**4. Learning and unlearning explicit and tacit knowledge**

An abundance of literature has examined organizational learning (see, e.g., Hedberg, 1981; Cummings, 2003; Argyris, 2004; Esterby-Smith & Lyles, 2005), and many concepts

Managing Tacit Knowledge in Strategic Outsourcing 119

Similarly, as a company must "disorganize" some part of its knowledge store (Holan et al., 2004), disorganization must take place at the individual level as well. For unlearning to take place, intentional unlearning of some parts of existing individual and organizational knowledge is needed. Cohen and Levinthal (1990) coined the term "absorptive capacity" to describe the observation that prior related knowledge enables the recognition of the value of new information, its assimilation, and its application to commercial needs. They emphasized that "the ability to assimilate information is a function of the richness of the pre-existing knowledge structure: learning is cumulative, and learning performance is greatest when the object of learning is related to what is already known" (Cohen & Levinthal, 1990, p. 131). Thus, learning is more difficult when individuals and organizations are faced with an

If sharing tacit knowledge is a demanding task, its unlearning is even more difficult. To study non-expressed knowledge, an adequate methodology has to be developed. To summarize our understanding on managing tacit knowledge, we propose a theoretical framework on how the process that will enable long-term viability of business systems

4. learning of the new knowledge and simultaneous unlearning of obsolete and

Although tacit knowledge constitutes a major part of what we know, it is difficult for organizations to fully benefit from this valuable asset because tacit knowledge is inherently elusive; in order to capture, store, and disseminate it, it first has to be made explicit. However, such a process is difficult and often fails for three reasons (Stenmark, 2001, p. 9):

Our understanding of the phenomena derives from the fact that tacit knowledge in its entirety is very difficult to recognize and benefit from. Thus, we propose bringing forward tacit knowledge that can potentially be mobilized and observable through different manifestations of behavior in order to make it explicit as only its explicitness would enable us to share it as well as learn what needs to be learned and unlearn those things that are outdated and obsolete. At this point, it should be stressed that not all dimensions of tacit knowledge foster processes of introducing novelties. Thus, an important knowledge management task would be to separate the tacit knowledge dimension, which both supports and contradicts the introduction of novelties—in our case, newly established outsourcing routines. Having done this, it should be less difficult to incorporate different management efforts into the learning processes of those who support the learning processes and those who are against the unlearning processes for novelties to be introduced (Rebernik &

In the outsourcing partnership, both parties have to work together, but they can either cooperate or participate. The distinction between cooperation and participation is described

2. on a personal level, we do not need to make it explicit in order to use it; and

1. recognition of the tacit dimension on an individual as well as organizational level; 2. observation of the behavior deriving from individuals as well as organizational teams

unfamiliar situation.

should occur (Rebernik & Širec, 2007):

inadequate knowledge.

Širec, 2007).

according to possessed tacit knowledge; 3. the making of the behavior explicit by sharing it;

1. we are not necessarily aware of our tacit knowledge;

**5. Problems with opportunistic behavior** 

3. we may not want to give up a valuable competitive advantage.

and theories of learning exist. By definition, an organization learns in only two ways: (a) through the learning of its members or (b) by incorporating new members who have knowledge the organization did not previously have (Simon, 1991, p. 125). We should also pay attention to the individual level, as learning and unlearning take place at both levels. When a company outsources, it has to adapt on two levels: the company and the individual. This adaptation takes place with the help of learning—namely, the acquisition of new knowledge from persons able and prepared to use acquired knowledge in decision making and influencing other organizations (Miller, 1996). Adaptation also takes place at the organizational level because new organizational routines have to be created and performed so that newly established outsourcing ties and deployment of activities can take place. Successful learning results in modified behavior (MacDonald, 1995); in other words, the result of learning is adaptation. Furthermore, in the process of adaptation, the entrepreneur and organization have to unlearn many previously set rules and ways of doing business.

Looking at organizational learning from this perspective and understanding outsourcing as a learning process, one can expect a company to outsource if the entrepreneur is willing and able to learn and is capable of delegating some business tasks to the outsourcing partner. When current knowledge and required new knowledge are closely related, learning is not difficult; however, when a wide gap exists between current knowledge and new knowledge, individuals and organizations have to invest in the learning process. An important part of investment is unlearning obsolete knowledge and values that impede our ability to absorb new information and exploit it.

Any understanding involves both learning new knowledge and discarding obsolete and/or misleading knowledge. Sometimes the unlearning may be as important as the acquisition of new knowledge (Hedberg, 1981). Organizations' conceptual understanding as informationprocessing systems draws our attention to experiential knowledge that is stored in organizational memory (Andersen et al., 2003). Although experiential knowledge is often equated with tacit knowledge, in reality not all of it is tacit; indeed, some of it can be articulated and shared. The real problem is that much of the experiential knowledge collected in the "pre-outsourcing period" may have become obsolete and should be disposed of because it has become useless and impedes the accumulation of new knowledge as well as the creation of sustainable relationships. The presence of certain knowledge may constrain learning or even encourage ineffective learning (Cummings, 2003). It has been suggested that the proponents of experiential knowledge may be the worst at unlearning, as the accumulation of such experiential knowledge requires considerable investment of time and resources. Knowles and Saxberg (1988) also suggest that those who have invested heavily in their current knowledge may not be willing to unlearn. It would stand to reason that long-held views and knowledge acquired and reinforced over time may be considered more difficult to unlearn than recently acquired knowledge, to which the individual has less of an emotional attachment. This viewpoint contrasts with that which relates to absorptive capacity, which claims that—without an appropriate knowledge base—new knowledge cannot be absorbed. Nonetheless, regardless of whether previously acquired knowledge helps unlearning or hinders it, previously acquired knowledge is recognized as having some influence on unlearning. Tacit knowledge, in particular, raises issues in relation to unlearning due to the fact that it is less easily identified or articulated, meaning it may be less easily challenged as part of the unlearning process (Becker, 2006).

and theories of learning exist. By definition, an organization learns in only two ways: (a) through the learning of its members or (b) by incorporating new members who have knowledge the organization did not previously have (Simon, 1991, p. 125). We should also pay attention to the individual level, as learning and unlearning take place at both levels. When a company outsources, it has to adapt on two levels: the company and the individual. This adaptation takes place with the help of learning—namely, the acquisition of new knowledge from persons able and prepared to use acquired knowledge in decision making and influencing other organizations (Miller, 1996). Adaptation also takes place at the organizational level because new organizational routines have to be created and performed so that newly established outsourcing ties and deployment of activities can take place. Successful learning results in modified behavior (MacDonald, 1995); in other words, the result of learning is adaptation. Furthermore, in the process of adaptation, the entrepreneur and organization have to unlearn many previously set rules and ways of

Looking at organizational learning from this perspective and understanding outsourcing as a learning process, one can expect a company to outsource if the entrepreneur is willing and able to learn and is capable of delegating some business tasks to the outsourcing partner. When current knowledge and required new knowledge are closely related, learning is not difficult; however, when a wide gap exists between current knowledge and new knowledge, individuals and organizations have to invest in the learning process. An important part of investment is unlearning obsolete knowledge and values that impede our ability to absorb

Any understanding involves both learning new knowledge and discarding obsolete and/or misleading knowledge. Sometimes the unlearning may be as important as the acquisition of new knowledge (Hedberg, 1981). Organizations' conceptual understanding as informationprocessing systems draws our attention to experiential knowledge that is stored in organizational memory (Andersen et al., 2003). Although experiential knowledge is often equated with tacit knowledge, in reality not all of it is tacit; indeed, some of it can be articulated and shared. The real problem is that much of the experiential knowledge collected in the "pre-outsourcing period" may have become obsolete and should be disposed of because it has become useless and impedes the accumulation of new knowledge as well as the creation of sustainable relationships. The presence of certain knowledge may constrain learning or even encourage ineffective learning (Cummings, 2003). It has been suggested that the proponents of experiential knowledge may be the worst at unlearning, as the accumulation of such experiential knowledge requires considerable investment of time and resources. Knowles and Saxberg (1988) also suggest that those who have invested heavily in their current knowledge may not be willing to unlearn. It would stand to reason that long-held views and knowledge acquired and reinforced over time may be considered more difficult to unlearn than recently acquired knowledge, to which the individual has less of an emotional attachment. This viewpoint contrasts with that which relates to absorptive capacity, which claims that—without an appropriate knowledge base—new knowledge cannot be absorbed. Nonetheless, regardless of whether previously acquired knowledge helps unlearning or hinders it, previously acquired knowledge is recognized as having some influence on unlearning. Tacit knowledge, in particular, raises issues in relation to unlearning due to the fact that it is less easily identified or articulated, meaning it may be less easily challenged as part of

doing business.

new information and exploit it.

the unlearning process (Becker, 2006).

Similarly, as a company must "disorganize" some part of its knowledge store (Holan et al., 2004), disorganization must take place at the individual level as well. For unlearning to take place, intentional unlearning of some parts of existing individual and organizational knowledge is needed. Cohen and Levinthal (1990) coined the term "absorptive capacity" to describe the observation that prior related knowledge enables the recognition of the value of new information, its assimilation, and its application to commercial needs. They emphasized that "the ability to assimilate information is a function of the richness of the pre-existing knowledge structure: learning is cumulative, and learning performance is greatest when the object of learning is related to what is already known" (Cohen & Levinthal, 1990, p. 131). Thus, learning is more difficult when individuals and organizations are faced with an unfamiliar situation.

If sharing tacit knowledge is a demanding task, its unlearning is even more difficult. To study non-expressed knowledge, an adequate methodology has to be developed. To summarize our understanding on managing tacit knowledge, we propose a theoretical framework on how the process that will enable long-term viability of business systems should occur (Rebernik & Širec, 2007):


Although tacit knowledge constitutes a major part of what we know, it is difficult for organizations to fully benefit from this valuable asset because tacit knowledge is inherently elusive; in order to capture, store, and disseminate it, it first has to be made explicit. However, such a process is difficult and often fails for three reasons (Stenmark, 2001, p. 9):


Our understanding of the phenomena derives from the fact that tacit knowledge in its entirety is very difficult to recognize and benefit from. Thus, we propose bringing forward tacit knowledge that can potentially be mobilized and observable through different manifestations of behavior in order to make it explicit as only its explicitness would enable us to share it as well as learn what needs to be learned and unlearn those things that are outdated and obsolete. At this point, it should be stressed that not all dimensions of tacit knowledge foster processes of introducing novelties. Thus, an important knowledge management task would be to separate the tacit knowledge dimension, which both supports and contradicts the introduction of novelties—in our case, newly established outsourcing routines. Having done this, it should be less difficult to incorporate different management efforts into the learning processes of those who support the learning processes and those who are against the unlearning processes for novelties to be introduced (Rebernik & Širec, 2007).
