self-conscious emotions, behavioral governance, authentic pride, hubristic pride, decision makers,

Background The physician-patient relationship is a critical component of the integrated approach to excellence in health-care delivery. Although commonly modelled within the boundaries of the agency theory and regarded as synonymous to an agent-principal interaction, there exists only a sparse understanding about the most effective ways of governing it.

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PurposeThe purpose of this paper is to explore knowledge creation processes in small innovative hi‐tech firms operating in the software industry.Design/methodology/approachThe research framework examines specific action and interaction processes aiming at creating knowledge. This exploratory research is constituted by five case studies, each of them being represented by a small Canadian software firm. Analysis draws upon four sources of data. A total of 15 interviews (three per case) had been conducted and subsequently transcribed and coded using qualitative software – Nvivo 07.FindingsThe results of the study reveal that interaction processes permitting the creation of knowledge in small hi‐tech firms can take place via: formal meetings; informal communities; project teams; external interaction; and information technology‐tools. Rapid prototyping represents the kernel activity of knowledge creation through action. Details of the results, implications of the findings, and conclusions are presented and discussed.Research limitations/implicationsThis paper is based on a limited number of case studies, therefore empirical results cannot be generalized. Future research on larger samples of small Canadian software firms is needed, using the same eligibility criteria and comparing the same knowledge creation processes as those explored in this study. Other promising avenues of inquiry include such questions as the way small knowledge‐based firms operating in turbulent environments organize internally to create knowledge, the conditions enabling the generation of knowledge, and the particular “spaces” in which knowledge creation occurs in these firms.Practical implicationsThe systematic description and comparison of knowledge creation processes in each explored company contribute to the better understanding of specific “interaction” and “action” processes through which knowledge is generated, enabling practitioners in small innovative hi‐tech firms to design appropriate policies and procedures for enhancing knowledge creation behaviors of their employees.Originality/valueThis research is among the first and most exhaustive exploratory and comparative studies carried out in the Canadian context of small firms operating in the software industry.