Challenges and Issues in Knowledge Management, 293–251 Copyright © 2005 by Information Age Publishing All rights of reproduction in any form reserved. 293 FLAWS IN THE “ENGINE” OF KNOWLEDGE CREATION A Critique of Nonaka’s Theory S. GOURLAY AND A. NURSE Stephen Gourlay and Andrew Nurse Nonaka’s theory of organizational knowledge creation 1 has achieved par- adigmatic status since its publication in the mid-1990s, 2 and has recently been described as “highly respected” (Easterby-Smith & Lyles, 2003b, p. 11). The theory rests on the assumption that knowledge is created through social interaction between tacit and explicit knowledge. Nonaka and his colleagues postulated four modes of knowledge conversion corre- sponding to different forms of such interaction (see Figure 13.1). Accord- ing to their framework, knowledge creation begins with socialization (S), continues with externalization (E), combination (C), and internalization (I), before returning to socialization, but at a new level, hence the meta- phor of a spiral of knowledge creation (cf. Nonaka, 1991a, 1994, 1995; Nonaka, Byosiere, Borucki, & Konno, 1994; Nonaka, Konno, & Toyama, 2001; Nonaka & Takeuchi, 1995). These ideas, first published in 1991 (Nonaka, 1991a), drew on studies of information creation in innovating Japanese companies (Imai, Non- aka, & Takeuchi, 1985; Nonaka, 1988a, 1988b, 1990, 1991b; Nonaka & CHAPTER 13