Every organization kicks off with less number of people, with task uncertainty and with trials to establish its products and processes in the market. Processes which are yet to be standardized leads most of the employees to remain in learning phase. Knowledge tends to be tacit rather than procedural. Since solutions are not readily available for the problems in the inception stage of the small organizations, an extra effort is required to come up with the appropriate solutions. When it comes to the aspect of problems and solving them, tacit knowledge plays a vital role. The absence of tacit knowledge leads to high employee attrition rate. Thus knowledge management in the small organization is of the utmost importance without which the transition of the organization into next phases i.e., knowledge applying stages will be difficult. It is the responsibility of the entrepreneur and the manager to administer the knowledge in the small organization. They also need to identify the need for the knowledge management system which lies beyond possessing computers or automation; like the decisions arrived at after brain storming.

Keywords: Knowledge Management System; Tacit; Procedural; Employee Attrition; Brain Storming.