Chapter 3

Tacit Knowledge

Knowledge is an important part of organisational decision making. The environment

demands “deep knowledge” that comes primarily from tacit knowledge (Goldberg, 2005,
cited by Bennet &Bennet, 2008). Irick (2007) cites Gourlay (2002) to define tacit knowledge
as a “form of knowledge that is highly personal and context specific and deeply rooted in
individual experiences, ideas, values and emotions”

Knowledge starts as tacit knowledge, that is, the initial movement of knowledge is from its
origins within individuals (in the unconscious) to an outward expression. Polanyi states, “We
start from the fact that we can know more than we can tell” (Polanyi, 1967, p. 108). He called
this pre-logical phase of knowing tacit knowledge, that is, knowledge that cannot be
articulated (Polanyi, 1958).

Tacit Knowledge is the “knowing how”. It is associated with experience and understanding.
Expertise of any form is highly dependent on tacit knowledge .Very often innovative
solutions are based on tacit knowledge and it is for this reason that Organisations need to
concentrate on its capture, transfer and storage.

Classifications of Tacit Knowledge

Smith (2001) classifies Tacit Knowledge to be of two types – technical and cognitive. We
observe “Technical” tacit knowledge when someone masters a skill. “Cognitive” tacit
knowledge incorporates implicit mental models and perceptions that are “so ingrained that
they are taken for granted”. Cognitive tacit knowledge affects how we make sense of our
world (Smith, 2001).

Bennet and Bennet in their article “Engaging Tacit Knowledge in support of Organisational
learning” (2008), speak of four forms of tacit knowledge.
1. Embodied Tacit knowledge
2. Intuitive Tacit knowledge
3. Affective Tacit knowledge
4. Spiritual Tacit knowledge
Embodied tacit knowledge
This is also referred to as ‘somatic’ knowledge. It is both kinaesthetic and sensory. The
knowledge is connected to some movement or some sensory perception, and the movement
or sensory perception acts as a trigger to bring this knowledge to the fore, and to cause some
action to take place. Quite often this embodied knowledge is linked to experiential learning.
You learn by doing and by watching, and as keep doing, much of the knowledge becomes
internalised and then becomes tacit. Persons can no longer explain how they know what they
know. It is a stage of unconscious competence.
Intuitive tacit knowledge
Intuitive tacit knowledge is a sense of knowing coming from inside an individual that may
influence decisions or actions- but the individual does not know how or why the action taken
is a correct one. Intuitive knowledge is a result of continuous learning through experience
(Bennet and Bennet. 2007a).
Affective tacit knowledge
Affective tacit knowledge is connected to emotions and feeling. Feelings that are not
expressed, and that are perhaps not even recognised tacit knowledge. They may still play an
important role in decision making either encouraging or discouraging the employee from
performing a particular action.
Spiritual Tacit Knowledge
Zohar and Marshall describe spiritual tacit knowledge as: “. . . the intelligence with which
we address and solve problems of meaning and value . . . [that] places our actions and our
lives in a wider-richer meaning-giving context, [and] . . . can assess that one course of action
or one life-path is more meaningful than another” (Zohar and Marshall, 2000, pp. 2-3 as cited
by Bennet and Bennet, 2008).
Spiritual tacit knowledge can be described in terms of knowledge based on matters of the
soul. It is specifically focused on moral aspects, the emotional part of human nature and
higher development of the mental ability.

Where can we find Tacit Knowledge?

In an individual, tacit knowledge resides in the unconscious. In an organisation, the question

to be asked is whether it resides in the unconscious of the individuals who make up the
organisation, or does the organisation as a whole have an unconscious as well.
Hubert Saint Onge in his article “Don’t underestimate the role of Tacit Knowledge” writes
that in the business context, tacit knowledge exists at two levels- the individual and the
organisational level. He speaks of tacit knowledge as the individual’s beliefs, assumptions
and values which are formed as a result of experience. It is based on these assumptions and
beliefs that decisions are made and patterns of behaviour are developed. On the
organisational level, tacit knowledge is acquired and shared when individuals work together
and share common problems or issues. Over time, Saint Onge says, this shared tacit
knowledge would become the collective mindset of the organisation. He guards
organisations against allowing this rigid mindset to continue as it may prove to be a barrier in
the organisation’s ability to respond appropriately to a changing environment. To avoid this,
he says that tacit knowledge should constantly be renewed (Saint Onge, 1998). In order that
capture, storage, renewal and use of tacit knowledge happen, it is essential to understand
where in the learning cycle of the organisation tacit knowledge gets generated.

The Generation of Tacit Knowledge in the learning system.

Revisiting Parsons’ learning system, we can observe the learning system in an organisation.
Where in the four quadrants or subsystems is knowledge most likely to be generated?

Environmental Interface Action Reflection

Dissemination and Diffusion Collective interpretation of

knowledge
Generation of knowledge Creation of Tacit
Knowledge

Meaning and Memory Integration of knowledge

Creation
Dissemination and Diffusion
Ownership and authority for
use

(Adapted from Schwandt, D. R & Masquardt, M. J. Organisational Learning From World class Theories to Global best
practices. St. Lucie Press, Boca Raton, Florida, USA, 2000 and Dixon, N. M. The Organisation Learning Cycle. Gower,
Brookfield, Vermont, USA, 1999)
As we can observe, the creation of Tacit Knowledge is not restricted to any one subsystem or
quadrant. In the Environmental Interface Quadrant, individual reactions to new knowledge
bring tacit knowledge to fore whilst reacting to changes in the environment. In the Action
Reflection quadrant, the Collective Interpretation once again causes tacit knowledge to aid
interpretation, and new tacit knowledge may be created at this stage. When Knowledge is
disseminated, once again the receptor of the knowledge reacts with the existing mental
model, which contains both tacit and explicit knowledge. Understanding and reaction to the
new knowledge would necessitate the creation of some tacit knowledge, which along with the
explicit, moves to the next quadrant. In the last quadrant, where meaning creation happens,
tacit knowledge is created, which may get used in the actions taken.

Tacit knowledge is created in the learning system at all stages – more so perhaps in the
actions in the Action and Reflection subsystem and in the Memory subsystem.

At all the stages, there is some conversion of knowledge from one form to another. Nonaka
and Takeuchi (1995) say that learning in an organisation occurs when such conversions take
place. Knowledge creation in an organisation occurs through a continuous dialogue between
tacit and explicit knowledge. Their SECI model speaks of four different modes of knowledge
conversion (Nonaka, 1995)

 From Tacit to Tacit. Nonaka says that this happens during socialisation process.
People share tacit knowledge with each other during social interactions. People share
knowledge during shared work experience through one of two roles: the tutor or the
apprentice. They arrive at a mutual understanding through the sharing of mental
models and knowledge is transferred.
 From Explicit to Explicit. This form of conversion occurs during what Nonaka terms
as Combination. Existing explicit knowledge is used along with other explicit
knowledge. No new knowledge is created at this stage. Instead there are
improvements in the existing processes. This is akin to Argyris’ single loop learning.
 From Tacit to Explicit. Nonaka describes this conversion as Externalisation. It would
entail articulating one’s own tacit knowledge as well as eliciting and translating the
tacit knowledge of others. It is this conversion that is not easy to control or
institutionalize.
  From Explicit to Tacit happens during internalization. Employees would take shared
experiences and store in their own mental models, to be expanded upon and used at
some stage during the process.
The following diagram represents the knowledge spiral that is created.

Tacit Knowledge

Socialization Externalization
Tacit Explicit

Tacit Knowledge
Explicit Knowledge
Combination
Internalization

Explicit Knowledge

(Adapted from Li, M., & Gao, F. (2003). Why Nonaka highlights tacit knowledge: a critical review. Journal of
Knowledge Management, 7(4), 6-14. doi: 10.1108/13673270310492903.)

How is knowledge created in the organisation? Nonaka and Toyama believe that knowledge
begins with subjective tacit knowledge flow of information which individuals have created
for themselves by their own actions. This for the individual, Nonaka says, is ‘pure
experience’.

An organisation may help to give deeper understanding to these beliefs that individuals have.

They believe that there is a ‘spiral process’ towards a solution that begins within the work
team where the problem is perceived. Members of work team would engage in dialogue,
going to and fro between their respective tacit knowledge and the available explicit
knowledge and also the tacit and explicit knowledge of customers and other knowledge
alliances.

The following diagram shows the knowledge creation process as explained by Nonaka and
Toyama (2003) and Stillwell (1994).
 Enabling conditions
Intention, Autonomy, Creative chaos

Redundancy Requisite variety

Tacit knowledge Explicit Knowledge

Socialization Externalization Combination

Sharing Tacit Knowledge Creating Concepts Justifying concepts Building an archetypeCross levelling knowledge

Internalization

Tacit Knowledge Explicit Knowledge

From users Internalization by Explicit knowledge as advertisements, patents etc.

users
From
knowledge
alliances

(Adapted from Baskerville, R and Dulipovici, A. (2006). The theoretical foundations of knowledge
management. Knowledge Management Research & Practice 4, 83–105. doi:10.1057/palgrave.kmrp.8500090)

Knowledge creation begins with Socialization. The work team perceives the problem/goal,
and each has tacit knowledge of the same. This knowledge is difficult to formalize, and can
be acquired only through direct experience. All members of the work team come together to
solve the problem, and are acquainted with the constraints or limitations of the issue. Direct
experience together would help them to exchange tacit knowledge, and tacit knowledge of
individuals slowly begins to become the tacit knowledge of the group.

The next process is Externalization. Members of work team would engage in dialogue, going
to and fro between the tacit knowledge and the explicit knowledge that is available. There
would be contradictions between the existing explicit knowledge and the tacit knowledge of
individuals and the group tacit knowledge. At this stage concepts are justified and the tacit
knowledge is converted to explicit knowledge that is understandable and acceptable to all.
In Combination, which is the third stage, the concepts that have been made explicit are
disseminated widely, and come under discussion with a wider group of people in the
organisation. There is combination with their explicit knowledge to form a larger amount of
explicit knowledge, which is then used to solve the problem.

In the last stage, this explicit knowledge as it is being used over and over again to solve the
problem or achieve the goal, is internalised and gets converted once again into tacit
knowledge held by individuals, groups and the organisation as well.

Nonaka and Toyoma say that this process need not happen only with problems situations. It
could happen with new product design, or any other activity in the organisation (Nonaka and
Toyoma, 2003).

The areas of Externalisation and Socialization are the areas that the organisation would find
difficult to control or formalize. Although tacit knowledge constitutes the major part of what
we know, it is difficult for organizations to fully benefit from this valuable asset. This is
because tacit knowledge is inherently elusive, and in order to capture, store, and disseminate
such knowledge, it is necessary that it first has to be made explicit - what Nonaka terms as
Externalization. Also important is the process of Socialization where tacit knowledge gets
directly converted to tacit knowledge.

Benefits of tacit knowledge to Organisations and Individuals

Such processes are difficult to put in place. Yet it is essential that this knowledge is
communicated to the rest of the organisation. Benefits accrue to individual, as well as to the
organisation as a whole.

For the organisation, intuitive or tacit knowledge is being passed on to other employees,
ensuring that they may also be able to act in a similarly desirable manner. It is also important
to ensure that this knowledge be communicated in order that it remain with the company
regardless of whether the employee remains with the company or not.

It is essential from the point of view of the learner and the person who is communicating the
knowledge as well. The knowledge if not communicated remains vague for the
communicator and the learner does not get the benefit of the knowledge at all. When this
knowledge is not made explicit, then the mistakes that are made are likely to be repeated, and
lessons that may be learnt are not. This may prove to be costly to the individual as well as at
the corporate level. It may also be the case that what is tacit is not accurate in certain cases.
Then it becomes imperative that the knowledge be made explicit in order that corrections are
made.

It has been established that capturing and transferring this knowledge would have a positive
effect on organisations. The question arises as to how we would affect these conversions?

Strategies and methods to convert tacit knowledge to explicit knowledge

With regards to knowledge management one of the key issues that mangers encounter is that
of capture of tacit knowledge and its subsequent transformation into a form that may be
easily transferred and then stored as well. The conversion makes the knowledge more
accessible. With this comes a dilemma for organisations. Tacit knowledge is less accessible,
but more critical. If we wish to argue that tacit knowledge provides a competitive advantage,
then making it completely accessible and visible would leave it open to illegitimate use as
well. Organisations need to decide whether to convert the knowledge, and if they do to what
extent, as well as what storage mechanisms they wish to use.

One of the strategies employed to convert tacit knowledge to explicit knowledge is what is
termed as “Personalisation”. In Personalisation, activities such as storytelling are undertaken,
which involve person to person interaction and the resultant/transferred knowledge is stored
in the human mind (Jasimuddin, Klein & Connell, 2005). This system according Hansen
provides creative and extremely analytically rigorous advice on the strategic problems by
challenging individual expertise.

McKinsey and Company and Bain and company use personalisation as a strategy to manage
tacit knowledge. People are made to use their analytic and creative skills by solving myriad
of unique business problems (Smith, 2001).

In 1996, Xerox designed an initiative called “Eureka” which they termed as a “social tactical
system”. This initiative linked 25, 000 field representative technicians. They used this to be
able to write about how to fix and diagnose problems. The field reps would maintain a
database of this tacit knowledge by contributing and renewing tips and information about
how they would solve a particular problem. Every time a contribution is made, the person’s
name goes on to the system. (Smith, 2001)
Xerox also had another initiative by which they converted explicit knowledge to tacit. They
converted what is in the manual, which is indicative of what they should do, to what they
actually did. In certain situations a machine cannot be fixed according to the instructions the
manual. These machines did get fixed because of departure from the normal procedure.
Explicit knowledge was taken and compared to practice and changes made in action taken.
There is also an informal socialization process where the field representatives would meet
and then exchange knowledge of such departures. Here then was exchange of tacit
knowledge. There was created a collective pool of practical or tacit knowledge that anyone
can contribute to and all can draw upon (Smith, 2001).

Smith (2001) and Jasimuddin, Klein and Connell (2005) speak about the use of communities
of practice to “capture and share knowledge” and to “complement existing organisational
structures”. These are large groups of people who have similar interests. They work and
exchange information about these interests outside of the formal organisational structure. The
World Bank has many communities of practice established across the world. Xerox also has
them – they call them “communities of interest”. At Xerox theses group members share
specific knowledge or have common interest in a process or some particular activity related
to a product (Smith, 2001).

Elizabeth Smith in her article “The role of Tacit Knowledge in the Workplace” mentions an
interesting concept. She advocates the use of peer to peer networks in order to combine local
expertise from various geographical areas around the world with insights of the local
managers. She calls this “global brain” (Smith, 2001).

In “Leveraging Tacit Organisational Knowledge” Dick Stenmark explains that web

documents may be used to visualise and communicate knowledge. Online Recommender
systems may be used to visualize and communicate knowledge. He explains that the
recommender system, which is a web based document retrieval system, may be used to
capture some tacit knowledge. In this system, when a user identifies certain documents as
interesting, a dynamic profile that represents part of the tacit knowledge may be maintained
on the system. As this profile file would be used to help searches, all would be interested in
giving some detail. These would not provide entire knowledge, but would provide cues,
which along with the document retrieved would give a connection to the tacit knowledge of
many others, whilst awakening the tacit knowledge of the person initiating the search
(Stenmark, 2001).
Bennet & Bennet (2008) speak of methods of surfacing tacit knowledge. Before the
knowledge can be externalised and captured and subsequently stored, they mention that the
tacit knowledge that resides in the unconscious of the individual must be brought to the
conscious of the same individual. The say this may be done in numerous ways- two may be
mentioned - triggering and self collaboration. Knowledge thus brought into the conscious
may be embedded by repetition.

Triggering occurs with the help of conversations, dialogue and questions and often happens
in sink or swim situations. Collaboration with the self is carrying out internal dialogue whilst
following the rules of dialogue- no quick judgement, an active effort to look for meaning and
connection between what the people thinks and they feel (Bennet & Bennet, 2008).

Garvin (1993) asserts that there are not many companies that are able to successfully do
affect this conversion. Learning Organisations have been successful in using it and changing
behaviour to reflect the new insights that they have gained.

What must organisations do in order to encourage this conversion and transfer of knowledge?
A supportive environment where people are recognised and rewarded for using intuition and
creativity at work is necessary. This is done in Ernst and Young. Employees are evaluated on
work contributions and how well they use the firm’s knowledge resources. Merrill Lynch
encourages this networking and team spirit by evaluating them and attaching compensation to
network and peer relationship, cooperation and sharing of knowledge.

Smith (2001) mentions that Xerox encouraged employees to transfer knowledge by using
overlapping teams that allowed for both social interaction as well as continuity of control, as
well as joint learning and information sharing. She also asserts that it is necessary to reward
employees to share their insights and tacit knowledge. They should be encouraged to write
their stores and document their insights, use photos and drawings or rough diagrams about
how to solve a difficult problem or improve existing work processes.

Joia & Lemos (2010) examine what is required for knowledge transfer and mention the
following.

Sufficient time to ensure that there is social contact. They mention that socialization process
would take time. Along with this common language to communicate along with mutual trust
and a good relationship network in the organisation is required. Added to this they also
mention the importance of reward for sharing knowledge and for using shared knowledge is
necessary.

In spite of efforts by organisations to transfer knowledge, at times tacit knowledge remains

tacit. Connel, Klein & Powell say that tacit knowledge is difficult to articulate, and there is
not sufficient technology developed to aid this conversion. Sometimes the context of the
knowledge makes isolation of knowledge and its transfer difficult. It is also important that the
employees should want to internalise this knowledge. If they do not see the benefit, then
chances are that the knowledge would not be internalised by them and the transfer would
remain incomplete.

Dick Stenmark (2001) says knowledge remains tacit because at times people are not aware of
the fact that this knowledge exists with them and that they need to externalise it. They may
not even feel the need as they are able to function well without externalising it. There are
times when they might not want to, as they may feel that they are giving up power or a
competitive advantage.

Hedesstrom & Whittey and Collins & Kirsch argue that there is no need to transfer the
knowledge at all. One of the arguments they offer is that tacit knowledge is vital knowledge.
Therefore to make it accessible and available could lead to its misuse and in the loss of the
competitive advantage that the knowledge may bring.

The next question that needs to be addressed is that of storage. Once this knowledge is
converted to explicit form and transferred to employees, it is also essential to find some
method or process to store this knowledge for reuse or for future reference. For this we need
to examine the concept of organisational memory.