W Mark

Fruin

Knowledge
London:

Works:
Oxford

Managing

Intellectual

Capital

at Toshiba

Press, ix + 267 pages,

University

1997

KnowledgeWorks is the product

turing

systems. During

factories,

Yanagicho

of W. Mark Fruins six-year study of Toshibas manufacthis time, he worked in uniform on the floor of one of Toshibas

Works

in Kawasaki

City. He also spent this time

operations, product development plans, and human resource management

is one of many development
factories (often referred to as Knowledge

studying

plant

practices. Yanagicho
Works) at Toshiba.

They are noted for their ability to design and develop a wide range of high-tech products
in a highly productive,
efficient and flexible manner. According
to Fruin, the key to the
success of these factories

starts with

the decision

to integrate

R&D,

engineering

manufacturing
operations on the same factory floor. This arrangement,
the heart of Toshibas competitive
advantage, because it has a dramatic

he argues, lies at
effect on the way

that knowledge
is created and applied throughout
each development
factory.
Do not expect anything like Nonaka and Takeuchis theory-laden
account
nese knowledge

management

practices

or Pagels how-to

manual

and

of Japd-

for the management

of

intellectual capital. Fruins is neither a highly theoretical nor a prescriptive piece, but he
does outline a host of descriptive details about Toshibas knowledge
management practices
that illustrate

the source of their

success in product

development.

Due to his extensive

experience within Yanagicho, Fruin is able to provide a valuable, in-depth

specific manufacturing
practices of a Japanese electronics firm. Moreover,
its value as a case study, KnvuhdgeWbk.r also offers a welcome
abstracted concepts such as organizational
late into real-world
settings.
For example,

knowledge

several studies have defined

look into the

in addition to

demonstration

and organizational

organizational

knowledge

of how overlearning

trans-

in terms

of a

firms integrative capacity or the number of decisions that a firm can alter simultaneously
and harmoniously.
Fruin argues that a factorys integrative capacity is the direct product
of a highly

motivated

workforce

that has shared a rich history

of collective

problem

solving. To illustrate the event of Yanagichos integrative

capacity, he gives a detailed
account of the collaborative
contributions
of employees in the design and manufacture of
the SuperSmart

card. SuperSmart

is a ten key, credit card-sized

computer

that was devel-

oped for Visa International

in less than 22 months to specifications that exceeded Visas
requirements. The development of SuperSmart showcased Yanagichos organizational
knowledge or learning
coordinate
marketing
supplier

capability

which,

in this context,

was defined

by their

ability

to

a wide range of variables creatively and efficiently. Their failure to coordinate

plans with Visa notwithstanding,
ydnagicho did successfully coordinate large
networks,

a multitude

ment, design, and development

of product
personnel,

development

projects,

and almost 200 manage-

both inside and outside of Toshiba.

All of this

HOOK

367

REVIEWS

coordination
allowed Yanagicho to acquire high value-added supplies at the best possible
price, to co-develop key components without
losing ownership
rights, and to produce a
reliable

product

on time and under

As an ethnographer
Fruin was well positioned

budget.

of day-to-day employee activities on the Yanagicho factory floor,

to examine the contribution
of local actions to global outcomes

such as factory performance. He makes a host of genera.1 observations. For example, he

notes that cross-functional
collaboration
on the factory floor and a shared sense of mission
encouraged
informed

employee

input

decision-making,

across function
all of which

groups,

increased

improved

feedback,

the speed and quality

opment projects. Unfortunately,

however, he never takes the opportunity
into the larger questions raised by his study.
For example,

Fruin frequently

remarks on the stickiness

and facilitated

of product

devel-

to sink his teeth

of the knowledge

that was

created at Yanagicho. By this he means that Yanagichos specific ability to coordinate the
research, development,
and production
of a wide range of high-tech
products did not
translate well into other settings. The site-specificity
of Toshibas capabilities
became
particularly
apparent when Toshiba attempted
to set up development
factories abroad.
Toshiba found that, even when they transported
the very same employees that were
responsible for coordinating
manufacturing
activities at Yanagicho and/or other development factories, they could not reproduce
the original

site. These observations

the same level of innovative

raise a number

of interesting

efficiency found at

questions

that are not

thoroughly
explored: When does an entire worksite rather than an individual
mind
become the proper unit for the analysis of organizational
learning activities? Does all
learning
tributed

take place in the heads of the employees? Or are these cognitive

between a group of individuals
and their artifacts?

Based on Fruins

observations,

one is left to conclude

practices

that the employees

dis-

did not

possess all of the knowledge

that was relevant to the success of Knowledge
Works. It
appears that key elements of the knowledge
production
process resided in some combination

of technological

Fruins study
organizational
what individuals
Finally,

artifacts and the social dynamics

uncovers,
knowledge

in the organization
Fruin

of Yanagicho

itself. In any case,

but does not elucidate, tantalizing

evidence that concepts of
may indeed refer to something that is greater than the sum of
know.

makes several observations

regarding

the benefits

of Japanese

(as

opposed to Western) systems of manufacturing.

Throughout
KnowledgeWorks, Fruin argues that cooperative supplier relations, and human resource strategies that emphasize
long-term employment
and team-based worker relations fostered the shared sense of risks
and rewards that lie at the heart of Toshibas, and more widely, Japans industrial success.
Thus, he concludes
tech products

that it would

to emulate

with

the virtues of Japanese manufacturing

that tightly-knit,
long-term
tors promote the cooperation
However, Japans prolonged

behoove other countries

loyalties among employees,

and long-term
investments
and continued

manufacturing

strong

markets

for high-

systems. There is no doubt

suppliers, customers, and credithat nurture collective learning.

recession, exacerbated

by struc-

368

ROOK

tural and cultural

resistance to restructuring,

match the virtues.

In light

REVIEWS

suggests that there may be vices enough

of Japans recent industrial

devils advocate to Fruins sometimes one-sided

loyalties, by inhibiting
arms length transacting

woes, one feels compelled

to

to play

account. One might argue that these

and disinterested
decision-making,
in-

hibit change and reallocation across the industrial

sector. Fruin has identified why Japanese manufacturing
systems enjoyed such tremendous
collective success in the post-war
era. Yet, unwittingly,

he may also have identified

why the Japanese manufacturing

have suffered a lack of collective success in the late 1990s.

In fairness to Fruin, the communal
structure of Japans financial
systems may be the more likely culprits

for their recent troubles.

systems

and governance

As Fruin demonstrates,

however, the origin and function

one another. The challenge going

of all of these industrial

functions are deeply rooted in
forward, for eastern and western manufacturing
systems

alike, will

balance between

be to achieve a greater

of the selection

the benefits

of collective

learning

and

pressures of the market.

Kenahll

Visiting
Centre for Management

Hoyt

Researcher

of Innovation
& Technopreneurship
National University
of Singapore

NOTES
1. Nonaka,

I. and Takeuchi,

Companies
Create the Dynamics
for the Learning
Company.

H.

1995.
The Knowledge
Creating
Company:
How
of Innovation.
Pagel, C. 1998. Handbook
of Strategies

Japanese
and Tools

2. Rivkin, J. 1998. Optimally

local search on rugged landscapes, HBS Working
Paper,
98-067.
See also, Henderson,
R. 1994. The evolution
of integrative
capability:
Innovation
in cardiovascular
drug discovery. Industrial
and corporate change, S(3):
607-630.
3. See Cognitive

in the Wild by Edwin

Hutchins for a study of distributed
cognition that
provides evidence for the claim that, not just individuals,
but entire organizational
systems, are subject to learning processes.