In this paper, we examine the knowledge production and the knowledge management processes as the basic requirement of the competitiveness and innovation activities. First, we intend to analyse the causality and the required conditions, major forms and the certain stages of knowledge production. For the institutions, knowledge means institutional harmony, rules, experiences and practices and it is not receivable from the data bases, but created through common mind. Knowledge creation processes should be considered as "the initial stage of the knowledge production activities in firms that aims to create and use the tacit knowledge" parallel with the long term operational strategic plans. Secondly, dealing with "the knowledge management system? that considered as the necessitate to implementing the efficient knowledge production process and the useful applications. Having been the sector specific knowledge in which the firm operates, gives serious advantages to the firms in an intense competitive environment. In this framework, by forming the knowledge management system, transition of the knowledge should be secured through each person in all departments in the company. The existence of functional common corporate culture effects positively to the knowledge accumulation process, and contributes consistently to facilitating the knowledge management system. The continuity in the knowledge production process that is a requirement for innovative activities, allows renewing the available knowledge stocks. This gives the clues why the knowledge production and management processes considered as the crucial stage for the companies that seeks to gain the competitiveness in international markets. Meanwhile, the efficient use of the information and communication technologies (ICTs) supports the knowledge management system also. By using the ICTs, throughout the processes of diffusing and evaluating, the cost reductions should be highly possible in terms of acquiring, accumulating and sharing the knowledge.