Practical Strategy as a Co-Creating Collective Narrative : A Perspective of Organizational Knowledge-Creating Theory

From the perspective of the knowledge-creating theory, a management strategy should be subjective and practical. However, three major phenomena in many ailing companies in Japan and the world have been observed: over-analysis, over-planning, and over-compliance. A ‘narrative turn’ and a ‘practice turn’ in management enables breaking through these situations. These two turns are essential factors embedded in the organizational knowledge-creating theory. The Externalization phase of the SECI spiral incorporates the narrative turn, and the Internalization phase incorporates the practice turn. These two turns together enhance the further practice and development of the knowledge-creating theory, especially from the strategy perspective. This paper presents the concept of narrative strategy with two concrete cases of Fujifilm and Hitachi. Implications and further research challenges are provided. keywords: Organizational Knowledge-Creating Theory, Knowledge-based Management, Phronesis, Leadership, Narrative Strategy, Fractal Organization Ikujiro Nonaka and Ayano Hirose 10 agement tends to avoid risks, and middle managers and frontline employees behave accordingly to avoid risks. Thus, organizations become homogeneous and closed within themselves, losing the vitality to innovate. The ‘narrative turn’ and ‘practice turn’ in management enable organizations to break through these situations. These two turns are essential factors embedded in the organizational knowledgecreating theory (Nonaka and Konno, 2008; 2012; Nonaka 2013). For example, the SECI model explains the processes of knowledge creation in which individuals share and create tacit knowledge from direct experiences through empathizing (Socialization), and then articulate tacit knowledge through dialogue and reflection into a concept (Externalization). Individuals then systemize and apply explicit knowledge and information into a model (Combination), and learn and acquire new tacit knowledge in practice (Internalization). In the Internalization phase, products and services created in the Combination phase are put on the market and used by the consumers, thereby, amplifying the collective knowledge of the organization and the creativity of the individual, which feeds the next SECI spiral for continuous input. The Externalization phase of the SECI spiral incorporates the narrative turn, and the Internalization phase incorporates the practice turn. These two turns together enhance the further practice and development of the knowledge-creating theory, especially looking at strategy from knowledge creation within the organization. This paper presents the concept of narrative strategy from the perspective of organizational knowledge-creating theory with two concrete cases. It then concludes with implications and further research challenges. DEVELOPMENT OF THE NARRATIVE