Knowledge Management Challenges in in Small- and Medium-sized Firms KAVOOS MOHANNAK School of Management, QUT Business School 2 George Street, Brisbane, QLD 4001, Australia E-mail: k.mohannak@qut.edu.au This paper is presented at The ISFAM 2014 World Congress in Tokyo – Management in Crisis - Tokyo, Japan September 2-4, 2014.

Research Context In this study, knowledge management (KM) is all the activities by which an organization identifies and utilizes external and internal knowledge. The research findings suggest that innovations occur when existing or new knowledge is integrated within organization which will result in a new product or service (Cavusgil et al. 2003). Little attention has made to investigate how they manage and integrate their specialised knowledge for innovation which is at their core of their business.

Research Questions Where are the potential challenges for the integration of specialised knowledge? What processes and practices are used by small medium sized technology-oriented firms to transfer, create and capture knowledge for the organisation’s benefit? How is knowledge integrated, sourced and recombined from internal and external sources for innovation and new product development?

Strands in Literature Kogut & Zander (1992) suggest that the primary challenge of the firm is to create and transfer knowledge efficiently within the firm (combinative capabilities) Knowledge-based view of the firm (see, Boisot, 1998; Grant, 1996a; Teece, 1998). Recent empirical study by Palacios, Gil & Garrigos (2009) also provides a bridge from knowledge management activities to technological innovation and distinctive competencies. Four categories of organisational resources and capabilities impact knowledge integration: 1) team-building capability; 2) integration of individual specialized knowledge that are sources of technical and commercial information; 3) knowledge integration through communication networks within and outside the organization; and 4) technology/knowledge systemic integration (Hargadon and Fanelli 2002; Huang and Newell 2003; Andreu and Sieber 2005).

Conceptual Framework Path dependency: Path dependency is a process in which the pattern of behaviour of the firm is based on the earlier experiences and cumulative knowledge of the firm. Mechanisms for linking technological and commercial knowledge: The framework emphasises the dynamic nature of the knowledge flows that must occur between the commercial and technological functions in the firm, linking to the strategy, innovation and operational processes, Knowledge Context: The specific knowledge integration issues faced by firms depend on the characteristics of specialised knowledge and technology context of the firm. Organisational Context: The organisational context (internal and external) refers to structure, systems, infrastructure, culture, and the particular business environment and challenges confronting the firm, which change over time.

Conceptual Framework Knowledge Determinants: Path dependency; knowledge linkage mechanisms; Organizational and Knowledge context Knowledge Activities: Identification, selection, acquisition & development, exploitation, protection Firm specific specialized Knowledge base; KM Systems External Knowledge: Search processes and integration and transfer of different knowledge-bases through partnerships and generic knowledge. Internal Knowledge: Learning processes, internal knowledge capabilities and competencies Organizational Knowledge Integration KI within project team - team building capability KI and capturing of individual specialized knowledge that are sources of technical and commercial information. KI through communication networks/systems within and outside the organisation; and Technology/knowledge systemic integration. Innovation Performance: Scale of new product/service; competitive advantage; capability development

Case Studies: Multiple case study method employed: Company A is an innovative firm and does much research and development in the area of information systems and automation engineering. Company B is a nanotechnology company which started about ten years ago and currently has about 30 employees. Company C is a commercial biotech laboratory that offers a range of chemical and microbiological testing across food, agricultural and environmental sectors utilising the best technology. Company D provides health-care solutions and products based on the science of cell biochemistry.

Research Findings Identifying the knowledge Gap “...it will generally come from a meeting where we discuss that we have these things coming up, how are we going to achieve them. That is where we start trying to identify gaps and holes...” Knowledge Acquisition and Development “ ...it could be in a number of different ways, it could well be that we decide somebody needs training … it could be as I said that we hire an external resource. It could be a contractor/specialist in that area, it could well be that we use documentation...” Knowledge utilisation and sharing “...we have quite a few social evenings where we encourage the guys to do things together at lunchtime and we have our little lunch learning meetings, they are less formal environments, but they still allow the guys to talk about and share ideas...” Organisational knowledge integration “...that is probably the biggest challenge for us is to capture that experience if you like...”

Practical Implications Technology-based firms must be strategic in knowledge management processes for innovation, especially for knowledge integration Leadership and management should encourage various practices for knowledge management, Capturing and sharing tacit knowledge, Team knowledge integration practices, Knowledge management & integration through communication networks, and Technology systems for knowledge management and integration.

Conclusions Knowledge management and integration process is very much project focused and not embedded within the overall organisational routines and mainly based on ad hoc and informal processes. The research highlights that technopreneurial firms must be intentional in order to manage their specialised knowledge strategically. Gaining access to internal knowledge and integrating this knowledge into new product development process was important; however equally important was gaining knowledge through external interaction. There is a need to improve the general effectiveness of the systems in supporting the management of knowledge beyond simple use of databases. Knowledge integration is not a stand-alone process. It has to be embedded throughout all business processes and has to become part of the firm’s culture and routines.

Thank You ….