PurposeThe aim of this paper is to examine empirically the relevance of the theory of deferred action for knowledge management systems (KMS) design in practice.Design/methodology/approachThe study adopts a case study approach to examine knowledge work and knowledge management in virtual teamwork in a large UK telecommunications company to understand the occurrence of emergent knowledge and how it is managed by virtual team leaders. The section in the company studied is described as a “knowledge intensive organization” dealing with the company's e‐commerce activities.FindingsThe analysis confirms the complex adaptive system hypothesis – a complex system adapts to its environment through self‐organization. The data reveal the behaviour of the virtual team to be self‐organizing and adaptive to its environment. It confirms the knowledge tacitness hypothesis and social embeddedness of knowledge hypothesis as important determinants of knowledge sharing. Specifically, the data reveal the main issues concerning knowledge sharing practices of virtual team workers and the crucial team leader's role in the effectiveness of the teams' capability to develop social links to externalise and share tacit knowledge to accomplish tasks.Research limitations/implicationsIn this paper, the authors contribute “emergent knowledge” as a third category of organizational knowledge in addition to the existing tacit and explicit knowledge that needs to be considered when designing KMS. It also derives socio‐technical systems design principles based on the theory of deferred action, and a tentative development process with metrics is then proposed for KMS design that caters for emergent, tacit, and explicit knowledge.Practical implicationsExisting models such as the SECI model do not acknowledge emergent knowledge or its conversion into explicit knowledge. The theory of deferred action is invoked to derive design principles, termed deferred systems design principles, to depict how explicit knowledge, tacit knowledge, and emergent knowledge can be represented to design knowledge management systems for “emergent organizations”.Originality/valueThe study contributes to the limited research and lack of consideration of emergent knowledge as an integral part of organizational knowledge, especially in an era of emergent organizations.