Despite the many individual studies on various knowledge management initiatives in large organisations, the perception of knowledge management practices and developments in Small and Medium enterprises suffers certain drawbacks. Small and Medium enterprises generally lack a proper understanding of knowledge management strategies in terms of key concepts. As such, there is paucity of information on the effect of different knowledge management strategies used by small firms on sales growth in the hospitality industry in Kenya. The study sought to determine the effect of knowledge management strategies on sales growth in the hospitality industry. Specific objectives included determining the effect the three knowledge management strategies on small and medium business sales growth. A cross-sectional survey research design was used for this study and a sample was conducted on all the 39 targeted respondents. A questionnaire with structured and unstructured questions was used to collect primary data from all the 39 top managers and supervisors of selected hospitality businesses since they are the key decision makers. 

Descriptive and regression analysis were used to analyze the data with the help of SPSS version 21. The findings from this study indicate that, though knowledge management strategies were used to a greater extent among the small businesses, they did not significantly contribute to sales growth in the hospitality industry. This implies that the relationship was not significant because the use of the knowledge management strategies did not fully actualize the intended sales growth in the hospitality businesses. The results of this study have implications in enhancing the growth of SME’s in Kenya and fostering further research.

Background of the Study 
Knowledge management is an emerging field that is gaining popularity in the business literature. The theory of knowledge management emerged on the maps of strategy consultants and conference organizers around 1995 and for a few years, it was the next big thing after business process re-engineering and total quality management (Tuomi, 2002). The concept of knowledge management is concerned with the creation of structures that combine the most advanced elements of technological resources and the indispensable input of human response to decision- making. The early emphasis in knowledge management was on information systems. Later, the focus shifted towards organizational development, intellectual capital management, and competence management. Towards the end of the 1990’s, social learning, organizational sense making, systemic innovation and change management became prominent themes in knowledge management. 

However, it is not until recently that scholars and practitioners alike became increasingly attracted to the science of applied knowledge within organizations hence an improvement on information technology theory and the pioneering work on models of learning organizations (Senge, 1994). As a result of this, the enlarging field of knowledge management is defined differently from other more traditional information technology functions and it is the creative mining of information from diverse sources with the purpose of business opportunities in mind. 

In recent times, technological changes have shifted firms away from being majorly concerned with the exploitation of tangible assets only, but also towards a steadfast and holistic interest in leveraging intangible assets as well (Raisinghani, 2000). The management of information as a key to grasping and retaining competitive advantage has recently evolved into the more strategically focused management of knowledge. The notion of knowledge management is nothing new and corporate knowledge is what the organisations possess which is gathered from internal and external sources for years (Manyara, 2006). 

According to Ellen, (1989), the only irreplaceable capital an organization possesses is the knowledge and ability of its people. The productivity of this capital depends on how effectively people share their competence with those who can use it. Therefore, the ability of an organization whether large, medium or small to stay current and stay relevant requires a core competence in knowledge management (Drucker, 1998). Because of this, the foundation of organisational competitiveness has shifted from an emphasis on physical and tangible resources to knowledge and managing knowledge-based resources has become the key for sustaining competitiveness and superior performance (Wong and Aspinwall, 2005). 

Knowledge is a very strategic tool for contemporary organizations and the ability to use this tool determines the limits of organizations’ life span. (Barca, 2002). It is not enough to have the knowledge of strategic characteristic to be successful because this valuable asset at hand should be somehow managed and this is only possible through knowledge management approach. Knowledge management framework is therefore based on the premise that the focus should be placed on the way knowledge is used to build the critical capabilities so as to succeed. These capabilities include the processes and activities that enable any business to compete. 

A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost or deliver benefits that exceed those of competing products. Competitive advantage is therefore rooted inside the firm in assets that are valuable, unique, intangible and inimitable (Manyara, 2006). From a knowledge-based perspective, business organizations are viewed as bundles of knowledge assets, the effective management of which affords firms competitive advantage (Choo and Bontis, 2002). According to Nonana and Takeuchi (1995), competitive advantage is founded in the ability of companies to create new forms of knowledge and translate this knowledge into innovative action. They further affirm that the sure source of lasting competitive advantage is knowledge. Therefore, knowledge creation and use are critical if firms are to gain competitiveness (Susan et al, 2003). However, firms must come up with Knowledge Management strategies that identify the key needs and issues within the organization and provide a framework for addressing these. 

Most previous discussions on knowledge management have concerned large organisations with little attention being paid to small business sector (McAdam and Reid, 2001). However, it should not be inferred that the thrust for knowledge management is driven by the size of the operation and therefore small businesses do not need it. Staff in small and medium enterprises just as in big corporations, need appropriate and up to date knowledge. They need to know what their colleagues know and to be connected with them to share knowledge. Small businesses have their own roles to play in the economy as do large organisations since both are crucial to the growth of the economy and they complement each other in the business chain. Thus, SME’s are important in the economy and their competitiveness is indispensable to a country’s growth and success. Therefore, they need ways to create, share and manage their knowledge.

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Item Type: Kenyan Topic  |  Size: 59 pages  |  Chapters: 1-5
Format: MS Word  |  Delivery: Within 30Mins.


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