The importance of tacit knowledge in strategic deliberations and decisions

Strategic decision making is a rather unstructured process with a wide variety of conflicting and equivocal considerations and inputs. Managers, usually working in top management teams, are asked to form an “interpretation” or working knowledge of the internal and external influences on the organization. This article suggests the real value of tacit knowledge and intuition to managers in the upper reaches of the organization. Tacit knowledge, based on the cumulative experiences of the manager, is equivalent to the intuitive feel and “softer” ways of knowing that all humans experience. It has been found to be quite valuable to upper‐level managers, but especially when intermingled with sound data analysis and more formal insight. When groups of managers can exchange and share the different types of knowledge, a complementary and synergistic learning process occurs. Managers are able to draw from a broader, more diverse set of possibilities and insights.