The impact of knowledge loss on the firm is a largely unexplored area of strategic management. This paper reports the findings of an in-depth case study of an organisation within the Australian Department of Defence. The study examines the nature and impact of knowledge loss within the construct of social capital. Of particular interest were the relationships between individuals’ activities, their levels of knowledge, and their motivation and ability to share this knowledge. The paper proposes a method to parameterise the knowledge resource variable. Findings suggest that the impact of knowledge loss may be traced directly to reduced capability in strategic activities at the organisational level, and indirectly to ineffectiveness and inefficiencies at the individual level.