Tacit VS Explicit: Transition of knowledge to business growth

 

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Introduction.

In today's rapidly evolving business landscape, knowledge has emerged as a crucial asset for driving growth and innovation. As organizations strive to remain competitive, they are increasingly focusing on harnessing knowledge to gain a strategic edge. This article delves into the dichotomy of tacit and explicit knowledge and explores how businesses can effectively transition these forms of knowledge to fuel their growth. Drawing on scholarly research and insights from prominent thinkers, this article aims to shed light on the intricate interplay between tacit and explicit knowledge and its impact on business success.

Understanding Tacit and Explicit Knowledge.

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To comprehend the transition of knowledge to business growth, it is imperative to grasp the distinction between tacit and explicit knowledge. According to Polanyi (1966), tacit knowledge refers to the unarticulated, intuitive, and personal understanding that individuals possess through their experiences and interactions. It encompasses skills, expertise, and insights that are challenging to formalize or convey explicitly. In contrast, explicit knowledge is codified, formalized, and easily communicable through various mediums, such as documents, manuals, and databases (Nonaka & Takeuchi, 1995).

Tacit Knowledge: The Hidden Driver.

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Tacit knowledge often resides within the minds of employees, developed through years of hands-on experience and experimentation. This type of knowledge plays a pivotal role in decision-making, problem-solving, and fostering creativity within an organization. As argued by Davenport and Prusak (1998), tacit knowledge can be a source of sustainable competitive advantage, as it is difficult for competitors to replicate or imitate.

Harnessing tacit knowledge for business growth involves creating an environment that facilitates knowledge sharing, collaboration, and informal interactions among employees. This can be achieved through strategies like mentorship programs, cross-functional teams, and open forums for idea exchange (Grant, 1996). By nurturing a culture that values and encourages tacit knowledge, organizations can unlock hidden potential and drive innovation.

Explicit Knowledge: The Foundation of Scalability

While tacit knowledge is invaluable, explicit knowledge plays a fundamental role in scaling operations and ensuring consistency. Explicit knowledge can be systematically organized, documented, and disseminated throughout an organization, enhancing efficiency and reducing the reliance on individual expertise (Hansen, Nohria, & Tierney, 1999).

To leverage explicit knowledge for business growth, companies can invest in knowledge management systems, standardized processes, and training programs. These mechanisms enable the efficient transfer of knowledge across different departments and facilitate onboarding of new employees. By capturing and codifying explicit knowledge, businesses can streamline operations, enhance customer experiences, and expedite decision-making.

Transitioning Knowledge for Business Growth.

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The journey from tacit to explicit knowledge is a dynamic process that requires careful orchestration. Nonaka and Konno (1998) introduced the concept of knowledge conversion, which outlines four modes of knowledge transfer: socialization, externalization, combination, and internalization. Socialization involves the sharing of tacit knowledge through interactions and experiences, while externalization transforms tacit knowledge into explicit forms, such as narratives and metaphors. Combination focuses on integrating explicit knowledge from various sources, and internalization entails applying explicit knowledge until it becomes tacit.

Successful knowledge transition demands a holistic approach that embraces both tacit and explicit dimensions. Organizations should emphasize the creation of a learning culture, where employees are encouraged to share experiences, reflect on insights, and convert tacit knowledge into tangible assets (Garvin, 1993). Through cross-functional collaboration and continuous learning initiatives, businesses can effectively bridge the gap between individual expertise and organizational growth.

Conclusion.

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The interplay between tacit and explicit knowledge forms the foundation for sustainable business growth in the knowledge-driven economy. By recognizing the value of tacit knowledge as a source of innovation and explicit knowledge as a catalyst for scalability, organizations can create a harmonious ecosystem that nurtures both dimensions.

References:

Davenport, T. H., & Prusak, L. (1998). Working Knowledge: How Organizations Manage What They Know. Harvard Business Press. [Online] Available at: https://www.researchgate.net/publication/229099904_Working_Knowledge_How_Organizations_Manage_What_They_Know  [Accessed on 03th August 2023].

Garvin, D. A. (1993). Building a Learning Organization. Harvard Business Review, 71(4), 78-91. [Online] Available at: https://citeseerx.ist.psu.edu/document?repid=rep1&type=pdf&doi=110d46f39d3531508765a7043039141448709093 [Accessed on 03th August 2023].

Hansen, M. T., Nohria, N., & Tierney, T. (1999). What's your strategy for managing knowledge? Harvard Business Review, 77(2), 106-116. [Online] Available at: https://hbr.org/1999/03/whats-your-strategy-for-managing-knowledge [Accessed on 03th August 2023].

Nonaka, I., & Konno, N. (1998). The Concept of "Ba": Building a Foundation for Knowledge Creation. California Management Review journals, 40(3), 40-54. [Online] Available at: https://journals.sagepub.com/doi/10.2307/41165942 [Accessed on 03th August 2023].

Nonaka, I., & Takeuchi, H. (1995). The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation? Oxford University Press. [Online] Available at: https://www.scirp.org/(S(i43dyn45teexjx455qlt3d2q))/reference/ReferencesPapers.aspx?ReferenceID=1927602 [Accessed on 03th August 2023].

Polanyi, M. (1966). The Tacit Dimension. Routledge. [Online] Available at: https://www.scirp.org/(S(czeh2tfqw2orz553k1w0r45))/reference/referencespapers.aspx?referenceid=1602894  [Accessed on 03th August 2023]

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