Knowledge, as a corporate asset, is the focus of much discussion. What constitutes knowledge and where does it reside? By some estimations, knowledge is a personal possession, something an individual has as a result of education and/or experience; by other estimations, it is a "consensually supported result of information processing and thus part of organizational memory, a publicly documented body of knowledge (Nevis et al., 1995). However, most would agree that, in a corporate sense, knowledge is the productive application of information(Bendaly, 1996).
Perceptions of knowledge differ according to what one considers the repository of knowledge: the individual or the organization. Knowledge as an asset in an organization results from efforts by knowledge workers, individuals in whose heads knowledge resides. Individuals bring knowledge with them to the workplace, knowledge they have acquired through education, training and experience, and, if they leave the workplace, they take with them additional knowledge acquired there. their leaving behind any personal knowledge depends on whether the organization has transformed it into organizational knowledge.
Organizational knowledge has been codified, stored and managed - it is explicit, systematic and easily communicated in the form of hard data and codified procedures (Inkpen, 2ii6). This contrasts with personal internalized, tacit knowledge (Polani, 1967).
Tacit knowledge involves intangible factors embedded in personal beliefs, experiences and values. Internalized, tacit knowledge is not easily communicated or even readily acknowledged by those who possess it. Organizations draw on individuals' tacit knowledge when they develop and implement explicit knowledge. Nonaka (1994) writes of the spiral of knowledge creation, whereby individuals, then groups, then organizations as a whole, convert tacit knowledge into explicit knowledge.
As an organization builds and expands its knowledge base, both tacit and explicit, it builds its intellectual capital and, consequently, enhances its competitive advantage. Knowledge becomes a competitive asset, especially knowledge which is firm-specific, private knowledge - in particular patents, copyrights and 'secret' procedures. However, as best practices are disseminated within an industry, they become public knowledge (Matusik & Hill, 1998) As individuals master firm-specific best practices, such knowledge becomes portable -a part of an individual's as well as the firm's human capital. Part of the knowledge and experience a new hire may bring to a firm is private knowledge from a prior workplace, just as he or she may transport such knowledge from a firm when he or she moves on to a new employer.