The Importance of Knowledge Management Processes for the Creation of Competitive Advantage by Companies of Varying Size

Abstract

Objective: This article analyses the intensity of knowledge management processes in companies of different size. It also examines the role of these processes in the formation of competitive advantage by these businesses. Company size is defined as the number of employees.

Research Design & Methods: This article is based on a quantitative study in which 1258 companies were examined. Several statistical tests were used to analyse the data, including the U Mann-Whitney test, linear regression and Pearson correlation.

Findings: It was found that the intensity of knowledge management processes was higher for bigger firms. The results also show that, regardless of the size, entities with more intensive knowledge management processes were relatively more competitive. Another finding is that knowledge management processes were regarded especially important for the competitiveness of large companies, with 250 employees or more.

Implications & Recommendations: The implications of this study can be valuable for managers preparing to execute knowledge management processes. Based on insights from the study managers can plan strategically and make informed decisions about what type of knowledge management initiatives to implement.

Contribution & Value Added: The size of an organisation is a factor that so far has been ignored in the study of the relationship between the intensity of knowledge management and competitive advantage. Specific characteristics of a company that result from its size determine its unique approach to knowledge management – the principles and rules that apply to large organisations cannot easily be scaled down and implemented in SMEs.

Keywords

knowledge management, firm’s size, competitive advantage, competitiveness