A Dynamic Theory of Organizational Knowledge Creation By Ikujiro Nonaka The objective of this paper is to develop the essential elements

of a theory of organizational knowledge creation. The difference between knowledge and information is that information is a flow of messages, while knowledge is created and organized flow of information. By this definition, knowledge is related to human actions. Information can be viewed as a syntactic aspect or volume of information rather than the content. Knowledge is more relevant to a semantic aspect or conveyed meaning. Knowledge creation consists of two dimensions: explicit, declarative knowledge, or codified knowledge; and tacit knowledge, procedural knowledge, or knowledge that is hard to formalize or communicate or involves in a specific context. Individual members of an organization drive organizational knowledge creation. Three important factors influencing the formation of new knowledge: intention, autonomy, and a certain level of environmental fluctuation. There are four modes of knowledge conversion: (1) from tacit to tacit knowledge; (2) from explicit to explicit knowledge; (3) from tacit to explicit knowledge; and (4) from explicit to tacit knowledge. From tacit to tacit knowledge mode is called socialization. To acquire tacit knowledge is learning from experience, observation, imitation, and practice. Examples of mechanisms to trigger the explicit to explicit mode or combination are meetings and telephone conversations, which combine different explicit knowledge held by individuals. The tacit to explicit knowledge mode or externalization is processed by using metaphor to reveal hidden tacit knowledge that is hard to communicate, while action, trial-and-error experimentation, or learning by doing is related to the explicit to tacit knowledge or internalization. Organizational knowledge creation takes place when all four modes are organizationally managed to form a continual cycle. There are five organizational knowledge creation processes: enlarging individual knowledge, sharing tacit knowledge, crystallization, justification, and networking knowledge. Individual knowledge can be enlarged if the individual has various and in-dept knowledge. The knowledge remains personal until it is shared to others. Mutual trust among individuals in a group is formed through shared experience. The knowledge created in an interaction of group members is crystallized into some concrete forms such as a product or a system by experiments. The quality of gained knowledge is justified if it is truly worthwhile to set up a criteria or standard for the organization. Summarily, the knowledge creation knowledge starts from combination to socialization, internalization, and externalization modes. Based on this study, two management models are proposed: middle-up-down management and a hypertext organization. In the middle-up-down model, all members are important actors because a major characteristic of the model regarding to knowledge creation is the wide scope of cooperative relationships among top, middle and lower managers. In addition, the major role of middle managers is to synthesize the tacit knowledge of both employees and top management to explicit knowledge. In hypertext organization, knowledge creation is more effective and efficient with an ability of employees to acquire, create, exploit, and accumulate new knowledge continuously and repeatedly in a circular process similar to a concept of hypertext in the Internet world. In conclusion, this paper elaborates knowledge in several aspects: information VS knowledge definitions, syntactic VS semantic views, explicit VS tacit views, knowledge conversion modes, knowledge creation processes, and new perspectives of organizational knowledge. Due to rich details and definition of organizational knowledge creation, this paper provides a primary look of the IS knowledge management domain. Subsequent articles employ insights from this article as theoretical resources in following works.