The argument of this chapter is that tacit knowledge is the primary basis for effective management, and the basis for its deterioration. Stated briefly, the reasoning for this claim is as follows: The primary basis for effective management is to define and transform, as much as possible, the behavior required to achieve the organization’s objectives into routines that work (Argyris, 1990, 1993; Argyris & Schön, 1996; Nelson & Winter, 1977). Routines are implemented through skillful actions. Actions that are skillful are based largely on tacit knowledge. Such actions become selfreinforcing of the status quo. The self-reinforcing features tend to reduce inquiry into gaps and inconsistencies in the tacit knowledge. When these surface, they are often embarrassing or threatening. Individuals deal with embarrassment or threat with another set of skillful-hence tacit-actions. These actions are counterproductive to effective management.