular, the analysis is on the function of domestic plants, the Operation Management Consulting Division (OMCD), and the Global Production Center (GPC) as nodes on Toyota's...