Long Range Planning 38 (2005) 27e49 www.lrpjournal.

com

Knowledge Creation through

Networked Strategic
Communities
Case Studies on New Product
Development in Japanese Companies

Mitsuru Kodama

This article provides a new point of view regarding the knowledge management of new
product development, a high-tech field requiring the merging and integration of different
technologies. Case studies examine the dynamism of the knowledge creation process at
Fujitsu Ltd. as it merges and integrates the different elements of broadband network
technology, computer and software technology, and multimedia processing technology,
and these observations are analysed and compared with the NPD processes at other
manufacturers. To achieve the desired product development, a strategic team at Fujitsu,
consisting mainly of undisclosed cross-functional middle managers, swiftly transcended
Fujitsu’s business divisions to form strategic communities inside and outside the company,
including customers, and then networked the communities together. The synthesizing
capability of the network Leader Group enabled Fujitsu to build new business models
aimed at customers and achieve a successful outcome ahead of Japanese competitors.
Ó 2004 Elsevier Ltd. All rights reserved

Networks of strategic communities

It is a truism that large, established companies must continually evolve by engaging in various
forms of innovation. Particularly in light of the advent of the knowledge society, businesses are
faced with a significant transition from focusing solely on developing new products and services, to
also innovating strategically to improve their business processes and performance.

0024-6301/$ - see front matter Ó 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.lrp.2004.11.011
 In particular, for major, leading-edge businesses whose core competencies are in the software,
information and communication technologies that form the foundation of multimedia and
broadband networks, recent years have brought increasingly intense competition to leverage
strategic communities through extensive partnership-based inter-organizational collaboration for
the purpose of developing strategic enterprises, expanding market shares, and creating new
businesses.
Strategic communities are based on the concept of ‘ba’ as shared spaces for emerging
relationships that serve as a foundation for knowledge creation.1 Participating in a ‘ba’ means
transcending one’s own limited perspective or boundary and contributing to a dynamic process of
knowledge creation. In a strategic community, members (including customers) who possess
different values and knowledge consciously and strategically create a ‘ba’ in a shared context that is
always changing. New knowledge and competencies are formed by organic merging and integrating
communities to form new ‘ba’ to address multiple new eventualities. From the practical aspect, we
see the strategic communities as informal organizations possessing elements coherent with both the
resource-based view of emergent shared-context learning2 and the planned strategic-based view of
planning for target market position.3
In this article, we define strategic communities as both emergent and strategic, as negotiated
inter-organizational relationships that are associated with creative yet strategic thinking and action
in an ongoing communicative and collaborative process, dependent on neither market nor
hierarchical mechanisms of control.4 SCs may be part of the mix in several arrangements, such as
strategic alliances, joint ventures, consortia, associations, and round-tables.
SCs can offer relevant solutions where enterprises are in a management environment beset by
numerous uncertainties, where predictions are difficult, and management is searching for valid
strategies. The task of such communities is to emergently and strategically form and implement
concrete business concepts and ideas. Trial and error (such as incubation) may be necessary,
however, and strategy will emerge from among the collaborative actions. For the most part, middle
management is at the centre of strategic communities, forming informal and virtual teams both
inside and outside the company which actively generate emergent, entrepreneurial strategies and
create new knowledge. This knowledge in turn produces new demand and results in the emergence
of new markets.
SC leaders maintain close links with top management to share strategic perspectives, consider
directions that the community should be aiming for and reporting on the details of community
activities. Such activities are authorized within the corporation by top management, and capital
required for daily operation secured, enabling them to pursue a deliberate strategy-making process
towards their desired target position. At the same time, their informality, based on the ‘ba’ concept,
ensures SCs remain a shared space for emerging relationships, and thus their strategy-making also
displays emergent characteristics.5
But the transfer of resources and knowledge between strategic partners is different from the
creation of new knowledge. Knowledge creation occurs in the context of a community that is fluid
and evolving rather than tightly bound or static. The formal organization, with its bureaucratic
rigidities, is a poor vehicle for learning. And, besides, sources of innovation do not reside
exclusively inside firms, but also between them.

sources of innovation do not reside exclusively inside firms, but also

between them.

Knowledge creation is an extremely important issue. Knowledge has been seen as a property of
communities of practice,6 ‘ba’,7 communities of creation,8 strategic communities,9 and networks of
collaborating organizations,10 rather than as a resource generated and possessed by individuals.
When the knowledge base of an industry is both complex and expanding, and the sources of

28 Knowledge Creation through Networked Strategic Communities

expertise are broadly dispersed, the locus of innovation will be found in networks of inter-
organizational learning rather than in individual firms.11 The connections made through networks
of strategic communities based on inter-organizational collaborative relationships is thus an
important locus for the creation of knowledge, with new knowledge growing from the ongoing
social interaction typical of SC collaboration.

Comparison of SC and networked SCs with other forms of organizations

In this area of the process of knowledge sharing and transfer, strategic communities (and networks
of SCs) share common ground with knowledge networking organizations12 and strategic alliances.13
Previous research into knowledge networking organizations or strategic alliances has been into
stable relationships operating in established markets free from severe disruptions in external
environments. The analysis framework was also static, and there was no discussion of the dynamic
dimension of time. This article, on the other hand, covers a relatively short period of several months
during which firms formed collaborative strategic communities (and networks of communities)
with partners to cultivate unknown markets in a rapidly changing environment, a dynamic process
in which time was a significant dimension.
As the present author’s previous research shows, strategic communities (and networked SCs) are
different from cross-functional teams who mostly carry out new product development (NPD) in
a project management style, with clearly defined resources and systems and following
a predetermined schedule. However, fluctuations in the external environment may mean that
SCs and networked SCs have to accept (perhaps quite significant) rearrangements in partners on
the network level, which can include changes in internal and external resources.
The current study differs from previous research not only in terms of its framework, but also as
far as the unit of analysis under study and the method adopted. In studies of knowledge networking
organizations, strategic alliances or cross-functional teams the unit might typically be the
corporation or organization, and the researcher can easily study such network structures from
outside the corporation by analysing NPD processes or organizational structures through
interviews, secondary sources, etc. But in the study of strategic communities the unit of analysis
may hidden behind the inter-corporate or inter-organizational layer, and in this case, the author
went inside the organization to collect detailed data about the structure and network arrangements
of communities, and was thus able to analyse topics such as knowledge sharing or knowledge
integration as an observer or practitioner (see ‘Research Methodology’ for details). In addition,
leaders who handle the task of linking multiple SCs into networks need a different style to that of
project leaders pursuing NPD with fixed resources. Strategic community leaders must have the
ability to control networked SCs flexibly by rearranging communities or adding new ones as
required by fluctuations in the environment.

Research
Positioning
As outlined, this research was not a macro level analysis of static strategic relationships or networks
between companies in growing or maturing markets, but a micro analysis of a dynamic, time-
oriented NPD management process toward the creation of unknown markets in an uncertain
external environment. The aim here was to explore individual cases that point to basic guidelines
for how practitioners in leading-edge fields can think and act in order to create unknown markets.
To thoroughly understand this sort of dynamic organizational behaviour across time, qualitative
methods are better able to address workplace realities than large-scale quantitative methods. To
provide details of the research method used in this article, the author collected a variety of data
related to the NPD process in which the author himself participated as a leader in a high-tech
corporation as it endeavoured to create unknown markets.
This article describes the development process that occurred between April 2001 and late 2002 at
Fujitsu, a traditional Japanese manufacturer, which developed a product capable of seamless video

Long Range Planning, vol 38 2005 29

streaming over wired and wireless networks using technology resulting from the merging and
integration of broadband Internet technology and third-generation mobile phone technology. The
network of strategic communities inside and outside Fujitsu, which included customers, made it
possible for this development process to occur at an unusually fast speed. In this case study, our
analysis of knowledge creation focuses on the process by which networks of strategic communities
created a high degree of new knowledge based on new technologies and practices that were diffused
beyond their boundaries. Examples of product development at Fujitsu and other manufacturers are
analysed and compared from three angles derived from the approach of grounded theory.

The network of strategic communities inside and outside Fujitsu, which

included customers, [allowed for very fast] new product development
The first angle analyses the characteristics of communities formed within the firm, with partners,
and with customers from the three elements of involvement in the collaboration, 14 shared values, 15
and the speed at which the SCs were formed. From the same three elements above and
embeddedness,16 the second angle analyses how the SC networks triggered the merging and
integration of knowledge distributed across the boundaries of individual SCs. The third angle
discusses the synthesizing capability that the Leader Group (LG), comprising the leaders of the
networked SCs, used to dialectically integrate the different knowledge of the communities to create
new knowledge as part of the product development process.17

Context and approach

A qualitative research methodology was adopted to yield rich data to facilitate the generation of
theoretical categories that could not be derived satisfactorily from existing theory. Due to the
exploratory nature of this research and the intention to identify the main people, events, activities
and influences that affect the progress of innovation, the grounded theory-based study of data
interpretation was selected, which was blended with the case study design and with ethnographic
approaches.18
The research data came primarily from longitudinal study over a 4-year period (2000-2003)
examining new knowledge creation process with respect to innovation process with partners
(including customers) in an informal cross-functional team in a product development department
at Fujitsu and five other companies in the IT and multimedia business fields. This research
paradigm, which was based on in-depth qualitative study, has some similarity to ethnography19 and
other forms of research20 that derive their theoretical insights from naturally occurring data
including interviews or questionnaires.21 The author of this article served as a project leader in
a video business planning and development project utilizing third-generation mobile telephone
technology (the Mobile Multimedia Business Department at NTT DoCoMo), and this experience
allowed him direct knowledge and detailed information which enhanced the accuracy of the
empirical analyses in this research. Research data and insight were gained alongside or on the back
of the intervention. [See appendix for details of research method.]
In refining patterns into conceptual categories and to develop the logic of the conceptual
framework and generate new theory, I was particularly interested in the origin and dynamics of the
new knowledge creation process within networked SCs. On the basis of the patterns evident in
stage 2 analysis, I studied the various categories describing the origin and characteristics of new
knowledge creation processes, and identified seven aggregate broader concepts. These seven
concepts provide a conceptual framework that determines the structure of this article: involvement
(from DiMaggio and Powell), embeddedness (from Granovetter), shared values (from present
author’s previous research), high speed of SC formation, leadership-based strategic community,
dialectical leadership, and synthesizing capability (following Nonaka and Toyama). These are
described in detail in the Results and Discussion section below.

30 Knowledge Creation through Networked Strategic Communities

Summary of in-depth cases
Case 1 (Fujitsu)
In Japan, a number of Japanese manufacturers engaged in new product development with the aim
of offering new video distribution services for use with FOMA,22 NTT DoCoMo’s new third-
generation (3G) mobile phone service launched in October 2001, the first commercially available
3G service in the world. At that time, the development team at Fujitsu’s Network Division was
engaged in the development of a new live video camera and video streaming platform that could
stream the same video content simultaneously to FOMA mobile phones, personal digital assistants
(PDAs), and notebook computers equipped with wireless cards (see Figure 1).
This development, however, required the merging and integration of three fundamentally
different technologies: broadband network technology, computer and software technology, and
multimedia processing technology. Such product development was impossible with the systems in
Fujitsu’s Business Division, and the development team at the Network Division therefore needed to
create new, compound knowledge by merging and integrating elements of technology in the
possession of teams in their own and other divisions, namely the broadband network technology of
their own Network Division, computer and software technology of the Software Division, and
multimedia processing technology of the Fujitsu Laboratories.23 To this end, a cross-functional
team, transcending the boundaries of the business divisions within Fujitsu, was quickly formed
(SC-a). The Sales Division with marketing and sales capabilities also joined SC-a, and, while
maintaining close collaboration with the divisions developing the target product, started marketing
activities aimed at all types of customers including communications carriers such as NTT DoCoMo,
ASP/ISP, and corporate customers (Phase 1). An early development was the formation of SC-b
between the NPD teams of Fujitsu’s Network Software Divisions and the video business planning
and development at a customer firm, NTT DoCoMo. These teams communicated and collaborated
closely (Phase 2) to study the technical aspects of interface conditions required for building a 3G

Figure 1. NPD Targets for NTT DoCoMo and KDDI

Long Range Planning, vol 38 2005 31

 NTT DoCoMo (customer)

SC-b
Fujitsu
NMS - Software Division
Network PacketVideo,
Communi- - Laboratory
Division Inc. (USA)
cations, - Sales Division
Inc. (USA) - Group Companies

SC-c SC-a SC-d

SC-e
Domestic & overseas moving picture
camera manufacturers (6 companies)

SC-a: Fujitsu Group’s SC comprising Network Division, Software Division, Laboratory,

Sales Division and Group companies
SC-b: SC with customer NTT DoCoM
SC-c: SC with NMS Communications, Inc. USA
SC-d: SC with PacketVideo, Inc. USA
SC-e: SC with 6 domestic and overseas moving picture camera manufacturers

Figure 2. Networked SCs including NTT DoCoMo at Fujitsu

communications network and achieving inter-operability between multimedia communications

and 3G mobile phones, as well as collecting data on customers’ needs to assist with product
development. (For structure of Fujitsu’s SCs, see Figure 2, for network development phasing, see
Figure 3.)

Fujitsu needed to create new, compound knowledge by merging and

integrating elements of technology in the possession of teams in
[various] company divisions

In the process of pursuing technical investigations in greater detail and solving a number of
technical issues, Fujitsu formed collaborative relationships with best partners around the world.
Specifically, in developing a wireless video gateway system in Figure 1, the Fujitsu’s Network

Phase 4
(Jan 02~)

Phase 3 SC-a
Phase 1 Phase 2
(Sep 00~) (Dec 00~) (Jun 01~)

SC-b SC-c SC-d SC-e

SC-a SC-a
SC-a
Phase 5
SC-b SC-b SC-c SC-d (Aug 02~)
SC-f

SC-h SC-g

Phase 1: Creating SC with Network Division, Software Division, Laboratory, Sales Division and
Group Companies at Fujitsu Group
Phase 2: Networking SC with the Fujitsu Group and NTT DoCoMo, a customer
Phase 3: Networking SC with the Fujitsu Group, NTT DoCoMo, NMS Communications, and PacketVideo
Phase 4: Networking SC with the Fujitsu Group, NTT DoCoMo, NMS Communications, PacketVideo,
and 6 domestic and overseas moving picture camera manufacturers
Phase 5: Networking SC with the Fujitsu Group, KDDI, and 6 domestic and overseas moving picture
camera manufacturers

Figure 3. Networked SCs at Fujitsu

32 Knowledge Creation through Networked Strategic Communities

Division NPD team formed a strategic alliance (SC-c) with NMS Communications of the United
States to promote joint development.24 A technical tie-up was also established with Packet Video of
the United States to integrate their video streaming server product (see Figure 1), to supplement
the functionality of Fujitsu’s own product under development (SC-d). Network links were
formed in this phase (Phase 3) to facilitate the discussion of various technical matters across
SC-a through SC-d.
Next, the possibility of developing a new type of live video camera for mobile phones with
MPEG-4 moving picture technology stimulated discussion of the possibilities of a business model
where providers could charge a fee to provide live video content (such as images of sightseeing
spots, day care centres, business process monitoring, progress of events) over a broadband network
to 3G mobile phones, PDAs, and computers on an ‘anywhere, anytime’ basis. Six manufacturers
developing live moving picture cameras (Megatips, AlphaOmega, Hitachi Kokusai Electric and
Cannon from Japanese, and Leadtek, @utoTOOLS from Taiwan) joined Fujitsu in SC-e.
This phased development of networked SCs (Phase 4) allowed the technologies such as
multimedia video processing and the communications protocols required for end-to-end live video
transmission to be thoroughly discussed, with the result that, by April 2002, Fujitsu was able to
announce development of new products covering the whole sector illustrated in Figure 1.
The system could now be supplied to NTT DoCoMo, the customer, tie-ups could be formed with
the sales SI vendors enabling sales to ISPs/ASPs and large corporate customers. Apart from the
speed and breadth of the development, this NPD represented a significant pattern of new
knowledge being created by merging and integrating knowledge from around the world.
DoCoMo immediately launched ‘V-Live’, a trial one-to-many video streaming service provided
via the 3G mobile network and delivering both live and archived content to mobile phones and
PDAs.25 One of the representative business models involved live broadcasts aimed at corporate
member customers and the distribution of archived videos such as new product information.
Another model involved real-time monitoring of stores or young children at child care centres,
a new application that received high levels of customer support. For mobile handset users, video
content included music, sports’ highlights, news, animation, tourist information and more. Closed
content was available exclusively to the customers of content providers or corporate users’
members. Examples of such content include English conversation lessons, internal information for
employees, security services (observation from a remote location) and investor relations tools.
Content providers or corporate users of closed-content systems were charged a fee for system
construction. (for applications see Table 1.)
Following the launch of DoCoMo’s V-Live service, the project team in Fujitsu Software Division
developed a network of SCs to handle collaborative relations with KIDDI, as illustrated in phase 5
of Figure 3. Following active discussions about video streaming systems with KDDI Development
Department, SC-f was formed to handle a basic survey of product development (See Figure 4). At
the same time, a new SC (SC-g) within Fujitsu as an informal cross-functional team including all
the related divisions was also formed to study a new video distribution platform for KDDI in detail.
SC-h was also established with manufacturers developing live moving picture cameras to deal with
various technical discussions, and the three SCs networked to provide an arena for the joint
development of 3G mobile video streaming service based on CDMA technology with the KDDI
development team. KDDI subsequently launched the nationwide service of CDMA 1X WIN, a new
3G service that enables high speed data communications of up to 2.4Mbps.26 CDMA 1X WIN will
allow the popular 3G web access services and EZ video-mail, a faster delivery. In addition, the
service will host a new series of rich services dedicated to CDMA 1X WIN, including
a video distribution channel, an innovative service that automatically distributes various genres
of program, and Live Camera, a service that delivers video content in real time.27 To support the
content volume that will grow with the availability of high speed data communications, KDDI
introduced (Nov 2003) the first fixed packet communications service rate plan in the world to
allow users of services, including email, unlimited usage for a fixed monthly charge of 4,200 yen
(approx $35).

Long Range Planning, vol 38 2005 33

Table 1. Business models, Industry fields and Applications for mobile video streaming (V-Live Service)

Business Model APPLICATIONS

Live Broadcasts Archived Videos Real-Time Monitoring

INDUSTRY FIELD
Contents Creation Live Streaming Content Streaming
Broadcasting Live Camera
Trading Video Streaming
Advertisement Event Information Delivery
Consulting Firm Company Proposals
Day-care Centre Nanny-cam
Education Remote Education Virtual Language School
Travel Agency Virtual Travel
Manufacturer Live Camera Video Catalogue
Intra Video Streaming
Contents Creation Live Streaming Archive Streaming
Security House Monitoring
Energy Gas Equipment Monitoring
Medical Centre Remote Medical Checking
Veterinary Care Centre Animal Monitoring
Retailer Shop Monitoring

Case 2 (Company A)
Company A engaged in technical studies of Figure 1 products at about the same time and in the
same manner as Fujitsu, and faced similar difficulties of merging and integrating different
technologies. Unlike Fujitsu, however, Company A used the internal companies within their
corporate organization, but the sharing of information and knowledge among the internal
companies was ineffective.28 The Network company that controlled broadband network technology
was completely separate from and the Solutions company that held computer and software
technology, while multimedia processing technology was divided among Company A’s Research
laboratory and group companies. These units, which had all been developed independently, had
little history of working collaboratively, and conflicts between them had previously occasionally
hindered NPD. Central to NPD at this Company was the Network Company’s development team
who formed a cross-functional group transcending internal and group member companies

KDDI Domestic & overseas moving picture

(Customer) camera manufacturers (6 companies)

SC-f SC-h Fujitsu

- Network Division
- Laboratory
Software
- Sales Division
Division
- Group Companies

SC-g

Figure 4. Networked SCs including KDDI at Fujitsu

34 Knowledge Creation through Networked Strategic Communities

(equivalent to SC-a). The NPD team studied how to merge and integrate its own team’s broadband
network technology, computer and software technology from the Solutions Company and
multimedia processing technologies from its research laboratories. Company A was at least a half
year behind Fujitsu in forming its SC-a, and thus SCs to address marketing to customers and
technical studies with communications carriers (SC-b equivalents) also lagged behind Fujitsu.
Company A adopted the same scheme as Fujitsu in pursuing strategic tie-ups with partners while
continuing its own development efforts to develop a video streaming server and a wireless video
gateway system (equivalent to SC-c and SC-d). The company encountered the same problems as
Fujitsu in merging and integrating different technologies. Its organizational system, of independent
companies, made knowledge sharing and collaboration extremely difficult, and as a result technical
and resource allocation decisions were much delayed. SCs were also formed with camera developers
and manufacturers (SC-e equivalent), and the SCs around Company A were eventually networked.
Company A proceeded to offer a system to NTT DoCoMo and create sales tie-up with vendors to
aim at ISPs/ASPs and large corporate customers, but the delay in forming SCs meant that product
completion time had been delayed until November 2002. Within 5 months, Company A had
replaced its internal companies with a business division line system for its corporate organization
and, specifically, strengthened information and knowledge-sharing between the Network and
Solutions divisions, and its sales structure across all divisions.

Case 3 (Company B)
Company B had been engaged in the development of video distribution systems for broadband
and had (mostly internally) developed an MPEG-4 video streaming server about one year before
Fujitsu did. With limited resources (engineers, capital, etc.), Company B had concentrated on
developing wired broadband services rather than mobile applications. With 30 of its customers
in the broadband industry (communications carriers, ISPs/ASPs, content providers, etc.)
Company B had formed a video streaming forum and was actively engaged in creating new
business models, succeeding in distributing video to PDAs by late 2002. By April 2003, the
company completed development of MPEG-4 player software (running under Windows CE) to
distribute video to dedicated PDA terminals aimed at the mobile communications carrier NTT
DoCoMo.
Company B had also investigated a technical tie-up with Company A to develop a 3G mobile
phone product and conducted a series of NPD studies, and by March 2003 technical inter-
operability between Company B’s video streaming server and Company A’s wireless video gateway
system had been established. But by May 2003 a firm strategic tie-up with Company A had not
materialized, and thus a joint business model and sales system remained unestablished.

Case 4 (Company C, Company D, Company E)

These three companies (typical of Japan’s large electrical appliance manufacturers) had
considerable interest in developing products in the sector illustrated in Figure 1, and were
studying NPD concurrently with Fujitsu. Despite using the internal company or business division
systems, their ability to share information and knowledge internally or make adjustments or links
with related divisions was weak. All three companies placed prime importance on the basic
technology developed by their own research facilities, developing new technologies from the
knowledge resources they had accumulated over many years, rather than via technical links with
external strategic partners. Thus considerable time was spent studying the problems of merging and
integrating different elements (what type of signal processing method to use, which system
configuration to select, etc). While they exchanged views on several occasions with communications
carriers and other customers, they did not take sufficient advantage of collaboration in establishing
their product development and business model. At the same time, the issue of the level of risk
involved in devoting their resources toward the development of 3G mobile phone services remained
unsolved. By May 2003, unlike Fujitsu, Company A or Company B, these companies had not
completed the target NPD.

Long Range Planning, vol 38 2005 35

Given the expertise required, and the desired short timeframes [such
development] would have been impossible from the knowledge base of
only one company.

Results and discussion

In this case, new product development required hardware and software elemental technology as
well as technologies in a wide range of fields including broadband network technology, mobile
network technology, computer and software technology, multimedia processing technology, and
network operation technology. Given the breadth of expertise required, and the short timeframes
desired for bringing a competition-beating product to market, it would have been impossible for
such development to be completed from the knowledge base of only one company.
Two distinct steps were involved. The first step involved knowledge sharing. Along with gaining
a clear understanding of partners’ capabilities, it was necessary to judge whether a partner’s core
technology was suitable for satisfying the technical needs in the NPD, and it was important for
engineers to gain a deep understanding that transcended the level of simple information sharing.
While information and knowledge could be shared between both parties through close dialog and
discussions, it is necessary for engineers to understand the core technologies thoroughly. The
second step involved knowledge integration and the knowledge creation which is based on such
integration. This step (based on the thorough mutual understanding of core technologies achieved
in the first step) involved the integration of the core technologies of one’s own and partner
companies. While, naturally, this includes knowledge transfer, the most important point (amply
illustrated in this case), is that core technologies are first integrated and then further improved
(adding technical value), or that the integration of core technologies lead to a process of knowledge
creation in which new technology is developed. The two steps of knowledge sharing and knowledge
integration are therefore both important in this case.
In this section, this comparative research into NPD at Fujitsu and the other companies is used to
consider what sort of impact the characteristics of strategic communities and their networks, and
the synthesizing capability of the Leader Group had on knowledge creation, the desired output of
the various companies.

SC characteristics
Involvement
One important element in the formation of strategic communities is collaboration. As defined by
DiMaggio and Powell, the conditions required for deep collaboration include the presence of deep
interaction among community members, of a strategic partnership between the organizations that
form communities, and of interactive information sharing within them. High levels of involvement
in the collaborative process (i.e. the development of a strong mutual awareness that members are
involved in a common enterprise) are also essential. The following standard was used to rate
involvement. A ‘high’ rating was accorded to SCs or networks that engaged in close dialog and
collaboration and were able to progress beyond knowledge sharing to knowledge integration. A
‘medium’ rating was accorded if they got to the knowledge sharing stage, while a ‘low’ rating was
given if they were able to engage in dialog but did not get further than merely exchanging
information.
Table 2 shows the weightings given to each factor for each company’s SCs. As far as involvement
is concerned, high levels were observed in the SCs of Fujitsu and Company A, but low involvement
levels for the three companies in case 4. At Company B, high levels of involvement were observed in
SCs, with the exception of the SC with partners, where a medium score was registered. Here, it
seemed that the deeper its strategic alliance with its partner Company A got, the less deeply involved

36 Knowledge Creation through Networked Strategic Communities

Long Range Planning, vol 38
Table 2. Evaluations of Knowledge Creation in the 4 Case Studies

Company SC Characteristics Internal SC SC with SC with Characteristics of Synthesizing Knowledge

Partner Customer networked SCs capability creation

Case 1 Involvement High High High High High High

(Fujitsu) Resonance of value High High High High
SC formation speed High High High - Presence of solid LG - NPD completed
- Business model
established
2005

Network formation speed High

Embeddedness High
Case 2 Involvement High High High High High High
(Company A) Resonance of value High High High High
SC formation speed Low High High - Presence of solid LG Approx. half year behind
Fujitsu, but
- NPD completed
- Business model
established
Network formation speed High
Embeddedness High

Case 3 Involvement High Medium High Medium Medium Medium

(Company B) Resonance of value High Medium High Medium
SC formation speed High Medium High - LG not yet matured - NPD partially completed
- Business model not fully
established
Network formation speed Medium
Embeddedness Medium
Case 4 Involvement Low Low Low Low Low Low
(Companies Resonance of value Low Low Low Low
C, D, E) SC formation speed Low Low Low - LG not present All not yet completed
Network formation speed Low
Embeddedness Low
37
Company B became, rather showing medium levels of involvement by making decisions more
carefully through technology verification and discussion of future business models.

[An] important element in SCs is that community members resonate

shared values aimed at achieving business goals.
Shared values
The second important element in the formation of SCs (as the author has previously noted) is the
process whereby all community members, in their effort to fulfil the SC’s mission, resonate shared
values aimed at achieving business goals. This idea equates to that of ‘the hidden value’, espoused in
other research, that enables the shared values within organizations or communities to produce new
knowledge or competencies.29 The sharing of values in SCs with partners inside and outside the
company leads to dialectical ideas and strength to act among community members, turning into
a capability for generating community competencies, knowledge that forms a new core for the SC.30
The standard used to rate shared values gave a ‘high’ rating to SCs or networks that were able to
move from knowledge sharing to knowledge integration through close dialog and collaboration
among themselves and where members succeeded in sharing values and ideas in their effort to
realize knowledge creation (and complete the NPD); a ‘medium’ rating was given if the community,
while not able to move on to the knowledge integration stage, were able to engage in sufficient
dialog and collaboration to understand each other’s values and reach the knowledge sharing stage,
and a ‘low’ rating was given if they were unable to achieve a sufficient understanding of each other’s
ideas and values at the information sharing level. Table 2 reports that high levels of resonance value
was observed in the SCs of Fujitsu and Company A, (where product development was successful),
while none was observed with the three companies in case 4. As with involvement, Company B
recorded high levels of shared values internally and with customers, but, oddly, only medium levels
were observed when the company worked to build a solid business model with its partner,
Company A.

Formation speed
The third important element in the formation of SCs is speed, although it has not been discussed in
any depth in research on inter-organizational networks. This element must be considered, however,
by businesses in industries undergoing rapid change or whose technologies are rapidly advancing.
Here, a ‘high’ rating was given if SCs were formed in less than a month, ‘medium’ if it took between
two and six months, and ‘low’ if it took more than six months or was not achieved at all.

companies need to jump into the confusion, keep moving, and seize
opportunities quickly in rapidly changing, unpredictable and
ambiguous markets.
The decisive factor behind this rapid formation of SCs is improvisation, an especially important
concept when developing innovative products and services in an environment where market needs
are uncertain due to ongoing rapid changes and technology is also changing.31 Speed and flexibility
are particularly essential when making organizational decisions in tie-ups with external strategic
partners. From the viewpoint of strategic logic, companies need to jump into the confusion, keep
moving, and seize opportunities quickly as they pursue markets which are rapidly changing,
unpredictable and ambiguous (very characteristic of the 3G mobile phone market in these case
studies).32 In this case, Fujitsu and Company A needed to ride along with this flow: indeed a major
feature of Fujitsu’s success is the fact that they formed all their SCs very quickly. Company A,

38 Knowledge Creation through Networked Strategic Communities

meanwhile, formed all except their internal SCs (which were formed slowly) at the same high speed
as Fujitsu. Results for cases 3 & 4 followed the pattern of their weightings for other elements.

Networking SCs
Information and knowledge within communities is both ‘sticky’, in that it tends to be localized and
embedded in persons and their practices, and ‘leaky’, in that it can be shared and integrated across
the boundaries of organizations. The networking of SCs allows this ‘leaky’ aspect of knowledge to
work in a positive manner, enabling community leaders to promote knowledge-sharing beyond SC
boundaries, inspiring others to respond with new thoughts as fresh thinking is presented to them.
The act of transcending boundaries stimulates deep, meaningful learning, which in turn opens
possibilities for the generation of new knowledge and creativity. Radically new insights and
developments, such as the NPD in this case, often arise at the boundaries between SCs. In particular
the dilemma faced by firms is the need to reconcile rapid access to and integration of relevant new
knowledge, with the long timeframes needed for knowledge creation and integration. Networked
SCs based on deep inter-firm collaboration can offer a possible solution.33 The need for businesses
to transcend the boundaries of SCs has been increasing in recent years as markets in their industry
become more uncertain and technology changes more rapidly. The community leaders of
organizations need to build SCs inside and outside the company actively, including with customers,
and then to transcend the boundaries of the SCs by networking them quickly. To achieve this,
community members including community leaders need to build a platform for sharing values and
creating relationships of mutual trust while also engaging in ongoing mutual exchanges, in-depth
involvement at the boundaries of multiple, different SCs. An evaluation of successful networked
SCs can be found in the representative pattern of Fujitsu and Company A which have quickly
networked their SCs and realized high involvement and high shared values within these SCs (See
Table 2). Since Company B, on the other hand, achieved only medium levels for the three elements
(involvement, shared values, and SC formation speed) in forming SCs with partners, the company
was not sufficiently successful in building their overall SC network. The three companies in case 4,
however, were not unable to build a network at all owing to the low levels of the three elements in
their SCs. (Scoring of the elements in networks in Table 2 is on the same basis as or individual SCs)

Embeddedness in networked SCs

Fujitsu and Company A were able to achieve sufficient knowledge sharing among partners in the
SCs dispersed on the network to go on from there to carry out knowledge integration aimed at
creating new knowledge. To reach their ultimate target (new product development), the SC
networks needed to further integrate the knowledge that has been shared and created within
individual SCs. As Granovetter finds, this further integration occurs through close dialog and
collaboration across the network mediated by the Leader Group (LG), formed of community
leaders from all the SCs. The element which allows for the further integration of this knowledge,
and creation of new knowledge in networked SCs, is the factor of embeddedness. The element of
embeddedness describes the degree to which collaboration between SCs is enmeshed with and
connected to the broader inter-organizational network. The knowledge that is newly created with
the SCs transcends the boundaries of the SC and is shared across the network. The integration of
knowledge from the SCs then develops further through the high embeddedness that results from
close collaboration in the networks, facilitated by the Leader Group, and makes the final target, the
creation of new knowledge, possible.
This high embeddedness enabled Fujitsu and Company A to create knowledge that was new to the
networked SCs (as shown in the new video mobile broadband services by DoCoMo and KDDI in Fujitsu’s
case, and big customers like sales SI vendors, ISPs/ASPs and large corporate customers in Company A
case). Since Company B, however, only achieved a portion of its final target compared to Fujitsu
and Company A’s, it was given a ‘medium’ rating for embeddedness. And since Companies C, D, and E
did not achieve sufficient knowledge sharing with the SCs (they were still in the information sharing
stage), the level of embeddedness within the networked SCs was given a ‘low’ rating (see Table 2).

Long Range Planning, vol 38 2005 39

Synthesizing capability of leader group
Struggles and conflicts are a common occurrence among networked SCs, and such elements are
harmful to efforts to merge and integrate the knowledge possessed by the SCs. The role of the Leader
Group (LG), formed from the leaders of the individual SCs, is to merge and integrate the knowledge
of all SCs on the network and to generate synthesizing capability, the combined network power of all
SCs. The basic structure is illustrated as Figure 5. The LG needs to balance the various paradoxical
elements and issues within network SCs in order to realize this synthesizing capability, and also needs
to enable community leaders to conduct dialectical management consciously, engaging in
constructive dialog to solve the various differences and issues that result from learning at both SC
and LG levels. Thus the LG actively analyses problems and resolves issues, forms an arena for the
resonance of new shared values, and creates a higher level of knowledge. Dialectical management is
based on the Hegelian approach, a practical method of resolving conflict within an organization.34
The balancing of paradoxical elements and issues involves the synthesis of mutually divergent
views among organization members coming from different corporate cultures on the one hand, and
the synthesis of a variety of divergent business issues (such as the procedures of different
management, technologies, or business models). In the case of Fujitsu and Company A, for
example, syntheses were required in four areas:

1) the values of employees from a broad diversity of viewpoints and knowledge shaped by the
different corporate cultures to which they belong,
2) the different elements of technology acquired by engineers from different organizations aiming
to merge and integrate technological elements from the various SCs,
3) balancing proprietary development and development with other companies (or transferring
knowledge of the technology belonging to other companies), and
4) balancing wired broadband and wireless business models.

To find solutions to this broad variety of problems, the LG needs new approaches and methods,
and to adopt the methods of dialectical management to create synthesis and enable new knowledge
creation and innovation.

By communicating and collaborating... leaders are able to

transform problems that arise among them into constructive conflicts.
The LG promotes active dialog and discussion among community leaders in order to cultivate
a thorough understanding of problems and issues. By communicating and collaborating with each

SC

**
Synthesizing Capability

** **
SC ** ** SC
SC SC

SC Individual SC’s grouped into Network

Leader Group Comprising community leaders * * from all SCs

Leader Goup networks SCs together and generates synthesizing capability.

Figure 5. Leader Group Structure

40 Knowledge Creation through Networked Strategic Communities

other, leaders become aware of the roles and values of each other’s work. As a result, they are able to
transform the various problems that arise among them into constructive conflicts.35 This process
requires community leaders to follow a pattern of thought and action in which they ask themselves
what sorts of actions they themselves would take, what sorts of strategies or tactics they would
adopt, and what they could contribute toward achieving the innovation of a new business product.
In achieving such innovation, the LG promotes support for the community leaders’ successful
values, and the combined synergy and dialectical leadership management of the LG have led to the
high levels of synthesizing capability which have enabled Fujitsu and Company A to realize their
desired new products and business models. Fujitsu and Company A have used the shared values and
synergy of their SC leaders to form a Leader Group which attains high levels of synthesizing
capability, which in turn has reinforced their solid network of SCs.
In the remarkably short period of about a year and a half, Fujitsu succeeded in the development
of a large-scale new product system, and created new knowledge at high levels that led to the
establishment of business models with communications carriers and sales SI vendors. Although
Company A was slower than Fujitsu in forming internal SCs, like Fujitsu, it succeeded in using the
high levels of synthesizing capability produced by the LG to complete the NPD and establish
a business model. Company B, on the other hand, still has not formed any solid SCs, nor have they
generated sufficient synthesizing capability, although their technical tie-up with Company A has
enabled them to promote the NPD in Figure 1. Accordingly, Company B has neither established
a sales system or a business model, nor created knowledge of the same quality as Fujitsu or
Company A. All SC formation characteristics of the three companies in case 4 are at low levels,
a situation which has prevented the companies from networking their SCs and producing the
explicit output of knowledge creation.
As seen above, these case studies demonstrate that essential conditions for the creation of
knowledge of the highest quality (in the case of Fujitsu) are the high involvement of SCs, high
shared value scores, high speed of SC formation and high embeddedness while at the same time
merging and integrating knowledge possessed by the SCs diffused on the network, and forming an
LG that generates high levels of synthesizing capability to utilise the combined power of the network
of SCs. The case of Company A has shown that speed in the formation of SCs influences the
completion of the NPD schedule, while the case of Company B shows that, unless progress is made
in networking the SCs, an LG will not result.

Developing dialectical leadership: realizing strategic community-based firms

Innovative companies in the 21st century need to be strategic community-based firms: in other
words, we believe that it is important for companies wishing to create ongoing innovation to form
and network strategic communities based on creative knowledge assets. Knowledge, as a management
resource aimed at strategic innovation, can be created from SCs, where a wide range of knowledge
from both inside and outside the company, including from customers and strategic partners, can be
merged and integrated via the network, and completely new knowledge created to become a new
source of competitive advantage. To that end, it is important for the LG to aim at creating new value
from innovation with customers and strategic partners as the company endeavours to achieve its
desired vision and mission. The newly created value is then shared by, and supported by, all
community members through constructive dialog and discussion within the LG. The philosophy of
an interactive learning-based strategic community, where members teach and learn from each other,
is an important part of this process, and this approach promotes further dialectical consideration
and becomes the driving force for producing high levels of synthesizing capability.

Innovative companies in the 21st century [will be those that] form and
network strategic communities based on creative knowledge assets.

Long Range Planning, vol 38 2005 41

 The community leaders in the LG use synthesizing capability through dialectical management to
create innovative and creative products, business concepts, and reforms in business processes. The
governance and control mechanisms within the SCs and their networks, which may include
customers and external partners, are related in an important way to the behaviour of the leadership
of community leaders that form the LG, itself an informal SC positioned above the layer of
networked SCs - Figure 6 gives an analysis of how the first network at Fujitsu fits togther. The LG
gives greater strength to the cross-functional or inter-corporate integration characteristics of the SCs
and SC networks. The LG’s role is to boost NPD performance, and to fulfil this role, community
leaders in the LG need to have the element of dialectical leadership. This demands more than just the
elements of the participative leadership style and a flexible approach discussed in NPD literature to
date:36 they will also need to balance creativity with efficiency and participative approach with
directive control.37 Discussion of the issue of behaviour or dialectical management by leaders is
missing in previous research on cross-functional teams and project management for NPD, although
recent work has noted that the ability to balance a number of paradoxes is required for successful
product development, clarifying the frequent but ambiguous calls for subtle control, for effective
managers to provide strong leadership to keep teams focused and on schedule, while at the same time
empowering team members and fostering motivation and creativity.38
In our field studies we were able to glean some rich data from discussions with community
leaders about their dialectical considerations and actions. They included:

This development and turning it into a service product requires elements of technologies from
a variety of fields, and collaboration among internal members and external players is important. As
the person responsible for my team, I had to devote development resources, strategically and
deliberately, in order to pursue development according to a target schedule. There were also many
technically difficult areas, requiring both know-how and creativity from specialized engineers in the
various fields both inside and outside the company. Since new ideas and creativity from capable

Leader Group

**
SC-a

**
SC-b **
SC-c **
SC-d **
SC-e

Fujitsu Fujitsu-Software Division,

NTT DoCoMo Network Division Laboratory, Sales Division, Group Company

Moving picture camera

NMS communications Inc. PacketVideo Inc.
manufacturers(5 companies)

Figure 6. Formation of Strategic Communities, Networked SCs and Leader Group at Fujitsu

42 Knowledge Creation through Networked Strategic Communities

 engineers are important, as an organization, we had to exhibit flexible management. Development
cannot just be forced. (Fujitsu Community Leader)

Since development encompasses a variety of technical fields and new business models,
communication and ties with specialized engineers and persons in charge both inside and outside
the company are necessary. Though leadership and management that can guide development team
members in our own company and pull them along is also important of course, at the same time it is
important to empower and motivate young members of our own team and to build cooperative
relationships and a daily support system with leaders and engineers among players in other divisions
and external organizations (Company A Community Leader)

Technical development in fields such as digitalization, broadband, and multimedia has recently
become extremely difficult. Ten years or so ago, business models could exist in individual technical
fields, but now it’s impossible to generate new business models without merging various technologies.
To generate these business models, we need to form ties with specialists in many fields both
internally and externally, and to build the capacity to integrate technical and business model
aspects. It’s important to pursue various contradictions at the same time. (Company A Chief
Engineer)

We need to overcome technical issues and build a business model simultaneously. Innovation will
not emerge unless we tap the knowledge of both engineers and marketers and collaborate closely.
(Taiwanese Manufacturer Community Leader)

The same sort of issues and views that people at the forefront of development struggle with on
a daily basis as they work to cultivate new markets in a rapidly-changing environment of technical
innovations and business models were received from eight other community leaders, chief
engineers, and others. The demand for community leaders in SCs and networks to exercise
dialectical thinking and behaviour is growing stronger than before. The sort of leadership required,
gleaned from much of the data we obtained, is illustrated in Figure 7.

New Knowledge Creation

Synthesizing Capability

Dialectical Leadership

Synthesis

Participative Control Directive Control

CREATIVE LEADERSHIP STRATEGIC LEADERSHIP

- Autonomous, decentralized leadership - Integrated, centralized leadership

- Focused on creative thinking and behaviours - Focused on efficiency

SERVANT LEADERSHIP FORCEFUL LEADERSHIP

- Collaborating and enabling leadership - Taking charge and control

Figure 7. New Knowledge Creation through Dialectical Leadership

Long Range Planning, vol 38 2005 43

 The problem of successful dialectical leadership is to create and sustain a fruitful balance between
the two styles of leadership defined earlier as participative control and directive control. This
dominant duality can be analysed in two ways:

 Firstly it can be seen as a balance between the necessity to exhibit strategic leadership as directors
based on integrated, centralized leadership which can produce long-term strategy, focus on the
big picture and perform efficiency, with the need to display creative leadership, involving an
autonomous, decentralized style to liberate and enable creative thinking and behaviours among
community members; and
 Secondly it can be seen as a balance between the requirement to exhibit forceful leadership as
directors who can take charge and control community members, with an ability to also become
listeners, recipients and collaborators based on a collaborative leadership style,39 empowering
community members and enhancing intrinsic motivation among community members in their
knowledge creation activities.40 Their role as ‘followers’ providing ongoing support for the
community so that it can pursue dreams and a sense of accomplishment for the business vision
requires the element of servant leadership.41

As a result of synthesizing capability through dialectical leadership, both leaders and members of
communities can participate in decision-making in the SC and enhance mutual understanding and
strengthen links within the SC. This image of leadership at strategic community-based firms is not
the old type that was buttressed by a rigid hierarchy but a new model of leadership aimed at
achieving innovation, oriented toward the growth of not only individuals but of groups or
organizations and, in the cases studied in this article, strategic communities.

successful dialectical leadership [will] create and sustain a fruitful

balance between the participative and directive styles of leadership

Conclusion and managerial implications

‘How can corporations achieve innovation in a speedy yet reliable manner?’, is the greatest issue
facing innovative companies in the 21st century. For example, on one side of this double-faceted
issue is speed in introducing innovative new products and services to market ahead of the
competition, while on the other side is expansion of the market for these products and services. To
attain success, it is important for innovative companies to balance the various paradoxes in the SCs
networked within and beyond the organization, and to exhibit practical abilities.
These NPD case studies present one view on the proposition of what the capabilities of leading
companies in the knowledge-based society are for strategic community-based firms that form
dynamic innovative processes in SCs and network these SCs.42 In other words, one of the keys to
producing innovation in a knowledge-based society is how companies can organically and
innovatively network new and different knowledge created from the formation of a variety of SCs
inside and outside the company, and acquire the synthesizing capability they need to generate new
knowledge.
As community leaders, managers in the company who play important roles in producing
synthesizing capability for the company use dialectical thinking and power to act to synthesize
knowledge of good quality that was previously distributed variously inside and outside the
company. To this end, it is important for community leaders to promote the speedy formation of
quality SCs networked inside and outside the company, and to form an LG of leaders of the
communities as soon as possible.
From the viewpoint of leadership and organizational development, the key issue for companies of
the 21st century aiming to achieve innovation is how to nurture and produce community leaders

44 Knowledge Creation through Networked Strategic Communities

who understand the dialectical concept, and possess the capability to be both creative and strategic,
and the ability to act. The formation of SCs that can continuously generate innovation via the
capabilities of individual community leaders, the number of community leaders from each level of
management, and the abilities of these leaders to exercise their skills, along with the networking of
these SCs, determine whether or not a company is able to build synthesizing capabilities.
Superior core technology in the leading-edge high-tech fields of IT and e-commerce continues to
spread throughout the world and undergo dramatic changes. Innovative companies that need to
establish competitive advantage in the network economy cannot seek to retain full control over
innovative processes under conventional hierarchical mechanisms and closed autonomous systems.
From now on, companies will require a management that can, from a multiple variety of
viewpoints, use networked SCs to synthesize superior knowledge that is held and spread out both
inside and outside the organization. The structure of networking SCs and of establishing a Leader
Group which manages by means of dialectical leadership as described here will allow innovative
companies the best chance to realize their essential desired output - creating completely new
knowledge.

. companies cannot retain full control over innovative processes

under conventional hierarchical mechanisms

Acknowledgments
The author wishes to express his deep appreciation to the executives, managers, and development
staff of all companies concerned for the long interviews and their permission to access materials
inside and outside the company in the process of conducting this research. As reflective
practitioners, they embraced their own beliefs and thoughts and in their fieldwork devoted all their
energies to NPD and the establishment of a business model. Without this contact with them, the
author would never have been able to experience to this extent the reality of dynamism in
innovation. The author would also like to acknowledge Professor Charles Baden-Fuller, Editor-
in-Chief of LRP, and three anonymous reviewers for their valuable comments.

Appendix
Research method
The author conducted objective analyses and examinations of relationships with the strategic
partners of each firm observed from within the organization of manufacturers and NTT DoCoMo,
and collected detailed chronological data about the knowledge created through the strategic
communities’ formation. The primary contacts during the data collection process were the
managers and staff of Fujitsu Ltd. (Network Division, Software Division, Laboratories, and Sales
Division); a Fujitsu subsidiary (Fujitsu Communication Systems Ltd.); strategic partners Packet
Video Inc. and NMS Communications Inc. (both of the United States), NTT DoCoMo, KDDI, four
Japanese and two Taiwanese video processing camera manufacturers; and third parties such as sales
SI partners and ASP/ISPs. These firms played important roles in forming the networks of SCs,
enabling access to a total of 73 senior executives, senior managers, associate managers, development
staff and sales staff for interviews lasting one to two hours, and materials from both inside and
outside Fujitsu. To perform comparative case studies with Fujitsu, interviews were conducted at the
same time with a total of 37 senior executives, senior managers, associate managers, development
staff and sales staff in the development divisions of five large communications and electrical
appliance manufacturers in Japan, who were engaged in development of similar types of target
products to Fujitsu. Data on factors contributing to the success of Fujitsu’s NPD process, and those

Long Range Planning, vol 38 2005 45

used by five other manufacturers in their attempts to gain an edge over Fujitsu, was collected and
analysed. During these interventions, the experiences and views expressed, the action-centred
dilemmas and actual actions of participants were recorded as research data via notes, internal and
outside rich documents, etc. The theory that has emerged from this research centres around
concepts of new knowledge creation process within the collaboration of networked SCs.
The data analysis for the research was in three stages:

1) developing an in-depth case history of the informal cross-functional team’s activities in Fujitsu
and other companies from the raw data that I could gain;
2) open coding and subsequent selective coding the in-depth case histories for the characteristics
and origin of knowledge creation process; and
3) analysing the pattern of relationships among the conceptual categories.

In the first stage of the data analysis, chronological descriptions of the companies’ activities were
constructed with respect to knowledge creation process, describing how it came about, when it
happened, who was involved, and major outcomes, and through this work, the in-depth case
histories of the companies were completed. The second stage of analysis involved coding the in-
depth case histories with respect to their characteristics, origin and effects. This was a highly
iterative procedure that involved moving between the in-depth case histories, existing theory, and
the raw data.43 Data were subjected to continuous, cyclical, evolving interpretation and reinter-
pretation that allow patterns to emerge.
Following Locke, the grounded theory approach worked from researchers’ interpretations and
descriptions of phenomena based in turn on the actors’ subjective descriptions and interpretations
of their experiences in a setting. This ‘interpretation of an interpretation’ strives to provide
contextual relevance.44 From the in-depth case histories, first-order descriptions were advanced
based on broad categories that were developed from the existing theory, and these categories were
then refined by tracing patterns and consistencies.45 The analysis continued with this interplay
between the data and the emerging patterns until the patterns were refined into conceptual
categories.46 The third stage of data analysis aimed to examine the empirical in-depth case results
across the selected categories and the theoretical literature, and to develop the logic of the
conceptual framework and generate new theory.

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phones on a real time basis. KDDI aggressively encourages Live Video Distribution services as well as
applications for business solutions, taking advantage of a full range of CDMA 1X WIN features.
28. NEC to Offer PacketVideo’s Industry-leading Wireless Streaming Products to the Japanese Market. See
Web site: http://www.pv.com/press/view.asp?id=195.
29. C. A. O’Reilly III and J. Pfeffer, Hidden Value: How Great Companies Achieve Extraordinary Results with
Ordinary People, Harvard Business School, Boston, MA (2000).
30. M. Kodama, Strategic Partnership with Innovative Customers: A Japanese Case Study, Information
Systems Management 19, 31e52 (2002); see also M. Kodama Op Cit at Ref 15.
31. S. L. Brown and K. M. Eisenhardt, Competing on the Edge, Harvard Business School, Boston, MA (1998).
32. K. M. Eisenhardt and D. N. Sull, Strategy as Simple Rules, Harvard Business Review 79, 106e116 (2001).
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(1996).
34. For example: J. K. Benson, Organization: A Dialectical View, Administrative Science Quarterly 22, 221e242
(1977); K. Peng and R. E. Nisbett, Culture Dialectics, and Reasoning about Contradiction,
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35. This matches the interaction-type opinion of conflicts in groups reported in the past. See S. P. Robbins,
Managing Organizational Conflict: A Nontraditional Approach, Prentice Hall Englewood Cliffs, New Jersey
(1974).
36. D. Dougherty, Organizing for innovation, in S. R. Clegg, C. Hardy and W. R. Nord (eds.), Handbook of
organization studies, Sage, Thousand Oaks, CA, 424e439 (1996); F. E. McDonough and G. Barczak,
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(1996); K. Eisenhardt and N. Tabrizi, Accelerating adaptive process: Product innovation in the global
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42. For another exploration of this theme see: M. Vandenbosch and T. Clift, Dramatically Reducing Cycle
Times through Flash Development, Long Range Planning 35, 567e589 (2002); C. Ibbott and R. O’Keefe,
Transforming the Vodafone/Ericsson Relationship, Long Range Planning 37, 219e237 (2004); R. Sanchez
and R. P. Collins, Competing-and Learning-in Modular Markets, Long Range Planning 34, 645e667
(2001).
43. B. Glaser and A. Strauss, The discovery of grounded theory: Strategies for qualitative research, Aldine,
Chicago (1967).
44. D. Silvermann, Doing qualitative research, Sage, Thousand Oaks, CA (2000).

48 Knowledge Creation through Networked Strategic Communities

45. A. Strauss, Qualitative analysis for social scientists, Cambridge University Press, New York (1987).
46. K. M. Eisenhardt, Building Theories from Case Study Research, Academy of Management Review 14,
532e550 (1989).

Biography
Mitsuru Kodama is Professor of Information and Management in the College of Commerce and Graduate School
of Business Administration at Nihon University. He holds B.S., M.S. and Ph.D. degrees in electrical engineering
from Waseda University, Tokyo, Japan. His research interests include innovation, organizational learning,
knowledge management, and organizational structure. He has published over 60 refereed papers in the area of
management, information systems, electronics and telecommunications. College of Commerce, Nihon University
5-2-1 Kinuta Setagaya-ku, Tokyo 157-8570, Japan, tel:+81-3749-6819, e-mail [email protected]

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