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The Handbook of Service Industries

Edited by John R. Bryson and Peter W. Daniels

Service activities are now acknowledged as key players in economic development, societal change and public policy worldwide. This exciting Handbook not only contributes to ongoing conceptual debates about the nature of service-led economies and societies; it also pushes back the frontiers of current critical thinking about the role of service activities in urban and regional development and the important research agendas that remain to be addressed.
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Chapter 19: Knowledge Creation in a Japanese Convenience Store Chain: The Case of Seven-Eleven Japan

Ikujiro Nonaka, Vesa Peltokorpi and Dai Senoo


Ikujiro Nonaka, Vesa Peltokorpi and Dai Senoo Introduction Markets evolve through progressive steps initiated by innovative entrepreneurs and changing environment. The innovation processes and market evolution can be interpreted through the positivist or phenomenological philosophies. Theories influenced by the three schools of positivism (nineteenth-century positivism, logical positivism and logical empiricism) explain the process through linear changes in which agents act as passive information processors. In contrast, phenomenology, starting with the internal world of embedded actors, enables one to describe innovation from the actor’s subjective point of view. The reality lies between the objective and subjective worlds, as retail innovations are based on constant subjective anticipation of changing customer needs through constantly absorbing, processing and systemizing internal and external information/knowledge. An essential part of the process is knowledge creation, not information and knowledge per se (Nonaka, 1991, 1994; Nonaka and Takeuchi, 1995). While innovations and retail evolution are dialectic processes, they are frequently explained through linear causalities. Some scholars have departed from dualistic dichotomies by explaining innovative retail evolution through Hegelian dialectics (Gist, 1968). Albeit providing a dynamic perspective, dialectic frameworks mainly focus on holistic change, placing little emphasis on purposive and interest-driven behavior and/or the nexus between internal and external change. The interaction among embedded actors is a crucial part of the innovation processes in franchising relationships, which is the focus of this chapter. We describe retail innovation using the dialectic knowledge-based view, taking into account tacit knowledge and agent-structure dynamics (Nonaka, 1991, 1994; Nonaka and Takeuchi, 1995; Nonaka...

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