Abstract
As the knowledge-based economy comes, knowledge innovation and protection are the top issues for management consulting firms which highly rely on knowledge. The more knowledge intensive the companies are, the more dependent in knowledge innovation they do. Knowledge innovation comes from interation, so it is crucial for management consulting firms to protect their intellectual property and knowledge. Besides, management consulting firms should also concern the profitability from their innovation and knowledge. This study proposes the research framework that includes three ways of knowledge co-creation with: customers, colleagues, and the third parties. The research framework also concerns with knowledge protection from the angle of protection mechanisms. Furthermore, the study also explores the issues of appropriability regime and complementary assets. Then we verify it with one practical case of a Chinese consulting firm. . The study reveals that management consulting firms use piecemeal intellectual property strategy, and tight process control for protecting co-creating knowledge and tight contracts with their partners and customers for appropriating their innovation and knowledge. Finally, the managerial implications for protecting and profiting co-creating knowledge are suggested.