Exchanging knowledge between individuals working in a firm, between but even within divisions, does not occur automatically (Szulanski 1996). It is not obvious that people exchange ideas, point each other to information that the other might use, or give feedback, even when they have no evil motives for not cooperating in such a manner. As a firm's competitive advantage is closely related to its innovative capacity, however, largely based on how it uses knowledge that is already available, the question then is: How does knowledge flow within a firm? What can be done to stimulate or re-direct knowledge flow within a firm? In recent years, increasing attention is given, by scholars in social sciences in general and in management in particular, to the networks of relations between individuals within firms involved in knowledge transfer and development. Consultancies too are scrambling to set up units that can analyze these networks for firms. In addition to the structural issue of who relates how to whom, I will argue that there is a need to look at why relations are established and maintained. This article thus discusses insights from both the literature on social networks and the anthropological literature on gift and favor exchange. As such, the how and the why of knowledge transfer.