Knowledge Management Practices and Performance of Small and Medium Enterprises in Nairobi City County, Kenya

Abstract

SMEs are an important component of the economy, especially with regard to absorbing a large percentage of the workforce. Good performance of these entities is therefore critical so that they can continue with their economic contribution. The general objective of this study was to investigate the influence of knowledge management practices on the performance of small and medium enterprises in Nairobi City County. Specifically, the study sought to: establish the influence knowledge creation, knowledge acquisition, and knowledge sharing/transfer and knowledge implementation on the performance of small and medium enterprises in Nairobi City County. This study was guided by Resource based view theory, Organizational learning theory and Knowledge based theory. The study was based on descriptive research design. The target population was 532 SMEs firms in Nairobi City County. The sample size was 150 SMEs covering different sectors. The study found out that knowledge creation significantly influenced performance of small and medium enterprises. Knowledge acquisition significantly influenced performance of small and medium enterprises. Knowledge sharing significantly influenced performance of small and medium enterprises. Knowledge implementation significantly influenced performance of small and medium enterprises. The study concludes that knowledge creation enabled creation of new products and services to meet customer need and satisfaction for increased loyalty. SMEs were encouraged to innovate for better services for better productivity and increased returns. SMEs were careful while hiring and put importance in hiring skilled employees for improved and better performance. SMEs put great importance on technological advancement and embraced technology in their daily running of the business. SME firm organized meetings to enable sharing of knowledge and borrowing of better ideas to the enterprises. SMEs achieved technological advantage by encouraging knowledge sharing on current issues. SMEs involved all departments for better exchange of views when implementing knowledge management. The study recommends that knowledge creation ought to enable creation of new products and services to meet customer need and satisfaction for increased loyalty. SMEs ought to be encouraged to innovate better services for better productivity and increased returns. SMEs ought to be careful while hiring and put importance in hiring skilled employees for improved and better performance. SMEs ought to send their employees for external training to increase their competence levels for better productivity. SME firm ought to organized meetings to enable sharing of knowledge and borrowing of better ideas to the enterprises. SMEs ought to achieve technological advantage by encouraging knowledge sharing on current issues. SMEs ought to take a rational decision as a key driver to knowledge implementation. SMEs ought to involve all departments for better exchange of views when implementing knowledge management.