There are two kinds of knowledge- explicit knowledge and tacit knowledge.
Explicit knowledge can be expressed in words and numbers and shared in the form of data, scientific formulae, specifications, manuals and the like. This kind of knowledge can be readily transmitted across individuals formally and systematically. Tacit knowledge, or the other hand, is highly personal and hard to formalize, making it difficult to communicate or share with others. Subjective insights, intuitions, and hunches fall into this category of knowledge. Difficult to. verbalize, such tacit knowledge is deeply rooted in an individual’s actions and experience, as well as in the ideals, values, or emotions he or she embraces.
These two types of knowledge are complementary to each other, and both are crucial to knowledge creation. They interact with and change into each other in the creative activities of human beings. Understanding this reciprocal relationship between explicit knowledge and tacit knowledge is the key to understanding the 
Knowledge creation in organizations takes place primarily through the dynamic process of four different modes of conversion between the two dimensions of knowledge.
Socialization: Tacit knowledge to conversion takes place when tacit knowledge within one individual is shared by another through training.
Combination: Explicit knowledge to explicit knowledge conversion takes place when an individual combines discrete pieces of explicit knowledge into a whole new concept.
Externalization: Tacit knowledge to explicit knowledge conversion can be said to take place when an individual is able to articulate the foundations of his and her tacit knowledge.
Internalization: Explicit knowledge to tacit knowledge conversion takes place when new explicit knowledge is shared throughout the firm and other members begin to use it to broaden, extend and reframe their own tacit knowledge.
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