Purpose - The purpose of this paper is to highlight the importance of tacit knowledge in construction and to underline the significant contribution of tacit knowledge towards the organisational performance. Design/methodology/approach - Includes a review of literature on principal insights of dominant views on knowledge and organisational resources to highlight the strategic nature of tacit knowledge. Further, intrinsic characteristics of the construction industry are discussed to underline the people factor and the role of the tacit knowledge. Findings - Valuable human and knowledge resources will be wasted unless organisations make better use of these prime resources. Tacit knowledge in particular is still considered to be relatively unexplored and proper understanding and management of this resource are of immense importance for better organisational performance. In this context, this paper reveals the labour and knowledge intensive nature of the construction industry and highlights the importance and the significant role of people factor and tacit knowledge in construction. Originality/value - Owing to paucity of literature and inadequate empirical research done, this paper provides the basis for more empirical research on finding importance of tacit knowledge towards organisational performance in the construction industry.