Summary:

What the article is about

This article explores some of the conceptual and practical issues that companies must confront when they begin to look deeply at what it takes to manage knowledge. A premise of the article, amply supported by research, is that some of the most valuable knowledge within a firm is essentially hidden or tacit - residing not within documents or databases but in the experience and skill of human beings.

The goal of the article is to introduce readers to some of the concepts, methods, and practices required to work effectively with tacit knowledge in the business setting.
 

Definition of basic terms

• Knowledge - In the business setting, knowledge might be information with significant human value added. The premise is that people add value to information. People combine information with other information to form new and unique combinations.

 
• Tacit knowledge - refers to the unspoken know-how in the organization. It is among the potentially valuable assets of an organization. See the article "The Knowledge in Knowledge Management" for other definitions.

Forms of Tacit Knowledge

1. Embodied Knowledge - knowledge embodied in people and social networks. This represents the knowledge that guides the person but they do not know they have them or they find it difficult to articulate them. The practices or "ways of the shop" that develop unnoticed in an organization also represents tacit knowledge. We may say that such knowledge is "embodied" in that it can not be detached from the knower.
2. Embedded Knowledge - Knowledge that resides in the things that people have produced. Knowledge may be embedded in the products or product prototypes, in processes, as well as the documents produced by people.

The Business Value of Tacit Knowledge

The following are the reasons why tacit knowledge merits deliberate management in business settings.

• Innovation - Tacit knowledge is strongly implicated in organizational innovation.
• Best Practices - Attention to tacit knowledge can enable firms to identify and transfer best practices more effectively.
• Imitation - Tacit knowledge can help firms resist imitation by competitors. Because it is embodied in the people and embedded in the things they create, the knowledge tends to resist transfer to new groups and settings.
• Core Competencies - Tacit knowledge can illuminate the emerging core competencies of the firm. If the company can get a handle on its tacit knowledge assets, a firm can better understand its competitive position and can more effectively select and shape the markets in which it competes.

Methods in Working with Tacit Knowledge

1. Collect - In this method, the firms attempt to collect and codify the tacit knowledge. The terms "knowledge base" and "knowledge repository" comes into play in this step. When embodied knowledge is captured and stored, it tends to assume a greater variety of forms than do stored data or information. Knowledge repositories can help companies to derive value from embedded knowledge that might otherwise have "fallen through the cracks" when that person leaves the company.
2. Connect - The method adheres to the primary argument that valuable knowledge in an organization is embodied, context-dependent and subject to a short shelf-life.
3. Characterize - Deals with the "what" and even the "why" of working with tacit knowledge. It has been discovered that characterization can most easily be summarized in terms of the familiar distinction between "bottom-up" and "top down" reasoning.

Click to go to other articles in this book:

• Fred Nickols. “The Knowledge in Knowledge Management” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 12-21.
• Joseph A. Horvath.  “Working with Tacit Knowledge” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 34-51.
• Morten T.Hansen, Nitin Nohria and Thomas Tierney.  “What's Your Strategy for Managing Knowledge?” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 55-69.
• Arik R. Johnson.  “Competitive Intelligence and Competitor Analysis as Knowledge Management Applications” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 85-97.
• George Roth and Art Kleiner.  “Developing Organizational Memory through Learning Histories” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 123-144.
• Sarah L. Roberts-Witt.  “Practical Taxonomies” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 214-222.
• Janis Forman.  “When Stories Create an Organization's Future” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 231-235.
• Eric Lesser and Laurence Prusak. ”Communities of Practice, Social Capital and Organizational Knowledge” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 251-259.
• Steve Kaye.  “Some Proven Ways to Promote the Exchange of Ideas” in: James W. Cortada and John A. Woods (editors).  The Knowledge Management Yearbook 2000-2001. Butterworth-Heinemann, 2000. pp. 391-398.