A Review and Critique of Nonaka and Takeuchi’s Theory of Organizational Knowledge Creation

Introduction Since the early 1990’s, interest of the topic of knowledge (e.g., knowledge management, knowledge sharing, knowledge creation, etc.) as it relates to organizations and value creation for organizations has increased dramatically in both the popular and scholarly literature (von Krogh, Ichijo, & Nonaka, 2000). As is often the case in applied fields, it appears that the practices related to the phenomenon of knowledge management and knowledge creation have accelerated faster than the scholarly work to explain them. Numerous books have been written documenting the practices organizations are using to try to capitalize on the value that knowledge management and knowledge creation promise. Organizations are spending millions of dollars each year on information systems to capture knowledge and consultants to help organizations better share and use knowledge. Organizations rely on innovation for new products and services to provide them with growth in revenue. And yet, one must ask the question, “What do we really know about how knowledge is created within and shared across organizations?” The purpose of this paper is to answer the question--Does the theory of organizational knowledge creation, put forth by Nonaka and Takeuchi (1995), and contributed to by others (Nonaka, Toyama, & Byosière, 2001; Von Krogh, Ishijo, & Nonaka, 2000), constitute a theory? Or, is what they have articulated just hypotheses and conjecture at this point? This first part of this article reviews and discusses what defines theory, the purpose of theory in both academia and practice, and how theory can be evaluated. Next, Nonaka and Takeuchi’s (1995) Theory of Organizational Knowledge Creation is reviewed at a general level for the benefit of the reader. Finally, Nonaka and Takeuchi’s theory of organizational knowledge creation is critiqued for the purpose of understanding its level of development and for making it a more fully mature theory.