Knowledge Management in Small Firms

Abstract

A recent headline in a major German newspaper read `Many companies pay lip service only to knowledge management - have no knowledge about their own competencies and knowledge is not shared with staff’. The article’ referred to a research study that surveyed top managers of 112 of Germany’s largest 500 companies with respect to their companies’ practice of knowledge management^2.. The study found a huge gap between the perceived need for knowledge management and the companies’ actual practice. Thus for instance, 98 percent of the management believes that regular systematic environmental scans about future trends and developments are a strategic necessity, yet only 20 percent are conducting such comprehensive scans. Only 28 percent of the companies communicate to their own staff the results of their scans. Data from outside the company flows primarily to top management, strategic planning, and sales, but not to the research and development (R&D) and production units. Knowledge about the companies’ own competencies is underdeveloped as only 26 percent of firms are looking into the effects of personnel fluctuation and thus the effects of the drain of the firm’s knowledge base.