Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. International Journal of Knowledge Management, 1(4), 43-72, October-December 2005 43 Knowledge Acquisition and Transfer in Egyptian Software Firms Ahmed A.S. Seleim, University of Alexandria, Egypt Ahmed S. Ashour, University of Alexandria, Egypt Omar E.M. Khalil, University of Massachusetts, USA ABSTRACT This investigation explored knowledge acquisition and transfer practice in the Egyptian software firms. It used a combination of a cross-sectional field survey of 38 firms and an in-depth qualitative analysis of 14 firms. Although most of the firms in the sample recognized the importance of knowledge, their idiosyncrasies appeared to affect the way knowledge is acquired and transferred. The firms were found to have a limited use of their software developers’ initiatives, R&D, and the academic and research institutions as sources for knowledge acquisition. They were also found to have limited capabilities in transferring and sharing knowledge. The Egyptian culture is rich in the social and emotional capital, which can play an important role in building relationships, facilitating the exchange of knowledge, and sharing of experience. Egyptian software firms should develop and implement KM strategies that attract expert software developers, capitalize on trust and social relationships, and build IT-based KM systems in order to enable knowledge acquisition and transfer. Keywords: Egypt; knowledge acquisition; knowledge management (KM); knowledge transfer; software industry INTRODUCTION Organizational knowledge accumu- lates over time and enables firms to attain deeper levels of understanding of their busi- ness. Knowledge is a critical factor that can be used to explain the growth of a firm, which is viewed as a repository of knowl- edge and experience (Penrose, 1959). Knowledge production is an economic ac- tivity (Machlup, 1962, 1983), and knowl- edge importance is on the rise in the post- capitalist society (Drucker, 1993). Conse- quently, knowledge management (KM) has become one of the major challenges fac- ing today’s organizations. In spite of the varying views of KM in the literature, knowledge acquisition, This paper appears in the journal International Journal of Knowledge Management edited by Murray Jennex. Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written permission 701 E. Chocolate Avenue, Suite 200, Hershey PA 17033-1240, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com ITJ2945 IDEA GROUP PUBLISHING