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Simple descriptors of knowledge states, often involving a single variable, have played an important role both in the theory of economic growth and in empirical research on R&D, the determinants of profitability, and related topics. Although considerable insight has been derived from these studies, both the theory and the evidence are generally at too aggregative a level to be more than the suggestion for the purpose of strategic analysis.
The domain of strategic choice certainly includes, for example, the choice of a level of R&D expenditure, but such a choice ordinarily interacts with the details of prior selection. It is, therefore, necessary to confront the difficulties that arise from the complexity and diversity of the phenomena denoted by such terms as knowledge, competence, skill, and so forth.

The reality of the phenomenon of tacit knowing at the level of individual skills is obvious from introspective evidence; its sources and signature were explored in depth in Nelson and Winter (1982). An article in the New York Times (Blakeslee, 1985) cited scientific evidence that different brain structures are involved in memory for the "procedural" knowledge underlying skills as opposed to memory for the "declarative knowledge" of facts, and provided a striking example of the distinction. Knowledge possessed by an organization may be tacit knowledge in the sense; first, that the possession arises from the association with the organization of an individual for whom the knowledge in question is tacit. Related articulable knowledge may be possessed by other members of the organization. Second, the fact that the myriads of relationships that enable the organization to function in a coordinated way are reasonably understood by (at most) the participants in the relationship and a few other means that the organization is certainly accomplishing its aims by following rules that are not known as such to most participants in the organization. Third, in a metaphorical sense, an organization's knowledge is tacit to the extent that its top decision makers are uniformed regarding the details of what happens when their decisions are implemented. The decision makers are the symbol-processing brains of the organization; the symbols they deal in may suggest very little of what the nerves, bones, and muscles actually do-even though, in the reality to which the metaphor relates, the nerves, bones and muscles may be quite capable of describing it to each other.

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* Contributed by: -
Dr. R. P. Verma,
Ex. H.O.D. & Dean, Commerce and Business Management Dept.,
Arabinda Bhandari,
Strategic Management Researcher,
Ranchi University, Ranchi.