Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology

Abstract A fundamental puzzle, as first stated by Michael Polanyi (1966), is that individuals appear to know more than they can explain. That knowledge can be tacit has broad implications for understanding the difficulty of imitating and diffusing individual skills, a problem lying at the heart of artificial intelligence to the competitive analysis of firms. Though the idea of tacit knowledge has been widely evoked but rarely defined-as if the lack of definition is itself evidence of the concept, it represents a dramatically different vantage point by which to analyze the capabilities and boundaries of firms.