Nonaka and Takeuchi’s Knowledge Management Model


Modern management theorists both see knowledge as a key component that helps an organization remain competitive, especially in the modern business world that is characterized by high competition. For this reason, the concept of knowledge management remains one of the most discussed topics (Hislop, 2013). Current literature is replete with models that try to explain how knowledge creation and innovation can be used to create products that are more competitive and improve the efficiency of processes in organizations (Rogers, 1962).

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This paper endeavors to offer a critical analysis of Nonaka and Takeuchi’s SECI model of knowledge management and how it has been implemented in the automobile industry. The paper will start by providing a critical evaluation that will take an objective approach aimed at providing an unbiased opinion based on available literature. Nonaka and Takeuchi proposed that innovation can be achieved through socialization, combination, externalization, and internalization (Nonaka & Takeuchi, 1995).

The SECI model, as it is widely known, has been accepted by most researchers and knowledge management entrepreneurs as a conceptual model that could be applied in almost all the industry settings (Best, 1990). This analysis will also seek to assess the implementation of the SECI Knowledge Management model in the Irizar Company, a global leader in the manufacture of coach bodywork. The success of the company has been attributed to a careful implementation of work teams to objectively achieve planned innovation (Love, Fong & Irani 2005).

Critical Analysis

The model is a spiral model that begins with socialization as the first stage, which is concerned with how knowledge is shared within and outside the organization’s environment. Nonaka and Takeuchi asserted that workers must be ready to freely share what they know so that the socialization process would be performed in an effective way (Nonaka & Takeuchi, 1995). However, while knowledge sharing was necessary for any successful socialization to take place, it is not always possible to find an organization with a perfect social stratum that can nurture this process. According to Glibsy and Holden (2003), internal sharing of knowledge among employees is facilitated by the strong individual affiliation of an employee to the organization and the clarity of the commitment to the firm.

Also, the socialization process can only be viable in a setting where employees exhibit cooperative attitudes, as opposed to showing competitive attitudes. The knowledge is obtained through watching and imitation (Kern, 2006, p. 261). This is the only way through which employees can share information not just for the sake of it, but for the reason that they intentionally and unconditionally do so to improve the knowledge and experience of each other (Glisby & Holden 2003, p. 29-36; Jashapara, 2011). While it has been proven empirically that knowledge sharing is possible in organizational settings, all the above factors can only be visible in the Japanese world.

According to Glisby and Holden (2003), knowledge sharing was only eminent in a Japanese context and cannot be true to other multifaceted societies. Therefore, external socialization for the sake of knowledge sharing is not a general application but rather a process attributed to Japanese. The socialization stage is therefore limited in scope and cannot offer a general input as to the social sharing of tacit knowledge (Hawryszkiewycz, 2010).

The second stage of the SECI model is called externalization, which focuses on the conversion of tacit knowledge shared in a social arrangement into explicit knowledge. In their assessment, Nonaka stressed that externalization is the most difficult stage and one that takes a lot of time. This stage requires a strong group organization for it to succeed. While it is arguable that group organization and orientation can influence externalization, it is difficult to have a naturally occurring group orientation or group mechanisms to make this stage a reality. Narayan (2001) argued that natural group orientation is a unique feature of Japanese people and only they can initiate a group mechanism that can sustain externalization of knowledge (Davenport & Prusak, 1998).

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Considerable evidence shows that numerous societies – and consequently organizations – an experience too much pressure from stakeholders. This includes externalizing knowledge. Weir and Hutchings (2005) found that a few organizations operated in a free-flowing environment, which was why they could afford the luxury of running externalization successfully (Eisenhardt, 1989).

However, they are fast to note that while most companies offer this comfort, a majority of organizations, especially in the Western world cannot be able to achieve externalization due to pressure from shareholders (Weir & Hutchings 2005, p. 89). Therefore, externalization cannot work as postulated by the SECI model (Weir and Hutchings, 2005).

The internalization stage entails changing explicit knowledge into a more tacit form via direct experience. It stresses the need to learn through doing. Nonaka and Takeuchi hold that the role of practice cannot be underestimated when it comes to assessing the effectiveness of applying explicit knowledge in real-life situations (Gourlay, 2006). In an organizational context, the conversion of explicit knowledge through a rotational process of repeat exercises is a typical Japanese practice, because of the emphasis on developing generalists as opposed to specialized professionals (Von, Ichijo, K & Nonaka, 2000). Creating a learning environment that supports this stage can be difficult, if not impossible, in most organizations. The impracticality of this stage makes it rather difficult to go by the generalities espoused by the SECI model (Gourlay, 2006).

Additionally, Japanese people exhibit fear of making mistakes, an attribute that hampers experiential learning and rotation as tools of ensuring increased competencies. Therefore, Weir and Hutchings concur with Glisby and Holden that the SECI model should be applied but only in limited scenarios where the subjects (employees) exhibit similar characteristics as those of Japanese workers (Glisby & Holden 2003, p. 29-36).

A knowledge-based firm would require employees and top managers to develop skills on what is good to share. Considering that this skill is rare among individuals, it can be extremely difficult to diffuse knowledge to the respective employees and extend the organization’s source of explicit knowledge (Von, Ichijo, K & Nonaka, 2000). What is true is that the process of building capacity that supports networks through careful sharing of internal knowledge can help improve or strengthen the organization’s competitive advantage. However, it is also clear that when an organization confines itself to its core strengths, it does not enjoy the benefits that come with overstretching beyond what is within (Conway & Steward, 2009).

This conceptualization does not meet the challenges of externally sourced information or knowledge, which is the reason the SECI model suffers from the deficiency of generalization (Soy, 1997). Today, organizations are moving from, the traditional modes of sourcing knowledge to modern ways characterized by outsourcing, and given this structure, an organization is likely to experience problems comprehending as its employees attempt to conceptualize the outsourced knowledge (Little, Quantas & Ray, 2012).

Since organizations have different levels of technology and different ways of arranging their knowledge, the significance of the outsourced knowledge may depend on the degree of competence that an organization exhibits. This opposes the general impression created by the SECI technique that assumes uniformity and ease with which information can be diffused (Von, Ichijo, K & Nonaka, 2000).

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Case Analysis of Irizar Company

Success factors in the strategic implementation of Knowledge management in

This analysis allows one to point out several factors that are instrumental in the successful implantation of the SECI model in Irizar, a global leader in Auto body manufacture. The analysis of this company reveals the existence of factors that comfortably fit into the 7-S Model established by McKinsey (McDermott & O’Dell, 2001)

The model contemplates that there is a list of elements that influence or promote the process of strategic change in organizations. In this case, Knowledge Management (KM) strategy is primarily charged with building capacity to generate synergy for innovation (Nonaka, et al., 2008). Factors that influenced the company’s model include Knowledge Management systems, corporate culture, and efficient management of human resources (Little, Quantas & Ray, 2012).

Knowledge management strategies

The top management of Irizar understood that Knowledge Management is concerned with the development of innovation through knowledge sharing and building necessary tools capable of translating opportunities into results (Michailova & Husted, 2003). The analysis has established that the company created a systemized approach in which working teams coordinated knowledge sharing facilitated by strong organizational values, such as a high degree of tolerance to mistakes, trust, and ability to exhibit excellent group orientation.

The company realized that it was necessary to create an environment that supports learning through experiences. Additionally, the company emphasized the role of knowledge creation and innovation. The other key concern that helped the company realize its core competencies was the intimate relationship between strategic targets and success and the knowledge of the working environment supported by long-term agreements with all the essential stakeholders (Michailova & Hutchings, 2006). The most significant achievements noted in Irizar include the following:

Overall employee satisfaction. As measured by proven metrics, high levels of participant satisfaction demonstrated that workers were actively engaged in knowledge sharing and decision-making processes. It also reveals that workers were subjected to a variety of different tasks, autonomy at the place of work. These aspects define what motivates people and the progressive leadership that is capable of influencing outcomes (Ralston, Holt, Terpstra &Yu 1997, p. 179).

Participation of workers in the generation and implementation of new knowledge. A study taken on the company showed that more than 90 percent of employees voluntarily take up active roles in working with each other in teams. The company developed a team approach that encourages employees or members of teams to make between two to three suggestions on improving their teams and the organization as a whole.

Shared learning among employees. To promote and support ease of transmission of knowledge both vertically and horizontally, there is a program that allocates at least 10 percent of the time to learning teams.

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Knowledge Management Tools. The company used several KM tools to foster the development and transfer of shared experiences (knowledge). The tools include the following: information and communication, capacity building through education and training, the assembly system of making decisions, working teams, and external relations (Kohlbacher & Krähe, 2007).

The other notable tool is the utilization of knowledge management results in measurement tools. The company did not limit the application of KM results-oriented tools to quantitative elements. It also went beyond the simple application of measurement to include other qualitative measurements that add value to strategic goals such as shared leadership, satisfaction and shared learning. This helped create a monitoring and control mechanism on the company’s strategic goals.

Change in an organizational structure. The company changed its approach from a traditional functional structure to a new form that was focused on processes and working teams. In this new setting, two fundamental variables are eminent: elimination of hierarchies and planning of tasks into teams. The organization has an almost flat chart that does not feature intermediary supervisory teams. Here, teams are oriented to manage a greater degree of work ranging from supplies to delivery through process engineering (Zhu, 2004, p. 67-79). This fosters unity among workers through eliminating fear and intimidation that comes with the definition or classification of employees based on hierarchy and power (King, 2007). This has promoted trust among teams, which has helped to generate a natural feeling to share important knowledge that has been gained through experiential learning (Ralston, Holt, Terpstra &Yu 1997, p. 179).


This paper has provided a critical analysis of the concept of knowledge management according to the model developed by Nonaka and Takeuchi. The analysis confirms that the application of the SECI model of knowledge management is practical and that organizations can use it to generate an impetus for change and improvements. However, while the SECI model is arguably incredible, critical analysis reveals that the applicability of the model may not provide a general insight into how organizations can use knowledge sharing to initiate innovation in the context of product improvement.


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