How to avoid brain drain? Knowledge management as a competitive advantage. Case: Finnish SME growth companies

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School of Business | Master's thesis
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INTRODUCTION: The objective of this study is to examine ways of controlling brain drain in growth SMEs and finding competitive edge from knowledge management. The study starts with a pre-examination of growth factors that would explain company growth. As literature and a preliminary research that was conducted go to show it is difficult to find factors which unambiguously would explain a firm's growth. Thus, knowledge management and brain drain were chosen to be looked into more deeply. THEORY Growth theories and entrepreneurial theories open the literature part followed by literature on knowledge and knowledge management. This reflects the progression that was followed throughout the research process. Knowledge part of the literature review focuses on tacit knowledge from brain drain prevention aspect. Also, knowledge management as source for competitive advantage is covered. EMPIRICAL RESEARCH: Empirical data was gathered using qualitative semi-structured interviews conducted with Finnish growth SMEs' directors, owner-founders and employees. Interviewees were asked to describe knowledge management in use from different aspects. Gathered data formed a base to more thorough analysis on how brain drain could be controlled and how knowledge management should be used to attain desired results. The industries covered by this sample included creative tech companies, content marketing, audio hardware and social media tools. MAIN FINDINGS: The study goes to show that organizations cultural factors, including knowledge sharing and transfer policies, openness, hierarchy recruiting and orientation processes can have a great effect on preventing outflow of crucial knowledge and enhancing competitive advantage. Moreover, good leadership practices including knowledge management can create competitive edge for growth SMEs.
knowledge management, tacit knowledge, knowledge transfer, brain drain, growth companies, entrepreneurship, SMEs
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