Further Reading » Defining Knowledge Creation

Defining Knowledge Creation

Organizational knowledge creation is the process of making available and amplifying knowledge created by individuals as well as crystallizing and connecting it to an organization's knowledge system. In other words, ensuring what individuals come to know in their work life benefits their colleagues and, eventually, the larger organization.

Knowledge Matrix / Knowledge Spiral Approach (1995):

The approach developed by Nonaka and Takeuchiis one of the most widely accepted approaches to classifying knowledge. Nonaka spearheaded the classification of knowledge based on a combination of knowledge accessibility (the flow of knowledge from one place to another and from one form to another) and knowledge transformation (where the knowledge is stored or located and in what form). From this Nonaka introduced the concept of the “knowledge spiral” in which innovation and learning occurs as a result of the flow and transformation of knowledge. Knowledge becomes crystallized within the organization moving when it moves from the individual to the group to organizational and even inter-organizational levels.

According to Nonaka and Takeuchi (1995), continuous innovation is enhanced by making use of the interdependence of those within the organization.

Knowledge that is accumulated from the outside is shared widely within the organization, stored as part of the company’s knowledge base, and utilized by those engaged in developing new technologies and products. The process of shifting knowledge from the outside to the inside, or inside to the outside, is called knowledge conversion.

(Nonaka & Takeuchi, 1995).

Nonaka’s (1994) dynamic theory of organizational knowledge creation holds that organizational knowledge is created through a continuous dialogue between tacit and explicit knowledge via four patterns of interactions, socialization, externalization, combination, and internalization.

  • Socialization: The process of sharing experiences and thereby creating tacit knowledge, such as shared mental modes and technical skills (i.e. common language). The key to acquire tacit knowledge is experience. Without some shared experience, it is extremely difficult for one person to project her/himself into another individual’s thinking process.
    • Result: From tacit to tacit - in this mode knowledge is converted through sharing and interaction between individuals. The key to acquiring tacit knowledge is through experience, since it is difficult for people to convey tacit knowledge. (Example: Riding a bike: it is easier to learn by doing than to give verbal instructions).
  • Externalization: The process of articulating tacit knowledge into explicit concepts (concrete knowledge). It may however be difficult to find an adequate verbal expression for a mental image through use of analytical methods alone. Externalization is therefore often driven by metaphor and/or analogy. Team members make use of meaningful dialog by sharing metaphors, analogies, concepts, hypothesis, and models.
    • Result: From tacit to explicit - This expands over time and through a process of mutual interaction between individuals.
  • Combination: The process of systematizing concepts into a knowledge system, i.e., combining different bodies of explicit knowledge. This entails reconfiguration of existing information, where sorting, adding, combining and categorizing of explicit knowledge can lead to new knowledge.
    • Result: From explicit to explicit – this conversion involves social interactions to reconfigure existing information through sorting, categorizing, adding and re-contextualizing explicit knowledge.
  • Internalization: This process is closely related to 'learning by doing' - where tacit knowledge is incorporated and applied in a person’s or an organization’s tasks. In this conversion mode it helps if knowledge is verbalized or diagrammed into documents or oral presentations. During this phase explicit knowledge is turned back into tacit knowledge. Although this appears to be an easy task, it is arguably one of the most difficult phases. Team members begin to internalize new explicit knowledge that broadens and reframe their own tacit knowledge. Internalization, as well as the other three modes, encourages spiralling throughout the organization. The spiral constitutes the four modes circling around each other and justifies concepts created at other stages.
    • Result: From explicit to tacit – as with the mode above, this process expands over time.


Figure 2 SECI Model

Adapted from: Nonaka, I. & Takeuchi, H. (1995). The Knowledge-Creating Company. New York, Oxford University Press.

Within the SECI model shared space serves as a foundation for knowledge creation as knowledge is embedded in shared space. If knowledge becomes separated from shared space then it becomes information. Information can exist in media or networks, knowledge cannot, it is intangible.

The two main areas of KM foci are (a) sharing existing knowledge, and (b) creating new knowledge. The process of knowledge creation occurs when the transfer of what is in someone’s head (thoughts, ideas actions, experiences) is transferred to another individual or group in such a way that the recipient’s future actions and decisions are influenced by what they have learned. New knowledge is then created. This is what Nonaka means by the “spiralling process of interactions between explicit and tacit knowledge”. The spiralling process demonstrates that KM is a dynamic and not a static activity.

I-Space Model (1998):

Boisot’s model introduces another dimension to Nonaka and Takeuchi, namely “abstraction”. This refers to how knowledge can become generalized to different situations. Boiset proposes a “social learning cycle” to model the dynamic flow of knowledge through six phases:

  1. Scanning – insights available from data, documents
  2. Problems solving – knowledge is given structure and coherence to these insights as knowledge becomes codified
  3. Abstraction – the newly codified insights are generalized to a wide range of situations
  4. Diffusion – the new insights are shared with a target audience in a codified and abstract form
  5. Absorption – the newly codified insights are applied to a variety of situations producing new knowledge. Knowledge is absorbed and produces new, learned behaviour and so becomes uncodified and tacit.
  6. Impacting – abstract knowledge becomes embedded in organizational practices, rules or behaviour patterns. Knowledge becomes concrete.

The social learning cycle means that knowledge is forever changing in a continual cycle of innovation and application. Data is filtered to produce meaningful information, this information is abstracted and codified to produce useful knowledge; this knowledge is applied in diverse situations and thereby produces new experiences in an uncodified form that produces the data for a new cycle of knowledge creation.

Both Boiset and Nonaka and Takeuchi models are dynamic. The rate at which the cycle operates varies from sector to sector. Rapidly evolving sectors have new knowledge being created and applied in rapid succession (e.g. solar energy industry subsector) while in some more established sectors the cycle time for innovation and learning is much slower.