The core capabilities of an organization include critical skills of employe
es, management systems, and norms and values. Core capabilities may be tran
sferred formally and explicitly. However, much knowledge, particularly know
ledge with rich tacit dimensions, is transferred informally through process
es of socialization and internalization. We focus on two transfer mechanism
s - mentoring and storytelling - that can leverage the knowledge of an orga
nization, particularly its tacit knowledge, to build core capabilities. We
draw on relevant research in learning and cognitive psychology to clarify t
he conditions under which mentoring and storytelling can be most effective
as carriers of knowledge. Finally, we present recommendations for specific
managerial practices that follow from our analysis.