Theory of Knowledge Creation: Two Dimensions  Epistemological Explicit knowledge Tacit knowledge  Ontological Individual Group Organization Inter-organization

Key Concept

Two dimensions of knowledge creation Ontological dimension Epistemological dimension IndividualGroupOrganizationInter-organization Explicit knowledge Tacit knowledge Knowledge level

Ontological Dimension  In a strict sense, knowledge is created only by individuals. An organization cannot create knowledge without individuals. The organization supports creative individuals or provides contexts for them to create knowledge.

 Organizational knowledge creation means a process that  This process takes place within an

Epistemological Dimension  Tacit knowledge  Explicit knowledge

Tacit Knowledge  It is

Explicit Knowledge  Or codified knowledge  Refers to

To know something  To know something is to create its image or pattern by tacitly integrating particulars.  In order to understand the pattern as a meaningful whole, it is necessary to integrate one’s body with the particulars.

Dichotomies  Indwelling breaks the traditional dichotomies between Mind & body Reason & emotion Subject & object Knower & known

Four Modes of Knowledge Conversion Knowledge Conversion To From

Socialization: from tacit to tacit  Socialization is a process of sharing experiences and thereby creating tacit knowledge such as shared mental models and technical skills.  An individual can acquire tacit knowledge directly from others without using language.

Externalization: from tacit to explicit  Externalization is a process of articulating tacit knowledge into explicit concepts.

Combination: from explicit to explicit  Combination is a process of systemizing concepts into a knowledge system. This mode involves combining different bodies of explicit knowledge

Internalization: from explicit to tacit  Internalization is a process of embodying explicit knowledge into tacit knowledge.

 The tacit knowledge accumulated at the individual level needs to be socialized with other organizational members, thereby starting a new spiral of knowledge creation.

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 Socialization aims at the sharing of tacit knowledge. On its own, it is a limited form of knowledge creation. Unless shared knowledge becomes explicit, it cannot be easily leveraged by the organization as a whole.  Also, a mere combination of discrete pieces of explicit information into a new whole does not really extend the organization’s existing knowledge base.

 But when tacit and explicit knowledge interact, an innovation emerges.  Organizational knowledge creation is a continuous and dynamic interaction between tacit and explicit knowledge.  This interaction is shaped by shifts between different modes of knowledge conversion, which are in turn induced by several triggers.

Knowledge Spiral SocializationExternalization InternalizationCombination Knowledge Conversion Linking Explicit Knowledge Learning by Doing Dialogue Field Building

 The socialization mode usually starts with building a “field” of interaction.  This field facilitates the sharing of members’ experiences and mental models.

 Second, the externalization mode is triggered by meaningful “dialogue or collective reflection,” in which using appropriate metaphor or analogy helps team members to articulate hidden tacit knowledge that is otherwise hard to communicate.

 Third, the combination mode is triggered by “networking” newly created knowledge and existing knowledge from other sections of the organization, thereby crystallizing them into a new product, service, or managerial system.  Finally, “learning by doing” triggers internalization.

The content of the knowledge created by each mode is naturally different

 Socialization: sympathized knowledge such as shared mental models and technical skills. The tacit skill of kneading dough in the Matsushita example is a sympathized knowledge.

 Externalization: conceptual knowledge The concept of “Tall Boy” in the Honda example is a conceptual knowledge created through the metaphor of “Automobile Evolution” and the analogy between a sphere and the concept of “man-maximum, machine-minimum”

 Combination gives rise to “systemic knowledge” such as a prototype and new component technologies. The micro-merchandizing program in the Kraft General Foods example is a systemic knowledge, which includes retail management methods as its components.

 Internalization produces “operational knowledge” about project management, production process, new product usage, and policy implementation. The bodily experience of working 150 hours a month in the Matsushita case is an operational knowledge of policy implementation.

These contents of knowledge interact with each other in the spiral of knowledge creation.  For example, sympathized knowledge about consumers’ wants may become explicit conceptual knowledge about new-product concept through socialization and externalization.

 Such conceptual knowledge becomes a guideline for creating systemic knowledge through combination.  For example, a new-product concept steers the combination phase, in which newly developed and existing component technologies are combined to build a prototype.  Systemic knowledge (e.g., a simulated production process for the new product) turns into operational knowledge for mass production of the product through internalization.

 In addition, experience-based operational knowledge often triggers a new cycle of knowledge creation.  For example, the users’ tacit operational knowledge about a product is often socialized, thereby initiating improvement of an existing product or development of an innovation.

Knowledge spiral  Thus far, we have focused discussion on the epistemological dimension of organizational knowledge creation.  However, an organization cannot create knowledge by itself.  Tacit knowledge of individuals is the basis of organizational knowledge creation.

 The organization has to mobilize tacit knowledge created and at the individual level.  The mobilized tacit knowledge is “organizationally” four modes of knowledge conversion and at higher ontological levels.  We call this the “ ”, in which the interaction between tacit knowledge and explicit knowledge will become larger in scale as it moves up the ontological levels.

 Organizational knowledge creation is a spiral process, starting at the individual level and moving up through expanding communities of interaction, that crosses sectional, departmental, divisional, and organizational boundaries.

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