Knowledge management and its importance in improving the performance of small and medium-size enterprises

The present research paper aims at elucidating the importance of using Knowledge Management as a modern management tool in small and medium-size enterprises operating in western Algeria and its role in improving their performance. An attempt is made in this research to give a theoretical definition of knowledge management, define its requirements and functions, explain performance and its components, and elucidate the importance of Knowledge Management in institutions. In addition, a brief overview is given about small and medium-sized enterprises and their characteristics in Algeria. Moreover, the study was conducted on a sample of small and medium-size enterprises in western Algeria, using questionnaires which were distributed to 40 managers of these institutions. These questionnaires were collected and analyzed by means of the Statistical Package for the Social Sciences (SPSS – manufactured by IBM Corporation). A set of conclusions could be drawn at the end of the research: - Small and medium-size enterprises in western Algeria use Knowledge Management as a modern management approach. - There is a statistically significant correlation between Knowledge Management and Performance in the institutions under study. - There is a statistically significant impact of Knowledge Management on the overall performance of the institutions under study.