The Effect of Knowledge Management in Start-ups : Exploring the Transition Process of a Start-up from Temporary to a Permanent Organization

Abstract: This study investigates the three different stages of start-ups’ life and brings lights into the impacts of knowledge management practices on the transition processes between these stages. Start-ups are described as newly created enterprises which aim to disrupt the current state of play of the industry with their innovative products or services. During their initial stages,they demonstrate similar characteristics with temporary organizations; however, as they are developed and turn into a permanent organization the similarities start to diminish. Effects of knowledge management practices during start-up’s journey from a temporary organization to a permanent organization were explored with the guidance of the following research question:How does knowledge management influence the transition of a start-up from a temporary to a permanent organization?The term start-up and its organizational practices remain a mystery in the academic literature. Moreover, there are a limited amount of academic studies about the implementation of knowledge management model within entrepreneurial enterprises. Therefore, this thesis aims to contribute to academic studies by exploring in what extent knowledge management activities are practiced and how these practices affect the development of a start-up from a temporary organization to a permanent organization. The theoretical findings are supported by the empirical findings, and a theory is built with the accordance.Grounded theory is chosen as a research methodology for this research paper due to the lack of literature and study in this research area. Thus, first eight unstructured and then five semi-structured interviews are conducted with the chosen start-ups which have successfully finalized their initialtwostages. During the data analysis, open, axial and selective coding methods are used as it is recommended for the grounded theory.The research question is investigated and answered with the guidance of the collected data from the interviews. With the empirical study, the life-cycle of start-ups is explored. Overall, the life of an enterprise consists of three stages: existence, survival and success. Start-ups share many similarities with temporary organizations during their existence and survival phases regarding the characteristics of their teams, projects (tasks) and time limitation. However, they aim to transform into a permanent organization since their goal is to grow and assure their position in the industry. Besides, knowledge management activities, including knowledge acquiring, transformation, storage and creation, have been prioritized by various types of organizations in order to improve their practices and gain a competitive advantage over their rivals. Similarly, implementation of knowledge management activities within a start-up provides many benefits to development and improvement of the enterprise. Accordingly, it improves their organizational practices and enhances their transition process from the temporary organization to a permanent organization.