The Role of Information Technology in the Advancement of Multinational Corporations’ Intellectual Capital

The Role of Information Technology in the Advancement of Multinational Corporations’ Intellectual Capital

Mona A. Mohamed (Towson University, Towson, MD, USA)
DOI: 10.4018/ijpmat.2012070101
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Abstract

The article provides a systematic multidisciplinary framework that defines the role of Information Communication Technology (ICT) in leveraging Intellectual Capital (IC) across borders and between headquarters and subsidiaries of Multinational Companies (MNCs). In reaching this goal, this article investigates the strategic importance and value of ICT in the management of IC within MNC ecosystem. More importantly, the paper addresses the transubstantiation of MNC into boundaryless Global Knowledge-Based Organization (GKB-MNC) which ultimately propagates into Learning MNC (LMNC). The latter is a proposed MNC type that sustains competitive advantage through systemic adoption of “Knowledge Iterative Supply Network (KISN)” model proposed by the author. Furthermore, the article suggests a new multinational ICT/IC governance strategy that handles the emerging complexities associated with the modern intangible assets reuse, synthesis and synergy. In effect, these complexities originate from the introduction of functionalities such as just-in-time knowledge supply, elicitation of tacit knowledge, and leveraging of the core competencies for the creation and maintenance of geographically distributed value proposition.
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Prolegomena

The current global economic transformations have resulted in a turbulent marketplace that needs continual IC value rejuvenation to create and sustain companies’ competitive advantage. This fact has been highlighted by Guthrie (2001) who claims that “the rise of the ‘new economy’, one principally driven by information and knowledge, international competitiveness and changing patterns of interpersonal activities is attributed to the increased prominence of intellectual capital (IC) as a management and research topic.” In turn, this evolution in IC is highly correlated with the growth of Knowledge Management (KM) as a new business and management discipline as testified by Meso and Smith (2000) that with the developments in KM, intellectual capital is gaining a reputation as the only strategic asset. Globalization has provided more opportunity for the ICT to play in the marketplace, Rezaee and Reinstein (1998) investigated the influence of ICT the firm globalization: internationalization, global network building, and global evolutionary dynamics. The authors found that globalization since 1980s is highly correlated with the advancement on ICT due to its influence on issues such as coordination among loosely federated components, overcome of the spatial and temporal barriers and it plays a central role in virtual and learning organizations. Furthermore, the author found that ICT can provide a cost-effective backbone for enabling timely decision-making and rapid communication of those decisions in a globally competing firm because it enhances not only information exchange, but also the sharing, creation, and utilization of knowledge.

At the global levels, it has been reported by many investigators that ICTs assisted in the establishment of the global social networks through deployment via digital networks that currently connecting the society. In particular, ICTs provide channels for communication and learning for the improvement of products and services (Jitsuzumi et al., 2001; Stromquist & Samoff, 2000; Montazemia et al., 2012; Hedelin & Allwood, 2002; and Mansell, 2002). More specifically, Alkalbani et al. (2013) found that ICT has a clear role to play in the industry, but to enhance competitiveness there is a high need for developing ICT strategy to embed ICT practices into the culture through training not only in technology, but also in ICT sharing perception and human organization. The same argument is supported by Pattnaik (2013) who examined the socio-cultural impacts of the globalization induced ICT in India from sociological viewpoints. The author found that ICT have created new sub-class of knowledge workers (i.e. the phenomenon of embourgeoisement) and added it to the existing pattern of the social stratification. This brings changes with structural relevance that lead to new culture as culture is too dependent on social structure

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