Top-management concepts become the operational conditions for middle managers, who will decide on the means to realize them. The middle managers’ decisions, in turn, constitute the operational conditions for front-line employees, who will implement the decisions.

In contrast, middle managers play a key role in our theory, acting as “knowledge engineers” within the company.

Organizational knowledge creation is a never-ending process that upgrades itself continuously. It does not end once an archetype has been developed. The new concept, which has been created, justified, and modeled, moves on to a new cycle of knowledge creation at a different ontological level.

In the second phase, tacit knowledge shared by, for example, a self-organizing team is converted to explicit knowledge in the form of a new concept, a process similar to externalization.

What I keep telling the top managers is to manage employees in such a manner as to allow them to develop their own ideas. I tell them they mustn’t push ideas from the top down. … In my beginning-of-the-year address last year, I told the employees, “You know the saying, ‘the nail that sticks out gets hammered down.’ But what if the nail doesn’t

40 percent of working hours in the materials management sections were spent on follow-up work caused by changes in product designs or production plans.

Much of the knowledge about production which Nissan has so painstakingly built up over the past several decades can, of course, be put into words and numbers. But much of it is locked up within the brains of individuals. (Nonaka, 1992, p. 28)

To foster a high degree of commitment from members of the organization, a knowledge vision should purposefully be left equivocal and open ended. A more equivocal vision gives members of the organization the freedom and autonomy to set their own goals, making them more committed to figuring out what the ideals of the top really mean.

Japanese engineers learned how to externalize tacit knowledge into explicit knowledge, and internalized it. American engineers learned how to socialize tacit knowledge from interaction with other people or direct experience on-site, and internalized it. Discovering and remedying weaknesses, both at the individual and organizational levels, hold the