Exploring Knowledge Capabilities in SMEs: Cases in Five Irish Software SMEs

Small and medium enterprises (SMEs) by their very nature differ from multinational enterprises (MNEs); this means that the knowledge management (KM) approach for SMEs differs from that implemented by a larger organisation. However, there remains an absence of empirical evidence that highlights how SMEs operationalise their approach to KM, particularly in the high-technology sectors. Unquestionably, KM has established considerable focus in MNEs during the past decade, it is therefore imperative that policy makers engage SMEs in order to better comprehend the role of SMEs in the global economy. In view of the current economic turbulence, never has it been more important to focus on the knowledge capabilities of software SMEs, as it is on the back of these types of small high-tech organisations that innovation, growth and potential recovery will be realised. Pursuing a qualitative analysis approach using multiple case studies, this chapter examines the knowledge capabilities in five Irish software SMEs with the objective of developing a greater understanding of an SME’s approach to KM and therefore developing an actionable way of assessing how important knowledge is managed, in this type of organisation. The transcripts derived from twenty eight interviews conducted were coded in order to identify the types of knowledge activities (KA) and modes of knowledge processing used to serve the knowledge needs of these organisations. Leveraging the empirical findings from the five cases, this study uncovered significant consistency across the knowledge focus of the five organisations, in software development, project and product knowledge. Depending on the company focus, niche knowledge types were also revealed. While the total number of KAs varied from firm to firm, it was discovered that software SMEs are good at knowledge transfer activity. This finding is largely attributed to the size and the focused business objectives of these firms. Surprisingly, knowledge creation activity was low and explained by the management style, where a small number of people, typically management, drive knowledge creation activity.