A Dynamic Theory of Organizational Knowledge Creation

This essay examines elements of a theory of organizational knowledge creation. To this end, a model for the management of the dynamic aspects of organizational knowledge is offered, using hands-on research and practical experience of Japanese firms. Two dimensions are examined to assess the importance of knowledge management: tacit and explicit knowledge. Four modes of knowledge creation through the interaction of tacit and explicit knowledge are presented: 1) socialization; 2) externalization; 3) internalization; and 4) combination. The process of organizational knowledge creation is also described in a corporate organizational setting. The model helps to explain how the knowledge of individuals, organizations, and societies can be enriched through the amplification of tacit and explicit knowledge of each. The key to this process is a joint creation of knowledge by both individuals and organizations. Organizations play an important role in mobilizing the tacit knowledge that individuals possess, as well as providing forums for knowledge creation through socialization, combination, externalization, and internalization. The concept of organizational knowledge creation allows for the development of a perspective that reaches beyond straightforward notions of organizational learning. Practical proposals, such as hypertext and middle-up-down management, are offered as modes of implementing more effective knowledge creation. (CBS)