Knowledge Management vs. Knowledge Creation: a Function of BENEFICIAL Learning in an ever Changing Organisational Environment – Part 3 of 7.

Knowledge Creation


The organization cannot create knowledge on its own without the initiative of the individual and the interaction that takes place within the group.

                                                                                                           Nonaka & Takeuchi


Nonaka (2000),   believe that ‘despite the widely recognised importance of knowledge as a vital source of competitive advantage, there is little understanding of how organisations actually create and manage knowledge dynamically’.

The result is that ‘knowledge management’ and ‘information management’ are often seen as the same because there is a general lack of understanding of knowledge, information and the knowledge creation process

The three stage transformation model proposed by the International Standards Organisation with inputs and outputs and a culture of addressing  deviations from standard to solve problems that arise, has resulted in the organisation being seen as an ‘information processing machine’. The consequence of which, is that the organisation passively processes information from the environment to solve a problem and adapts to the environment based on a given goal.

Figure 1. ISO Transformational Model

Nonaka (2000) take a different approach and maintain that organisations are entities that create knowledge continuously and suggest the opportunity is to understand the dynamic processes, in which organisations create, maintain and exploit knowledge.

In knowledge creation, micro and macro environments interact and changes occur at both the micro and the macro level. The individual (micro) influences and can be correspondingly influenced by the environment (macro) with which they interact.

Nonaka (2000) suggest, knowledge is created through the interaction of ‘explicit’ and ‘tacit’ knowledge where the individual transcends the boundaries between ‘self’ and ‘other’ and knowledge is created through interaction between individuals and/or individuals and their environment.

They propose a model of knowledge creation consisting of three elements:

  1. The SECI process (Socialisation, Externalisation, Internalisation and Combination), a process of creating knowledge through the conversion of tacit and explicit knowledge;
  2. `ba’, the shared context for knowledge creation; and
  3. Knowledge assets, the inputs, outputs, and moderators of the knowledge-creating processes.

Nonaka (2000) maintain ‘the knowledge creation process is a spiral that grows out of these three elements; the key to leading it is dialectical thinking where knowledge creation is a continuous, self-transcending process through which one transcends the boundary of the old self into a new self by acquiring a new context, a new view of the world, and new knowledge’.

Figure 2. Knowledge created through a Spiral


There is little debate regarding the importance of knowledge in today’s organisations, with Peter Drucker suggesting that;

“The single greatest challenge facing mangers in the developed countries of the world is to raise the productivity of knowledge and service works”.

Organisations today, however, are faced with the overriding problem that few managers, and information professionals understand how to manage knowledge in knowledge-creating organizations.

The tendency is to focus on quantifiable knowledge, and KM is often seen as some sort of information processing machine. A more holistic approach to KM is necessary due to the complex subjective and dynamic nature of knowledge. Cultural and contextual influences further increase the complexity of managing knowledge in global organisations. These factors need to be taken into account in any model or framework trying to explain key KM concepts and processes. Measurable metrics are required to monitor progress toward and attainment of expected KM benefits.

A holistic approach encompasses all the different types of content to be managed, ranging from data to information to knowledge, but also from tacit to explicit, and back to tacit-knowledge-type conversions. Davenport and Prusak, (1998, p.2) provide the following distinctions between data, information, and knowledge:

  • “Data: A set of discrete, objective facts about events. Information: A message, usually in the form of a document or an audible or visible communication.
  • Knowledge: A fluid mix of framed experiences, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers. In organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices, and norms”.

Davenport and Prusak (1998) and Nonaka & Takeuchi (1995) prioritise the importance of  ‘knowledge of context’ as more relevant and applicable for organizations involved in learning activities and knowledge management system (KMS) where a lot of information will be taken into action from knowledge repositories and the potential of generating of new knowledge among communities of practice (CoP) in collaborative environments.

Cristea & Capatina, (2009), Conclude that the practical benefit of knowledge management models is the fact that models helps key stakeholders to reach organizational purposes with a better understanding of the elements that are involved. Models further help us to understand what happens in the current state and offers a way to understand what is about to happen in the future state. A review of a number of key KM models highlights the following key elements:

  • The Krogh and Roos model follows an epistemological approach and emphasises the idea of knowledge that is found both in the individual mind and in the relations between persons.
  • The Nonaka/Takeuchi models is centred on knowledge spirals, which can explain  tacit knowledge transformation in explicit knowledge, this type of knowledge is considered to be the starting point for learning and innovation in individuals, groups and organizations.
  • The Choo/Weick model adopts an approach, which it tries to make sense of knowledge by analysing the way that informational elements are found in organisational actions.
  • The Wiig model is mostly based on the principle, which states that knowledge can be useful only when it is organized using semantic networks, in order to ensure perspectives and purposes are contextualised.
  • Adaptive models are are proving to be well suited to modelling knowledge management processes. The organization is treated as a living organism concerned with an independent existence, concerned with its ongoing survival.

Ruggles & Holtshouse, (1999), identified key attributes in the creation of knowledge in KM:

  • Generating new knowledge
  • Accessing valuable knowledge from outside sources
  • Using accessible knowledge in decision making
  • Embedding knowledge in processes, products and/or services
  • Representing knowledge in documents, databases, and software
  • Facilitating knowledge growth through culture and incentives
  • Transferring existing knowledge into other parts of the organization
  • Measuring the value of knowledge assets and/or impact of knowledge management
  • Both tacit and explicit knowledge forms are addressed; tacit knowledge (Polanyi 1966) is knowledge that often resides only within individuals, knowledge that is difficult to articulate such as expertise, know-how, tricks of the trade, and so on.
  • The benefit of Knowledge created.
  • The impact of Knowledge created.

In most organisations, making sense of information and data, knowledge creation and decision-making, tend to be treated as separate functions and responsibilities. These functions are assigned to various individuals and groups in the organisation. Typically, leadership make decisions that cascade down to training, manufacturing, and engineering functions that are required to create and apply new knowledge while the planning and marketing/sales functions are expected to independently make sense of the external environment.

The success of knowledge creation in an organisation is dependent on the integration of each of these functions, encapsulating the beliefs, interpretations, premises, procedures, experiences and intuitions of all levels, functions and roles within the organisation into a shared repository that is accessible to all relevant stakeholders.


Next – Part 4/7 Organisational Learning



  1. Cristea, D.S. & Capatina, A. (2009) Perspectives on knowledge management models, Economics and Applied Informatics, Years XV – no 2 – ISSN 1584-0.
  2. Davenport, T.H. and Prusak, L. (1998) Working Knowledge: How Organizations Manage What They Know, Boston, MA.: Harvard Business School Press, 1998.
  3. ISO 9001:2000, Quality Management Systems – Requirements Standard.
  4. Nonaka, I. and Takeuchi, H. (1995) The Knowledge-Creating Company, New York: Oxford University Press, 1995.
  5. Nonaka I, Toyama R, and Konno N, SECI, Ba and Leadership: a Unified Model of Dynamic Knowledge Creation, Long Range Planning vol. 33 (2000) 5-34.
  6. Ruggles , R. , and D. Holtshouse . 1999 . The knowledge advantage. Dover, New Hampshire : Capstone Publishers.
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