An empirical study was conducted involving several firms based in a vast and developing economy like India on effective knowledge management strategy. It was observed that firms with higher orientation in system strategy attach the highest emphasis to combination mode and, the lowest emphasis to socialization. For the highly human strategy oriented group, socialization gets the highest focus while the combination gets the lowest. The scenario turns the reverse for the firms with higher orientation in human strategy where emphasis is more on extra firm and intra-firm social information collection, gathering and transfer of tacit knowledge. So far as knowledge creation level is concerned, a significant variation is noted within the firms with higher performance be in highly system strategy oriented group or in highly human strategy oriented group. The study reveals that effective knowledge management involves striking a balance between knowledge management strategy and varying knowledge creation modes such as socialization, externalization, combination, and internalization in view of their industry type.