The purpose of this research is to analyze whether knowledge management has a significant influence on the organizational effectiveness of public institutions and private firms. To this effect it was worked with a sample of 146 organizations of an emerging country. Results show that the explanatory power of knowledge management on the organizational performance is a 45.8% in case of private firms and a 56.5% in the case of public institutions. In a similar way, in the case of private firms, every stage of knowledge management namely, create, share and apply knowledge in the top management teams, having a significant impact on the performance. Instead, in public institutions performance basically incides by stages of knowledge creation and application in the top management teams.