Chinese firms are increasingly paying attention to the knowledge resources of their employees - and are seeking to leverage those recourses for the greater good of the firm. Based on prior research, we aim firstly to develop and test a theoretical model that explains the salient factors determining successful Knowledge Management (KM) practice in Chinese firms. We argue that the use of both formal and informal KM tools have significant impacts on shaping a firm's transactive memory (TM), where the impacts are moderated by employees' cultural orientation. In turn, TM has significant positive impacts on enhancing organisational performance. We will follow the theoretical validation with a case-based, action-oriented intervention. We have preliminarily identified two firms in each of the Public Relations and IT Services Offshoring industries that are interested in participating in the research. The theoretical validation will also involve survey-based data collection and statistical analysis. We aim to discover how specific KM practices influence key dimensions of organisational performance such as financial profits, customer satisfaction, operational efficiency, personal productivity and employee satisfaction. We expect that this two-pronged approach will generate knowledge of significant value to both KM researchers and organisations.