The importance of knowledge management for firms internationally cannot be doubted. However, in order to understand the particular role of knowledge management in the development of organizational activities it is necessary to explain the context of knowledge within modern firms. Towards this direction, it has been accepted by Bollinger et al. (2001, 8) that ‘knowledge is a resource valuable to an organization’s ability to innovate and compete’. Through a more analytical presentation of knowledge within the organizational environment, Anand et al. (2003, 15) explained that ‘the knowledge possessed by an organization and its members can be classified as explicit or tacit. explicit knowledge can be codified and communicated without much difficulty while tacit knowledge–such as the manner of operating sensitive equipment or interpersonal skills–is not so easily articulated’. In other words, knowledge can have many forms and for this reason, when used as a criterion of analysis of a particular corporate action, it should be carefully examined as of its appropriateness and its efficiency in accordance with the needs of the firm at the particular time period. The above assumption is supported by Bendler et al. (2001, 8) who noticed that ‘knowledge has become the pre-eminent production factor, and it needs as much care, conscious management as its traditional counterparts’. Steyn (2004, 615) also highlighted the importance of knowledge for organizations supporting that ‘knowledge management enables organizations to improve efficiency and effectiveness mainly by decoding tacit knowledge into explicit information’. Moreover, in accordance with Chatzkel (2003, 3) ‘knowledge is not detached from the people, processes, or infrastructure of an organization and its network’. Also, Buckley et al. (2004, 371) found that ‘our view of knowledge is that it is the converse of uncertainty. uncertainty inhibits the ability of firms to create value by limiting the scope and effectiveness of the activities they undertake’.