Diffusion of knowledge is recognized as one of the key factors that determines organizational success in the knowledge-based economy. The research problem concerns the way social networks and organizational culture may influence knowledge sharing among the agents in general. This article presents the review and critical analysis of literature on the diffusion of knowledge from network and cultural perspective. The results of the research show that both social networks and organizational culture might support the flow of knowledge in different ways. The quality and quantity of organizational knowledge depend on different ties between employees, organizational departments, and between an organization and its environment. The conditions for diffusion of knowledge are provided by the knowledge culture, which differs depending on choosing codification or personalization as leading strategy of knowledge management, as well as on set of key organizational values. JEL Classification Numbers: D8, L14, M14, DOI: http://dx