We argue that knowledge management cannot be separated from firm modeling. We, therefore start from a firm modeling methodology hereafter called “Approach Based on Contract” (ABC). In the method ABC, the contract (explicit or implicit) between a firm and its clients is the first step of the modeling. This contract is progressively refined in an interactive top down and bottom up approach in which each design team (DT) enters a sub-contracting process with the others DTs involved in same business process. The sub-contractualization and its parallel design process stop when the model resulting of the lowest DT groups is so simple that it can be operationalized. We then discuss the interest and consequence of our approach on knowledge modeling, knowledge management, on the hierarchy of the firm and on manpower management.