Despite the fact that micro and small firms
have an acknowledged role in economic growth and innovation, in the literature of
strategic management the focus of theory development has been on larger
companies and established organizations. Also the literature about small
business strategy can be seen to draw on perspectives developed for larger
firms.  This study, thus, aims
to shed a light on the way in which strategy and knowledge management are
intertwined in micro firms. The objective of our qualitative study it to
explore the link between strategy and knowledge management in micro firm context.
Micro firms in this study were mostly entrepreneurs offering professional
services (e.g. management consulting, coaching, advertising, professional
guidance, services for career planning and recruitment, services for financial
management). The strategies
of the microfirms were strongly based on the core capabilities of the entrepreneurs´ and the vision of creating customer value was also closely linked to strategy reasoning. In addition to this, five other influencing factors effecting simultaneously on both strategy and knowledge
management could be recognized from the data: networks, entrepreneurial
identity, market environment, customers and self-management. Instead of knowledge
management being based on strategic decisions, in micro organizations it is
likely to be opposite. Strategy is developed and evolved not systematically or
in linear fashion but instead as mundane behavior. This study sheds a light
on the knowledge management in micro firms and elaborates the intertwined relationship
of strategy and knowledge management in small firms. It also provides practical implications as it
describes practical benefits that are available from systematic analysis of
qualifications and competences for micro firms.