Introduction

Knowledge as a competitive factor has hit the business headlines with a bang. Companies are argued to make more use of the hidden treasure in the minds of their employees. Innovative firms set up work on groups on knowledge management, professional organizers advertise workshops and conferences on knowledge management, and business consultants offer their services. Leading management theoreticians argue that it is much more profitable for a company to invest a given sum in its knowledge asset than to spend the same amount on material assets. The revolution in communications technology has brought economic changes which enhance the importance of knowledge. In modern industrial nations, knowledge intensive industries are responsible for a steady increasing proportion of the national net product. This knowledge is embedded in and carried through multiple entities including organization culture and identity, routines, policies, systems, and documents, as well as individual employees (Grant 1996a, 1996b; Nelson and Winter 1982). Knowledge assets may produce long term sustainable competitive advantage and a source of innovation. Advanced information technologies (e.g., the internet, intranets, extranets, browsers, data warehouses, data mining techniques, and software agents) can be used to systematize, enhance and expedite large-scale intra-and inter-firm knowledge management. Knowledge management refers to identifying and leveraging the collective knowledge in an organization to help the organization compete (Von Krogh 1998). Knowledge management is purported to increase innovativeness and responsiveness (Hackbarth 1998).

Knowledge management in traditional organizations

In Mark Koenig's view (2002, p. 20): The traditional or the initial stage of KM was driven primarily by information technology. That stage has been described . . . as "by the Internet out of intellectual capital." By this, Koenig means that the development of the Internet and the use of its technology to implement intranets provided the enterprise with an unprecedented tool for knowledge sharing

and transfer, and thus for getting value out of their previously developed intellectual capital. Knowledge management was the name introduced to describe the management activity concerned with implementing such solutions, in order to gain competitive advantage and to increase productivity and effectiveness. Further, this activity could be rationalized by its proponents (including large consulting organizations selling their own newly developed expertise in implementing such solutions) in terms of increasing the value of an enterprise's intellectual capital (IC). The notion of IC had appeared a few years earlier to account for the increasing disparity between the market value of real world enterprises and their book value as computed using measurable financial indicators and conventional formulae for establishing company valuations. In addition to the above, the first stage of KM was also characterized by a focus on "best practices," later revised to a focus on "lessons learned." But it is not clear from Koenig's account what "best practices" and "lessons learned" in KM have to do with the IT focus supposedly dominant in stage one. So for Koenig, the first stage of KM was about applying technology to accomplish knowledge sharing and coordination across the enterprise. Traditional knowledge management programs (the so called second age of KM) have focused on transforming tacit knowledge to explicit knowledge through procedures and structured repositories, such as databases, modern knowledge management techniques (called the third age of KM) have realised that this transformation is at best, and at worst it actively hinders knowledge retention due to the perceived complexity. Staff only enters knowledge when demanded to and actively seek to circumvent the process where possible creating small sub cultures of knowledge sharing not captured in the organization.

The second age of KM in Snowden's view is characterized by a focus on the four SECI model's processes describing the conversion of knowledge from Explicit to Tacit (Socialization), Tacit to Explicit (Externalization), Explicit to Explicit (Combination), and Tacit to Tacit

(Internalization). He goes on to comment about the misunderstanding of Polanyi's (1958, 1966) views on the nature of the relationship between tacit and explicit knowledge that is prevalent in the second age, specifically that it was "dualistic, rather than dialectical" (ibid.), in contrast with both Polanyi's and Nonaka's understanding of the relationship. But he says little else about the second Age, leaving the impression that there was little else to this age of KM.

Knowledge management in innovative organizations

Traditionally, wealth creation was based on land, capital and labour. Now, information and knowledge are major ingredients (Benkler 2006). Now Information is a resource for management and decision-making. Information and Communications Technologies (ICT) have made information collection, storage, processing, retrieval, analysis and dissemination cheap, affordable and accessible. ICT are changing the space and time dimensions of value-adding activities and patterns of social capital investment by making information available at any physical place, reducing the dependence on location, and compressing process cycle times and decisions (based on information) about such processes (Coakes 2002). Because information often changes rapidly and can be interpreted more or less effectively according to the knowledge of people using it, wealth creating processes and the opportunities that are associated with them now change more often and more rapidly. In such a changed landscape, organizations need to beresponsive, flexible and agile. In other words, they now need to have the capability to leverage available information and to use their collective knowledge to make appropriate decisions quickly and effectively. This need has driven the KM movement in new directions for both practice and theory. There are many complex knowledge streams within innovative organisation; flowing from person to person as part of the daily work (tacit-to-tacit, called socialisation), from person to the organisation as part of documentation processes (tacit-to-explicit, called externalisation), from the organisation to a person (explicit-to-tacit, called internalisation), and from one form within the organisation to another form (explicit-to-explicit, called combination). Innovative organizations are focusing on transfer of tacit knowledge. Much tacit knowledge is generated and transferred through body language or physical demonstrations of skills and, therefore, the use of information and communication technology is only partly possible (Leonhard and Sensiper, 1998). Role of knowledge management in innovative organizations: Create a sustainable competitive advantage: first role of knowledge management in innovation of todays commercial environment is create and develop competitive advantage by using participatory methods of acquiring knowledge.

Cavusgil et al (2003) expressed that creation and support from innovation program due to changing customer needs, is caused intense competitive advantage and changing technology rapid and complex. Although innovation internalization for today's organizations is very problem but close collaborative relationships can provide access to common processes and used by other organizations. Today acquire knowledge and skills through collaboration and participation has been identified as efficient and effectively method in successful innovation. Reduce the complexity of the innovation process: Second role of knowledge management is reduced the complexity in the innovation process. Shani et al(2003) believe that increasing the amount of knowledge that is available in organizations can increase the complexity in design and management of new products, but this complexity can be identify and easy by knowledge management and organization knowledgeoriented units that have strategic role(Adams & Lamont, 2003). The integration of tacit and explicit knowledge within the organization: third role of knowledge management in order to innovation process is Integration, sharing and developing tacit knowledge. As a result, knowledge and information is available and possibility. Sharing of tacit knowledge for innovation capability of organizations is very necessary(Adams & Lamont, 2003). Nonaka et al have divided knowledge to type of explicit & tacit knowledge that knowledge integration In connection with the use of policies, tools and processes knowledge management should be facilitate thinking and talking for learning and innovation in individual and organizational level. Produced a clear and explicit knowledge: The fourth role that knowledge plays in innovation process is related to clear and explicit knowledge. Although explicit knowledge such as tacit knowledge in innovation process does not play a dominant role, because explicit knowledge about innovation is readily available to competitors, however, explicit knowledge is one of the main components of innovation. Cooperate in goals sharing: Fifth role that knowledge plays in innovation is possible cooperation. Cooperation as ability of consumers, suppliers and workers to create a community for sharing knowledge inside and outside organizational boundaries that can shared commercial goals with together cooperation to give its benefit and profit to all of society members.

Transfer of tacit knowledge towards innovation

The sharing of tacit knowledge as resource for innovation is especially important in developing fields where not a lot of explicit knowledge exists, such as biotechnology. Innovators in these fields combine partially codified knowledge with complimentary resources such as cross-functional teams or learning-by-doing capabilities, which leads to new product and process innovations (Cardinal et al., 2001). knowledge management systems have a distinctive contribution in the development of sustainable competitive advantage through innovation. Whilst information and knowledge management systems alone do not possess the qualities required to provide organizations with sustainable competitive advantage. Getting tacit knowledge from customers and suppliers is a valuable source for organizations innovation programs due to scarcity of such knowledge that can be used as input for innovation. The authors also indicate that collaboration between organizations plays a significant role in sharing of tacit knowledge, which in turn positively impacts innovation capability (Cavusgil et al., 2003). The sharing of tacit knowledge as resource for innovation is especially important in developing fields where not a lot of explicit knowledge exists, such as biotechnology. Innovators in these fields combine partially codified knowledge with complimentary resources such as cross-functional teams or learning-by-doing capabilities, which leads to new product and process innovations (Cardinal et al., 2001). The fact that knowledge is not available in explicit format makes knowledge sharing and the application of knowledge in the innovation process difficult. Organizations are firstly not aware of the stocks of tacit knowledge available to them, and furthermore have no formalized way to access it. Knowledge management can make tacit knowledge accessible through an understanding of what tacit knowledge is available, e.g. through utilization of a database indicating peoples expertise. It can also assist in codifying tacit knowledge to make it explicit, in order for it to be more readily available application in future innovations. Knowledge management can play a major role in facilitating collaboration, which can assist in the sharing of tacit knowledge.

Barriers to successful tacit knowledge transfer

Tacit knowledge as personal knowledge that each individual possesses that is unique and once unlocked can be a creative contribution in an organization (Kikoski and Kikoski, 2004, p. 66). Nonaka (1991, p. 98) explores the term further: tacit knowledge is highly personal and hard to formalize and, therefore, difficult to communicate to others, and details his description that there are two dimensions of tacit knowledge: the first is the technical dimension which encompasses the know-how, the second is the cognitive dimension which consists of beliefs, ideas and values which we often take for granted (Nonaka and Konno, 1998, p. 42) Tacit knowledge resides in individual skills, previous experiences of collaborations and their social context. Many of these skills and social arrangements are related to work activities. For van Baalen et al. (2005) any form of explicit knowledge assumes the existence of tacit knowledge, the latter which cannot be articulated that easily. As a consequence the transfer of innovative knowledge (which often is tacit knowledge) from a person or group within an organization to another will become problematic (van Baalen et al., 2005). According to Szulanski, people on the source side may be reluctant to share their knowledge with others for fear of losing ownership, a position of privilege, superiority, for the lack of insufficient rewards or even sometimes due to being unaware of the fact that their knowledge might be of interest to others (van Baalen et al., 2005). Szulanskis discussion of the internal stickiness of knowledge transfer focuses on the possible barriers encountered in the transfer process. In his empirical analysis he came up with three barriers with significant potential to disrupt the transfer of tacit knowledge. Firstly, the ambiguity of the mostly tacit knowledge which needs to be transferred. This seems to have a huge influence, where neither sender nor receiver can find enough congruence. This is closely connected to the second barrier the lack of absorptive capacity, which happens if the receiver is not able to deal with the ambiguity and therefore the probability of failure increases. The third interconnected obstacle to smooth transfers according to Szulanski is difficult relationships between sender and receiver (Lehner and Lehmann, 2004). Other barriers, but with less influence are the lack of motivation by sender and receiver which might be overcome with executive fiat, and the unreliability of the sender which might slow down the transfer, but does not seem to affect its effectiveness.

During the transfer of tacit knowledge, communication problems at the interface can arise because many companies focus on the specialization of work. The higher the degree of specialization, the higher the isolation and narrower the perspective within a firm. The organization structure often hinders tacit knowledge sharing by establishing wrong authorities. Further, unclear goals and unclear incentives can inhibit tacit knowledge transfer. Finally, the physical layout of offices can act as a barrier, since they can hinder and disturb communication among employees (Hall and Sapsed, 2005; Lehner and Lehmann, 2004; von Krogh and Kohne, 1998). Competitive advantage will only be gained if companies value their tacit knowledge, as explicit knowledge can be known by others as well. Tacit knowledge creates the learning curve for others to follow and provides competitive advantage for future successful companies. Individual Barriers to tacit Knowledge Transfer: Loss of Power Revelation Uncertainity Motivation

Social Barriers: Language Conflict avoidance Culture Other technology barriers

Sucees factor for transfer of tacit knowledge:

Hansen et al. (1999) suggested two strategies for the transfer of organisational knowledge. The first strategy was called codification and the second personalisation. In codification, all knowledge is standardised, structured and stored in information systems. On the other hand, in personalisation, the emphasis is on tacit knowledge transfer from one person to another. In this case, the knowledge storage systems are less robust than in the earlier strategy. In the day-to-day activities of organisations, signs of tacit knowledge such as intuition, feelings, insights and personal abilities are detected. ODell and Grayson (1998) maintain that organisations have a large amount of knowledge to be discovered, mainly tacit knowledge in the form of know-how and best practices. Better use could be made of this knowledge if it were

transferred within the organisation. Even in bureaucratic organisations, despite the preponderance of operational standards, the bulk of this knowledge is to be found in people and in the interactions among them (Kim, 1993). Success factors: time, space and opportunity to transfer Trust and openness between sender and receiver Power relations Hierarchy Common language Relationship network Favorable environment Type of training Knowledge storage

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