This master thesis analyses the housing cooperative´s capability to manageknowledge in order to improve its performances and create innovation. It is based on the analysis of elite interviews concerning the latest ten years of two Swedish housing cooperatives (bostadsrättsförenigar), which are Brf Grantorpand Brf Kullen that, because of their almost identical properties, made acomparison possible. Absorptive Capacity, which refers to the organization´s ability to identify, assimilate and apply knowledge in its specific context and Knowledge Management, which refers to the organization´s knowledge management activities, provided the basis for the theoretical framework. The empirical data show that, within the organizations, the main sources of knowledge are the Board members: when internal expertise knowledge is present then innovation takes place. Lack of policies in recruiting Board members means that innovation coming from within the organizations is always fortuitous, and depends on the individuals´ previous expertise knowledge. Even if the two years mandate constitutes a constrain in investing in knowledge development, it has been revealed that providing the Board members with a general knowledge in the housing cooperatives´ all-day activities constitutes a solid precondition to capture new opportunities: Brf Kullen acts in a more proactive way and actively identifies opportunities in the environment. Whilst Brf Grantorp does suffer the lack of basic knowledge and acts in a more passive way, waiting for someone else bringing in from the outside. However, both the organizations suffer the lack of explicit knowledge management policies. This is very noticeable when it comes to codification and storage: what is provided is essentially of tacit nature, and blanks out over and over again because it still remains in the members´ heads and it leaves when they leave the Board. Hence, both the organizations´ ability to exploit and transfer knowledge suffers lack of efficiency. Furthermore, even if they offer both formal and informal manners in order to share ideas between Board members, the activities are subject to each Board member´s commitment and time.