Paper Summary: Theory of Organizational Knowledge Creation (Nonaka & Takeuchi)

Warnings: (1) as this is a quite long post, I supressed the sections that I did not use in this summary. For the complete summary model, read the previous post; (2) if you are acquainted to this book chapter, please skip the main ideas and go straight to the section entitled "IDEAS THAT OCURRED DURING READING" (down this page) where I include my own comments on it.

TITLE: Theory of Organizational Knowledge Creation
AUTHORS: Nonaka, Icujiro, Takeuchi, Hirotaka
DATE OF PUBLICATION: 1995
KEYWORDS: tacit knowledge, explicit knowledge, knowledge conversion, knowledge spiral, enabling conditions for organizational knowledge creation (intention, autonomy, redundancy of information, creative chaos, requisite diversity).
LOCATION (WHERE IT CAN BE FOUND): chapter 2 (pp 56-94) of the book The Knowledge Creating Company, How Japanese Companies created the Dynamics of Innovation. New York: Oxford University Press. 1995. 284 p.

MAIN IDEAS
· In our theory of organizational knowledge, we adopt the traditional definition of knowledge as “justified true belief”. However (…), we highlight the nature of knowledge as “justified belief”. We consider knowledge as a dynamic human process of justifying personal belief toward the truth.
· Knowledge conversion is the interaction between tacit and explicit knowledge. It should be noted that this conversion is a “social” process between individuals and not confined within an individual. There are four different modes of knowledge conversion: (1) from tacit knowledge to tacit knowledge, which we call socialization; (2) from tacit knowledge to explicit knowledge, or externalization; (3) from explicit knowledge to explicit knowledge, or combination and (4) from explicit knowledge to tacit knowledge, or internalization.
· Socialization is a process of sharing experiences and thereby creating tacit knowledge such as shared mental models and technical skills. Externalization is a process of articulating tacit knowledge into explicit concepts. It is a quintessential knowledge-creation process in that tacit knowledge becomes explicit, taking the shapes of metaphors, analogies, concepts, hypotheses or models. Combination is a process of systemizing concepts into a knowledge system. This mode of knowledge conversion involves combining different bodies of explicit knowledge. Reconfiguration of existing information through sorting, adding, combining and categorizing of explicit knowledge can lead to new knowledge. Internalization is a process of embodying explicit knowledge into tacit knowledge. It is closely related to “learning by doing”. When experiences through socialization, externalization, and combination are internalized into individuals’ tacit knowledge bases in the form of shared mental models or technical know-how, they become valuable assets.
· When tacit and explicit knowledge interact, an innovation emerges. This interaction is shaped by shifts between different modes of knowledge conversion, which are in turn induced by several triggers (see fig. 3-3). First, the socialization mode usually starts with building a “field” of interaction. Second, the externalization mode is triggered by meaningful “dialogue and collective reflection”, in which using appropriate metaphor and 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 role of the organization in the organizational knowledge-creation process is to provide the proper context for facilitating group activities as well as the creation and accumulation of knowledge at the individual level. In this section we will discuss five conditions required at the organizational level to promote the knowledge spiral [: intention, autonomy, fluctuation and creative chaos, redundancy and requisite variety, all defined in this chapter (not in this summary)].
· We present an integrated, five-phase model of the organization knowledge-creation process, using the basic constructs developed within the theoretical framework and incorporating the time dimension into our theory. The model, which should be interpreted as an ideal example of the process, consists of five phases: (1) sharing tacit knowledge; (2) creating concepts; (3) building an archetype; and (5) cross-leveling knowledge. (…) an archetypes, which can take the form of a prototype in the case of “hard” product development or an operating mechanism in the case of “soft” innovation, such as a new corporate value, a novel managerial system, or an innovative organizational structure. The last phase extends the knowledge created in, for example, a division and to others in the division, or across to other divisions, or even to outside constituents in what we term cross-leveling of knowledge.

IDEAS THAT OCURRED DURING READING
· I disagree with the opinion of some that the knowledge spiral proposed by Nonaka & Takeuchi goes toward centralization. According to Nonaka, knowledge can only be created through a social process of interaction between tacit and explicit knowledge, i.e. each
individual is seen as having knowledge to be shared with others within the organization. He then proposes the spiral, showing how these knowledge types are converted from one to the other with each other (4 conversion modes), and how they are shared in different levels within the organization (individual,group,organization,inter-organization). I
don't see why this is central at all.
· In many points, Nonaka sets the basis for my work on Agent-mediated Knowledge Management (done in collaboration with Gerd Wagner, Virginia Dignum and Anna Perini). For instance, when he mentions that intention and autonomy are essencial for knowledge creation. However, he does say that intention, in this case, is an activity to be performed by
management and we consider both the organzation's intention and the intentions of each of the other actors involved.

FUTURE READERS RECOMENDATION
It is a good chapter for those who are starting to work on KM because it is rich on definitions and on references to other interesting work. It motivates discussion on: knowledge types, how knowledge sharing occurs in practice, and knowledge creation process.