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Critical Factors for the Creation of Learning Healthcare Organizations on the way business is conducted, as well as on people's life styles. An important consequence of globalization and rapid technological change has been the generation of vast amounts of raw data and information, and the concomitant growth of the capabilities to process them into pertinent information and knowledge applicable to the solutions of business problems. Knowledge has become a major organizational tool in gaining and sustaining competitive advantage. Traditionally, economists have emphasized land and the associated natural resources, labor, and capital as the essential primary ingredients for the economic enterprise. However, in the Informa- tion Age, knowledge is considered as important as the three original prerequisites. Hence, the new term "knowledge economy" has emerged and managing knowledge has become one of the primary skills that organizations need to acquire in order to survive and prosper. Types of Knowledge In trying to understand the knowledge construct it is necessary first to recognize the binary nature of knowledge; namely its objective and subjective components. Knowledge can exist as an object, in essentially two forms; explicit or factual knowl- edge and tacit knowledge or "know how" (Haynes, 1999, 2000; Polyani, 1958, 1966; Wickramasinghe & Mills, 2001). It is well established that while both types of knowledge are important, tacit knowledge is more difficult to identify and thus manage (Nonaka, 1994; Nonaka &Nishiguchi, 2001). Of equal importance, though perhaps less well defined, knowledge also has a subjective component and can be viewed as an ongoing phenomenon, being shaped by social practices of communities (Boland & Tenkasi, 1995). The objective elements of knowledge can be thought of as primarily having an impact on process, while the subjective elements typically impact innova- tion. Both effective and efficient processes as well as the functions of supporting and fostering innovation are key concerns of knowledge man- agement. Thus, we have an interesting duality in knowledge management that some have called a contradiction (Schultz, 1998) and others describe as the loose-tight nature of knowledge manage- ment (Malhotra, 2000). The loose-tight nature of knowledge manage- ment comes into being because of the need to rec- ognize and draw upon some distinct philosophical perspectives; namely, the Lockean / Leibnitzian stream and the Hegelian /Kantian stream. Models of convergence and compliance representing the tight side are grounded in a Lockean / Leibnitzian tradition (Malhotra, 2000). These models are essential to provide the information processing aspects of knowledge management, most notably by enabling efficiencies of scale and scope and thus supporting the objective view of knowledge management. In contrast, the loose side provides agility and flexibility in the tradition of a Hegelian / Kantian perspective. Such models recognize the KNOWLEDGE There are many plausible definitions of knowl- edge. For the purposes of this chapter the definition of knowledge given by Davenport and Prusak (1998, p.5) will be used because it is not only broad and thus serves to capture the breadth of the construct, but also, and perhaps more importantly for this discussion, it serves to underscore that especially in an organizational context, knowl- edge is not a simple homogeneous construct but a compound construct. Knowledge is a fluid mix of framed experi- ences, values, contextual information, and expert insights that provides a framework for evaluating and incorporating new experiences and informa- tion. It originates and is applied in the minds of knowers. In organizations, it is often embedded not only in documents or repositories but also in organizational routines, processes, practices and norms Davenport and Prusak (ibid). 53