Continuous innovation in Japan: The power of tacit knowledge

Management practices of innovative Japanese companies, the 'knowledge creating companies', has been widely researched and extensively documented. We have begun to look 'behind the scenes', and examine more closely the question of 'what is the basic pattern of innovation in the knowledge-creating companies?' In this chapter, we will introduce the basic pattern of innovation at Nippon Roche. We argue that learning only or just breaking rules are not enough for continuous innovation. Rather individuals as well as organizations need to possess tacit knowledge.