A Dynamic Theory of Organizational Knowledge Creation (1994)
This paper proposes a paradigm for managing the dynamic aspects of organizational knowledge-creating processes.
2. BASIC CONCEPTS AND MODELS OF ORGANIZATIONAL KNOWLEDGE CREATION
The following subsections explore some basic constructs of the theory of organizational knowledge creation.
They begin by discussing the nature of information and knowledge and then draw a distinction between “tacit” and
This distinction represents what could be described as the epistemological dimension to organizational knowledge
It embraces a continual dialogue between explicit and tacit knowledge which drives the creation of new ideas and
Although ideas are formed in the minds of individuals, the interaction between individuals typically plays a critical role
in developing these ideas.
That is to say, “communities of interaction” contribute to the amplification and development of new knowledge.
Following a consideration of the two dimensions of knowledge creation, some attention is given to the role of
individuals and, more specifically, to their “commitment” to the knowledge creating process.
This covers aspects of their “intention,” the role of autonomy, and the effects of fluctuations or discontinuities in the
organization and its environment.
Next, a “spiral” model of knowledge creation is proposed which shows the relationship between the epistemological
and ontological dimensions of knowledge creation.
This spiral illustrates the creation of a new concept in terms of a continual dialogue between tacit and explicit
2.1 Knowledge and Information
As a fundamental basis for the theory of organizational creation of knowledge, it can be argued that attention should be
focused on the active, subjective nature of knowledge represented by such terms as “belief’ and “commitment” that
are deeply rooted in the value systems of individuals.
Information is a necessary medium or material for initiating and formalizing knowledge and can be viewed from
“syntactic” and “semantic” perspectives.
In terms of creating knowledge, the semantic aspect of information is more relevant as it focuses on conveyed
The syntactic aspect does not capture the importance of information in the knowledge creation process.
For the purposes of building a theory of knowledge creation, it is important to concentrate on the semantic aspects of
2.2 Two Dimensions of Knowledge Creation
Organizational knowledge is created by a continuous dialogue between tacit and explicit knowledge.
The nature of this dialogue is examined and are identified 4 patterns of interaction involving tacit and explicit
The ever-increasing importance of knowledge in contemporary society calls for a shift in our thinking concerning
innovation in large business organizations.
It raises questions about how organizations process knowledge and how they create new knowledge.
Although ideas are formed in the minds of individuals, interaction between individuals typically plays a critical role in
developing these ideas.
One dimension on how we can look at knowledge creation is to draw a distinction between the two types of
knowledge, tacit knowledge and explicit knowledge.
Tacit knowledge is hard to transfer; it involves both cognitive and technical elements.
The cognitive elements center on “mental models” in which human beings form working models of the world by
creating and manipulating analogies in their minds.
In contrast to this, the technical element of tacit knowledge covers concrete know-how, crafts, and skills that apply to
Explicit knowledge refers to knowledge that is transmittable in formal, systematic language. It is discrete or “digital”
and can be captured in records of the past such as libraries and databases.
The epistemological dimension adopts a definition of knowledge as “justified true belief”.
The ontological dimension is the level of social interaction.
At a fundamental level, knowledge is created by individuals.
An organization cannot create knowledge without individuals.
Organizational knowledge creation, therefore, should be understood in terms of a process that “organizationally”
amplifies the knowledge created by individuals.
2.3 Commitment on the Part of the Knowledge Subject. INTENTION, AUTONOMY, FLUCTUATION
The prime movers in the process of organizational knowledge creation are the individual members of an organization.
There are 3 basic factors that induce individual commitment in an organization setting:
1. INTENTION is concerned with how individuals form their approach to the world and try to make sense of their
It is not simply a state of mind, but rather what might be called an action-oriented concept.
Without intention, it would be impossible to judge the value of the information or knowledge perceived or created.
2. AUTONOMY: the principle of autonomy can be applied at the individual, group and organizational levels – either
separately or all together.
Every individual has his or her own personality, by allowing individuals to act autonomously, the organization may
increase the possibility of introducing unexpected opportunities.
An organization that allows this gets higher flexibility in acquiring, relating and interpreting information. Individual
autonomy also widens the possibility that individuals will motivate themselves to form new knowledge.
3. FLUCTUATION: even though the intention is internal to the individual, knowledge creation at the individual level
involves continuous interaction with the external world.
In this connection, chaos or discontinuity can generate new patterns of interactions between individuals and their
When a change occurs, people are often triggered to reconsider their fundamental thinking and perspectives.
They begin to question the validity of basic attitudes toward the world.
This process necessarily involves a deep personal commitment by the individual.
2.4 Knowledge Conversion and the Spiral of Knowledge
It is now possible to bring together the epistemological and ontological dimensions of knowledge creation to form a
“spiral” for the model for the process involved.
This involves identifying four different patterns of interaction between tacit and explicit knowledge.
These patterns represent ways in which existing knowledge can be converted into new knowledge.
Social interaction between individuals then provides an ontological dimension to the expansion of knowledge.
The assumption that knowledge is created through conversation between tacit and explicit knowledge allows us to
postulate four different “modes” on knowledge conversion:
1) From tacit knowledge to tacit knowledge
this can be done without talking.
The key to acquiring tacit knowledge is experience and a common example of this are apprentices who work
with mentors to learn their work.
This process is called socialization.
2) From explicit knowledge to explicit knowledge
it’s the most common way to exchange knowledge are through mechanisms like meetings, telephone
It involves the use of social processes to combine different bodies of explicit knowledge held by individuals.
This process is called combination.
3) From tacit knowledge to explicit knowledge, called “externalization.”
“Metaphor” plays an important role in the externalization process
4) From explicit knowledge to tacit knowledge, called “internalization.”
“Action” is deeply related to the internalization process.
The 3rd and 4th models of knowledge creation relate to patterns of conversation involving both tacit and explicit
These conversation modes capture the idea that explicit and tacit knowledge are complementary and can expand
over time through a process of mutual interaction.
Modal Shift and Spiral of knowledge
While each of the four models of knowledge conversion can create new knowledge independently, the central
theme of the model of organizational knowledge creation proposed here centers on a dynamic interaction between
the different modes of knowledge conversion.
Knowledge creation centers on the building of both tacit and explicit knowledge and, more importantly, in the
interchange between these two aspects of knowledge through internalization and externalization.
Organization knowledge creation, as distinct from individual knowledge creation, takes place when all four modes
of knowledge creation are “organizationally” managed to form a continuous cycle.
This cycle is shaped by a series of shifts between different modes of knowledge conversion.
There are various “triggers” that induce these shifts between different modes of knowledge conversion.
First, the socialization mode usually starts with the building of a “team” or “field” of interaction.
This field facilitates the sharing of members’ experiences and perspectives.
Second, the externalization mode is triggered by successive rounds of meaningful “dialogue.”
In this dialogue, the sophisticated use of “metaphors” can be used to enable team members to articulate their own
perspectives, and thereby reveal hidden tacit knowledge that is otherwise hard to communicate.
Thus, organizational knowledge creation can be viewed as an upward spiral process, starting at the individual level
moving up to the collective (group) level, and then to the organizational level, sometimes reaching out to the inter-