<![CDATA[Background: Digital Transformation and Knowledge Management in Community-Facing SMEs: A Literature Review has practical relevance for community-facing organizations because visible activity does not necessarily translate into durable organizational or stakeholder outcomes. In community-facing smes: a literature review, managers must coordinate experience, tacit knowledge, documented practices, external advice, lessons learned, and decision routines while responding to expectations from managers, employees, mentors, partner institutions, and community entrepreneurs. A program may expand reach or participation and still underperform when responsibilities are unclear, information is fragmented, or knowledge held by one person. Aims: This article develops a capability-based framework explaining how digital transformation and knowledge management may contribute to knowledge retention, capability, and innovation. It distinguishes simple activity from coordinated capability and identifies boundary conditions that can weaken otherwise positive relationships. Research Method: The paper uses an integrative conceptual review of established literature relevant to the focal domain, organizational capabilities, stakeholder relationships, and learning. It does not claim primary survey, interview, experimental, or transaction data. Results and Conclusion: The synthesis identifies four mutually dependent mechanisms: knowledge acquisition, translation into local practice, sharing and coaching, and institutionalization and renewal. Their value depends on transparent governance, usable information, proportionate participation requirements, and a review process that converts exceptions into improvement. The article argues that higher activity alone is an inadequate indicator of success because benefits can coexist with hidden workload, exclusion, dependency, or weakened trust. Contribution: The article contributes a diagnostic framework, linked performance indicators, six propositions for empirical testing, and a fivestage implementation pathway that can be used in resource-constrained community organizations.]]>
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