Page 287 - Operations Strategy

262 CHAPTER 7 • ImPRovEmEnT sTRATEgy
gathering, editing and diffusing existing knowledge. It is at this stage where informa-
tion technology is most helpful. Explicit knowledge can be established in databases,
disseminated through blogs, Web-based portals, emails and so on, as well as through
meetings and briefings. It is the combination stage that allows knowledge transfer
among groups and across organisations.

Internalisation (explicit-to-tacit knowledge)
Internalisation is the process of understanding and absorbing explicit knowledge and
then, through experiencing the application of the explicit knowledge, developing new
insights and understandings in the form of tacit knowledge. It is the actual ‘learning
by doing’ that encourages the formation of new tacit knowledge. The internalisation
process transfers organisation and group explicit knowledge to the individual.
Central to this model is the assertion that organisations should not be viewed as sim-
ply information processing entities, because this fails to capture the dynamic nature of
how organisations interact with individual staff and their environment. Rather, they
should be seen as knowledge-creating entities where various contradictions are synthe-
sised through dynamic interactions among individuals, the organisation and the envi-
ronment. Knowledge is created in the spiral by moving between seemingly opposing
concepts such as order and chaos, micro and macro, part and whole, mind and body,
tacit and explicit, self and other, deduction and induction and creativity and efficiency:
‘the key to understanding the knowledge-creating process is dialectic thinking and acting,
which transcends and synthesizes such contradictions. Synthesis is not compromise. Rather,
it is the integration of opposing aspects through a dynamic process of dialogue and practice’. 17
However, the theory is not without its critics – although most are academics with reser-
vations either about the use (or not) of previous research, or the generalisability of the
theory. Criticisms include, for example, that the model is based on Japanese manage-
ment cultural practices that are not transferable to other contexts. Further, the theory
does not fully discuss how knowledge can be built in an organisation that is culturally
diverse, with staff from different world views, backgrounds, educations, occupations
and speaking different languages.

the strategic importance of operational knowledge
One of the most important sources of process knowledge is the routines of process
control. Process control, and especially statistically based process control, is one of
the foundations of the Six Sigma improvement approach, explained in Chapter 3. And
while process control and process knowledge may seem surprisingly operational for a
book about the more strategic aspects of managing operations, it is vital to establish-
ing an operations-based strategic advantage. In reality, the strategic management of
any operation cannot be separated from how resources and processes are managed at
a detailed and day-to-day level. The process control cycle of capability development is
one of the best illustrations of this. As an operation increases its process knowledge it
has a better understanding of what its processes can do at the limits of their capability,
even though those limits are continually expanding. This allows them to develop bet-
ter products and services not only because of the enhanced process capability, but also
because of the operation’s confidence in that capability. Similarly, as process knowl-
edge increases, some of the more obvious operations trade-offs can be overcome. Often,

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