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Industrial and Corporate Change, Volume 11, Number 5, pp. 995-1009
© 2002 Oxford University Press

A firm as a dialectical being: towards a dynamic theory of a firm

Ikujiro Nonaka and Ryoko Toyama

Correspondence: Ryoko Toyama, Japan Advanced Institute of Science and Technology, Graduate School of Knowledge Science, Tatsunokuhi, Ishikawa 932-1292, Japan. Email: rtoyama{at}jaist.ac.jp.

Abstract

Today, firms are facing many contradictions: efficiency versus creativity; exploitation versus exploration; speed versus time-consuming resource building. This paper argues that a firm's capability to synthesize such contradictions is the key to understanding why a firm can be more efficient at producing knowledge than market. A firm can create new knowledge and capability that go beyond the balancing point in the existing frontier with its synthesizing capability, which is embedded in its knowledge vision, its ba, its creative routines, its incentive systems and its distributed leadership.


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