The Effect of Tacit Knowledge Management on Innovation: Matching Technology to Strategies

This research proposes tacit knowledge management as a tool to manage intellectual capital and the use of the tacit knowledge index (TKI) to assess the level of tacit knowledge within firms and the effect of tacit knowledge on firm performance. We drew on a sample of 108 United States and Canadian firms using knowledge management to determine each firm´s TKI and their use of knowledge management methods. We developed a measure that included both the degree of usage and the tacitness of the knowledge management method and used regression and correlation to statistically analyze the innovation and financial outcomes. Significant relationships were found between a firm´s level of TKI and the firm´s performance. Those firms that have a higher degree of tacit knowledge, as measured by the TKI, perform better on both financial and innovation business metrics