Abstract:

Knowledge is increasingly becoming a catalyst for change and creativity in firms: enabling effective operational and strategic activities. Existing literature in knowledge management, however, has focused mainly on generic outcomes derivable from knowledge management applications. This paper examines the strategic relevance of knowledge management in enhancing human capital management in firms. To achieve this objective we will present a detailed literature review on the implications of knowledge management on effective human capital development, and the consequences for a firm’s ability to sustain competitive advantage. We propose that firms that develop strong knowledge management culture and apply the specific lessons would be able to achieve high performance compared to firms that do otherwise. In addition, when a firm is able to consistently perform better compared to competitors, there is the tendency for these firms to achieve sustainable competitive advantage. This paper could serve as a frame of reference for future researchers with respect to literature, and may enable practitioners to gain better knowledge of key requirements for maintaining competitive performance via effective integration of knowledge management (KM) and human capital initiatives.