SECI Model ( Nonaka & Takeuchi )

Ikujiro Nonaka and Hirotaka Takeuchi propose a model of the knowledge creating process to understand the dynamic nature of knowledge creation, and to manage such a process effectively: the SECI model. There is a spiral of knowledge involved in their model, where the explicit and tacit knowledge interact with each other in a continuous process. This process leads to creation of new knowledge. The central thought of the model is that knowledge held by individuals is shared with other individuals so it interconnects to a new knowledge. The spiral of knowledge or the amount of knowledge so to say, grows all the time when more rounds are done in the model.

Socialization Sharing tacit knowledge through face-to-face communication or shared experience. Informal social intercourse and teaching by practical examples. An example is an apprenticeship. Externalization Trying to convert tacit knowledge to explicit knowledge by developing concepts and models. In this phase tacit knowledge is converted to understandable and interpretable form, so it can be also used by others. Externalized and theoretical knowledge is a base for creating new knowledge. Combination Compiling externalized explicit knowledge to broader entities and concept systems. When knowledge is in explicit form it can be combined with the knowledge that has been filed earlier. In this phase knowledge is also analyzed and organized. Internalization Internalization means understanding explicit knowledge. It happens when explicit knowledge transforms to tacit and becomes a part of individuals basic information.

Cycle continues now in the spiral of knowledge back to socialization when individual shares his tacit knowledge silently. This is how amount of knowledge grows and the previous conceptions might change. The creation of knowledge is a continuous process of dynamic interactions between tacit and explicit knowledge. The four modes of knowledge conversion interact in the spiral of knowledge creation. The spiral becomes larger in scale as it moves up through organizational levels, and can trigger new spirals of knowledge creation. Benefits of the SECI model - Appreciates the dynamic nature of knowledge and knowledge creation. - Provides a framework for management of the relevant processes. Disadvantages of the SECI model. - It is based on a study of Japanese organizations, which heavily rely on tacit knowledge: employees are often with a company for life. - The linearity of the concept: can the spiral jump steps? Can it go counter-clockwise? Sources: Tieto ja viestint organisaatiossa. Jyvskyln Yliopisto. http://www.12manage.com/methods_nonaka_seci.html Milovanovi, S. 2006. Knowledge sharing between users and informations specialists: Role of trust.

Finland & Knowledge Management

A few thoughts from Finnish authors During the last years knowledge has become a more important production factor, compared to traditional production factors like capital, machinery and wealth. Actually we have seen a movement from resource based point of view towards knowledge based point of view in corporations. According to this point of view, knowledge is a critical factor for organization. Thats why knowledge and know-how have been highlighted a lot in competition between companies and in international competition. An important point in knowledge management is to pay attention to collective knowledge and know-how and to evolve these things using teamwork. The goal of knowledge management is to make organization work more effectively, so company can strengthen its competitive capabilities and success. You need to have enough skilled workers and to educate them when needed. Its not just about the knowledge itself, but about how to use and spread the knowledge in the most effective and wide way. (Kukko, M., Yliniemi, T., Okkonen, J. & Hannula, M. 2004. Osaamisen ja tietmyksen hallinnalla kilpailukyky kytnnn toteutus suomalaisissa yrityksiss. e-Business Research Center. Researc Reports 10. Tampere, Cityoffset Oy. 43 s.)

The amount of knowledge has grown a lot and that has brought many challenges for controlling and managing knowledge. Knowledge is accumulated in individuals, systems and environment and knowledge management is about how to use this knowledge capital in a most effective way and about how to create new knowledge most effectively. Even

though computers and internet helps processing and spreading information, the most important resource is the human being processing information, because he can make the information trustworthy. The main idea is that knowledge spreads across the organization and it is not kept secret. Controlling the knowledge is a big problem nowadays because of the huge amount of it and thats why tools for managing this knowledge will become more important in the future. (Suurla, R. 2001. Avauksia tietmyksen hallintaan. Helsinki, Oy Edita Ab. s. 190) Most important thing is to create new knowledge, but its important as well to use silent and old knowledge to be effective. The goal is to create and strengthen core competences (Strmmer). (Strmmer, R. 1999. Henkilstjohtaminen. Helsinki, Oy Edita Ab. 1. painos. 225 s.) Knowledge Management and Corporations Even the traditional production industries are changing into a more knowledge and knowhow intensive sectors. Reasons for this are: Macro-scale - High cost of employees - High level of education and know-how - Looking for competitive advantage demands specialization Micro-scale - International competition - Possibility for a long and profitable customership - Possibility to strengthen the relationship with customer Knowledge Management and Software Industry Software industry is getting more and more important in Finland all the time. Different kinds of softwares are getting very important for all kinds of companies working in different fields. They are more often a built in application of products made by traditional companies like production industry and services. Other branches of businesses are becoming more and more knowledge intensive, so its important to take a close look for todays software industry. E-business and its competitiveness is based on effective use of programs. Some Facts of Finnish Software Industry - It employs directly 30 000 people and other 30 000 people are working with software in traditional companies - 80 % of software companies have less than 5 employees - Global markets grow 10 15 % a year

Software companies work in a very knowledge intensive environment and the employees are usually real specialists of a narrow sector. You need knowledge management to make the special knowledge of separate employees and teams to move within the company. Its very hard to manage this process because a lack of good tools and of course there is a problem of what to measure. Its the same problem in all specialist organizations, where the boss usually knows less about the subject than his employees. To succeed software corporation should know its target markets needs and working habits, technologies that it uses, to control the processes how to develop software, to know the factors of its delivery channels and to know international business (Tyrvinen et al. 2004)

Knowledge Management in the modern world - Traditional production factors are easy to get by anyone - Copying competitors products and knowledge is easier than ever because knowledge is spreading faster than ever before. - Competitive advance is being searched from knowledge - The one who succeeds creates and assimilates new knowledge and especially learns faster than the others. Most important thing is: Right knowledge in a right time in right way into a right place. It means refining data and information to a knowledge and understanding. But what and

what kind of information does one need? The users should be capable enough to be able to use knowledge in hand.

Introductory thoughts on knowledge management

What is the goal of effective knowledge management? 1.better coordination of knowledge within the company in order to multiply knowledge 2. accessability of knowledge for all parts of the company 3. Innovation fostering environment Additionally, knowledge management needs to be adapted to each and every situation depending on the companys size, industry and the function it is assigned to as well as the to the culture of a company. Depending on a companys priorities, they will either decide for an industrialization of knowledge or for the model of a learning organization. Most important is a continuing and consistent approach that is actually doing what it is telling. Source: Ursula Schneider: Die 7 Todsnden im Wissensmanagement (Frankfurt: 2001, Frankfurter Allgemeine), p. 19-39

Knowledge is the only resource that gets more valuable by using it. The competitive advantage that can be gained through knowledge is omnipresent in todays business environment. However, if knowledge is not being communicated, organized and used effectively it is simply lost. Studies show that by targeting the effective use of knowledge, production is usually increased by around 30%. (Source: Wrner, K.; Prieto, J.; Messner, M.; Schnettler, B. (1997), IAO-Studie Wissensmanagement) Most of the companies use less than half of their available knowledge as they are lacking either methods for identification and structuring or platforms that enable targeted knowledge exchange or both. One crucial success factor on the way to effective knowledge management is a targeted Human Resource Management in order to create a corporate culture that is supporting a continuous knowledge transfer as well as the management behind it. Knowledge is something that comes from information processed by using data. It includes experience, values, insights, and contextual information and helps in evaluation and incorporation of new experiences and creation of new knowledge. Knowledge originates from, and is applied by knowledge workers who are involved in a particular job or task. People use their knowledge in making decisions as well as many other actions. In the last few years, many organizations realize they own a vast amount of knowledge and that this knowledge needs to be managed in order to be useful. (Source: Journal of Knowledge Management Practice, March 2005)

Davenport and Prusak (1998) defined knowledge as a fluid mixture of experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. They argue that knowledge originates and is applied in the minds of people. In organizations, it becomes embedded in documents and repositories, in organizational routines, in processes, practices, and norms. There is a slightly different definition given by Alavi and Leidner (1999). They see knowledge as a justified personal belief that increases an individuals capacity to take action. There are two type of knowledge, namely explicit and tacit knowledge (Nonaka and Takeuchi, 1995). Tacit knowledge is obtained by internal individual processes and stored in human beings. Such knowledge is sometimes described as Experience, Reflection, Internalization or Individual Talent. Explicit knowledge is stored in a mechanical or technological device, such as documents or databases. This knowledge would be more useful if it could be shared and used among

the community that works together using collaborative technology at anytime, anyplace and anywhere