Tacit Knowledge and Knowledge Conversion

Organization Science informs ®
Vol. 20, No. 3, May–June 2009, pp. 635–652 doi 10.1287/orsc.1080.0412

issn 1047-7039 eissn 1526-5455 09 2003 0412 © 2009 INFORMS
Tacit Knowledge and Knowledge Conversion:

Controversy and Advancement in Organizational
Knowledge Creation Theory
Ikujiro Nonaka
Graduate School of International Corporate Strategy, Hitotsubashi University,
Gakujutsu Sogo Center, 2-1-2 Hitotsubashi, Chiyoda-ku, Tokyo 101-8439, Japan, ksakata@ics.hit-u.ac.jp
Georg von Krogh

Department of Management, Technology, and Economics, ETH Zurich, Zurich, gvkrogh@ethz.ch
N onaka’s paper [1994. A dynamic theory of organizational knowledge creation. Organ. Sci. 5(1) 14–37] contributed to
the concepts of “tacit knowledge” and “knowledge conversion” in organization science. We present work that shaped
the development of organizational knowledge creation theory and identify two premises upon which more than 15 years
of extensive academic work has been conducted: (1) tacit and explicit knowledge can be conceptually distinguished along
a continuum; (2) knowledge conversion explains, theoretically and empirically, the interaction between tacit and explicit
knowledge. Recently, scholars have raised several issues regarding the understanding of tacit knowledge as well as the
interaction between tacit and explicit knowledge in the theory. The purpose of this article is to introduce and comment
on the debate about organizational knowledge creation theory. We aim to help scholars make sense of this debate by
synthesizing six fundamental questions on organizational knowledge creation theory. Next, we seek to elaborate and advance
the theory by responding to questions and incorporating new research. Finally, we discuss implications of our endeavor for
organization science.
Key words: organizational knowledge; organizational knowledge creation; knowledge-based view of the firm; organization
theory; social practice; innovation
History: Published online in Articles in Advance January 22, 2009.
1. Introduction writing. For example, knowledge of a solution to a dif-

Organizational knowledge creation is the process of ferential equation is explicit knowledge. The concept of
making available and amplifying knowledge created by “knowledge conversion” explains how tacit and explicit
individuals as well as crystallizing and connecting it knowledge interact along a continuum.
to an organization’s knowledge system. The article by While academic work has made significant progress in
Nonaka (1994) in Organization Science developed orga- developing, testing, and extending organizational knowl-
nizational knowledge creation theory to explain this pro- edge creation theory, important scholarly contributions
cess. The concept of “tacit knowledge” is a corner-
have also raised issues with the theory and proposed
stone in organizational knowledge creation theory and
covers knowledge that is unarticulated and tied to the alternative approaches to understand knowledge (in
senses, movement skills, physical experiences, intuition, particular, tacit knowledge) in organizations. Our goals
or implicit rules of thumb. Knowledge of wine tast- in this article are to systematically and comparatively
ing, crafting a violin, or interpreting a complex seismic analyze the debate on organizational knowledge creation
printout of an oil reservoir are well-known examples of theory and suggest how the controversies surrounding
tacit knowledge. Tacit knowledge differs from “explicit it might be resolved. In our analysis, we incorporate
knowledge” that is uttered and captured in drawings and recent research. This article is organized as follows: the
635
Nonaka and von Krogh: Perspective
636 Organization Science 20(3), pp. 635–652, © 2009 INFORMS
next section presents core concepts of and questions con- knowledge-based view of the firm and the theory of
cerning organizational knowledge creation theory. The dynamic capabilities by explaining the dynamic pro-
remainder of this article elaborates and advances the cesses of organizational knowledge creation (Nonaka
theory by responding to the questions, with §3 clarify- 1987, 1991, 1994; Nonaka et al. 2006). Two premises
ing the concept of knowledge in the theory, including were important in this effort: tacit and explicit knowledge
the distinction between “tacit” and “explicit” knowledge, can be conceptually distinguished along a continuum,
and §4 clarifying “knowledge conversion.” Finally, we and knowledge conversion explains the interaction
conclude the article and discuss the implications for between tacit and explicit knowledge.1 These premises
scholars in organization science. received important scholarly analysis. In the following
section, we present the central concepts and premises,
and synthesize the debate into six questions on organiza-
2. Organizational Knowledge Creation tional knowledge creation theory.
Theory: Core Concepts and Issues
Since the seminal work by Teece (1981, 1982) and 2.1. Conceptual Distinction Between Tacit and
Nelson and Winter (1982), knowledge has assumed an Explicit Knowledge
increasingly legitimate and important role in organiza- In the early 1990s, a growing group of scholars (e.g.,
tion science. Breaking with established theories of the Kilduff 1993, von Krogh et al. 1994; for review, see
firm in neoclassical economics, knowledge was increas- also Dodgson 1993, Weick and Westley 1996, Vera
ingly seen as a factor to explain the idiosyncrasies of and Crossan 2003) criticized the preoccupation with the
firms. The resource-based theory of the firm showed notion of pregiven universal “information” that charac-
the importance of knowledge alongside other costly- terized mainstream organization theory from the 1950s
to-imitate resources for competitive advantage (Barney through to the 1980s (e.g., March and Simon 1958)
1991, Reed and DeFillippi 1990, Conner and Prahalad and the tendency to equate information with knowledge
1996). In 1987, Winter published a chapter arguing that (see Newell and Simon 1972). Organizational knowledge
tacit knowledge is a source of competitive advantage creation theory aimed at developing a comprehensive
for firms (Winter 1987). This work triggered subse- view of knowledge that could shed light on orga-
quent research on knowledge in organizations, includ- nizational creativity, learning, innovation, and change
ing a milestone work by Kogut and Zander (1992) (Nonaka 1987, 1988, 1991). As Argote et al. (2003,
that distinguished between codified and tacit knowl- p. 573) suggested, knowledge creation became one of
edge. Winter’s (1987) and Kogut and Zander’s (1992) the important outcomes of knowledge management in
work initiated a line of inquiry in strategic manage- organizations. Organizational knowledge creation the-
ment often referred to as the “knowledge-based view ory defined knowledge in three parts, indicating that it
of the firm” (e.g., von Krogh et al. 1994, Spender has complementary properties. First, knowledge is jus-
and Grant 1996, Tsoukas 1996, Spender 1996, Szulan- tified true belief. Individuals justify the truthfulness of
ski 1996, Gupta and Govindarajan 2000; see also Foss their beliefs based on their interactions with the world
1996). The knowledge-based view included strategies (Nonaka 1994, Nonaka et al. 2006). Second, knowledge
for managing knowledge assets (e.g., Boisot 1998; Chou is (i) the actuality of skillful action (we recognize that
and He 2004; Nonaka et al. 2000, 2005b; Teece 1998, someone has knowledge through their performance of
2000; Bowonder and Miyake 2000; Chen and Edging- a task) and/or (ii) the potentiality of defining a situa-
ton 2005). Authors empirically tested the implications tion so as to permit (skillful) action (Stehr 1992, 1994).
of these strategies for firm performance (e.g., Bierly and Knowledge allows humans to define, prepare, shape, and
Chakrabarti 1996, De Carolis and Deeds 1999, Dröge learn to solve a task or problem (von Krogh et al. 2000).
et al. 2003, Poppo and Zenger 1998, Sabherwal and Sab- Third, knowledge is explicit and tacit along a continuum
herwal 2005, Choi and Lee 2002) and provided empir- (Nonaka 1991, 1994). Knowledge that is uttered, formu-
ical support for Winter’s (1987) original conjecture. In lated in sentences, and captured in drawings and writing
parallel to this development, Teece et al. (1997) created is explicit. Explicit knowledge has a universal character,
a theory of firms’ dynamic capabilities. In contrast to supporting the capacity to act across contexts. Explicit
the resource-based theory of the firm, this framework knowledge is accessible through consciousness. Knowl-
highlighted the importance of dynamic processes. The edge tied to the senses, tactile experiences, movement
competitive advantage of firms rests on processes of skills, intuition, unarticulated mental models, or implicit
coordinating and combining assets, shaped by the firms’ rules of thumb is “tacit.” Tacit knowledge is rooted in
knowledge asset positions, as well as path dependencies action, procedures, routines, commitment, ideals, val-
in asset acquisition and development. ues, and emotions (Nonaka et al. 1996, 2000a, b). Tacit
Organizational knowledge creation theory aimed not knowledge can be accessible through consciousness if it
only to explain the nature of knowledge assets and strate- leans towards the explicit side of the continuum. How-
gies for managing them, but also to complement the ever, most of the details about individual skills, due to
Organization Science 20(3), pp. 635–652, © 2009 INFORMS 637
their embodiment, are inaccessible through conscious- individual representations and lead to improved indi-
ness (Anderson 1983, Ambrosini and Bowman 2001, vidual and organizational action. The March and Olsen
Sun 1997). Tacit knowledge was discussed by Polanyi (1975) framework is based on a view of human cog-
(1966), and based on his work, one can state that tacit nition as holding abstract and universal representations
knowledge often “indwells” in a comprehensive cog- about problems and processing information to resolve
nizance of the human mind and body. The notion of them (see also March and Simon 1958, Cyert and March
“continuum” refers to knowledge ranging from tacit to 1963). From the viewpoint of organizational knowledge
explicit and vice versa. By incorporating “tacit knowl- creation theory, a controversy with this model is that,
edge,” organizational knowledge creation theory over- although accounting for the organization’s adaptation to
came mainstream theory’s tendency to equate knowledge a pregiven reality such as a market or an industry, it can-
with information. not effectively explain how organizations foster creativ-
Each property of knowledge makes up for that which ity, create opportunities, change, and enable innovation.
is lacking in the other properties, and therefore allow However, including “truth” in the definition of knowl-
us to theorize about and research various characteris- edge leads to a reappropriation of the “correspondence
tics of action and cognition. For example, individuals doctrine” that organizational knowledge creation theory
may hold tacit beliefs about objects, events, and relation- sought to overcome (Hildreth and Kimble 2002). If the
ships. Such beliefs may sometimes hinder the capacity theory assumes that knowledge creation is the search for
of individuals to act and impede groups from effectively true belief, it may be limited to explaining how a pre-
coordinating individual action (Edmonson 1999). When given reality is represented in the organization, while
making knowledge increasingly explicit along the con- providing limited insight on topics such as innovation
tinuum, the individual justify their beliefs based on their (see Gourlay and Nurse 2005). This discussion can be
observation of objects, events, and relationships (Nonaka distilled in the following question:
et al. 1996). Over time, these beliefs may become true
if they can be justified and are useful to them and/or Question 1. What is the status of “truth” in the def-
their group in coordinating individual action. However, inition of knowledge?
because individuals may not be able to articulate all their
beliefs and justify them (tacit knowledge), it seems not Second, several scholars discussed the third part of the
all knowledge is justified true belief.2 definition (Cook and Brown 1999, Brown and Duguid
Scholars discussed the first and the third part of the 2001, Hildreth and Kimble 2002). Tsoukas (1996, 2003)
definition of knowledge. First, Gourlay and Nurse (2005) and Hildreth and Kimble (2002) noted that by using the
as well as Hildreth and Kimble (2002) pointed to notions concepts of tacit and explicit knowledge, organizational
of “truth.” The authors argued that “knowledge cre- knowledge creation theory departed from the original
ation,” because of the way the theory defines knowl- work of Polanyi (1966, 1969). Polanyi, in his efforts
edge, is a “process of seeking true belief,” which implies to counter positivism in science, resisted the notion of
that truth resides outside human endeavor. This is prob- “purely” explicit knowledge devoid of any tacit dimen-
lematic because organizational knowledge creation the- sions. Explicit knowledge is always grounded in tacit
ory targeted the notion of information and criticized knowledge. Polanyi (1969) remarked that even a formal
the so-called “correspondence doctrine,” which charac- science such as mathematics relies on the nonexact judg-
terized mainstream organization theory (von Krogh and ment of individuals. For example, knowledge of differ-
Roos 1995). The correspondence doctrine assumes that ential equations requires the presence of a “knower” who
an objective and pregiven reality for the organization understands the equation and its purpose, chooses vari-
exists, for example, an industry or market environment. ables, holds explicit knowledge of solutions, and inter-
This reality is represented internally in the organiza- prets the results. Tacit and explicit knowledge are not
tion through information. When decision makers gather two separate types but inherently inseparable (see Adler
and process information about the organization’s envi- 1995, Hildreth and Kimble 2002). Therefore, “rules” of
ronment, they can achieve more accurate or “true” rep- performance, such as those incorporated in “technical
resentations and make better decisions. For example, knowledge,” are different if tacitly acquired from learn-
March and Olsen (1975) proposed an early framework of ing on the job or if acquired through manuals and tools
organizational learning where individuals hold represen- (Tsoukas 2003).3 This is a result of cognitive necessity:
tations of an objective, pregiven reality. They improve a person cannot simultaneously be aware of the task and
these representations by processing information about the tool. Either my focus is on the hammer with which
this reality. Based on improved representations, individ- I want to drive the nail into the wall or on the task of
uals act and participate in decision situations. Individual driving the nail into the wall. Distinguishing between
actions shape organizational actions that, in turn, lead “focal” and “subsidiary” awareness, Polanyi remarked
to environmental responses. The learning cycle would that action is disrupted if a person shifts their focal atten-
be complete when these environmental responses alter tion to the particulars of which they were previously
aware in a subsidiary manner. Due to the shift in atten- interacting, her reflections on her own work, and explicit
tion, tacit knowledge cannot be represented in language, knowledge and artifacts in the form of memos, charts,
writing, or tools (Hildreth and Kimble 2002). Thus, analysis, video shots, interview statements, and samples
one may argue that the distinction between tacit and of clothing. In the process, other people’s knowledge of
explicit knowledge in organizational knowledge creation the trend-setter group grows, too.
theory is conceptually flawed. Furthermore, because of Second, knowledge adopts alternating forms so as to
this flaw, its value to organization science may also be mutually enhance tacit and explicit elements. Because
debated (Tsoukas 2003). This line of argument raises knowledge is the capacity to act based on explicit and
two questions: tacit elements, enhancing this capacity means making
use of existing and new tacit and explicit knowledge.
Question 2. Do tacit and explicit knowledge fall
Knowledge alternates between tacit knowledge that may
along a continuum?
give rise to new explicit knowledge and vice versa.
Question 3. Is the tacit/explicit knowledge distinc- The alternation occurs in four processes: socialization,
tion along the continuum valuable for organization externalization, combination, and internalization (often
science? referred to as the SECI model). In these processes, tacit
and explicit knowledge mutually enhance each other
2.2. Knowledge Conversion Explains the towards increasing the capacity to act4 (Nonaka 1991,
Interaction Between Tacit and 1994; Nonaka and Takeuchi 1995).
Explicit Knowledge The concept of “knowledge conversion” triggered aca-
Organizational knowledge creation theory aimed at com- demic debates that can be grouped into three streams:
plementing the somewhat static view of “knowledge the conceptual basis, the relationship of knowledge con-
assets” in the knowledge-based view (e.g., Grant 1996, version to social practice, and the outcome of knowledge
De Carolis and Deeds 1999) and the theory of dynamic conversion. The first stream argued based on an inter-
capabilities (e.g., Teece et al. 1997, Helfat 1997) by pretation of the original text of Polanyi (1966, 1969;
explaining how tacit and explicit forms of knowledge see also 1958). Hildreth and Kimble (2002, p. 6) point
interact to create new knowledge. In the theory, tacit and out that “if we accept Polanyi’s view of tacit (implicit)
explicit knowledge are not separate but “mutually com- knowledge as being inexpressible, it cannot be converted
plementary” in that they dynamically interact with each into explicit knowledge because it can never be exter-
other in creative activities by individuals and groups nalized and written down in an explicit form.” This
(Nonaka 1994, Nonaka et al. 1996a, Alavi and Leidner point was also underscored by D’Eredita and Barretto
2001). For example, to speak a sentence that captures (2006), Gourlay (2006), and Ribeiro and Collins (2007).
explicit knowledge, we need tacit knowledge to utter it The authors analyzed in depth the case of the develop-
(to pause, shape sounds, find and use rhythm, and so ment of Matshushita’s bread-baking machine presented
on). Along the continuum, knowledge can momentarily in Nonaka and Takeuchi (1995; see also Nonaka 1991).
take on different forms. Human creativity affords these Initially, a product development group at the company
alternating forms for the purpose of effectively interact- failed to engineer a product that could produce good-
ing, discovering “truth,” justifying observations, defining tasting bread. Their main problem was technical: the
problems, and solving them. In the theory, “knowledge dough could not be mechanically manipulated in a way
conversion” captures the interaction between tacit and that brought sufficient air, lightness, and mix to the
explicit knowledge along the continuum and refers to dough. The case shows that a young engineer, Tanaka,
two elements (Nonaka 1994): first, personal subjective acquired tacit knowledge from jointly working with the
knowledge can be socially justified and brought together master baker at a nearby luxury hotel. Upon returning
with other’s knowledge so that knowledge keeps expand- to the company and the group, Tanaka made her knowl-
ing (Massey and Montoya-Weiss 2006). The individual edge increasingly explicit by, for example, proposing a
brings to bear their tacit and explicit knowledge and concept of “twisting stretch.” This concept was consid-
the process forces their interaction (e.g., Nonaka 1994, ered important by Tanaka in her illustration and expla-
Nonaka and Takeuchi 1995). Consider a marketer of a nation to the product development group how the master
clothing company who, seeking ideas for new trends, baker handled and kneaded the dough. Equipped with
interacts with a group of young fashion trend setters. She this concept, the group engineered a machine that emu-
observes language, clothing colors and styles, rituals, lated the movement of “twisting stretch.” Ribeiro and
and the use of technology, and she feels this group can Collins (2007, p. 1418) comment that “ there is no
give important cues to future fashion. She also reflects ‘conversion’ from tacit to explicit knowledge in bread-
on her own practice of observing and interacting with baking machines At the end, the master baker’s
this group (Schön 1983). In justifying investments in fur- tacit knowledge has been neither explicated nor incor-
ther working with this group to her colleagues in fashion porated into the machine.” Thus, the notion of “conver-
design and marketing, she uses her tacit knowledge from sion” could be a conceptual flaw (Gourlay 2006, Ribeiro
and Collins 2007). This line of argument leads to the 3. Clarifying the Tacit/Explicit Distinction
following question: In the following section, we respond to the questions
Question 4. What is the conceptual basis of knowl- regarding the definition of knowledge in organizational
edge conversion? knowledge creation theory. We also argue why we think
the tacit/explicit distinction along the continuum is of
The second stream argued that knowledge conver- value to organization science.
sion is impossible because tacit knowledge is chiefly
acquired through the social practice of solving tasks and, 3.1. Question 1: Status of “Truth”
thus, resides in that practice (Cook and Brown 1999, The definition of knowledge entails “justified true belief.”
Hildreth and Kimble 2002, Tsoukas 2003, Ribeiro and
In Nonaka (1994), very limited space was devoted to the
Collins 2007). As Tsoukas (2003, p. 424) suggests, “we
discussion of justification, truth, and belief. Nonaka and
learn to engage in practical activities through our par-
Takeuchi (1995, p. 58) clarified further:
ticipation in social practices, under the guidance of peo-
ple who are more experienced than us.” Hildreth and We adopt a traditional definition of knowledge as “justi-
Kimble (2002) emphasize the importance of a mentor in fied true belief.” It should be noted, however, that while
the organization who has a lot of tacit knowledge and traditional Western epistemology has focused on “truth-
who guides the newcomer in learning this tacit knowl- fulness” as the essential attribute of knowledge, we high-
edge through a practice. In these authors’ view, action light the nature of knowledge as “justified belief
requires tacit knowledge, which is acquired in the social While traditional epistemology emphasizes the absolute,
practice of which the individual is a member. An alter- static, and non-human nature of knowledge, typically
expressed in propositions and formal logic, we consider
native to knowledge conversion is a process of shift-
knowledge as a dynamic human process of justifying per-
ing between “focal” and “subsidiary” awareness. The
sonal belief toward the “truth.”
individual shifts awareness between the task and the
tools, reflects on their own experiences, uses language Three observations can be made regarding the status
to remind themselves of what they already know, the- of “truth” in this definition. First, the theory of orga-
matizes certain circumstances, and discusses them with nizational knowledge creation clearly separates itself
others (Tsoukas 2003). In this view of knowledge as from epistemology built on the correspondence doctrine
social practice, Cook and Brown (1999) point out that prevalent in mainstream organization theory. This doc-
new knowledge and novel ways of knowing are gener- trine taught that information processing creates “true”
ated through the interplay between reflection, themati- representations of an individual or organizational real-
zation, and experience within situated interaction. Thus, ity. Reality, thus, serves as a point of reference against
the following question can be formulated: which the truthfulness of representations can be gauged.
Question 5. Given the relationship between tacit Conversely, in organizational knowledge creation theory,
knowledge and social practices, how can the concept of the status of truth is that it directs justification of belief
knowledge conversion be upheld? towards experience. In other words, beliefs are true to
the extent that they can be justified by the individual
In the third stream, Gourlay and Nurse (2005) pro-
organizational member at certain moments and using
vided a detailed analysis of the process of knowledge
various mental models.
conversion. The authors concluded that the process out-
Second, the emphasis on justified belief in the def-
come is not well specified in the theory. Tacit and
inition of knowledge corresponds to an epistemology
explicit knowledge interact along the continuum. Yet,
of pragmatism developed by authors such as Charles
Nonaka (1994) refers to the encompassing “knowledge
created through the process,” and does not specify more Peirce, William James, and John Dewey. Early pragma-
concrete outcomes. The lack of precision regarding out- tism took the view that if an idea works, it is “true”
comes complicates empirical observation and measure- for a person. However, to avoid the many fallacies
ments. This may undermine the predictive power of the associated with excessive relativism (each person has
theory, because researchers will not be entirely clear their own truth), later pragmatists adopted various solu-
about what phenomena to examine in the organization. tions to explain how “reality” interacts with an individ-
This line of argument leads to the following question: ual’s knowledge. For example, following Putnam (1981),
pragmatists could claim that individuals and “reality”
Question 6. What is the outcome of knowledge interactively shape truth. The individual employs mental
conversion? models, such as a way of arguing about the “truthful-
In the following section, we respond to the six im- ness” of an observation, that allows them to distinguish
portant questions synthesized above and thereby seek between “reality” and the appearance of an object, event,
to advance the theory. We start by clarifying the tacit/ or relationship (Toulmin 1958). The definition of knowl-
explicit knowledge distinction along the continuum and edge implies that, over time, beliefs become true if they
then proceed to the concept of knowledge conversion. can be justified and are useful to the individual or group
in question, and enable this individual to act, the group collectively justify beliefs in the organization. The sta-
to coordinate individual action, and shape “reality.” tus of truth is important because it allows the theory to
Third, organizational knowledge creation theory also adopt a broader definition of knowledge (rather than just
includes a social definition of knowledge creation that individual or organizational representations of a pregiven
holds consequences for the status of “truth.” Accord- reality) that includes both tacit and explicit forms along
ing to Nonaka (1994), Nonaka and Takeuchi (1995), a continuum of knowledge. We turn to this next.
Nonaka and Konno (1998), and von Krogh et al. (2000),
knowledge is created through the interaction between 3.2. Question 2: Upholding the Tacit/Explicit
individuals with different biographies. Different biogra- Distinction Along the Continuum
phies imply that individuals bring different knowledge Question 2 asks about the basis for upholding the tacit/
and interests to the process, and these represent a specific explicit distinction along the continuum of knowledge.
challenge. Early work proposed that knowledge creation According to Polanyi’s work, tacit knowledge/knowing
in organizations is influenced by factors such as organi- is impossible to communicate to others through articu-
zational culture, leadership, organizational structures, and lation and it ranges from knowledge for inherent physi-
incentives systems, which provide a social context for, cal functioning to the insights or inspiration needed for
enable, or constrain the process where people with differ- an act of creativity. Explicit knowledge is articulated,
ent knowledge and interests interact (Nonaka and Konno and therefore it can be communicated to others. Let
1998; Hedlund 1986, 1994; Hedlund and Nonaka 1993; us consider the example of science. Polanyi’s argument
von Krogh 1998; Nonaka et al. 2000a). A large array against positivism was that scientific progress could not
of empirical work confirmed that organizational knowl- be explained by the accumulation of articulated, uni-
edge creation is very sensitive to social context, such as versal, and formal scientific knowledge. While uphold-
the organization of processes (Dyk et al. 2005), timing ing the distinction between tacit knowledge/knowing
of activities (Massey and Montoya-Weiss 2006), physical and explicit knowledge, he considered the primacy of
proximity of people (McFadyen and Canella 2005), and tacit knowledge/knowing for all other knowledge: Tacit
people’s use of technology (Chou and He 2004). knowledge is required to understand explicit knowl-
People’s justification of their beliefs is a process edge. Yet, he also admitted that foreknowledge of a
embedded in a social context. The definition of “truth” true or partly true conception of the nature of things
resulting from this process may be contested. People’s was needed for scientific discovery and inquiry (Polanyi
past investments in learning and knowledge shape their 1964). Scientific knowledge, by definition, can be shared
current and future interests. For example, an engineer amongst scientists. To make a scientific advance, the
might have invested years in learning how to build exact scientist must have acquired tacit knowledge in set-
physical models and product prototypes to be tested in ting up and calibrating her equipment, orchestrating the
a laboratory. Consider the case where the cost of new laboratory, documenting experimental steps, choosing
product development processes can be reduced by intro- materials, using senses to interpret results, and so forth.
ducing a technology that simulates products in virtual However, scientific advance also assumes the scientist
reality, rather than doing physical experiments on proto- is aware of explicit knowledge, such as conjectures,
types. On the one hand, top management may embrace theories, research design, analysis, and conclusions. Ulti-
this idea, suggest implementing the new technology, and mately, scientific knowledge with its flaws in “represent-
in the process, undermine the future need for the engi- ing” reality also shapes the individual scientist’s quest
neer’s expertise. On the other hand, the engineer may for new knowledge through tacit understanding which,
resist the introduction of the new technology. The engi- in turn, feeds into the social process of doing science.
neer’s version of “truth” may be that computer-generated As a social process, science provides scientific knowl-
models fail to reveal all the technical parameters of edge that is passed on to peers who accept it as such,
prototype testing. This example underscores an impor- and who are exposed to the “same indeterminate reality”
tant insight about organizational knowledge creation: and, therefore, can test this knowledge (Jha 2002).
The process is “fragile” and fraught with uncertainty, We share Polanyi’s (1966) conjecture that knowledge
conflicts of interest, and differences in mindset (see for people and groups can be rooted in tacit knowledge
Zárraga and Bonache 2005, Swan et al. 1999, Goodall and have tacit elements. This is so because the second
and Roberts 2003, Beech et al. 2002). part of the definition of knowledge relates to the capacity
To conclude, knowledge as “justified true belief” to act, define, and solve problems. The arguments lead-
should not be considered a relapse into the correspon- ing to Question 2 do not account for this point of agree-
dence doctrine that characterized mainstream organiza- ment by suggesting the theory treats explicit and tacit
tion theory articulated in the 1950s–1970s. Rather, the knowledge as separate entities. In organizational knowl-
status of “truth” in the theory is that it relates to justi- edge creation theory, tacit and explicit knowledge should
fied beliefs, corresponds to pragmatist epistemology, and not be seen as separate entities but rather mutually com-
results from processes where people individually and plementary and based on the same continuum. This is
not an entirely new idea. Baldwin and Baldwin (1978), be understood (e.g., expertise or organizational cul-
for example, suggested that “knowing” and “knowledge” ture), the continuum is valuable. Researchers can ana-
are two ends of a continuum.5 Yet, this part of the defi- lyze the interaction between tacit and explicit knowledge
nition in Nonaka (1994) created confusion and needs to or direct their attention to one end of the continuum.
be elaborated. For example, research can discern statistical relation-
An explicit form of knowledge is objective, rational, ships between intellectual property (explicit knowledge)
and created in the “then and there,” whereas a tacit form and firm performance or reveal the tacit knowledge
is actionable, subjective, experiential, and created in the and creative processes of engineers as they develop
“here and now” (Leonard and Sensiper 1998; see also new patentable technologies (see also Ambrosini and
Rämö 2004). Tacit knowledge is acquired with little or Bowman 2001, Arnulf 2005).
no direct instruction, it is procedural, and above all, The focus on empirical research and the need for
practically useful (Sternberg et al. 1995). Even if we new theorizing was an important rationale for Winter
try hard, it cannot be fully articulated because much of (1987) and Kogut and Zander (1992) to distinguish
it is embodied (Maturana and Varela 1987) and, there- between tacit knowledge and explicit knowledge assets
fore, intuitive, tied to the senses, and escaping any for- in the knowledge-based view of the firm. For exam-
mal analysis through self-introspection. At one extreme ple, by focusing on explicit or “codified” knowledge
end of the continuum, tacit knowledge is not accessi- and the replication of technology, Kogut and Zander
ble through consciousness (Anderson 1983, Sun 1997, (1992) could examine whether organizational growth
Ambrosini and Bowman 2001).6 and international expansion destroy the source of com-
In principle, one could take the view that all tacit petitive advantages for the firm. It would be cumber-
knowledge remains embodied, forever locked away in some if researchers who examine technical knowledge
people’s neural networks. Yet, by logical extension of under all circumstances had to consider tacit knowledge
how people express their thoughts, viewpoints, and inter- in measuring technical progress and innovation. More-
ests, some tacit knowledge must also be the basis for over, a prerogative use of “organizational knowledge”
explicit knowledge (Day 2005). For example, some tacit could demand researchers to always consider its origin
knowledge of scientists must be the basis for scien- in the tacit knowledge of people, groups, and organiza-
tific knowledge, such as experiences with discovery tions. To advance the knowledge-based view of the firm,
processes, the results of scientists’ successful improvi- history has shown that scholars need the choice of what
sations with instruments in the laboratory, and errors end of the knowledge continuum to focus on.
to avoid when replicating the experiment. Thus, some Second, one purpose of scholarship in organization
knowledge must move along the continuum from tacit science is to provide knowledge for management prac-
towards scientific knowledge that eventually becomes tice. This requires that scholars not only develop and
knowledge independent of the scientist who created it in test theory, but also that they extract knowledge that can
the first place. This process of “moving along the contin- be used as input to solve practical problems in organi-
uum” is more fluid than a discrete shift from subsidiary zations (Eisenhardt 1989). The tacit/explicit distinction
to focal awareness. We will return to this point in the along the continuum of knowledge allows us to examine
next section. the tacit knowledge people use to solve tasks and also
To conclude, the arguments leading to Question 2 did to raise questions on how people in organizations some-
not fully account for points of agreement between orga- times substitute tacit knowledge for “simple” explicit
nizational knowledge creation theory and the work by knowledge, e.g., in a given context, elementary but effec-
Polanyi. The clarification of the tacit/explicit knowledge tive rules for problem definition and solving. Such ele-
distinction along the continuum shows that it can be mentary rules are also an important target for empiri-
upheld in the theory. Next, we turn to the value of the cal research in organization science. They are valuable
distinction for organization science. to management practice, not as accurately “represent-
ing” problems and solutions across organizations,7 but
3.3. Question 3: Value of the Tacit/Explicit as a source of inspiration for how to do things dif-
Distinction for Organization Science ferently and deal with new situations (see Crowston
Question 3 asks if the tacit/explicit knowledge distinc- 1997). For example, Flanagan et al. (2007) conducted
tion along a continuum is valuable for organization sci- a case study of a diesel engine manufacturer, and their
ence. We contend that the continuum is valuable if it results showed that senior designers often had “tacit
can generate questions and specific results of interest overview knowledge” of complex product designs with
to our field for two reasons. First, because researchers modules and interconnections, as well as the project
can unveil and distinguish knowledge assets for organi- organization (with roles and expertise) that mapped onto
zational action that are immediately visible (e.g., tech- these designs. Thus, senior designers played an impor-
nology, procedures) from knowledge in organizations tant role in supporting teamwork by coordinating activ-
that require several levels of “thick” interpretation to ities and facilitating communication across large project
teams. When these designers moved on and novices the master baker’s tacit knowledge is explicated and
and contractors were hired, processes broke down and “represented” as explicit knowledge. However, in orga-
costly oversights became more frequent, as did the need nizational knowledge creation theory, a premise is that
for additional management overhead. The authors intro- tacit knowledge, at one extreme end of the continuum,
duced and demonstrated the utility of a simple rule they is embodied knowledge, hardwired into our cognition
called “design confidence,” a metric that reflects design- and biological functioning as individuals (Maturana and
ers’ belief in the maturity of a design parameter at a Varela 1987, Varela et al. 1991). At the extreme of
given time in the design process. Design confidence does embodied knowledge, tacit knowledge is tied to our
not represent the technology, but is rather an element of physiology and sensory and motor functioning, but also
explicit knowledge about task completion. Such knowl- to our history of physical movement in the world (Varela
edge provides designers with an overview of how their 1992). What we refer to as “embodied” knowledge for
work impacts on the work of other project members and the individual involves processes that are automatic,
provides experienced and novice designers with a “lan- nondirected, and nonintentional (Reber 1993). There is
guage” to discuss technical designs. no possibility to “represent” this embodied knowledge
To conclude, we find that the tacit/explicit distinction in language, drawings, models, manuals, etc.8 Thus, the
along the continuum is valuable for our field because it theory should not reduce all tacit knowledge to that
allows the examination of knowledge that serves specific which can be potentially articulated.
purposes in organization science, and because the dis- Knowledge is transformed and also enriched when it
tinction may aid management practice. Having clarified gradually assumes an explicit form, for example, through
the definition of knowledge in organizational knowledge utterances. Embodied knowledge enables us to make
creation theory, we now turn to the questions concerning these utterances in the first place, but as we articulate,
knowledge conversion. we experiment with words, concepts, and linguistic rela-
tionships that enable us to convey meaning to ourselves
4. Clarifying Knowledge Conversion and others.9 This process of moving towards the explicit
Based on the tacit/explicit distinction along a continuum knowledge side of the continuum allows us to express
of knowledge, organizational knowledge creation theory certain aspects of our tacit knowledge. For example, the
sought to explain how new knowledge is created in an creative aspect of articulation appears in Italo Calvino’s
organization through the process of knowledge conver- (1990) reflections on his authorship. Calvino’s struggle
sion. In the following section, we discuss the conceptual to render his emotional state involves a fundamental
basis for knowledge conversion, how knowledge con- search for words, concepts, and phrases until he finds
version relates to social practice and, finally, alternative those that fulfill his expectations towards his emotions.
perspectives on the process outcome. Authorship is a craft of narrating ideas, feelings, or
memories not so as to represent them accurately from
4.1. Question 4: Conceptual Basis for memory, but to use or create words and sentences that
Knowledge Conversion best convey knowledge to others (see von Krogh and
Question 4 asks about the conceptual basis for knowl- Roos 1995).
edge conversion. There are four reasons why we propose In contrast to the extreme of embodied knowledge,
that the concept can be upheld. First, if the distinction increasingly explicit knowledge involves cognitive pro-
between tacit and explicit forms of knowledge along the cesses that are flexible, controlled, and intentional
continuum is maintained as argued above, then knowl- (Reber 1993). A critical reader might comment that
edge conversion becomes imperative for organizational it is “wrong” to call increasingly externalized ele-
knowledge creation. Knowledge loses some of its “tacit- ments “explicit knowledge.” Yet, we think that the term
ness” through the process of externalization. As it moves “knowledge” should apply if it results from the justifi-
along the continuum to become more explicit, knowl- cation of belief and if it enhances the capacity to act,
edge becomes a basis for reflection and conscious action, define, and solve problems (see also Sun et al. 2001,
and, as Grant (1996) remarks, it becomes less costly Dienes and Perner 1999, Pothos 2007). At one extreme
to share with others. Thus, knowledge conversion from of the continuum, some simple explicit knowledge can
tacit to explicit is important for expanding knowledge even enable machines to solve very specific, constrained,
beyond what a single individual might know. and well-defined problems. As Dreyfus and Dreyfus
Scholarly work indicated that organizational knowl- (1986) convincingly argue, expert knowledge can never
edge creation theory construes explicit knowledge as the be fully captured in computer software due to the tacit
representation of the tacit knowledge on which it is and embodied elements. Yet, expert knowledge is a basis
based (e.g., Tsoukas 2003, 2005; Hildreth and Kimble for increasingly explicit knowledge on which to create
2002). For example, Ribeiro and Collins (2007) sug- automated processes.
gest that Nonaka and Takeuchi (1995) claim that knowl- Second, in considering the conversion from explicit to
edge conversion in the home-bakery case ensures that tacit along the continuum of knowledge, we first note that
the second part of the definition, namely that “knowl- (Chronbach’s : 0.838–0.947). Moreover, the authors
edge is the capacity to act,” is important to understanding show that knowledge conversion correlates with various
the functioning of knowledge conversion. Explicit knowl- types of knowledge assets in organizations. This finding
edge can be shared at low cost amongst individuals and also underscores the need to understand how to effec-
loses some of its “explicitness” through internalization, tively build and use knowledge assets, as advocated in
where people move to act on the knowledge (Nonaka the knowledge-based view of the firm.
1994). “Movement” here implies that individuals acquire Fourth, psychological research on knowledge acqui-
tacit knowledge through action, practice, and reflection. sition, learning, and cognition has progressed rapidly
Tacit knowledge, therefore, contains elements of explicit over the last years, and recent work provides insights
knowledge as well as rich “situated” elements, that is, on the conjecture of an individual’s knowledge conver-
elements unique to action and practice. Whereas the con- sion (externalization and internalization).11 For exam-
text of action and practice may be social, internalization ple, Stanley et al. (1989) showed that when learning
is an individual, psychological process. The impersonal a new task, people’s tacit knowledge of how to solve the
aspects of explicit knowledge return to personal partici- task often precedes their explicit knowledge observed
pation in the search for and acceptance of the object to in the verbalization of their learning. Based on a
be known (also suggested by Polanyi and Grene 1969). review of studies on learning, Sun (1997; see also Sun
From this perspective, as underscored by Jha (2002, pp. et al. 2001, 2007) proposed that, due to the fact that
226–228), tacit and explicit knowledge are not “compet- explicit knowledge lags behind but improves along with
ing,” but rather are two forms knowledge assumes on a tacit knowledge, explicit knowledge is extracted from
continuum, “oscillating” to mutually enhance each other. tacit knowledge (Sun 1997, p. 1323). Moreover, Koch
Third, empirical studies lend support to the concept (2004) presents work showing that people have the cog-
of knowledge conversion. For example, in an early nitive capacity to reflect and use explicit knowledge to
attempt, Nonaka et al. (1994) used confirmatory fac- detect errors already made unconsciously, based on their
tor analysis to test to what extent organizational knowl- tacit knowledge. Explicit knowledge starts as slow and
edge creation can be explained by the SECI model.
consciously modifiable cognition but, with a certain rep-
The study was based on survey data from 105 man-
etition, gradually becomes tacit knowledge. Ashby et al.
agers in Japanese firms. The authors operationalized
(1998) tentatively proposed that in learning a new task,
socialization, externalization, combination, and inter-
a person’s conscious awareness and verbal systems allow
nalization in 38 items, and the survey identified the
them to acquire explicit knowledge. With time, however,
time the respondents spent on the different activities
tacit knowledge becomes more important for solving the
of the four processes. All four processes explain vari-
task, provided that such knowledge is more efficient in
ance in the knowledge creation construct, although
contrary to what Nonaka (1994) proposed, the study task solutions.
did not find that managers’ use of “dialogue” and The acquisition of tacit and explicit knowledge is an
“metaphor” were important in externalization.10 Later, important topic in studies of artificial grammar learning
Becerra-Fernandez and Sabherwal (2001) investigated (AGL). Here, subjects are asked to learn an unknown
the relationship between context, such as the task ori- but finite set of continuation relations between symbols,
entation and domain, and knowledge conversion, using including beginning and end states, so that a “correct”
both quantitative and qualitative methods. The data were sequence of symbols can be constructed and distin-
collected at the Kennedy Space Center and consisted of guished from a “false” sequence (Reber 1989). Pothos
interviews and survey data from 159 individuals. The (2007) has reviewed research on AGL since the 1950s
authors found evidence supporting knowledge conver- and concluded that tacit knowledge should be under-
sion as operationalized in 19 items, adjusted to various stood as knowledge that is not consciously activated at
knowledge management tools and processes available the time of a cognitive operation. Furthermore, explicit
in the case organization. However, they also found that knowledge “starts as slow and consciously modifiable,
the four SECI processes, mediated by context, have a but with repetition, it gradually becomes automated”
different impact on people’s satisfaction with knowl- (Pothos 2007, p. 230). As tacit knowledge gradually
edge management (measured by 11 items). Chou and He forms, people are increasingly able to work with very
(2004) developed a survey instrument to capture both complex stimuli in terms of symbols and their relations.
knowledge conversion and knowledge assets in firms. The literature in cognitive psychology does not use the
The authors collected data from 204 organizations in a term “knowledge conversion,” but theories and research
variety of industries. The knowledge conversion (SECI in this field may shed light on the interaction between
model) was operationalized in 15 items, and four types tacit and explicit forms of knowledge along the contin-
of knowledge assets were operationalized in 43 items. uum. Recent research aims at understanding individual
The data show that the knowledge creation construct is cognition and often does not presuppose that a person
reliably measured by processes of knowledge conversion operates in a social context. In organizational knowledge
creation theory, knowledge conversion is not only indi- of trying to achieve standards of excellence (see also
vidual but also a social process (Nonaka and Takeuchi Knight 1998). Virtuous behavior is an internal good for a
1995, p. 61). We turn to this point in the next section. practice. For example, becoming a virtuous piano player
To conclude, the tacit/explicit distinction along a is a good internal to, or in support of, the social prac-
knowledge continuum allows the conceptual basis for tice of “piano playing.” By being a member of a social
knowledge conversion to be more fully understood. We practice, practitioners learn the “rules” of performance,
clarified the concept and showed that it receives empiri- skills, values, beliefs, and norms that constitute virtu-
cal support in organization science. In addition, new the- ous behavior and that shape their work. When gradually
orizing and empirical research in cognitive psychology developing their expertise, practitioners become capable
provide novel insight into the concept. of participating effectively in a social practice consti-
tuted of a complex web of people, artifacts, and activi-
4.2. Question 5: Social Practice and ties (see Gherardi 2006). Practitioners’ tacit knowledge
Knowledge Conversion consists of a set of particulars, such as the keys on a
Given the relationship between tacit knowledge and piano, of which they are subsidiarily aware as they focus
social practices, Question 5 asks how the notion of on something else, such as playing great music (see
knowledge conversion can be upheld. In this section, Tsoukas 2003).
we examine in more detail the concept of “social prac- Practitioners “intuitively” recognize when the “rules”
tice” and show that the questions posed to organiza- of performance apply and which “rules” to follow.
tional knowledge creation theory emanate from a differ- At best, practitioners “intuitively” recognize when the
ent research agenda than the one advancing the theory. “rules” should be discarded or reformed in light of
Next, we discuss the relationship between explicit and emergent circumstances (see Olin and Wickenberg 2001,
tacit knowledge in social practices. We conclude that Smith et al. 2003). Yet, it is difficult (if not impossi-
organizational knowledge creation theory has not ade- ble) for practitioners to reflect on the “rules” of per-
quately accounted for the role of social practices. formance while they are engaged in the practice, and
The questions concerning knowledge conversion in thereby change or invent entirely new “rules” (Bourdieu
organizational knowledge creation theory illustrate the 1990). The reason could be that social practices transmit
differences in research agendas pursued by researchers conscious but also unconscious “rules” and, thus, help
in organization science. Organizational knowledge cre- conserve tacit knowledge (Cook and Brown 1999; see
ation theory, complementing both the knowledge-based also Day 2005).
view of the firm and dynamic capabilities theory, focuses The social practice’s boundaries and member inclu-
on organizational creativity, change, and innovation, sion are part of defining a social identity. Practitioners
although much of the debate on the theory origi- tend to draw “boundaries” around their social practice,
nated from a different research agenda. In what can and they regulate “membership.” Membership can only
be broadly referred to as the “social practice view” of be attained if people behave according to overt or covert
organizational knowledge, based on what Schatzki et al. “rules” of performance in that practice (Wenger 1998).
(2001) called the “practice turn” in the social sciences, To conclude, tacit knowledge is constitutive of social
researchers analyzed existing, tightly-knit groups oper- practice.
ating in socially stable organizational contexts that allow Organizational knowledge creation theory aims at
individuals to acquire tacit knowledge through socializa- explaining organizational creativity, change, and inno-
tion in practice. Thus, since its introduction into organi- vation more than it aims at explaining how organiza-
zation science (e.g., Winter 1987; Nonaka 1991, 1994; tions conserve tacit knowledge through social practices.
Kogut and Zander 1992), “tacit knowledge” has come A number of empirical studies underscore this point.
to serve two purposes: as a foundation of social practice Dyk et al. (2005) gathered longitudinal data from a car
and as a foundation for innovation. manufacturer and confirmed the notion that organiza-
Within the social practice view of organizational tional knowledge creation in new product development
knowledge (e.g., Wenger 1998; Brown and Duguid 1991, proceeds through an intertwined process of knowledge
2001), Tsoukas (2003) suggests that we acquire tacit conversion. Their study extended organizational knowl-
knowledge or learn to engage in practical activities edge creation theory by comparing the relative amount
through our participation in social practices under the of intraorganizational knowledge transfer occurring dur-
guidance of people who are more experienced than us. In ing periods of product redesign with the amount of
his seminal work advancing the concept of social prac- knowledge transfer occurring during steady-state peri-
tices, Tsoukas (2003) builds on the writings of MacIn- ods. Similar empirical work on product development
tyre (1984b), amongst others, who understands a social can be found in Schulze and Hoegl (2006), Hoegl and
practice as any coherent, complex, coordinated form of Schulze (2005), and Flanagan et al. (2007). Massey
human activity through which goods internal to that and Montoya-Weiss (2006) show that knowledge con-
form of activity are realized and extended in the course version often implies considerable change in the way
organizations employ media to communicate knowledge. larger organization to be innovative. Venturing a descrip-
Other examples of how organizational knowledge cre- tion from a social practice perspective, this was possible
ation relates to innovation include, but are not limited because Tanaka temporarily left her “social practice of
to, new venture creation (Tsai and Li 2007), information engineering and product development” in the company to
systems development (Patnayakuni et al. 2006), work in join the “social practice of bread baking” by becoming
project teams (Fong 2003), and integration of customers an apprentice to the master baker.
in innovation processes (Su et al. 2007). The concept of knowledge conversion is fundamental
In organizational knowledge creation theory, practi- to organizational knowledge creation theory and impor-
tioners enter into and socialize in existing and new tant to organization science, because it explains how new
practices that require them to reflect on their “rules” ideas come forth in innovation, not only how individu-
of performance (see Nonaka 1994). According to the als tap into rich practices and acquire the tacit knowl-
theory, practitioner diversity is a source of innovation edge of these practices. Yet, authors who study tacit
(Roberts 2006). By bringing together different biogra- knowledge acquisition in social practices raise issues
phies, practitioners gain “fresh” ideas, insights, and in the theory regarding the interaction between explicit
experiences that allow them to reflect on events and sit- knowledge (e.g., manuals, written instructions, rules)
uations (von Krogh et al. 2000). Thus, organizational and tacit knowledge/knowing (see Cook and Brown
knowledge creation aims at expanding boundaries by 1999, Tsoukas 2003, Brown and Duguid 1991, 2001).
including more practitioners with different knowledge Because explicit knowledge fails to represent the prac-
and interests, who represent different social practices, tical circumstances surrounding individual tacit knowl-
and who come from diverse functions, departments, and edge acquisition, it is of limited value in guiding a
groups. Practitioners’ diverse tacit knowledge, that they social practice. Yet, examples underscore the importance
partly acquired in their diverse social practices, is of explicit, universal knowledge that spans individuals’
a source of creativity. Through knowledge conver- efforts and social practices. Consider explicit knowl-
sion (e.g., externalization and combination), practi- edge that enhances the reliability of behavior and that
remains the property of the organization beyond gener-
tioners may discover new ways of defining problems
ations of employees. A current example is credit levels
and searching for solutions (Nonaka and Konno 1998,
in relation to equity for banks regulated by the interna-
Leonard and Sensiper 1998). In contrast to the social
tional standard of Basel II, which aims at protecting all
practice view of organizational knowledge, in organiza-
stakeholders in the financial system. According to this
tional knowledge creation theory social identity is not
standard, banks should have in place explicit, regulated
necessarily tied to one existing practice but emerges
knowledge in the form of procedures for decision mak-
for those groups involved in the organizational knowl-
ing on credit levels. Bank employees are mandated to
edge creation and that cross social practices. As becomes act on this knowledge beyond their particular interests.
apparent from this discussion, tacit knowledge (along- Part of this explicit knowledge is also the basis for auto-
side other forms of knowledge) is also seen constitutive mated systems that monitor credit risks in transactions
of innovation. and trading.
Equipped with an understanding of the different agen- Although authors who examine social practices rec-
das of the social practice view of organizational knowl- ognize the notion of explicit knowledge, one of their
edge and organizational knowledge creation theory, we very important contributions to organization science is
can now return to the analysis by Ribeiro and Collins to suggest that tacit knowledge/knowing is a prereq-
(2007) of knowledge conversion performed by Tanaka uisite for the application of explicit knowledge. Yet,
and the home-bakery product development group. The in organizations, a social practice may constitute hid-
conversion of knowledge from a tacit towards an explicit den “rules” of performance, procedures, problem under-
form is inherently a creative act using metaphors, analo- standing, problem solutions, and tasks that have the
gies, and images (Nonaka 1991). An example is the con- potential to be articulated. These elements provide a
cept of “twisting stretch.” Knowledge conversion in this basis for the explicit knowledge end of the continuum.
case is not about Tanaka representing tacit knowledge of Eyerman and Jamison (1991; see also Tilly 1999) sug-
the master baker or the social practice of baking bread gest that when individuals collectively act to change
(that Tanaka became a member of) in the concept of practice, they often create new, explicit knowledge in
“twisting stretch.” In fact, this would have to presuppose the process that inspires others to act too. For example,
a different understanding of “truth” than the one adopted in an organization, people may first have a tacit sense
in the definition of knowledge (see §3.1). Rather, knowl- of inequality, such as how decisions are being made or
edge conversion is about expanding the previous bound- incentives used. Next, people may articulate knowledge,
aries of the knowledge of the individuals (Tanaka learn- share it, and then act to change their situation for the
ing to bake with the master baker) and the team (Tanaka better. These aspects of knowledge conversion also need
developing the concept of “twisting stretch”) for the to be included in organizational knowledge creation.
To conclude, based on Question 5 and the discus- Given the discussion in §4.2, we propose that the out-
sion above, knowledge conversion plays a critical role come of knowledge conversion can also be a new social
in explaining organizational knowledge creation. The practice. Organizational knowledge creation theory was
debate that led to Question 5 also shows that the relation- formulated as an alternative to mainstream organization
ship between organizational knowledge creation theory theory, based on the correspondence doctrine and the
and the social practice view of organizational knowledge idea of the organization as an information-processing
is underdeveloped. This is a challenge for organizational entity. In mainstream organization theory, for example,
knowledge creation theory. As Brown and Duguid’s the work of March and Simon (1958), an organization
(1991) seminal work shows, innovation requires the inter- overcomes the individual’s bounded rationality and lim-
action between people in a social practice who have been its to information processing and decision making by
socialized into that practice. However, it also requires the specifying hierarchies, partitioning tasks, defining rules,
interaction of people from diverse social practices who and channeling information to clearly identified posi-
by their membership in these practices have acquired dis- tions. As a system, the organization could strive to pre-
tinct tacit knowledge. In particular, the idea that exter- serve rationality in the face of individual limitations.
nalization and combination of knowledge is valuable However, well-defined problems and explicit problem-
hinges on differences in social practices throughout the solving procedures were necessary conditions for the
organization.12 Thus, social practices may be neces- system to work; they could be effectively represented by
sary, but not sufficient, for understanding organizational the individual who could make the best (optimizing or
knowledge creation. satisficing) decisions.
Whereas mainstream theory aimed at constraining
problems and solutions, organizational knowledge cre-
4.3. Question 6: Outcome of Knowledge
ation aims at defining new problems and creating,
Conversion
exploring, and experimenting with new solutions. Indi-
We now proceed to Question 6, which asks about
vidual limitations are obstacles to creativity and inno-
the outcome of knowledge conversion, which was not
vation rather than a constrained capacity to process
adequately developed in Nonaka (1994). Based on the
available information. Individual limitations are not
discussion in §4.2, we propose there are two ways
overcome by adherence to rational information pro-
to understand the outcome of knowledge conversion,
cessing suprastructures, but by intensifying interac-
as “knowledge outcomes” and as “social practice out- tions between organizational members who, thereby, can
comes.” According to the definition of knowledge in expand the boundaries of their knowledge. Here, there
the theory, the “knowledge outcome” could be threefold. is common ground between the social practice view of
First, the ultimate outcome of organizational knowl- organizational knowledge and organizational knowledge
edge creation is product and process innovations. Yet, creation theory. As argued in §4.2, interactions consti-
on the way there, knowledge conversion could provide tute the fabric of social practices (e.g., Gherardi 2006).
enhanced understanding or “justified true belief” (see Likewise, in creating organizational knowledge, people
Massey and Montoya-Weiss 2006). For example, the come together from different areas of the organization
individual establishes stronger justification for beliefs that in themselves constitute diverse social practices.
about truth, and a team reaches agreement on and col- Although differences in people’s biographies, including
lective understanding of problems, solutions, tasks, and knowledge and interests, may adversely impact on orga-
actions in the organization. Second, a knowledge out- nizational knowledge creation and make it fragile, diver-
come is an enhanced capacity to act (see Sabherwal sity rooted in various social practices is key to a suc-
and Becerra-Fernandez 2003, Wathne et al. 1996). For cessful process. As shown convincingly by the debate
example, newly acquired individual knowledge enables on organizational knowledge creation theory (§4.2), a
improved or new definitions or problems and solutions social practice brings routine and stability to behavior
and more effective task performance. For the team, and processes. Thus, we propose that social practices
shared knowledge allows for group decision making may evolve around knowledge conversion, over time
and problem solving (Grant 1996), drawing from shared providing necessary conditions of stability. In a social
insights, language, mental models, knowledge about practice of knowledge conversion, there may exist a
expertise, problem-solving capabilities, and specialized coherent, complex, coordinated form of human activ-
tasks of individual organizational members. Third, the ity in the shape of socialization, combination, external-
capacity to act, define, and solve problems can be ization, and internalization. The goods internal to that
explicit and/or tacit along the continuum (see Dyck et al. form of activity should be considered the knowledge
2005). For the individual, the outcome of knowledge created and acquired by its practitioners. In trying to
conversion can be the development of tacit and explicit achieve standards of excellence in organizational knowl-
forms of knowledge. At the level of the team, it can be edge creation, practitioners learn to identify and remove
shared knowledge also ranging from tacit to explicit. obstacles to knowledge conversion, such as a lack of
resources, time to engage in organizational knowledge or fail in innovation. For example, in the social prac-
creation, and lack of mutual trust amongst practitioners. tice view, tacit knowledge is acquired through socializa-
However, there is currently limited understanding about tion of organizational members into a group under the
how social practices emerge from knowledge conversion. guidance of a mentor. As several writers point out (e.g.,
To conclude, knowledge conversion may have both a Nelson and Winter 1982, Winter 1987, Grant 1996),
knowledge and a social practice outcome. More research repetitive recognizable patterns of interdependent actions
is needed on the emergence of new social practices of carried out by multiple actors or organizational rou-
knowledge conversion. tines emerge and are conserved through such knowledge
acquisition. Criticizing the existing literature, Feldmann
and Pentland (2003) argue that organizational routines
5. Discussion and Conclusion can also evoke considerable change in organizations,
Based on the article by Nonaka (1994) in Organiza- because multiple actors who hold diverse goals, infor-
tion Science, two premises have influenced more than mation, and interpretations need to interact to perform
15 years of theory building and research on organiza- routines. In a similar vein, to enable innovation through
tional knowledge creation: tacit and explicit knowledge organizational knowledge creation, organization mem-
can be conceptually distinguished along a continuum, bers transcend boundaries on their existing knowledge
and knowledge conversion explains, theoretically and and social practices. Interaction emerges between peo-
empirically, the interaction between tacit and explicit ple from different social practices who pursue diverse
forms of knowledge. Recently, a number of issues were
interests, speak different languages, hold unique men-
raised regarding these premises. This article introduced
tal models and distinct preferences, access various social
and commented upon the discussions on organizational
networks, etc.
knowledge creation theory with the aim of helping
The social practice view of organizational knowledge
scholars to make sense of the issues and advance their
is imperative to investigating these and other sources of
own work. We propose that the two premises should be
fragility in organizational knowledge creation, because
upheld in organizational knowledge creation theory. As
it may provide a much needed political understanding
shown, they serve theory building and empirical research
of knowledge in organizations. In this paper, we catego-
on creativity, change, innovation, and learning in organi-
rized the social-practice view of organizational knowl-
zation science. However, distilling and responding to six
edge broadly. Future work should deliver a compara-
questions to organizational knowledge creation theory,
tive analysis of the various theoretical assumptions and
we also found there are major research opportunities in
methodological orientations in the literature contributing
the intersection between social practices and organiza-
tional knowledge creation. As we argued in §4.2, this is to this view (for a starting point, see Cox 2005, Antona-
so because social practice may be seen as a necessary, copoulou 2008). In particular, more analysis is needed
but not sufficient, condition for organizational knowl- of the literature that sheds light on the political and con-
edge creation. Thus, what we have uncovered can be flicting natures of learning, knowledge, and social prac-
summarized in a new broad research question: tice (e.g., Contu et al. 2003, Contu and Willmott 2003).
Organization science will benefit from a realistic discus-
Question 7. What is the relationship between orga- sion of when social practices enable or stifle organiza-
nizational knowledge creation and social practices in tional knowledge creation and vice versa. This discus-
organizations? sion should be informed by work attempting to answer
This is not a trivial question. Organizational knowl- the following question:
edge creation theory proposes that leaders in organi- Question 8. When and why do social practices con-
zations establish a social context (Japanese: “Ba”) that tribute to the conservation of existing tacit knowledge
positively influences the outcome of the process (Nonaka and existing routine rather than organizational knowl-
and Konno 1998; Nonaka et al. 2000a, b; Bryant 2005). edge creation and innovation?
When people commit to this context by joining inno-
vation projects, meeting in small networks, or exchange Theory building and research on Question 8 will inev-
information in online and offline communities, they may itably connect organizational knowledge creation theory
transcend their knowledge as well as the social practices to the emerging discussion on organizational ambidexter-
in which they acquired much of their knowledge. How- ity. The “organizational ambidexterity” hypothesis sug-
ever, as discussed in §3.1, people’s diverse biographies gests that successful organizations achieve a balance
introduce fragility in organizational knowledge creation. between being efficient in running today’s business,
The social practice view of organizational knowledge while being adaptive to changes in their environment
allows us to theorize how tacit knowledge is acquired ensuring that they also survive in the future (Tushman
and biographies are shaped in the organization, and thus and O’Reilly 1996). A critically important research ques-
brings us closer to explaining how organizations succeed tion is how leaders enable ambidexterity in organizations
(Gibson and Birkinshaw 2004). Organizational knowl- as well as social practices in organization. As seen,
edge creation provides an organization with the ability to the research opportunities are vast. We welcome your
adapt to a changing environment (Nonaka et al. 2006). participation!
However, given that organizational knowledge creation
entails personal risks, costs, and rewards, this research Acknowledgments
question can be interpreted as a problem of organiza- The authors are very grateful for comments from Linda
tional members’ motivations to transcend their social Argote, two Organization Science reviewers, Ginni Light, Jan
practices and the knowledge entailed in the efficient run- Henrik Sieg, Matthias Stuermer, Zeynep Erden, and Stefan
ning of a business. Thus, future research on organiza- Haefliger. A previous version of this paper was presented at
tional knowledge creation and social practices should a faculty seminar on October 10, 2008, at Universidade Nova
attempt to contribute to the following question: de Lisboa, Portugal.
Question 9. How can leadership motivate and Endnotes

enable individuals to contribute to organizational knowl- 1
A third important premise is that knowledge creation is con-
edge creation by transcending social practices? text dependent and requires specific organizational leadership.
The concept of leadership in organizational knowledge cre-
To answer Questions 7–9 it will be useful to con- ation theory was discussed by Gourlay (2006) and Essers
sider work teams as a unit of analysis. Innovation and and Schreinemakers (1997). Lado and Wilson (1994) and
organizational knowledge creation is often temporarily Tsoukas (1996) provide seminal discussions of leadership in
organized in project teams composed of people who rep- the knowledge-based view of the firm. Due to space con-
resent various functions, units, groups, or organizations. straints, we will not address this issue in the current paper.
2
There is a substantial literature available on team com- We are grateful to Linda Argote for pointing out that knowl-
position and how the diversity of team members impacts edge can manifest itself in justified true belief or in action. To
on innovation (for a review, see Jackson et al. 2003). For capture these manifestations, it is imperative to include several
example, recently authors have argued that factors such complementary properties in the definition of knowledge §2.1.
3
as team members’ prior experience of working together, Polanyi’s work appeared in the 1960s and should be under-
stood in this historical context. His work was based on
team size, and diversity in knowledge domains impact
“Gestalt” psychology and stood for an alternative perspec-
the ability to innovate (Taylor and Greve 2006). Yet, tive to the mainstream theory of human cognition and knowl-
forming work teams with diverse members is challeng- edge emerging at the time. Toward the end of the 1950s,
ing. Research has uncovered that team performance and several attempts were made to integrate various scientific dis-
its members’ feelings and behavior toward each other ciplines, ranging from psychology to computer science, in a
are influenced by factors such as diverse technical lan- common endeavor to develop a “science of the mind” (see,
guages and perspectives, the need for power and status for example, Gardner 1985). Polanyi’s work was so impor-
in the team, the urge to develop a feeling of cohesive- tant because it analyzed the inherently personal, subjective,
ness, and managing relationships with groups beyond and process-oriented component of knowledge/knowing and,
the team (Jackson 1996). Thus, future research on the thus, provides an alternative view of the scientific enterprise.
relationship between organizational knowledge creation His work shares the intention of organizational knowledge
and social practice should account for team formation creation theory, which attempts to create a compound view
of knowledge, including tacit and explicit elements. However,
and factors that impact on team performance.
a marked difference between Polanyi’s work and Nonaka’s
Finally, empirical research on Questions 7–9 should (1994) is that the former author contributes to science stud-
consider that knowledge takes different forms along ies, whereas the latter paper is a contribution to organization
the continuum. Thus, a multitude of research designs science and reflects the pursuit of a research agenda in this
are needed that include participant observation, labora- field. Although Polanyi’s work inspired the concept of tacit
tory studies, surveys, biographical analysis, and inter- knowledge, organizational knowledge creation theory needed
views. Moreover, due to the intimate connection between to expand it to both capture social forces and recent contribu-
knowledge and social practice giving organizational tions to the understanding of knowledge in management and
knowledge creation a “here and now” character, there organization theory. Therefore, the concept of tacit knowledge
is a need to conduct extensive research on knowledge was inspired by but not restricted to Polanyi’s work.
4
conversion in the “concrete lived time” of practitioners Externalization is similar to Kogut and Zander’s (1992) “cod-
(Chia 2002). The debate on organizational knowledge ification.” For an additional comparison and explanation of
knowledge conversion, see Nonaka (1994).
creation theory has an inevitable outcome: future empir- 5
Another example of the continuum idea is found in
ical research should pursue more longitudinal designs Nicolini et al. (2003), who proposed that “knowing” precedes
in the field to clarify how social practice relating to “knowledge.”
organizational knowledge creation can best be observed. 6
Varela (1992, p. 259) shows this view of (tacit) knowledge
Research and theory building that aim to answer the as embodied corresponds to work of pragmatist philosophers
set of research questions presented will greatly advance (see §2.1) (see Shook and Margolis 2007). It should also be
the understanding of organizational knowledge creation noted here that recent work in cognitive psychology applies
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Tacit Knowledge and Knowledge Conversion

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Organization Science informs ®

Vol. 20, No. 3, May–June 2009, pp. 635–652 doi 10.1287/orsc.1080.0412

Tacit Knowledge and Knowledge Conversion:

Georg von Krogh

1. Introduction writing. For example, knowledge of a solution to a dif-

Question 9. How can leadership motivate and Endnotes

new methods and research designs, including neuroimaging, References

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