The Creation of Corporate Knowledge and Innovation among Indonesia's Batik Producers: A Case Study of Four Main Areas of Batik Production in Java

Abstract

Creation of corporate knowledge is generally recognized as crucial for innovation. Through a combination of tacit and explicit knowledge, companies can develop a concept or model of operation that is not easily imitated, and which can serve as the main source of their competitive advantage. Unfortunately, not much research has been done on how this ‘corporate knowledge’ is created, so both theories and information on knowledge creation is limited. This study attempts to examine select cases of creative creation of such knowledge in the traditionally family run batik industry in Java, Indonesia. The results of this study reveal that such a process of knowledge exists in the batik industry and is one of the factors that allow it to thrive. The primary method used in this study is the multivariate technique, which was used in tandem with SEM statistics and Lisrel software, to survey 220 batik businesses in Yogyakarta, Solo, Cirebon and Pekalongan. It was found that the most important stage in the process of knowledge creation is the conversion of tacit knowledge into explicit knowledge. The company's environmental conditions are also very important for the creation of knowledge processes.