Transfer of tacit knowledge in organizations

Authors: Soile Hakkarainen, Outi Saramäki & Jenny Makkonen^|

In recent years, organizations worldwide have come to realise the value of tacit knowledge, the experience and knowhow of their employees. The methods for collecting and sharing this resource, however, are poorly known and implemented.

This small survey in four different organizations in Finland reveals the lack of knowledge in management procedures. None of the work places had a system for collecting, storing and sharing tacit knowledge that the interviewed employees were aware of. Although some thought that the managers were in charge of tacit knowledge transfer, most felt that they were themselves responsible for collecting the knowledge. The preferred methods for sharing knowledge were personal notes and, especially, social interaction between co-workers. Younger employees did not seem to value tacit knowledge, whereas the more experienced workers actively collected knowledge for their own use.

Introduction

This paper is the result of a Pedagogical development project, which is a part of the teacher education studies at the JAMK Teacher education college. The project was done by three students in the international group during 2017.

Tacit knowledge has been recognised as an important asset in many different kinds of working environments. Not much is known about the ways in which this elusive resource is managed or exploited, however, partly due to its inherent nature as a personal and undocumented resource.

The aim of this project work was to explore whether and how tacit knowledge is collected and shared in two different kinds of organizations, universities and companies. We aimed to gather practices used in different working environments to collect and share the tacit knowledge.

The concept of tacit knowledge

Organization related knowledge is classified as tacit and explicit knowledge and organizations must promote environments to enable the access of its members to this knowledge (Toledo et al. 2016). Explicit knowledge is documented, structured, externalized and conscious. It has a fixed content that can be captured and shared through information technology. In contrast, tacit knowledge resides in perception and behaviour of human beings. It evolves from people interaction and requires skills and practice (Ajmal & Koskinen 2008). Especially the concept of tacit knowledge is very wide, and the tacit knowledge of the employees has been considered as one of the key resources of companies (Pohjalainen 2012).

The concept of tacit knowledge was developed by Polanyi (1966) in 1940’s. He stated that the employees always have more information than they can forward to others (Pohjalainen 2012). In companies, losing this information during retirement of people is being considered as a threat. Therefore, during the recent years, research and development of methods and platforms to collect and share employees’ knowledge has become a highly popular topic (e.g. Ajmal & Koskinen 2008; Chugh 2013; Rumanti et al. 2015; Addis 2016; Chuang et al. 2016). Examples of methods described in literature are storytelling (Shaw & Liu 2016) and mentoring (Chen & Vogel 2016).

It has been estimated that 90 percent of the knowledge in any organization is embedded and synthesized in peoples’ heads and a lot of tacit knowledge is lost through outsourcing, downsizing, mergers and terminations. It has been suggested that organizations, which effectively create, share, and transfer knowledge – tacit or otherwise – between individuals and groups, as well as within the entire organization are more effective overall than organizations that do not (Kogut & Zander 1992). Tacit knowledge can therefore be considered an invisible line item in corporate budgets. It is tacit knowledge that plays a key role in leveraging the overall quality of knowledge (Smith 2001).

The SECI model of knowledge dimensions (Figure 1) is a model of knowledge creation that explains how tacit and explicit knowledge are converted into organizational knowledge. The basis of the model is a study of Japanese organizations (Nonaka & Takeuchi 1995). The model distinguishes four knowledge dimensions – socialization, externalization, combination, and internalization (SECI; Nonaka 1991; Nonaka & Takeuchi 1995). Socialisation is explained as social interaction as tacit to tacit knowledge transfer, sharing tacit knowledge face-to-face or through experiences. For example, meetings and brainstorm can support this kind of interaction, rather than written manuals or textbooks. Between tacit and explicit knowledge lies externalization. For example, concepts, images, and written documents can support this kind of interaction. Combination contains the explicit knowledge that is collected from inside or outside the organization and then combined, edited or processed to form new knowledge. The new explicit knowledge is then disseminated among the members of the organization. Explicit knowledge is transformed into tacit knowledge by internalization (knowledge receiving and application by an individual), enclosed by learning by doing.  Explicit knowledge becomes thus part of an individual’s knowledge and an asset for the organization. Internalization is also a process of continuous individual and collective reflection and the ability to see connections and recognize patterns and the capacity to make sense between fields, ideas, and concepts. After internalization, the process continues at a new level, forming a spiral of knowledge creation that is described in the SECI model (Nonaka & Takeuchi 1995).

Organisations must ensure that tacit knowledge is freely and openly shared among their members (Shao et al. 2016). Since tacit knowledge is based on personal experiences and skills, it is usually difficult to share without the active participation and cooperation of the individuals (Suppiah & Sandhu 2011). Empirical studies found that tacit knowledge-sharing behaviour is not influenced only by psychological motivations, but also by contextual factors such as organisational climate (eg. Shao et al. 2012), and a desirable climate can create an environment which is beneficial to encourage knowledge sharing (Shao et al. 2016). In recent years, there have also been several attempts to apply data mining techniques to the collection of tacit knowledge (Sihui & Xueguo 2016). However, it has also been stated that the collecting and sharing of the tacit knowledge is most efficient when it is done as a continuous process and happens side-by-side with the daily work routines (Alastalo 2014). Therefore, it should not be seen as a part of retirement process, but instead something that is continuously done in different parts of the person’s working career (Alastalo 2014). Within the organizations, such as universities, where the work is often project-based, this kind of sharing may often be demanding and even impossible. Due to these reasons, knowledge management should not be considered as transferring the knowledge. Rather, it is about fostering an organizational culture that facilitates and encourages the creation, sharing, and utilization of knowledge. This requires a thorough understanding of the complexities of the organizational and professional cultures that guide and motivate the people working in a project (Ajmal & Koskinen 2008).

Methods

To gather information on methods of tacit knowledge transfer in work places, a small survey of eleven simple questions was directed at employees of two different kinds of workplaces, universities and companies. The university employees were chosen to exclude research and teaching personnel, as the nature of their work is so independent and self-supervised, that their knowledge sharing strategies are likely also differing of those conducting more traditional work.

The selected interviewed persons were at different stages of their career. The aim was to interview those who had just started at their current job and those who were moving away from working life in the near future. A total of eight persons answered the questionnaire. Three of the interviewees were newcomers (less than a year at the work place) and three were retiring or otherwise extremely experienced (over 30 years at the work place). Two fell between these two categories (3-11 years at the work place). No record of the name, age, or sex of the employees was made and the questionnaire document contained information about the development project. Participation in the interview was voluntary. Interviews were conducted during spring and summer 2017.

The interviewees were selected from work places from the authors’ networks and employees from different sectors were included in order to create a broader perspective from different industry groups. The survey was conducted in four different workplaces, four interviews were made in three different universities and four interviews in a company. The interview materials were collected, and the answers reviewed at the same time.

The questionnaire was sent by e-mail to the compliant employees. The interviewees were instructed to describe cases related to their own work processes, to describe example cases and to reflect on their own role in sharing or collecting tacit knowledge. The questions were open and sought to get the most detailed descriptions of the current state of the work place’s tacit knowledge management.

Looking at one single interview does not offer a very solid foundation of the current state, so several interviews were considered. The original number of interviews of 2 – 3 persons was extended to eight interviews so that the issue could also be viewed from a slightly broader point of view.

Results and discussion

The aim of this project work was to explore how tacit knowledge is collected and shared in today´s working life. In order to get an idea of the current state, we made a survey, which aimed to gather practices that are used in different working environments for collecting and sharing tacit knowledge.

The eight interviews conducted revealed that the represented organizations are not dealing with tacit knowledge management. Only one interviewee said that there is a process and an agreed approach to managing tacit knowledge: “We have a training system in which a more experienced employee guides a new person to work. Two shifts are done together and then they will still make sure that you have learned the things.” Also, completely opposite answers were obtained, as one interviewee reported that they weren´t interested in whether or not the process existed and did not consider it necessary. Furthermore, one theme that emerged from the interviews was that the newer employees did not seem to value tacit knowledge. The appreciation for it appears to come with experience and indeed, it was the more senior employees that implemented methods of collecting and storing tacit knowledge, albeit mostly for their own purposes. It is likely that the older and more experienced employees have more psychological motivation and they also have higher impact to organisational climate (eg. Shao et al. 2012), and therefore their willingness to knowledge sharing is higher.

The interviews showed that there is a wealth of information within companies but finding it in different situations is challenging: “First you need to find the right place where the information is stored or the right person to contact”. In one work place, the organization’s intranet was said to be extensive, but lacking in a clear “starter package” for new employees, making it time consuming to find the necessary information. One interviewee had been considering collecting information for summer workers: “I have been thinking a lot about how to teach our new summer trainees so that their time does not go to the fact that they have to find information somewhere. Finding information is unpleasant and takes a lot of time.”

No common denominator for lack of organizational knowledge management emerged from the answers, although it was generally felt that the responsibility for managing the information was every employees’ own. A noteworthy fact was that the employees with longer careers had their own systematic ways of managing important information for themselves. Most commonly used were memory sticks, network libraries, email folders and notebooks. Sharing of tacit knowledge is also challenging: one interviewee said that they were gathering important information for themselves but did not share it because they were afraid that information would overload other workers.

A common view was revealed by all respondents’ feedback: tacit knowledge is not commonly collected in different organizations. Sharing the knowledge is employees’ own responsibility. The results are similar with earlier studies, showing that tacit knowledge is based on personal experiences and skills, it is usually difficult to share without the active participation and cooperation of the individuals (Suppiah & Sandhu 2011). When the individual answers were mirrored to the SECI-model of knowledge (Figure 1; Nonaka & Takeuchi 1995) social interaction, i.e. sharing tacit knowledge face-to-face or through experiences was highlighted as the most popular method. This is logical, as tacit knowledge is conveyed not only by words and phrases, but also by actions, expressions, and emotions. Direct interaction between co-workers may also be quicker than searching for knowledge in notebooks or web-based archives. This is also in line with work by Allen (1977) and later by Cross & Sproull (2004), who have found that people are more likely to seek for information from other people than databases. Other sectors from the model that could be recognized were the externalization in the form of concepts, images, and written documents and internalization, as learning-by-doing kind of approach to gain new information.

From the interviews, it was easy to notice that the silent knowledge concept is understood quite well. Employees create operating models and their own processes to manage important information. The management of information seems to be left to the employees’ responsibility and it runs as their own shadow process in the work places represented in the survey, although three respondents (from the same work place) thought the responsibility for collecting tacit knowledge was with the managers instead of line workers.

Experience and tacit knowledge are not valued very highly in Finland, theoretical knowledge has more respect. This also applies to organization leaders, even though some studies have valued it as one of the key resources of companies (Pohjalainen 2012). Furthermore, the redundancy of employees has lost lots of tacit, and explicit, knowledge, as the cold-shouldered employees have been unwilling to share their knowledge. This phenomenon was not recognized by the employer beforehand at all.  The importance of tacit knowledge also varied according to the respondent’s age. Younger employees do not recognize and give value for the tacit knowledge – gaining experience will develop and teach to respect this kind of know-how.

Because the study was small, and the target group was limited, the results cannot be generalized to cover the situation all over the Finnish organizations. However, the results gave us a great deal of reflection and thinking about the way companies could work in the future and pay attention to tacit knowledge gathering. With future technologies, when the world is digitalized, information management becomes easier, faster and more agile. Data storage is cheap, and employees have extensive skills to maintain it. Which is therefore more profitable for the business; expensive training of employees or development of process management technologies (e.g. Ajmal & Koskinen 2008; Chugh 2013; Rumanti et al. 2015; Addis 2016; Chuang et al. 2016) for tacit knowledge?

Conclusions and practical implications

Tacit knowledge is not commonly collected in Finnish organizations and companies, although many organizations have had a rude awakening to the information loss due to the retirement or other kind of reduction of the experienced employees. Overall, the concept of tacit knowledge is understood quite well. Several interviewed employees created models and by themselves to manage important information. Therefore, the management of information is left to the employees’ responsibility and it runs as a shadow process in most companies.

Knowledge management should not be considered only a process of transferring knowledge. Rather, it is about fostering an organizational culture that facilitates and encourages the creation, sharing, and utilization of knowledge.

Key words: Tacit knowledge, organizational knowledge, silent knowledge, work place, employee, knowledge transfer

Acknowledgements

We would like to acknowledge Dr. Sirpa Laitinen-Väänänen for the supervision and the interviewees for their time and effort.

Authors

Soile Hakkarainen¹ Telia Finland Oyj, Business Unit Enterprise, Teollisuuskatu 15, 00510 Helsinki, Finland. soile.hakkarainen@teliacompany.com.;

Outi Saramäki² Tampere, saramakior@gmail.com;

Jenny Makkonen³ University of Eastern Finland, Department of Environmental and Biological Sciences, P.O. Box 176727, 70211 Kuopio, Finland. jenny.makkonen@uef.fi.

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URN: http://urn.fi/urn:nbn:fi:jamk-issn-2489-2386-6