**3.1 The SECI and the concept of "BA" applied to the districts**

As previously emphasized, in the district system, the relationship that is created between companies gives rise, not only to an exchange of goods and services but, above all, to an interaction of knowledge and skills. Business networks and systems represent the place, physical or virtual, where learning and knowledge settling take place [52]. These activities are based on a main strategic resource: communication, which is the fundamental activity for the development of new knowledge. Interestingly, in this perspective, it becomes the analysis of the concept of "BA": it refers to the place, physical, mental or virtual, at the level of which the subjects, involved in the knowledge creation process, interact, directly linking their tacit and explicit knowledge. Nonaka and Konno [52] have built a model of cognitive processes, divided into four phases: socialization, outsourcing, combination and internalization (SECI). Based on this model, the interaction between explicit and tacit knowledge allows us to postulate four ways of converting knowledge:

**Socialization:** it allows to pass from a tacit knowledge to another tacit knowledge. It is a process of sharing experience and creating forms of tacit knowledge: mental models and technical skills. The key to acquiring tacit knowledge is the shared experience, without which it would be difficult to penetrate other people's thinking process [52].

**Externalization:** it is the process by which tacit knowledge is expressed through explicit concepts, in the form of metaphors, hypotheses or models [52]. This mode is the key to creating knowledge, because it creates new and explicit concepts from tacit knowledge. One of the systems for converting tacit knowledge into explicit knowledge is the metaphor-analogy-model sequence [52]. Metaphor is a way of perceiving an object by symbolically imagining another; the analogy helps to understand the unknown through the known and to overcome the gap that separates the image from the logical model. In this way, once the explicit concepts are created, it is possible to build models [52].

**Combination:** it is a process of systematization of concepts, which makes it possible to pass from one explicit knowledge to another [52]. Individuals exchange and combine knowledge using different tools such as documents, meetings and computer networks; the reconfiguration of information through sorting or categorization can lead to new forms of knowledge [52].

**Internalization:** it is the process of translating tacit knowledge into explicit knowledge [52]. It is a concept linked to that of learning by doing, that is, learning by action. The more knowledge is represented in documents and manuals—which also facilitate its transmission to other subjects—the simpler the conversion is [52]. If we want to "materially" imagine the exchange or interaction of knowledge in which individuals are involved, we can refer to **Figure 4**.

**117**

*The Management, Sharing and Transfer of Knowledge in the Oil Districts - The Case Study…*

In each phase of the interaction, a different level of "BA" comes into play: it represents a support element for the interaction of knowledge possessed by individuals, groups and the entire organization—i.e. the carriers—depending on the level in which the mechanism is activated. Each phase requires a different way of converting the knowledge and, consequently, of a different "BA", depending on the

• **Originating BA**: is a support for the socialization activity, thanks to the establishment of mainly mental interactions, which are based on the sharing of the same collective imagination and are aimed at the transfer of tacit knowledge

• **Interacting BA**: allows the externalization of tacit knowledge, through basic

• **Cyber BA**: is a support for the combination of explicit knowledge, necessary for the creation of new applications to tacit knowledge, now becoming explicit

• **Exercising BA**: has the purpose of providing mechanisms for the dissemination of knowledge within the company and for the creation of organizational learning systems, thanks to which communication and sharing of the new knowledge

In addition to what has been said for individuals, within the industrial systems, there is the existence of a further typology of "BA", closely linked to the division of

This further typification is classified as the field of interaction between the various district enterprises, which serves to simplify and encourage the creation and transfer of new knowledge between district companies. Therefore, the fundamental difference between the different "BA" consists in the extension beyond the boundaries of the company, allowing the effective connection between the

labour that characterizes this type of business reality: the distrectual "BA".

mechanisms of interaction and dialog that develop within a group

There are, in fact in **Figure 5**, four distinct types of "BA":

*The spiral of knowledge and the SECI model. i: individual, g: group and o: organization.*

*DOI: http://dx.doi.org/10.5772/intechopen.86298*

characteristics of the latter [52].

**Figure 4.**

created can be achieved.

*The Management, Sharing and Transfer of Knowledge in the Oil Districts - The Case Study… DOI: http://dx.doi.org/10.5772/intechopen.86298*

**Figure 4.** *The spiral of knowledge and the SECI model. i: individual, g: group and o: organization.*

In each phase of the interaction, a different level of "BA" comes into play: it represents a support element for the interaction of knowledge possessed by individuals, groups and the entire organization—i.e. the carriers—depending on the level in which the mechanism is activated. Each phase requires a different way of converting the knowledge and, consequently, of a different "BA", depending on the characteristics of the latter [52].

There are, in fact in **Figure 5**, four distinct types of "BA":


In addition to what has been said for individuals, within the industrial systems, there is the existence of a further typology of "BA", closely linked to the division of labour that characterizes this type of business reality: the distrectual "BA".

This further typification is classified as the field of interaction between the various district enterprises, which serves to simplify and encourage the creation and transfer of new knowledge between district companies. Therefore, the fundamental difference between the different "BA" consists in the extension beyond the boundaries of the company, allowing the effective connection between the

*Current Issues in Knowledge Management*

**Relations between companies**: the relationships between the district companies that are part of the production chain are often vertical and involve companies that carry out different phases of a single production process [3]. More rarely they can be horizontal, between companies operating in the same phases or in similar phases of the production process. Some districts take the form of intersectoral clusters, in which there are also relationships between the companies of the district core business and the suppliers of materials and other services used in the production process [3]. The different contacts can give rise to social relations between individuals from different societies. The industrial districts therefore function as meta-contexts, characterized by a strong information transparency, in which the boundaries between company contexts are poorly defined. The phenomenon of information transparency in IDs is best represented by the Marshallian model of the industrial-social environment [45].

As previously emphasized, in the district system, the relationship that is created between companies gives rise, not only to an exchange of goods and services but, above all, to an interaction of knowledge and skills. Business networks and systems represent the place, physical or virtual, where learning and knowledge settling take place [52]. These activities are based on a main strategic resource: communication, which is the fundamental activity for the development of new knowledge. Interestingly, in this perspective, it becomes the analysis of the concept of "BA": it refers to the place, physical, mental or virtual, at the level of which the subjects, involved in the knowledge creation process, interact, directly linking their tacit and explicit knowledge. Nonaka and Konno [52] have built a model of cognitive processes, divided into four phases: socialization, outsourcing, combination and internalization (SECI). Based on this model, the interaction between explicit and

tacit knowledge allows us to postulate four ways of converting knowledge:

**Socialization:** it allows to pass from a tacit knowledge to another tacit knowledge. It is a process of sharing experience and creating forms of tacit knowledge: mental models and technical skills. The key to acquiring tacit knowledge is the shared experience, without which it would be difficult to penetrate other people's

**Externalization:** it is the process by which tacit knowledge is expressed through explicit concepts, in the form of metaphors, hypotheses or models [52]. This mode is the key to creating knowledge, because it creates new and explicit concepts from tacit knowledge. One of the systems for converting tacit knowledge into explicit knowledge is the metaphor-analogy-model sequence [52]. Metaphor is a way of perceiving an object by symbolically imagining another; the analogy helps to understand the unknown through the known and to overcome the gap that separates the image from the logical model. In this way, once the explicit concepts are created, it

**Combination:** it is a process of systematization of concepts, which makes it possible to pass from one explicit knowledge to another [52]. Individuals exchange and combine knowledge using different tools such as documents, meetings and computer networks; the reconfiguration of information through sorting or catego-

**Internalization:** it is the process of translating tacit knowledge into explicit knowledge [52]. It is a concept linked to that of learning by doing, that is, learning by action. The more knowledge is represented in documents and manuals—which also facilitate its transmission to other subjects—the simpler the conversion is [52]. If we want to "materially" imagine the exchange or interaction of knowledge in

**3.1 The SECI and the concept of "BA" applied to the districts**

**116**

thinking process [52].

is possible to build models [52].

rization can lead to new forms of knowledge [52].

which individuals are involved, we can refer to **Figure 4**.

different "BA" present in the single companies [52]. The "BA" is characterized by three typical physical, mental and virtual components: the reality of the industrial district contains all three of these characteristics. In fact, it is physical, because it is geographically localized; therefore all the actors, who are part of it, live and work in the same place [52]; it is mental, because the main element of the industrial district is the sharing of everything related to the system—the history, the experiences and the attitudes—typical of this specific reality; and finally, it is virtual, a feature that is not yet distinctive of the ID, but which can be considered feasible in the not too distant future. Ultimately, the context of the industrial district, seen as an economic business reality in itself, represents a true "BA", and it is possible to read the district by applying the logical categories previously introduced:

