Waves of Knowledge Management: The Flow between Explicit and Tacit Knowledge

Abstract

Problem statement: Knowledge Management (KM) is often equated with content management. Indeed, robust knowledge management processes include a database; but, information becomes knowledge when it is understood, manipulated and can become tied to a purpose or idea. By equating KM with content management and by equating the purpose of KM with predictability and control, companies may inadvertently de-emphasize knowledge creation and transfer. To keep pace with global market dynamics, an explicit focus on the creation and transference of new knowledge and transferring has to be encouraged. Companies that are able to foster new knowledge creation and transference alongside the more traditional view of KM are able to strike a balance between effectiveness and efficiency and between innovation and productivity. But, how do companies foster knowledge creation and, further, how do they transfer such knowledge? Approach: The purpose of this study was to explore the various connections between knowledge transfer focusing on explicit and tacit knowledge. Results: The research argued and resulted impacting the discipline of Knowledge Transfer (KT). The discipline’s main ideas and their directions and limitations were examined. Conclusion: Additionally, the researchers proposed a knowledge transfer model which diagrams the transfer flow between explicit and tacit knowledge. The authors put forth a new direction of exploration in the transference of explicit and tacit knowledge-the knowledge transfer flow model.

Full text

American Journal of Economics and Business Administration 2 (1): 129-135, 2010
ISSN 1945-5488
© 2010 Science Publications
Corresponding Author: Roxanne Helm Stevens, School of Business and Management, Azusa Pacific University, USA
129
Waves of Knowledge Management: The Flow between Explicit and Tacit Knowledge
Roxanne Helm Stevens, Joshua Millage and Sondra Clark
School of Business and Management, Azusa Pacific University, USA
Abstract: Problem statement: Knowledge Management (KM) is often equated with content
management. Indeed, robust knowledge management processes include a database; but, information
becomes knowledge when it is understood, manipulated and can become tied to a purpose or idea. By
equating KM with content management and by equating the purpose of KM with predictability and
control, companies may inadvertently de-emphasize knowledge creation and transfer. To keep pace
with global market dynamics, an explicit focus on the creation and transference of new knowledge and
transferring has to be encouraged. Companies that are able to foster new knowledge creation and
transference alongside the more traditional view of KM are able to strike a balance between
effectiveness and efficiency and between innovation and productivity. But, how do companies foster
knowledge creation and, further, how do they transfer such knowledge? Approach: The purpose of
this study was to explore the various connections between knowledge transfer focusing on explicit and
tacit knowledge. Results: The research argued and resulted impacting the discipline of Knowledge
Transfer (KT). The discipline’s main ideas and their directions and limitations were examined.
Conclusion: Additionally, the researchers proposed a knowledge transfer model which diagrams the
transfer flow between explicit and tacit knowledge. The authors put forth a new direction of
exploration in the transference of explicit and tacit knowledge-the knowledge transfer flow model.
Key words: Knowledge management, knowledge transfer, organizational learning
INTRODUCTION
Knowledge is the key resource we possess as a
country both militarily and economically, it is only
through managing that knowledge that we can
successfully move forward in our progress towards
innovation (Drucker, 1994).
Knowledge management was founded out of a void
in the industry in the ability to capture, share and manage
knowledge (Alavi and Leidner, 2001). Moffett et al.
(2003), state “Knowledge Management (KM) has its
origins in a number of related business improvement
area, such as Total Quality Management (TQM),
Business Process Re-engineering (BPR), Information
Systems (IS) and Human Resource Development
(HRD). Knowledge management is the culmination and
implementation of methodologies and devices to
effectively translate data into practical information for
the company and individual (Randeree, 2006).
MacMillan (2008) defined knowledge
management as the handoff of knowledge. Indeed, a
particular importance of knowledge management is to
gather and use the best available knowledge to produce
competent managers and in turn make the organization
more successful (Wiig, 1999). Indeed, beyond simply
looking at the bottom-line, corporations are
increasingly focused on gaining strategic advantage by
capitalizing upon their know-how (Helm, 2010).
Gathering the best available knowledge is not
always easy; organizations must understand who holds
key knowledge; otherwise knowledge management
loses all importance. Perhaps the most crucial element
for organizations to understand is that knowledge
management is not a single set of skills or use of
technologies, rather it is a collection of ideas and
experiences only to be passed on by those who lived
and understood it (Aronson and McCarthy, 2004).
Differentiating between Information and
knowledge: When is information knowledge?
Information has potential if it properly managed. All
knowledge is based on information but all information
does not rise to the level of knowledge. Can knowledge
management help make piles of information into trends,
products and increased profitability for businesses?
In the purest form, all robust knowledge
management processes start with a database. But,
information becomes knowledge when it is understood,
manipulated and can become tied to a purpose and or
idea. For example, businesses have used consumer

Am. J. of Economics and Business Administration 2 (1): 129-135, 2010
130
purchase trends from previous years to try and order
proper inventory. Data mining or looking for a
correlation in information has been long included in
most social science fields.
Creating databases of information tying the
purchase of an item to a specific consumer and
including factors such as frequency of purchase and
average amount spent required is a huge undertaking
that requires a huge payoff for businesses to continue
the practice. The relationship between a consumer and
their shopping habits has psychological implications
that can be managed and utilized by the businesses
frequented by the consumer (Lacey and Sneath, 2006).
Databases should help an employee learn from the
information. But, commitment to information
technology infrastructures does not always lead to
better business performance or significant return on
investment (Malhotra, 2005).
Developing value through knowledge: It is useful to
understand the values that knowledge develops for an
organization. Nonaka and Takeuchi (1995) consider
knowledge and intellectual capital as a company’s
primary source of production and value. Intellectual
capital, recognized by organizations as the strategic
value of the human assets, is the collective value of the
workforce it is not the worker in a company-it is what
that person brings and contributes to the success of the
organization. Intellectual capital is the collective value
of the capabilities, knowledge, skills, life experiences
and motivation of the workforce (Aldisent, 2002). It
reflects the thinking, knowledge, creativity and decision
making that people in organizations contribute (Kaplan
and Norton, 2004).
In Making Sense of Intellectual Capital and
Andriessen (2004), defines value as, “the degree of
usefulness or desirability of something, especially in
comparison with other things.” Information must be
transformed into knowledge and then turned back into
information again, which must be shared within an
organization in order to make value (Jenson, 2009).
Knowledge found within an organization’s human
capital must be first captured and then transferred in
order to be exploited for advantage.
However, the intricacies of knowledge
management and optimization is something that many
have searched to identify and define. Knowledge has
been cited as the most valuable resource in creating a
sustainable and lasting competitive advantage in the
marketplace (Nonaka et al., 2000). In order for a
company to successfully function, they must be in the
process of capturing and transmitting that knowledge.
Once a company understands that knowledge is pivotal
in creating a competitive advantage they can begin to
understand the importance of knowledge management
in the firm.
Knowledge: According to Blanchard and Thacker
(2009), knowledge is defined as “an organized body of
facts, principles, procedures and information acquired
over time” (p. 18). According to Noe (2008),
“knowledge refers to what individuals or teams of
employees know or know how to do (human and social
knowledge) as well as a company’s rules, processes,
tools and routines (structured knowledge).
Jenson (2009) writes that all knowledge is attained
and possessed by individuals in a collective process.
Jenson (2009) refers to productive knowledge as a
means to form value, which only develops through the
collective process. According to Jenson (2009),
information-and not knowledge-can be shared and
spread among organization members.
Information is the raw product and knowledge is
the finished result of the product. Baker (2007) explains
that in order to turn information into knowledge, a
person would need “comparison, consequences,
connections and conversation.” This description of
knowledge is the condition of knowing something with
the familiarity gained through experience or
association.
Hierarchy of knowledge: The hierarchy of knowledge
is defined in Knowledge Management, challenges,
solutions and technologies (Becerra-Fernandez et al.,
2004). The first level of knowledge is defined as data,
which is comprised of the learned truth and things our
mind inputs from perceptions of the world around us.
The second level is information which is the correlation
between the raw data we receive and placing it in a
framework for eventual implication. The third level is
knowledge which combines data and information to
allow decision makers to initiate actions based on that
information. It is “justified beliefs about relationships
among concepts relevant to that particular area”
(Becerra-Fernandez et al., 2004).
A practical example is a customer buying a book
from an online bookseller. The book order is the data in
the knowledge process. That data then transfers to
knowledge when the bookseller’s analytics track how
many books were sold. The data from the individual
and the information from the analytics, allows
managers to properly stock the warehouse for the
correct sales demands.
Explicit knowledge: Calo (2008) further categorizes
knowledge into two types: (1) explicit knowledge and

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(2) tacit knowledge. Explicit knowledge finds roots in
tacit knowledge but actual explicit knowledge is the
codification of tacit knowledge to the external world
(Greiner et al., 2007). The opposite is also true; explicit
knowledge has the potential to become tacit knowledge
through in-taking the information internally and
synthesizing that information with other data (Lenard
and Sensiper, 1998).
Explicit knowledge is typically clear, traceable and
unequivocal; it comes in the form of documents,
databases and policy and procedure manuals which
makes explicit knowledge “readily transferable within
an organization or between individuals without the loss
of meaning” (Calo, 2008).
Explicit knowledge is the tangible ideas that
consists of numbers or words or shared in the form of
data (Nonaka and Konno, 1998). Further, Noe (2008),
states, explicit knowledge refers to manuals, formulas
and specifications described in formal language. This
type of knowledge is easily transmitted from one person
to another through scientific formula, manuals,
drawings, computer programs or other visual means
(Becerra-Fernandez et al., 2004). Explicit knowledge is
typically is shown through objective and rational ways,
such as, “then and there” rather than tacit knowledge
which is created in the “here and now” (Lenard and
Sensiper, 1998).
Explicit knowledge is easier to capture and
distribute because of its ability to be passed on in the
form of tangible material. However, while it is easier to
transfer this type of knowledge, there are still obstacles
with the transference of explicit knowledge. One major
issue is that though explicit knowledge is available, it
must be left up to the interpretation of the person who is
using the material (Parise et al., 2006).
Tacit knowledge: Tacit knowledge tends to be
informal, less definable and uneasily transferable
because it resides in the minds and experiences of
workers (Calo, 2008). Echoed by Noe (2008), tacit
knowledge is personal knowledge based on individual
experience and influenced by perceptions and values;
the transfer of tacit knowledge requires personal
communications through discussion and
demonstrations.
Tacit knowledge is also synonymously referred to
as a person’s “know how”-“informal and hard-to-pin
down skills” (Calo, 2008). Difficult to capture, a
dominant characteristic of tacit knowledge is that it is
personal knowledge. Tacit knowledge draws from
personal experiences and gives an individual foresight
and the awareness to make “Gut-level” decisions
(Becerra-Fernandez et al., 2004). Tacit knowledge is
specific to the person who possesses the knowledge.
The knowledge is individual and bound to the person
and context, thus making it difficult to transfer (Nonaka
and Takeuchi, 1995).
Tacit knowledge is normally acquired on the job or
in a specific situation and is often said to be a
competitive advantage within companies often because
it presents a challenge when trying to be imitated and
copied, thus making it even more difficult to store and
transfer (Ambrosini and Bowman, 2008). Tacit
knowledge is not easily quantified or conveyed and
causes information to be difficult to transmit between
individuals (Becerra-Fernandez et al., 2004).
Parise et al. (2006) present another perspective of
tacit knowledge-it is not simply what a person knows,
but who they know. Critical and strong relationships are
developed within the work environment among
workers. Because of the nature of collaborative efforts
that are common to the workplace, when an employee
leaves a company, it will inevitably take some time
before the newcomer can be entrusted. This can present
a problem because workers rely on each other to
accomplish tasks crucial to the success of the company.
It is this combination of explicit and tacit
knowledge that seasoned workers possess which has
become the most “strategically significant resource of
organizations” (Calo, 2008). As employees in
organizations progress, they acquire a set of knowledge
that is customized to the firms’ operations, structure
and culture. More importantly, it is the unique insights
and understood idiosyncrasies about the company that
is developed over time which make the learning
difficult to replicate or replace (Lesser, 2006). O’Dell
and Grayson (1998) further add that this “conscious
strategy for getting the right knowledge to the right
people at the right time” is defined as, knowledge
management” (Calo, 2008).
Knowledge management: On the surface, knowledge
management is difficult to define. This difficulty stems
from the confusion existing in a term which is
commonly used in organizations to describe the
practice (and system) of managing its knowledge-the
process of collecting, codifying and accessing the
totality of an organization's knowledge. Indeed, many
articles have been written about the misuse of the term
knowledge management as well as the absence of a
clear and crisp definition (Wiig, 1999). Stenmark
(2002) contends, it has often been pointed out that data,
information and knowledge are not the same, but
despite efforts to define them, many researches use the
terms very casually. In particular, the terms knowledge
and information are often used interchangeably.

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Knowledge management, an evolving term, has a
glut of contributions surrounding a formal definition.
Debates are ongoing as to concepts involved and how
to properly convey it in a universal fashion (Slagter,
2007). Indeed, Sveiby (2001) states, that knowledge
cannot be managed and therefore knowledge
management is a poor term. Sveiby (2001) offers that
knowledge focus or knowledge creation, are better
terms because they describe a mindset in which
knowledge is an activity not an object.
McInerney (2002) broadly described knowledge
management as a common business practice and as a
theoretical field of study. Others have simply concluded
that knowledge management is the creation, transfer and
retention of knowledge by organizations (Martin and
Phillips, 2004). In practice, knowledge management is a
conscious effort to gain from the knowledge that lies
within in an organization by using it to achieve the
organization’s mission (McInerney, 2002). Thus, having
knowledge about something, some process or method,
can allow executives to make judgments and proceed in a
manner that is just and coherent.
A more substantial definition was supplied by
Gephart et al. (1996), “knowledge management refers
to the process of enhancing company performance by
designing and implementing tools, process, systems,
structures and cultures to improve the creation, sharing
and use of knowledge.” Similarly, Rastogi (2000)
defines knowledge management as ‘a systematic and
integrative process of coordinating organization-wide
activities of acquiring, creating, storing, sharing,
diffusing, developing and deploying knowledge by
individuals and groups in pursuit of major
organizational goals. It is the process through which
organizations create and use their institutional and
collective knowledge.’ While many definitions stress
system processes with an IT focus, Rastogi (2000)
clearly points out the necessary human involvement
beyond those processes.
Rastogi (2000) rich definition also includes the
process of knowledge from the creation or acquisition
of knowledge to its use. Internal knowledge is
knowledge that is created within the company through
innovative attempts while external knowledge is
gained from outside sources (Seidler and Hartmann,
2008). Whichever way that it is acquired, it needs to
have a way by which it can be stored, shared and
ultimately deployed.
Knowledge transfer: Certainly, there are many
methods to transfer knowledge. Moreover, as
previously noted, the two types of knowledge most
familiar in the workplace are tacit and explicit. Tacit
knowledge is subjective knowledge that is not easy to
communicate. It is challenging to capture and
disseminate because of its inability to be put into
processes or written down in manuals or in policies. It
cannot be codified, but can be transferred through
personal experience and training. Conversely, explicit
knowledge is articulated and can be codified and stored
in a tangible way, making it easily distributable to any
population when needed (Seidler and Hartmann, 2008).
According to Nonaka and Takeuchi (1995), there
are four modes of knowledge sharing: socialization,
externalization, combination and internalization. Nonaka
and Takeuchi (1995) puts forth the SECI Model which
serves as an abstract outline for knowledge transfer. The
four parts are: Socialization, Externalization,
Combination and Internalization (Table 1).
Explicit and Tacit knowledge are closely linked.
They feed in and through each other, interacting and
eventually reaching knowledge creation (Nonaka and
Konno, 1998).
Socialization involves sharing tacit knowledge by
sharing experiences. Knowledge is shared and learning
occurs through observation, imitations and practice.
Socialization is the interactions between individuals
where tacit knowledge is shared. It comes from the
Nishida concept of pure experience. Often formed in
peer groups from having shared experiences, the
fundamental principle is being able to empathize with
others thus creating a level social environment that
enables the transfer of tacit knowledge.
Externalization, the next quadrant, is taking tacit
knowledge and turning it into a comprehensive form to
be interpreted by others. Externalization, translating
tacit knowledge into explicit knowledge, can take the
form of metaphors, models, concepts and equations.
Philosophers have defined humans to have inner and
outer boundaries which they transcend between on a
constant basis; it is the stage when the individual
identifies more with the group then their personal
identity and all start working for a common goal.
Internalization is the transformation of explicit
knowledge into tacit knowledge. This stage relies on
two dimensions. (1) Explicit knowledge must be put
into action and practiced. (2) The process of taking the
explicit knowledge and putting it into action.
Internalization, converting explicit knowledge to tacit
knowledge, can be accomplished through training
methods such as simulations, action learning and on-
the-job experiences are used to create tacit knowledge
from explicit knowledge (Nonaka and Takeuchi, 1995).
Table 1: Nonaka’s SECI Model (Nonaka and Takeuchi, 1995)
TO from Tacit Explicit
Tacit Socialization Externalization
Explicit Internalization Combination

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Combination involves systematizing explicit
concepts into a knowledge system by analyzing,
categorizing and using information in a new way.
Formal courses and seminars convert knowledge in
this way. This stage diffuses and communicated
explicit knowledge. It connects the knowledge and
creates a larger and more complex set of explicit
knowledge. There are three stages in this process: (1)
Seeking and possessing new explicit knowledge from
both inside or outside the company. The companies
will then combine, utilize and synthesize the gathered
information. (2) In the second phase knowledge is
spread laterally between organizational members. By
definition, explicit knowledge must be transferred and
in business settings it is most likely done by
presentation or meetings. (3) The final phase is the
filtering and editing of the explicit knowledge to make
it more productive for the company. Once the
synthesizing and combining information occurs the
organization can then begin to take relevant and
beneficial decisions (Nonaka and Konno, 1998).
The bridge between explicit and tactic: Tacit
knowledge has two main focus areas; the first area is
the technical realm which focuses on the aspects of
personal skills commonly known as “know-how”. The
second is a cognitive realm which consists of a deeply
foundational values, beliefs and ideals which few rarely
stop to evaluate (Nonaka and Konno, 1998).
A practical example of tacit knowledge is of a
farmer who grows only corn in a specific location. This
farmer has been growing the corn for forty years on the
same farm and has amassed a body of knowledge on
how best to maximize production. The farmer
understands the effects of weather patterns and how
best to react to them. When he sees signs of a drought,
he will prepare his crop by digging trenches to hold
water. He can understand what specific nutrients the
crops are lacking depending on the coloration, stature
and vitality of the corn. While other farmers learn from
books and other informational sources, they can never
cultivate the corps to the same level as the farmer with
the forty years of tacit knowledge.
Creating knowledge is a process of organizing data
into information that can be analyzed and used to make
educated decisions. Knowledge creation allows
individuals to form tacit knowledge and explicit
knowledge. Knowledge creation can stem from an
individuals personal experiences and environment or can
be learned from different forms of explicit knowledge
such a manuals, written instructions or diagrams.
Fig. 1: Knowledge transfer flow model
Through synthesizing prior knowledge and
combing it with data or information, new tacit and
explicit knowledge is created. This process is defined as
knowledge discover. Explicit knowledge is formed
through combination which is when two bodies of
explicit knowledge are unified to create a higher
understanding of that knowledge (Nonaka and
Takeuchi, 1995).
Explicit and tacit knowledge ebb and flow from
one form to another. While the knowledge transfer flow
model, Fig. 1, does not have a central starting place for
the sake of clarity we will start with explicit knowledge.
There are four main stages in the knowledge transfer
flow model. (1) The explicit knowledge, (which is
simply knowledge, data and information) is synthesized
with outside environmental factors and individual
experience. The culmination of combining explicit
knowledge, environment and individual experiences
create tacit knowledge. Tacit knowledge is a personal
knowledge, unique to the individual whose experiences
and ideas have gone into the formation of the tacit
knowledge. (2) The next stage is the transfer of tacit
knowledge. The entire body of an individual’s tacit
knowledge cannot be fully transferred. Hunch, intuition
and insights cannot be transferred to another
individual and will stay with the original possessor of
the tacit knowledge. What the individual can transfer
is data and information. (3) That data and information

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which is public quantitative data and information can
be internalized by another individual and, at that
point, becomes explicit knowledge. (4) The final
phase is simply the continuation of the flow of
knowledge. The new explicit knowledge created will
repeat the cycle just noted.
It is to be noted, the Knowledge transfer flow
model is not a cycle. Knowledge is constantly changing
and evolving. Through each transfer from explicit to
tacit or tacit to explicit the knowledge shared is not the
same. Because humans are involved in knowledge
transfer, there will always be a personal element in the
understanding of knowledge and thus the exact
knowledge cannot be transferred through generations.
This model shows us that Tacit Knowledge (TK)
is a function of Environment (E) plus Individual
Experience (IE) plus Explicit Knowledge (EK):
TK = f(αE+EK) + (βIE+EK)
CONCLUSION
If knowledge is determined to be the most valuable
asset of the firm then the transfer of knowledge needs to
be a top priority (Randeree, 2006). However, this is not
an easy process; organizations must first identify who
holds key knowledge and then understand how to
successfully transfer that knowledge. Knowledge can
consist of a person’s mental thoughts, beliefs,
perspectives and mental associations (Alavi and Leidner,
2001). Those internal processes and connections must be
brought out into a form of explicit knowledge in order to
create useful knowledge the firm can transfer.
Externalization is the process of changing tacit
knowledge by means of language, sharing of concepts
or other means of communication. Internalization takes
the explicit knowledge and converts the knowledge into
tacit knowledge, this process represent learning in its
traditional form (Lenard and Sensiper, 1998).
A company might have ample amounts of
information but it is not until that information is
identified and organized that the organization can begin
to utilize that information (Alavi and Leidner, 2001).
Further, the transfer of key knowledge is a critical
process which gives organizations competitive
advantage by fully optimizing the knowledge they
possess. Unless key knowledge is transferred the firm
cannot operate at optimal effectiveness.
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