The core capabilities of an organization include critical skills of employees, management systems, and norms and values. Core capabilities may be transferred formally and explicitly. However, much knowledge, particularly knowledge with rich tacit dimensions, is transferred informally through processes of socialization and internalization. We focus on two transfer mechanisms--mentoring and storytelling--that can leverage the knowledge of an organization, particularly its tacit knowledge, to build core capabilities. We draw on relevant research in learning and cognitive psychology to clarify the 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.