Role and Room for Knowledge Management in Small and Medium Enterprises

Role and Room for Knowledge Management in Small and Medium Enterprises

Neeta Baporikar (Namibia University of Science and Technology, Namibia & University of Pune, India)
DOI: 10.4018/978-1-5225-8933-4.ch006

Abstract

In the present day, success and worth of businesses depend more on intellectual capital. So, knowledge is a critical resource, for any organizational growth and sustainability. For small and medium enterprises (SMEs) the latent knowledge seen as the principal component for success often tends to be over guarded. That itself is sometimes detrimental to the SMEs growth. This outlook towards knowledge by SMEs has to undergo a change as there is vast room for knowledge management (KM). Abundant studies and research exist on KM, but the focus on SMEs is limited. Current scenario of globalization, technological advances, higher returns on intellectual capital, growing significance of knowledge-intensive industries makes KM a strategic and competitive tool for SME growth, sustainability, and development. KM is indispensable for successful and sustainable business in this contemporary complex economy. Thus, the overall aim of this study done by in-depth literature review and contextual analysis is to enhance the understanding of the role and room for KM in SMEs in this globalized world.
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Background

One of the most significant evolutions in the business environment over the past decade is the dawn of the new economy. In particular, the management of knowledge assets may provide small firms new tools for survival, growth and maintaining a sustainable competitive advantage (Omerzel & Antoncic, 2008). There is a general accord in business practices and academia on the fact that SMEs are falling behind large companies in developing KM practices and benefits of KM has not fully exploited by these firms. This is reflected in a literature gap where little research efforts have been carried out on this topic. There is abundance of literature describing how various large companies are successfully practicing KM, but the reasons why small firms show poor usage of KM tools are still unclear. In fact, little empirical studies have been conducted to identify the factors influencing KM adoption in SMEs (Finkl & Ploder, 2009). In addition, there is a growing need for qualitative analysis of the effects of knowledge management practices of networked SMEs (Valkokari & Helander, 2007). The potential which KM offers in improving efficiency and innovation has been cited as a key source of competitive advantage (MacKinnon et al., 2002).

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