Is Formality in Knowledge Management Practices Related to the Size of Organizations? The Basque Case

This article's objectives are to analyze the trends related to knowledge management process in small and medium‐sized enterprises (SMEs) and to compare these findings with the conclusions of other research studies designed for SMEs and to examine the level of formality in knowledge management processes according to the size of enterprise. As well, to propose a model suited to the characteristics of the small business. The information is collected from 22 Basque Country SMEs grouped into industrial clusters, through a survey that is conducted to identify the use of practices related to knowledge management. Results show that informal practices figure prominently in the day to day of the SME and that the knowledge management process is not standardized but that is performed by the collaborative work between people, among others. Besides, the size of the SME acts as a factor in regard to the level of formality in knowledge management process. This study helps SME managers understand where the organizational knowledge is found within organizations and, consequently, to not neglect the importance of people in keeping competitiveness high. The article provides new information on how firms located in a particular region of Spain perform in relation to knowledge management, and it could be considered a sort of benchmarking practice on the behavior of SME in managing knowledge, which will be useful for the organization when taking management decisions.