Organizational

Knowledge

Prof.Dr.Dr.Dr.H.C. Constantin Bratianu

Faculty of Business Administration

Academy of Economic Studies

Learning Objectives

• Explain the concepts of knowledge economy, and

knowledge worker

• Explain the concepts of tacit knowledge, and

explicit knowledge

• Explain the Western vs. Eastern interpretations of

knowledge

• To define the cognitive knowledge and the emotional

knowledge

• To explain the learning cycle

My business is

thinking

T.A. Edison

(1) I know what I don’t know

New economy

• In the machine age, people were ancillary, and things

were central.

• In the new economy, things are ancillary and

knowledge is central.

• Today, a company’s value derives not from things, but

from knowledge, know-how, intellectual assets,

competencies – all embedded in people.

Knowledge based processes

• Information and knowledge become more and more

important in any economy, as intangible resources

• Today, more than 50% of the gross domestic product

(GDP) in developed economies is knowledge based

• In U.S.A. intellectual and information processes (i.e.

software, communications, education, medical care etc.)

provide 76% of all U.S.A. GDP

Market value

Company Market value

($ billions)

Book value

($ billions)

eBay 54.5 4.9

Intel 170.9 33.5

Microsoft 286.2 57.5

Nucor(Steel) 4.8 2.3

J.C.Penny 10.0 6.4

General

Motors

27.3 25.3

Emergence of knowledge workers

• Knowledge workers have high degree of expertise, education, or experience, and the primary purpose of their jobs involves the creation, distribution, or application of knowledge.

• Managing knowledge work and knowledge worker will require exceptional imagination, exceptional courage, and leadership of a different kind than the leadership of industrial era.

• Knowledge is a highly nonlinear reality and thus, new methods and metrics should be developed

Information & Knowledge

• Data refers to symbols and letters and has no meaning

(i.e. 20, C, =,+)

• Information refers to processed data. Information is

data imersed in a field of meanings (i.e. 20 degree C, 20

yrs, 20 m)

• Knowledge is processed information (i.e. today is 20

degree C – the highest temperature for this time, in the

last 10 yrs)

Cogito, ergo sum !

R. Descartes

Cartesian dualism

• R. Descartes is famous in science for introducing the

coordinate system and expressing geometrical positions

by using algebraic formulation

Cogito ergo sum ! / I think, therefore I am !

• That makes mind more certain than matter

• If I ceased to think, there would be no evidence of my

existence. I am a thing that thinks.

Cartesian dualism

• Descartes contributed very much to imposing the

dualism of mind and matter, which began with Plato

and was developed by the Christian philosophy

• The Cartesian system presents two parallel worlds,

that of mind and that of matter

• Knowledge comes to our minds in an explicit way and

it should be of a rational nature

B. Russell:

It follows that we cannot know things through the

senses alone, since through the senses alone

we cannot know that things exist. Therefore

knowledge consists in reflection, not in

impression, and perception is not knowledge,

because it has no part in apprehending truth,

since it has none in apprehending existence

To release the spirit one must accentuate the work with

meditations of the heart and the soul.

(M. Musaschi – The Book of five rings)

Kamakura

Ikujiro Nonaka (n. 1935)

Professor Emeritus, Hitotsubashi University, Graduate

School of International Strategy

Japanese oneness of mind and body

• Samurai education placed a great emphasis on building

up character and attached little importance to prudence,

intelligence, and metaphysics.

• Being a man of action was considered more important

than mastering philosophy and literature, although these

subjects constituted a major part of the samurai’s

intellectual education.

(Nonaka & Takeuchi – The knowledge creating company)

KNOWLEDGE

Knowledge structure

Explicit knowledge

Tacit knowledge

Rational mind

Non-rational

mind

Knowledge transfer

process

Direct

experience

Tacit & Explicit knowledge

• Polanyi:” I shall reconsider human knowledge by starting

from the fact that we know more than we can tell”

• Tacit knowledge is similar to practical knowledge and it

is the “knowing what” face of the knowledge body

• Explicit knowledge approaches the theoretical

knowledge and it is the “knowing how” face of the same

knowledge body

Explicit

knowledge

Tacit knowledgeTacit knowledge

Explicit

knowledge

Combination

Socialization

InternalizationExternalization

Socialization

• It is a process of exchange of tacit knowledge between

two or more individuals.

• The most difficult process since tacit knowledge is based

on sharing feelings, emotions, and experiences.

• Individual face-to-face interaction is the only way to

capture the full range of physical sensations and

emotional reactions that are necessary for transferring

tacit knowledge.

Combination

• This is the most used and practical mode for sharingexplicit knowledge between two or several individuals

• It is based on rational arguments and verbal language

• Knowledge flows from the individual with a higher level of knowing toward the individual with a lower level of knowing

• Sharing knowledge is different than sharing tangible things, since there is no law of conservation

Externalization

• This is a process of transforming tacit knowledge into

explicit knowledge

• It is a transformation of knowledge taken from direct

experience and from the non-rational mind and put it into

a rational way able of being explained using the verbal

language

• For the Japanese companies this is a knowledge

creation process, which contributes significatly to the

innovation process

Internalization

• It is the reverse process by which explicit knowledge istransformed into tacit knowledge

• This is very helpful in developing different skills and in creating some control mechanisms

• It is a process which goes from the organizational knowledge to the individual knowledge, in order to increase individual’s understanding

• It is a very useful process in developing organizational culture and behavior

Welding of materials

• Welding is defined in the engineering literature as being

the process that joins materials, usually metals or

thermoplastics, by causing coalescence.

• This is often done by melting the workpieces and

adding a filler material to form a pool of molten

material that cools to become a strong joint.

• Sometimes, pressure is used in conjunction with heat, or

by itself, to produce the weld. Many different energy

sources can be used for welding, including a gas flame,

an electric arc, a laser, an electron beam, friction and

ultrasound.

Welding of knowledge

• Have you ever thought of welding 2 ideas ?

• We are currently doing it, but we do not know how.

• Have you ever thought of welding an abstract

concept with a personal feeling ?

• We are currently doing it, but we do not know how.

Welding of knowledge

Tacit knowledge Explicit knowledge

Explicit knowledgeTacit knowledge Tacit knowledge

Explicit knowledge

Socialization CombinationInternalization

Externalization

Concept of SNOW

• Snow is a possible natural form taken by water

in some given temperature conditions.

• Snow is precipitation in the form of crystaline

water ice, consisting of a multitude of

snowflakes.

COGNITIVE-EMOTIONAL KNOWLEDGE DYAD

Knowledge structure

Cognitive knowledge

Emotional knowledge

Mind

Heart

Knowledge transfer

process

Sensory system

Learning cycle

Direct experience

Observation

and reflection

Abstract concepts

Testing in

new situations