Nonaka and Takeuchi mentioned that knowledge in the company is embodied in people’s mind. It means that every individual (read: employee) will have different information and experiences based on what they did before. We can call this knowledge as tacit knowledge since it has not expressed yet. Tacit knowledge cannot be documented in the company. Tacit knowledge is difficult to express, formalize, or share. Tacit knowledge is about ‘knowing how’. ‘Knowing how’ is skills owned by individuals. For example, engineers have skills deal with technical things. Tacit knowledge is built unconsciously in individuals through some mental processes called experiences. By having tacit knowledge, individuals in company can make good decision while facing some problems to solve. The way they make decisions will be influenced by habits they faced in daily life. Tacit knowledge is also about routines in the company, which is including in ways of producing things, ways of hiring and firing employees, ways of handling inventory, advertising policy, and R&D procedures. Unlike tacit, explicit knowledge can be printed, documented and shared to others. It is about ‘knowing that’. Documents printed such as company reports are included in explicit knowledge.
So, which knowledge is better? In my opinion, both tacit and explicit knowledge are very important for companies to get sustainable competitive advantage in market. None is better because each knowledge has its own advantages and disadvantages. Tacit knowledge is difficult to imitate than explicit knowledge. It can become core competencies in the company as long as the company knows the ability how to capture and transfer it. But, since tacit knowledge is buried in employee’s mind, a company needs to be worried because if they are left so the knowledge will also go with the individuals.
Oppositely, explicit knowledge can be copied easily by competitors since they are printed and documented so that people can easily read and keep the information. But, this explicit knowledge is not easy gone since it has been kept well by the company in the database system.
