IntroductionMany studies have emphasized the idea that knowledge of a firm is a source of competitive advantage (Chini, 2004; Grant, 1996; Kogut & Zander, 1992). To acquire knowledge that can become a source of competitiveness, there is a method of creating knowledge within an organization and gaining knowledge from external sources. Nonaka and Takeuchi (1995) stated that knowledge creation is a dynamic circulation process of tacit knowledge and explicit knowledge through four conversion modes. Cohen and Levinthal (1990) used the concept of absorptive capacity to explain ways in which companies evaluate, interpret, and apply external knowledge. While transferring knowledge to the required location and using it is important, knowledge transfer has cost issues, namely its stickiness (Szulanski, 1996, 2000; von Hippel, 1994). Knowledge network theories have developed to explain the process of gaining, diffusing, and transferring knowledge. Within the field of knowledge network theory, research has focused on the strength or weakness of ties (Hansen, 1999, 2002), network scope (Ernst & Kim, 2002), center of network (Ernst & Kim, 2002; Tsai, 2001), and the directionality of transfer (Chini, 2004; Kim, 2015). However, few detailed studies have explored how knowledge within networks is created, diffused, and standardized.This study comprehensively analyzes the case of Toyota Motor Corporation (Toyota) to investigate the creation, diffusion, and standardization of knowledge within a corporation. In particular, the analysis is on the function of domestic plants, the Operation Management Consulting Division (OMCD), and the Global Production Center (GPC) as nodes on Toyota's domestic knowledge network.Creation of Knowledge DiversityToyota has four domestic vehicle production plants: Motomachi, Takaoka, Tsutsumi, and Tahara. These four plants have slightly different production systems based on conditions such as car model, the ratio of exports, the number of production options, supplier relationships, and plant location constraints.One characteristic of the Toyota Production System (TPS) is kaizen activities that occur on the production floor. If the results of kaizen activities have positive effect for productivity, it becomes new work standards. These activities are conducted on the production floors of each plant and each operate under different conditions. These activities are reflected in the work standards of each plant, with the production system of each developing over time. This is how diversity of the TPS is initiated.Kaizen ideas are generated by individual workers or by small groups called QC circles. When a problem is identified on the production floor, a production floor leader confirms the problem as it occurs, investigating the circumstances surrounding the problem in detail and determining the cause. The leader then encourages the worker to generate ideas that will resolve the problem. These ideas are then compiled, and a solution is submitted (Monden, 2006).When submitting the solution, the production floor leader primarily makes a specific determination regarding various factors involved in work standards. The production floor leader determines the cycle time required to produce each unit of product as well as the order of manufacturing operation job. Production floor leaders in each plant are responsible for creating and revising work standards; this bottom-up organizational culture is characteristic of Toyota. It is one of the sources of Toyota's knowledge diversity.In labor-intensive processes such as final assembly, there are no set of universal engineering principles as can be found in other processes; thus, a chief leader (CL) and group leader (GL) have been influential in developing not only kaizen on a process but also the design of the process (Fujimoto, 1997).The construction of new plants and refurbishments to existing plants offer major opportunities to implement and test concepts for new assembly systems. …
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