is a process of embodying explicit knowledge into tacit knowledge, internalizing the experiences gained through the other modes of knowledge creation into individuals’ tacit knowledge bases in the form of shared mental models or work practices. Internalization is facilitated if the knowledge is captured in documents or conveyed in the form of stories, so that individuals may re-experience indirectly the experience of others. Matsushita’s home bakery product was a great success. It sold a record 536,000 units in its first year, topped the list of Mother’s Day gifts, and was featured in a 1987 issue of Fortune magazine. The success story was disseminated throughout Matsushita by word of mouth and in-house publications, changing employees’ perceptions about the potential of home appliances and inspiring them to develop other innovative products. The new tacit knowledge being internalized was that Matsushita could develop a product by interfacing directly with customers and by pursuing quality without compromise.