Another way of defining knowledge is to make a distinction between “tacit” and “explicit” knowledge (Polyani, 1966). Nonaka and Takeuchi (1995) make the same point in more precise terms:
Explicit knowledge is documented and public; structured, fixed-content, externalized, and conscious (Duffy, 2000). Explicit knowledge is what can be captured and shared through information technology.
Tacit knowledge resides in the human mind, behavior, and perception (Duffy, 2000). Tacit knowledge evolves from people’s interactions and requires skill and practice.
Nonaka and Takeuchi suggest that tacit knowledge is hidden and thus cannot be easily represented via electronics. Tacit refers to hunches, intuitions and insights (Guth, 1996), it is personal, undocumented, context-sensitive, dynamically created and derived, internalized and experience-based (Duffy, 2000). Nonaka and Takeuchi mean that knowledge is the product of the interaction of explicit and tacit knowledge. The process of creating knowledge results in a spiraling of knowledge acquisition. It starts with people sharing their internal tacit knowledge by socializing with others or by capturing it in digital or analogue form. Other people then internalize the shared knowledge, and that process creates new knowledge. These people, with the newly created knowledge, then share this knowledge with others, and the process begins again. Hibbard (1997) articulated this process as innovation.
With regard to KM, we must take into consideration the more system-bound side of knowledge (information): explicit knowledge and the more people-bound side of knowledge (capacity and attitude) implicit knowledge. From a study of the success of Japanese entrepreneurs, it has become apparent that their success is mainly due to their ability to transform implicit knowledge into explicit knowledge whereby. For example, it’s attempted to grasp people's creative ideas (implicit knowledge) as information and knowledge systems (explicit knowledge), so that they become reproducible and useable
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