Jurnal Ekonomi dan Bisnis. Vol. 11 No. 4 Desember 2022 P - ISSN : 2503-4413 E - ISSN : 2654-5837. Hal 752 Ae 758 KNOWLEDGE CREATION: PERSPECTIVE ON THE HALAL SMEs IN SIDOARJO Muhafidhah Novie A*. Siti Mahmudah 2 A Management Study Program. Nahdlatul Ulama University Sidoarjo. Indonesian IPWIJA University Jakarta College of Economics. Indonesian Article Info Article History : Received 16 Des - 2022 Accepted 25 Des - 2022 Available Online 30 Des Ae 2022 Abstract This study aims to determine of knowledge creation as perspective on the Halal SMEs in Jabon District. Sidoarjo. To get a clear and structured picture of the phenomenon under study, the research was conducted using a descriptive qualitative method through an ethnomethodological The informants were selected using a purposive sampling technique by considering that the informants are members of the Seaweed SME, namely entrepreneurs (Source Mulyo Cooperative 5. and red seaweed farmers of Gracilaria sp. The results showed that the knowledge creation as perspective on the Halal Seaweed SMEs in Jabon District. Sidoarjo could be done by applying the SECI Nonaka and Takeuchi This model emphasizes the creation of new knowledge in the organization through the conversion of tacit and explicit knowledge with the dimensions of Socialization. Externalization. Combination, and Internalization. This will form a loop that will never stop, and will even Through this continuous process, it is hoped that the differences in understanding between Cooperatives and Farmers regarding the development of seaweed SME will be corrected, resulting in the same agreement on efforts to develop Seaweed SMEs based on knowledge creation perspective. Keyword : SMEs. Seaweed. Knowledge creation. SECI. Sidoarjo. The socialization process is very useful for individuals who are members of the SME to gain new knowledge, thus giving rise to product ideas or alternative production techniques. A community called "Jepara Writing Academy" stated that the application of Knowledge creation further enhances and broadens members' horizons in terms of writing and publishing their works. It was further emphasized that the development of small and medium industries (SME) requires broad insight and knowledge so that each industry has innovation and creativity in creating products desired by consumers. One of the efforts that can be made to increase knowledge in the seaweed cultivation sector is the implementation of periodic Besides that,(Anggraini & Thamrin, 2019. Muzdalifah et , 2020. Novie et al. , 2020. Pujianto & Evendi. The knowledge creation approach is an effort that needs to be driven in the development of Halal Seaweed SMEs in Jabon District. Sidoarjo because it will identify various knowledge that needs to be initiated by the organization to its members to create innovation and creativity to produce products that are more competitive and attractive to the international market. Based on Introduction Knowledge is an important factor for companies to be able to achieve a competitive First. The creation of innovative products cannot be separated from knowledge because the breadth of knowledge is a factor that encourages the birth of the idea to create a certain Second. Knowledge will make it easier for all components of the company to improve their product deficiencies for the better in the future. This knowledge certainly comes from each individual initiated by the organization or the surrounding environment. The initiation process carried out by an organization to bring out individual creativity so that they can create new products or innovate is often referred to as Knowledge creation. Knowledge creation can be interpreted as socialization carried out by an organization or company to its members continuously and sustainably. Knowledge creation is expected to be able to create output in the form of representations of ideas that have been socialized previously in the form of images, alternative methods, or new products from the (Durst. Edvardsson, & Bruns, 2013. Abdeldayem and Aldulaimi 2020. Syamsuddin et Utami and Ekawati 2. the observations made by the author, it is known that so far the cultivation of red seaweed in Kupang Village. Jabon Sidoarjo District is carried out on 800 hectares of pond land by local farmers. Each hectare can produce about 15 tons of red seaweed in one cultivation cycle which is about 45 days. The selling price of red seaweed is IDR 7,000 per kilogram so the calculation of profit every one cycle for farmers is Rp. 13 million or Rp. million per month. This advantage is quite large considering that seaweed cultivation does not require high production costs because seaweed cultivation only requires the cost of providing seeds and labor, which is about 20% of the In addition, the Foreign Exchange Village program is an opportunity for farmers to further develop their businesses because their crops can be exported independently. (Mulya, 2021. Novrita et al. , 2018. Sari & Kurniawan, 2. So far, the development of seaweed SMEs in Kupang village. Jabon sub-district. Sidoarjo tends to stagnate. Seaweed exports carried out by local seaweed SMEs are only in the form of dried red seaweed or processed into flour. Meanwhile, every business world, whether small, medium, or large, is required to be able to survive in increasingly free and open market competition. The increasingly competitive marketing climate requires every business world to innovate to be able to maintain market share while reaching wider consumers. Moreover, many other regions in Indonesia also act as seaweed producers, such as South Sulawesi. NTT. NTB, and Central Sulawesi which also make international markets their sales targets for seaweed production. (Bisilisin & Naatonis, 2021. Handi, 2021. Mulya, 2. Knowledge creation research that has been done generally discusses large companies, it is still very rare for research on Knowledge creation to discuss small and medium industries. On that basis, the author is interested in analyzing knowledge creation as an approach to developing halal seaweed SMEs in Jabon District. Sidaorjo. customers, researchers, and experts related to their Furthermore, the output stage can be seen from the ideas that are spoken or displayed in the form of draft drawings of new products and alternative techniques that need to be done. (Indriartiningtias. Subagyo, and Hartono 2017. Pokrovkaia et al. Wakhidah and Rukiyah Knowledge creation can be done through 4 processes known as the SECI acronym. is(Indriartiningtias et al. , 2. Socialization Process (Socializatio. As the most basic process in disseminating knowledge. This process causes social interaction between individuals so that there is an interaction between tacit The socialization process can be done in the form of discussions, stories, or sharing experiences. Externalization Process The externalization process is defined as an effort to translate or translate tacit knowledge into explicit . Real knowledge is usually manifested in written or graphic form. so that tacit knowledge can be known and understood by the outside environment. Combination Process The combination process is an effort to disseminate and/or develop existing explicit knowledge. Documented knowledge can be disseminated through a meeting in the form of a document or an education or training Knowledge can be developed further by combining or processing various Process Internalization . The last process is a change from explicit knowledge to tacit knowledge so that it can be a learning process and/or research carried out or experiences that have been passed by each individual. Seaweed Seaweed is one of the marine plants belonging to the algae group that lives on the bottom of the waters. Taxonomically, seaweed belongs to the thallophyta division or thallus plants. Seaweeds are classified based on the content of dominant pigments in their thallus, namely green (Chlorophyt. , (Rhodophyt. , brown seaweed (Phaeophyt. , and blonde seaweed (Chrysophyt. The four classes of seaweed have various types with each role for other living things, including humans. History records that humans have been using seaweed as a food ingredient since 2700 BC. (Mulya, 2021. Novrita et al. , 2018. Sari & Kurniawan, 2. Literature Review Knowledge creation Nonaka Hirotaka Takeuchi emphasized that the implementation of knowledge creation must pay attention to the process of knowledge being created and managed sustainably. Therefore, every organization must develop a basic framework of knowledge consisting of two dimensions, namely epistemology and ontology. To measure the success of knowledge creation, an organization must perform three stages, namely process, output, and outcome. The process is the initial stage which can be in the form of input from In this study, the authors focus on the red seaweed class with the type Gracilaria sp. this species is widely cultivated in Jabon District. Sidaorjo. Gracilaria sp is a type of gelatinous seaweed that has high economic value. Chemically, agar is rich in hydrocolloid compounds. The compound is gelatinous, so it is very good to use as a food thickener. Therefore, the demand for the agar-agar industry from year to year continues to increase, thus providing great profits. In everyday life, red seaweed has many benefits ranging from food, medical, as well as industrial raw materials. (Handi 2021. Wisdom 2015. Ramadhan et al. Small and Medium Industry (SM. Small and Medium Industry (SM. is also referred to as the industrial world on a small scale, or local community industry (Nwokocha. Anyanwu. Madu, & Nwankwo, 2. SMe in Indonesia has a crucial and strategic role in the country's development program because it can absorb a large enough workforce. SMe has more value compared to large companies, namely the high creativity of its members. Broadly speaking. SMIs can be characterized by small scale both in terms of capital and the amount of production, relatively few members or workers and generally family members or local relatives, and the formal education of workers on average is not too (Arsyan, 2019. Estiasih et al. , 2019. Indriartiningtias et al. , 2017. Nwokocha et al. , 2. documentation through taking pictures, notes, and information related to the development of Seaweed SMEs through the Knowledge creation approach. Furthermore, the data obtained is reduced according to the relevant topic being studied, then presented in the form of a narrative description until finally a comprehensive conclusion can be drawn as an inductive finding. (Lexy J. Moelong. Results and Discussion Research conducted by Nonaka and Ichijo states that the success of Japanese companies is due to the ability and expertise of organizations in creating knowledge, not because of their skills in manufacturing, access to cheap capital, close relationships and collaboration with consumers or suppliers, and the seniority system, although it is undeniable that all these factors still play an important role. The creation of organizational knowledge in question is the ability of the company as a whole to create new knowledge which is the result of the conversion between tacit knowledge and explicit knowledge which is realized through the process of socialization, externalization, combination, and internalization (SECimode. Companies knowledge,(Indriartiningtias Nwokocha et al. , 2. Table 1. Interview Results Related to the Implementation of the SECI Model SECI Socialization Research Methods Types of research This research was conducted through a ethnomethodological approach is used to analyze activities carried out routinely by groups or Thus, a clear and structured picture can be obtained regarding the phenomenon under (Creswell, 2. Informant This study aims to determine the application of Knowledge creation as perspective to the Halal Seaweed SMEs in Jabon District. Sidoarjo. The informants were selected using a purposive sampling technique by considering that the informants were members of the Seaweed SME, namely entrepreneurs (Source Mulyo Cooperative 5. and seaweed farmers. Data Collection Procedure The research data were collected through observation, documentation, and semi-structured Observations were made by researchers through systematic observations of the symptoms Observations were carried out followed by interviews with informants as well as Externalization Combination Internalization Informant 1 Have tacit related to halal seaweed as an export Have never written or published red The process has not been carried out in of halal SMEs Not done Informant 2 Tacit knowledge of Never write or publish Have never with outside related to and drying Not done Source: Research data processing, 2022 Socialization It is a process of sharing information or experiences and social interactions that result in the AuWe have many ideas to cultivate seaweed here. We want the community's production not only to make seaweed as But it's hard for us to say how. Explain it to them how. In line with this statement. Mustofa added that seaweed farmers have a desire to use alternative drying techniques if the weather is not The farmers have the knowledge to do alternative drying, but they find it difficult to express the idea and the limited cost of creating the alternative dryer. In addition, farmers tend not to understand the import-export process, because they only focus on cultivation. Referring to the results of the interview above, the process of forming tacit knowledge that exists in individuals needs to be removed and formulated into other media that can be easily learned by other individuals. For example, in a meeting program, the cooperative is expected to explain its knowledge of export activities. On the other hand, farmers also explain what is known about processing seaweed effectively and The organization's management can make reports from the results of discussions during deliberation/meetings. Notes on the results of these discussions are made in physical or digital form, then shared in a chat discussion forum . , so that members can review what was discussed at the With externalization, the tacit knowledge that exists within the individual can be removed and poured into other media that are easier for others to learn and understand. Usually, the form of externalization is in the form of images, text, sound, or video. The results of the interview prove that externalization is an important stage to create Combination This stage is defined as a process of combining Explicit knowledge from one individual to another into new codified Explicit knowledge. other words, a knowledge that has been in the form of research results or images belonging to an individual with the results of other individuals' research is combined into new knowledge, which can be used to increase organizational (Nwokocha et al. , 2. In the case of halal seaweed SMEs, knowledge of seaweed cultivation techniques owned by farmers can be combined with the processing capabilities possessed by the Head of the Cooperative, so that new knowledge can be realized in the form of alternative processed products of red seaweed. This combination process can also be carried out with stakeholders and outside parties, but based on the results of TACIT . ersonal/individua. into other individual TACIT As research states that socialization is very useful for individuals who are members of the SMe to gain new knowledge, thus giving rise to product ideas or alternative production techniques. (Indriartiningtias et al. , 2. From the results of the interview with the Head of the Sumber Mulyo Cooperative 5758 (Informant . , it is known that he has a lot of information and ideas in processing seaweed produced by farmers in Jabon District so that it is more potential for export activities. Meanwhile, through interviews with seaweed farmers . , it is known that farmers have quite a lot of knowledge about seaweed cultivation techniques or ideas for alternative drying techniques if the weather is not favorable. As explained by Mostofa that weather conditions can be an obstacle to red seaweed production activities. It is further said that AuSeaweed drying relies on sunlight. Farmers don't have automatic tools like big factories to dry seaweed. That's why the drying process sometimes takes longer than growing the seaweed itself. Ay From the results of the interviews above, it can be seen that there is a lot of tacit knowledge possessed by each individual. Each member in a group or community must know his head. The difference in tacit knowledge between one individual and another becomes an opportunity for an organization like SME to continue to grow. the results of research conducted by Mitchell & Boyle that knowledge is the basis for generating a new idea. The emergence of new ideas is the initial form of innovation of an organization in developing itself. It should be emphasized that socialization will have significant implications as an early stage of knowledge creation. (Beneovy et , 2020. Indriartiningtias et al. , 2. Externalization The externalization model is explained as the process of articulating TACIT knowledge into EXPLICIT knowledge concepts. The knowledge possessed by individuals is disseminated in various it can be through scientific publications, presentations at a seminar or workshop, or just by making simple posters about the contents of individual thoughts. This process is intended to turn knowledge that is only in one's head into a real product (Indriartiningtias et al. , 2. The results of the interview show that both informant 1 and informant 2 have never published their TACIT knowledge. As stated by the Head of the Sumber Mulyo Cooperative 5758 that interviews it is known that so far there has been no intensive interaction between farmers and outside parties regarding alternative seaweed cultivation and drying techniques. Farmers tend to do all cultivation and drying with conventional methods. In addition, the Cooperative which is the organization of seaweed SMe also has not collaborated much with farmers in carrying out export activities. Cooperatives in Jabon village mostly do product marketing manually by using the word-of-mouth system . ord of mout. There has been no sharing of information between farmers and cooperatives regarding the exploring activities of seaweed products produced in Jabon District. Sidoarjo. This process should be optimized and facilitated by each stakeholder in the organization, for example by providing training or holding The provision of seminars and training is an advanced form of the socialization stage. Furthermore, it can be said that the seminars and training are a form of learning orientation for individuals to be able to innovate in creating a product(Estiasih et al. , 2019. Wahyudi, 2. Internalization Internalization is a process of converting Explicit knowledge that has been codified into TACIT knowledge that is personally owned by This process is carried out by individuals who try to understand existing knowledge by studying a theory or conducting research on an object being studied. The internalization process can produce satisfactory results if there is a balance between the learning process and the practical process in the real world . earning by doin. The balance between learning theory and practice ultimately produces and adds new knowledge to the individual. (Soul and Arnawa Based on the explanation of the process above, it can be explained that the halal seaweed SMe organization which consists of cooperatives and seaweed farmers can conduct joint discussions between personnel to discuss various activities related to the seaweed SMe and harmonize opinions so that the SMe development program runs well. and smooth. It should also be understood that this process will be resumed at the initial process, namely socialization, externalization, combination, and back to the internalization This will form a loop that will never stop, and will even expand. Through this continuous process, it is hoped that the differences in understanding between cooperatives and farmers regarding the development of seaweed SMEs will be corrected. Based on this description, it can be emphasized that knowledge is a fundamental asset as well as a key to organizational strength to identify and solve problems as a source of strength and competitiveness so that organizations can survive and compete with other countries around the world (Gunawan & Kurniawan, 2. Knowledge is not just a collection of contextual data and information related to experience, values , and insights, but knowledge is a dynamic process of social interaction between individuals in an organization with experience and insight that guides the individual to want to learn, act and do his job to solve problems. Conclusions Based on the description above, it can be concluded that the knowledge creation as a perspective on the Halal Seaweed SME in Jabon District. Sidoarjo can be done by applying the SECI Nonaka and Takeuchi models. This model emphasizes the creation of new knowledge in the organization through the conversion of tacit and explicit knowledge with the dimensions of Socialization. Externalization. Combination, and Internalization. The difference in tacit knowledge between one individual and another becomes an opportunity for an organization like SME to continue to grow. Furthermore, through the externalization process, the tacit knowledge that exists within the individual can be removed and poured into other media that are easier for others to learn and understand. In addition, the combination process should be optimized and facilitated by each stakeholder in the organization, for example by providing training or holding seminars. Through the seminar, new knowledge will be formed between members of the seaweed SME, so that the differences in understanding between the Cooperative and the Farmer regarding the development of the seaweed SME will be corrected which in the end will result in an agreement on efforts to develop the Halal Seaweed SME by the knowledge creation perspective. Suggestion Based on the conclusions that have been described, it is necessary to recommend to the Seaweed SME stakeholders in the Jabon Sidoarjo District to facilitate each implementation of the SECI model as a knowledge creation process. Thus, it is hoped that the Halal Seaweed SME will provide tangible benefits for pond farmers to be able to carry out export activities independently based on knowledge creation perspective. Acknowledge The author would like thanks to teams for their indepth input and suggestions and careful reading of the manuscript. This research was partly supported by the Research Team Faculty Economic Nahdlatul Ulama University. Sidoarjo. Industri Pengolahan Komoditas Rumput Laut Cotonii Untuk Peningkatan Nilai Tambah Di Sentra Kawasan Industrialisasi. Jurnal Kebijakan Sosial Ekonomi Kelautan Dan Perikanan, 5. , https://doi. org/10. 15578/jksekp. Indriartiningtias. Subagyo. , & Hartono. Knowledge Creation pada Industri Kecil dan Menengah : Dalam Tinjauan Kajian Pustaka secara Sistematis. Jurnal Ilmiah Teknik Industri, 16. , 142. https://doi. org/10. 23917/JITI. V16I2. Jiwa. , & Arnawa. Anteseden Inovasi. Organizational Citizenship Behavior (Oc. Dan Kinerja Ukm Garam Rakyat Di Kabupaten Buleleng. 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