Knowledge Creation, Organizational Learning and Their Effects on Organizational Performance

Knowledge has become one of the most important intangible assets for the company in the current competitive environment (Nonaka, 1994; Hunt, 1995; Grant, 1996; Hunt & Morgan, 1996; Teece, 1998; Lee & Sukoco, 2007; Li et al., 2009), being of particular importance knowledge creation processes within an organization (Nonaka, 1994; Nonaka & Konno, 1998; Nonaka et al., 2000) to achieve long-term competitive advantage (Nevis et al., 1995; Davenport & Prusack, 1997; Chow et al., 2000; Gold et al., 2001; Lin & Lee, 2004; Hicks et al., 2007). Furthermore, learning is at the heart of corporate governance and it has become the essence of productive activity that has new rules, new boundaries and new ways of behaving (Garcia et al., 2009). Thus, one of the strategic values of an organization lies in becoming a "learning organization". These organizations have an enterprise architecture that converts the firm into a place of learning, so the organization can make appropriate approaches to changing environment (Kogut & Zander, 1996; Garcia et al., 2007). The concept of knowledge management involves managing the learning processes of individual and collective members of an organization. Therefore, it includes organizational learning (related to the creation of new knowledge), and most processes related to the acquisition of knowledge from outside, dissemination, storage and exploitation of knowledge at the firm (Day, 1992; Garcia et al., 2009). So this paper analyzes how the 4 modes of knowledge conversion model proposed in the "knowledge creating organization" (Nonaka & Takeuchi, 1995): Socialization, Externalization, Combination and Internalization (SECI) affect organizational learning and the results of the organization. Analyzing a sample of 284 Spanish companies, we propose a model to analyze this relationship. The results show (1) a positive relation between the modes of knowledge creation, (2) knowledge creation influences organizational learning as an essential part of Knowledge Management (Garcia et al., 2007; Garcia et al., 2009), (3) knowledge creation and organizational learning can create a new approach of continuous improvement leading to the increase of organizational performance (Senge, 1990; Peters, 1992).