The management of knowledge resources in SMEs: an Australian case study

Purpose – The paper's aim is to examine processes used to control the management of knowledge resources in small and medium enterprises (SMEs) and to compare the findings with the underlying assumptions and prescriptions of intellectual capital guidelines designed for SMEs. Design/methodology/approach – An in‐depth case study of a successful Australian SME is conducted to identify the means used to control strategizing and the management of knowledge resources. Findings – It was found that informal, intensive dialogue based processes, structured by an overriding management philosophy, governed strategization and the management of knowledge resources. These governance processes were affected by a combination of formal and informal controls and serendipitous outcomes. Research limitations/implications – The paper examines only one organization and the study can be extended to other SMEs to develop more detailed specific policy recommendations. Practical implications – Intellectual capital management guidelines developed for SMEs may have little benefit due to assumptions of resource availability and the fundamental importance of formalization of strategy and control, ignoring possible scarcity of resources and the benefits of flexibility and responsiveness afforded by informal controls in SMEs. The research shows that knowledge harvesting is affected through the way knowledge is used rather than what is developed. Originality/value – The paper empirically examines the management of knowledge resources in an Australian SME and outlines the way formal and informal controls were interwoven in organizational practices to manage knowledge harvesting. It provides a critique of intellectual capital guidelines in SMEs, highlighting a potential mis‐match between practice and key assumptions underlying the guidelines.