Objectives: Knowledge management has become critical to an efficient hospital management due to the development of hospital information systems. Thus, this study by targeting hospital staff, aims to reveal the structural relationship of key factors in knowledge management that affect the organizational effectiveness of hospitals. Methods: Data was collected through a self-administered questionnaire survey carried out with 323 staff members who work at five tertiary hospitals located in Seoul. Reliability analysis and confirmatory factor analysis were conducted to confirm the reliability and validity of measurement items. Structure equation analysis was used to test the hypotheses of the presented research model. Results: All the key factors in knowledge management were revealed to have a positive effect on the parameter of job satisfaction, which turned out to have a significant effect on even both competitive advantage and innovation. In the path with the organizational commitment as a parameter, knowledge sharing culture and business strategy were shown to have a positive effect on organizational commitment, which turned out to have a significant effect on innovation. Conclusions: The knowledge management of hospitals were empirically shown to have a positive effect on their organizational effectiveness; and thus an introduction of knowledge management in managing hospitals is expected to raise organizational effectiveness.