MGMT630 Knowledge Management Assignment 1 Solution Spring 2014

Three intellectual capitals of an organization are human, structural and customer capital.
Customer knowledge is very significant asset of a knowledge-intensive organization.Customer
knowledge is the knowledge from the customers, about the customers and for the customers
(customer satisfaction via fulfilling their needs and wants). Organization gathers, manages and shares the valuable knowledge of the customers which acts as a competitive activity; but it still receives a little considerations.
Nonaka’s SECI theory of knowledge creation explicates the knowledge creation and
sharing via four-stage process that is, Socialization, Externalization, Combination, and
Internalization. Creation of customer knowledge necessitates right information system that
maintains and sustains knowledge creation process. The customer relationship management
information system facilitates the organizations to collect, save and analyze the comprehensive data regarding customers.
After carefully reading the above-mentioned construct, describe how you can use SECI for knowledge creation of customers. Explain the process with the help of a suitable example.


The process works by different linking process of these two types of knowledge in the organization. Knowledge creating process is a continuous, self-transcending process. As knowledge is created between individuals or between individuals and the environment, individuals transcends the boundary between self and others. As per Ikujiro Nonaka there are four types of knowledge creating process.

Knowledge Creating SECI model Socialization Externalization Combination InternalizationSocialization


This process focuses on tacit to tacit knowledgelinking. Tacit knowledge goes beyond the boundary and new knowledge is created by using the process of interactions, observing, discussing, analyzing, spending time together or living in same environment. The socialization is also known as converting new knowledge through shared experiences. Organizations gain new knowledge from outside its boundary also like interacting with customers, suppliers and stack holders. This occurs in traditional environments where son learns the technique of wood craft from his father by working with him (rather than from reading from books or manuals).


This process focuses on tacit to explicit knowledge linking. It helps in creating new knowledge as tacit knowledge comes out of its boundary and became collective group knowledge. This process we can say that knowledge is crystallized. The process of externalization is often driven by metaphor analogy and models. Quality circles are formed in manufacturing sectors where workman put their learning and experience they have to improve or solve the process related problems.


Combination is a process where knowledge transforms from explicit knowledge to explicit knowledge. The finance department collects all financial reports from each departments and publics a consolidated annual financial performance report. Creative use of database to get business report, sorting, adding , categorizing are some examples of combination process.


By internalization explicit knowledge is created using tacit knowledge and is shared across the organization. When this tacit knowledge is read or practiced by individuals then it broadens the learning spiral of knowledge creation. Organization tries to innovate or learn when this new knowledge is shared in Socialization process. Organizations provide training programs for its employees at different stages of their working with the company. By reading these training manuals and documents employees internalize the tacit knowledge and try to create new knowledge after the internalization process.