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SECI PROCESS AND BA FOR K. CREATION
Nonaka's Model of Knowledge Creation & Transformation
In 1995, Nonaka coined the terms tacit knowledge and explicit knowledge as the two main types of human knowledge. The key to knowledge creation lies in the way it is mobilized and converted through technology.
Tacit to tacit communication (Socialization): Takes place between people in meetings or in team discussions.
Tacit to explicit communication (Externalization): Articulation among people through dialog (e.g., brainstorming).
Explicit to explicit communication (Communication): This transformation phase can be best supported by technology. Explicit knowledge can be easily captured and then Distributed/transmitted to worldwide audience.
Explicit to tacit communication (Internalization): This implies taking explicit knowledge (e.g., a report) and deducing new ideas or taking constructive action. One significant goal of knowledge management is to create technology to help the users to derive tacit knowledge from explicit knowledge.
Socialization-Externalization-Combination-Internalization Process
Organizations create and define problems, develop and apply knowledge to solve the problems, and then further develop new knowledge through the action of problem solving. In many organizations, developing new knowledge is even more important than keeping track of existing knowledge. The organization is not merely an information processing machine, but an entity that creates knowledge through action and interaction. It interacts with its environment, and reshapes the environment and even itself through the process of knowledge creation.
Hence, Nonaka et al. (2000) argue that the most important aspect of understanding a firm’s capability concerning knowledge is the dynamic capability to continuously create new knowledge out of existing firm-specific capabilities, rather than the stock of knowledge that a firm possesses at any one point in time. With this view of an organization as an entity that creates knowledge continuously, we need to reexamine our theories of the firm, in terms of how it is organized and managed, how it interacts with its environment, and how its members interact with each other. This is the topic in a later chapter on resource-based strategy.
Knowledge creation is a continuous, self-transcending process through which one transcends the boundary of the old self into a new self by acquiring new context, a new view of the world, and new knowledge One also transcends the boundary between self and other, as knowledge is created through the interactions among individuals or between individuals and their environment.
To understand how organizations create knowledge dynamically, Nonaka et al. (2000) proposed a model of knowledge creation, consisting of three elements: (1) the SECI process, the process of knowledge creation through conversion between tacit and explicit knowledge, in which SECI captures socialization, externalization, combination, and internalization (2) ba, the shared context for knowledge creation and the place to create knowledge, and (3) knowledge assets, the resources required to enable knowledge creation, such as inputs, outputs, and moderator of the knowledge creating process.
The three elements of knowledge creation have to interact with each other to form the knowledge spiral that creates knowledge. An organization creates knowledge through interactions between explicit and tacit knowledge. This interaction is a called knowledge conversion. Through the conversion process, tacit and explicit knowledge expand in both quality and quantity. There are four steps in knowledge conversion: from tacit to tacit, from tacit to explicit, from explicit to explicit, and from explicit to tacit. These four steps are called socialization, externalization, combination and internalization, and they cover the SECI process.
Socialization is the conversion of tacit knowledge to tacit knowledge. New tacit knowledge is converted through shared experiences. New tacit knowledge is acquired through shared experience, such as spending time together or living in the same environment. Socialization takes place when new skills are acquired by spending time with others who have those skills. Socialization does also occur outside the typical workplace, when mental models and opinions are shard among persons who are present. Socialization is the sharing of tacit knowledge between individuals, usually through joint activities rather than written or verbal instructions. For example, by transferring ideas and images, apprenticeships allow newcomers to see the way other think. Knowledge is produced in a group setting not only through mere acquisition of the individuals’ knowledge, but also through the sharing of common understanding. Social processes play an important role in the transition of knowledge across individuals or groups.
Externalization is the conversion of tacit knowledge to explicit knowledge. Tacit knowledge is articulated into explicit knowledge. Explicit knowledge can be expressed in words and numbers and shared in the form of data, scientific formulae, specifications manuals and the like. This kind of knowledge can be readily transmitted between individuals both formally and systematically. The successful conversion of tacit knowledge into explicit knowledge depends on the common knowledge space as well as use of means such as metaphors, analogy and mental models. Externalization involves the expression of tacit knowledge and its conversion into comprehensible forms that are easier to understand. Conventional learning methodologies require the externalization of the professor’s knowledge as the initial step in the students’ learning process. Externalization involves techniques that help to express ideas or images as words, concepts, visuals, or figurative language (e.g., metaphors, analogies, and narratives), and deductive/inductive reasoning or creative inference.
Combination is the conversion of explicit knowledge to explicit knowledge. Explicit knowledge is converted into more complex and systematic sets of explicit knowledge. Explicit knowledge is collected from inside and outside the organization and then combined, edited and processed to from new explicit knowledge. The new knowledge is then disseminated among the members of the organization. When the financial controller collects information from all parts of the organization and puts it together to show the financial health of the organization, that report is new knowledge in the sense that it synthesizes explicit knowledge from a many different sources in one context. Combination involves the conversion of explicit knowledge into more complex sets of explicit knowledge. Focusing on communication, diffusion, integration, and systemization of knowledge, combination contributes to knowledge at the group level as well as tat the organizational level. Innovative organizations seek to develop new concepts that are created, justified, and modeled at the organizational, and sometimes inter organizational, level. Complex organizational processes require the cooperation of various groups within the organization, and combination supports these processes by aggregating technologies and knowledge.
SECI Process of Knowledge Creation
To Tacit
To Explicit
From Tacit
ternalization
Socializati
From Explicit
Internalization
Combination
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Internalization is the conversion of explicit knowledge to tacit knowledge. Individuals convert explicit knowledge into tacit knowledge. By reading documents or manuals about their jobs and the organization, new employees can internalize this explicit knowledge in such documents to start doing their jobs. When internalization has occurred, the new knowledge becomes part of existing mental models and know-how. This tacit knowledge accumulated at the individual level
can stimulate a new spiral of knowledge creation when it is shared with others through socialization. Internalization requires the individual to identify the knowledge relevant to oneself within the organization’s explicit knowledge. In internalization processes, the explicit acquiring the knowledge can re- experience what others go through. Alternatively, individuals could acquire tacit knowledge in virtual situations, either vicariously be reading or listening to others’ stories, or experientially through simulations or experiments. Learning by doing, on-the-job training, learning by observation, and face-to- face meetings are some of the internalization processes by which individuals acquire knowledge
Knowledge creation is a continuous process of dynamic interactions between tacit and explicit knowledge. Such interactions are shaped by shifts between different modes of knowledge conversion, not just through one mode of interaction. Knowledge created through each of the four modes of knowledge conversion interacts in the spiral of knowledge creation. Nonaka et al. (2000) emphasize that it is important to note that the movement through the four modes of knowledge conversion forms a spiral, not a circle.
The first element of the Nonaka et al. (20000 model for knowledge creation is the SECI process. The second element is ba, which is the name given the location or context where knowledge creation takes place. Knowledge needs a context to be created. The context is defined in terms of who participates and how they participate. Knowledge needs a physical context to be created; there is no creation without a place. Ba, which can be translated to place, offers such a context. Ba does not necessarily mea a physical place. The Japanese word ba means a place at a specific time. Ba is the real cultural, social and historic context which is of importance to each knowledge worker, and which enables each knowledge worker to understand and appreciate information. Ba is the place where information is understood so that it becomes knowledge.
The key concept in understanding ba is interaction. Knowledge creation is a dynamic human process that transcends existing boundaries. Knowledge is created through the interactions among individuals or between individuals and their environments, rather than by an individual operating alone. Ba is the context shared by those who interact with each other, and through such interactions, those who participate in ba and the context itself evolve through self-transcendence to create knowledge. Participants of ba cannot be mere onlookers. Instead, they are committed to ba through action and interaction.
Ba lets participants share time and space, and yet it transcends time and space. In knowledge creation, especially in socialization and externalization, it is important for participants to share time and space. A close physical interaction is important in sharing the context and forming a common language among participants. Also, since knowledge is intangible, unbounded and dynamic and cannot be stocked, ba works as the platform of knowledge creation by collecting the applied knowledge of the area into a certain time and spaces and integrating it. However, as ba can be a mental or virtual place as well as a physical place, it does not have to be bound to a certain space and time.
The third and final element of the knowledge creation model is knowledge assets. Assets are firm-specific resources that are used to create value for the firm. Knowledge assets are resources required to support the knowledge creating process. Important knowledge assets are trust, roles and routines. Trust is required to stimulate knowledge workers to share knowledge and to enter into a social knowledge creation process. Roles have to be defined so that knowledge workers are familiar with how the knowledge creation process is to take place. Routines are important to know, so that different knowledge workers in different roles handle time and place and frequencies for knowledge creation equally. Knowledge assets must be built and used internally in order to be valuable to the firm, as they cannot be acquired externally.
To understand how knowledge assets are created, acquired and exploited, Nonaka et al. (2000) proposed to categorize knowledge assets into four types: experiential knowledge assets, conceptual knowledge assets, systemic knowledge assets and routine knowledge assets. Experiential knowledge assets consist of the shared tacit knowledge that is built through shared hands-on experience amongst the members of the organization, and between the members of the organization and its customers, suppliers and affiliated firms. Skills and know-how that area acquired and accumulated by individuals through experiences at work are examples of experiential knowledge assets.
Conceptual knowledge assets consist of explicit knowledge articulated through mages, symbols and language. They are the assets based on the concepts held by customers and members of the organization. Systemic knowledge assets consist of systematized and packaged explicit knowledge, such as explicitly stated technologies, product specifications, manuals, and documented and packaged information about customers and suppliers. Routine knowledge assets consist of the tacit knowledge that is routinized and embedded in the actions and practices of the organization. Know-how, organizational culture and organizational routines for carrying out the day-to-day business of the organization are examples of routine knowledge assets.
These four types of knowledge assets form the basis of the knowledge creating process. To manage knowledge creation and exploitation effectively, a company has to map its stocks of knowledge assets. However, cataloguing the existing knowledge is not enough. As stated above, knowledge assets are dynamic, and new knowledge assets can be created from existing knowledge assets.
The three elements of the knowledge creation model – SECI, ba and assets – represent requirements which all have to be taken care of by management to achieve successful knowledge creation. The SECI process takes care of the interaction between tacit and explicit knowledge, while ba is the place for this interaction, and knowledge assets are the resources for this interaction. When moving through the SECI process in a spiral, the organization develops new knowledge. This spiral is dependent on ba and is stimulated by conditions of growth based on available knowledge assets.
Management is important in all three elements. Executive management is responsible for articulating corporate knowledge ambitions. Middle management is responsible for creating and sustaining ba. Both executive and middle management are responsible for the availability of knowledge assets. The knowledge-creating process cannot be managed in the traditional sense of management, which centers on controlling the flow of information. Managers ca, however, lead the organization to actively and dynamically create knowledge by providing certain conditions.
Researchers and practitioners argue that most of the knowledge applied by individuals in organization is tacit knowledge. Traditionally, organizations have been concerned with management of explicit knowledge, which is of less importance to the business at any point in time. However, tacit and explicit knowledge are dependent on each other to be complete sources of knowledge. When we apply the SECI process, we see that there is an interaction between explicit and tacit knowledge, which creates new knowledge. In the externalization stage, tacit knowledge is concerted into explicit knowledge. The successful conversion of tacit knowledge into explicit knowledge depends on the common knowledge space as well as use of means such as metaphors, analogy and mental models. Such means help individuals express knowledge in words and numbers and share it in the form of data, scientific formulae, specification, manuals and the like This kind of knowledge can be readily transmitted between individuals both formally and systematically.
Nonaka et al. (2000) argue that fostering love, care, trust and commitment amongst organizational members is important, as it forms the foundation of knowledge creation. For knowledge (especially tacit knowledge) to be shared and for the self-transcending process of knowledge creation to occur, there should be strong love, caring and trust among organization members. As information creates power, an individual might be motivated to monopolize it, hiding it even from his or her colleagues. However, as knowledge needs to be shared to be created and exploited, it is important for leaders to create an atmosphere in which organization members feel safe sharing their knowledge. It is also important for leaders to cultivate commitment amongst organization members to motivate the sharing and creation of knowledge, preferably based on a corporate knowledge vision.
Nonaka et al. (2000) defined knowledge assets as firm-specific resources that are indispensable to create value for the firm; knowledge assets are inputs, outputs and moderating factors of the knowledge-creating process. For example, trust amongst organizational members is produced as an output of the knowledge-creating process, and at the same time trust moderates how ba functions as a platform for the knowledge-creating process. This definition of knowledge assets focuses on resources for knowledge creation.
