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Industrial and Corporate Change, Volume 9, Number 1, pp. 1-20
© 2000 Oxford University Press

A firm as a knowledge-creating entity: a new perspective on the theory of the firm

I Nonaka, R Toyama and A Nagata

Japan Advanced Institute of Science and Technology, Graduate School of Knowledge Science, Tatsunokuchi, Ishikawa, 932-1292, Japan

Abstract

The knowledge-based view of the firm views a firm as a knowledge-creating entity, and argues that knowledge and the capability to create and utilize such knowledge are the most important source of a firm's sustainable competitive advantage. Knowledge and skills give a firm a competitive advantage because it is through this set of knowledge and skills that a firm is able to innovate new products/processes/services, or improve existing ones more efficiently and/or effectively. The raison d'être of a firm is to continuously create knowledge.


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