Abstract

The purpose of this study is to analyze the effect of knowledge management practices on the firm’s performance in software industry of Pakistan. A co relational research design using a multiple regression was used to test the causal relationships among the knowledge management practices, firm’s performance and the moderating role of interpersonal trust. Hypotheses were tested through field research study carried out on 38 firms in information technology industry of Pakistan. Quantitative data using convenient sampling technique were collected through questionnaires. The important finding of this paper is that the presence of IPT as a moderator changes the direction or strength of relation between KMPs and FP. This study contributes to the growing body of literature linking knowledge management and the resource base view and knowledge base view and determines practices that have a positive incidence on firm’s performance. The paper concludes that developing interpersonal trust among employees can lead to effective implementation of KMPS which increases the firm’s performance. Future cross-cultural research would be valuable and may reveal details about the phenomena in a broader context.

Key words: Knowledge Management Practices (KMPs), Firm Performance (FP), Interpersonal Trust (IPT), Resource Base View (RBV), Knowledge Base View (KBV).