Theoretical and Empirical Foundations of Nonaka’s Organizational Knowledge

Subject: Organizational Management
Pages: 5
Words: 1452
Reading time:
7 min
Study level: PhD


Contemporary management is extremely shifting its focus from the traditional reliance of tangible assets to intangible assets such as knowledge. Knowledge management has turned out to be among the most popularly researched disciplines by both academic scholars and management practitioners from most industries. The structure of the firm in a competitive environment results from three imperatives. “A firm must produce knowledge within the firm, must transfer and diffuse knowledge within the firm, must bind knowledge to the firm, that is, prevent its transfer outside of the firm” (Golga & Halberstam, 2007, p. 1126). Professor Ikujiro Nonaka’s (1994) Dynamic Theory of Organizational knowledge creation sets the platform for reflecting the conceptualization of the knowledge creation process. This study aims at critically evaluating the empirical and theoretical foundations of the theory highlighting the flaws within and gaps in the theory.

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Scope of the theory

In his theory, Nonaka (1994) argues that organizational knowledge creation is a continuous process of dialogue between the tacit and explicit knowledge through four defined patterns that involve socializing, combining, internalization, and externalization (Lorsch, 1965, p.23). The theory holds that organizational knowledge creation takes place upon the acquiring of information through a combination of the four modes by forming a continuous cycle that is motivated by human actions such as group interactions, engaging in dialogue and so on. The knowledge creating theory is focused mainly on the dialectical evolution of the social world through such human interactions and the environment (Nonaka 2005, p.375). Nonaka asserts that, the commonly held “input –process- output “paradigm that many organizations employ to process information portrays what he calls a “passive and static view of the organization” (p.14). He suggests the spiralling of knowledge from tacit to explicit. According to Nonaka and Takeuchi (1995), “tacit knowledge is highly personal and hard to formalize which makes it difficult to communicate or be shared with others…Subjective insights, intuitions, as well as hunches, fall under the tacit category of knowledge” (p.8). Nonaka (2005, p.376) asserts, “The boundaries between explicit and tacit knowledge are porous as all knowledge and action is rooted in the tacit components”.

Critical evaluation of the Theoretical underpinning

Rene Descartes’ radical influence on the concept of knowledge is still traceable in modern theories related to the creation and the dissemination of knowledge (Curtis & Petras, 1970, p.378). He laid out distinguished basic rules as a way of securing explicit knowledge (p.379). Knowledge is in this case a dynamic human process aimed at justifying commonly held beliefs in the pursuit of the ideal truth (Polanyi, 1966, 1969). Information is a significant epistemological building block for knowledge. Ideas of the “information” or “knowledge” economy have drawn many economists as well as other scholar towards epistemological issues (Duguid, 2005, p. 110). As opposed to the context, free positivist mirror image of the human mind- environment interaction, the theory is founded on the belief that human values and ideals are vital components of knowledge (Nonaka 2005, p.380)

As Nonaka (2005) claims, knowledge creation process cannot be addressed as a sole normative model because human values and ideals are subjective and truth as a subject is depended upon values, ideals and concepts (p. 381). Due to this influence, Nonaka and Takeuchi (1995) stress a point on his separation of the forms of knowledge by considering tacit knowledge as ‘eastern’ and explicit knowledge as being ‘western’. He highlights in his theory what he construes as western (Cartesian) concept of knowledge (Proctor, 1995, p 56). The separation that he makes results to theoretical flaws in his theory despite the fact that it is the most cited theory in the discipline of knowledge management (Kothari et al. 2011, p. 4). In this case, Golga and Halberstam (2007, p.1132) argue that Nonaka limits the scope of his theory by trying to explain such divisions in the study of knowledge management.

Nonaka and Takeuchi in defence of this theory argue that western companies emphasis on knowledge management is accompanied by a lack of understanding of how it is created (1995, pp. 6-7). A key argument in support of this theory as put forth by Nonaka is that the knowledge creation process is a self- transcending (Anand & Singh, 2011, p.928). This implies that knowledge holds the potency of transcending itself from its old essence to new knowledge (Stacey, 2001, p. 98). As a result, critiques consider the theory as having a mystical dimension not supported further with convincing evidence or facts (Drummond et al. 2008, p. 250).

Critical evaluation of the theory’s empirical foundation

Nonaka and Takeuchi, (1995, p 14) suggest that in order to be able to cope with the dynamically changing organizational environment, it is vital to “create new knowledge, disseminate it through the organization, and embody it in products, services and systems”. Nonaka’s theory appeals intuitively in terms of organizational learning. Based on Epistemology and Ontology, the knowledge creation theory incorporates values, contexts, and power as well as considering the continuously changing process of knowledge creation to fit into the environment and exert change on the environment in return (Nonaka 2005, p.380). Nonaka and his associates have utilized empirical methods to prove the theory (Itami, 1987, p.47). These include case studies and a survey of managers mostly from Japanese companies. Gourlay (2006, p. 343) asserts that SECI, which is an exceptionally famous model by Nonaka, has been widely accepted by a majority of authors and is considered as having achieved paradigmatic status. The framework portrays the dynamic character of knowledge in most organizations based on the sharing of subjectivity (Sekaran, 2000, p. 567).

The context of knowledge management appreciates the use of case studies as a way of validating Nonaka’s theory by either himself or his colleagues. Gourlay (2006, p 246) posits that the ability to present phenomena as it is in real life situations is among the major strengths of case studies. The case study that Nonaka conducts lacks universality in that his sampling is Japanese companies (Frith & Wolpert 2004, p 23).

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Johnson and Duberly (2000), and Von Krogh and Roos (1995), have employed Nonaka’s theory in understanding organizational knowledge creation in diverse industries. They have acknowledged that the theory is effective in explaining the process of knowledge creation in the sector (p. 12).

As Nonaka (2005) argues, “Since knowledge emanates from subjective worldviews, ‘absolute’ truth cannot be a product of knowledge” (p.390). As a result, the view of knowledge conveyed in the theory is pragmatic in the sense that it only holds as truth as long as it is relevant and practical to practitioners.

Weaknesses and gaps in the Theory

There is much available evidence that presents Nonaka’s theory as, not only flawed, but also full of gaps. For instance, it mostly centres on expressing knowledge motions and explaining the different forms and categories of knowledge rather than the creation of knowledge. As a result, the theory is digressing from its basic focus to other realms considered relatively less prominent (Starkey, 1996, p. 345).

Nonaka et al. (1994, p. 12), created a survey targeting a number of Japanese managers in an effort to validate the theory. As a result, a number of scholars posit that the theory only holds in the Japanese culture, as researchers did not test it on all cultures (Argyris, 1999, p. 67). Gourlay (2006, p 245) adds, “The percentage of variance explained through confirmatory factor analysis did reach acceptable levels for socialization and combination such levels were not reached for the other two modes”. By this Gourlay meant that the study was not all-inclusive as to validate the four modes in Nonaka’s theory (Zhen-Jia, 2009. p.64).

The evidence of the validity that aims at backing Nonaka’s theory is, however, not concrete. For instance, a study aimed at proving socialization and externalization of technical tacit knowledge in the bread making industry proves this (Khaled & Algharibe, 2010, p 9). There is the assumption that when someone is compelled to learn under the guidance of another who is an expert in the field, some kind of knowledge is transferred (Hall, 1980, p 45). This ignores the fact that people constantly learn new things without having direct contact with other people considered as experts (Dosi et al. 2000, p 34).


Despite the strength of Nonaka’s theory, as evidenced in the paper, a number of researchers involved in the study of knowledge management have found it flawed and wanting. The evidence that the theoretical framework provides is inclusive, therefore, making it open to alternative interpretations (Garratt, 2000, p. 203). For instance, combination and internalization have been continuously criticized as ambiguous while knowledge conversion appears to be more involved with knowledge transfer than knowledge creation (Zhen-Jia, 2009, p.63).This makes the theory incomplete and generally having many noticeable gaps.

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