Facilitating the Use of Intellectual Capital in a Matrix Multinational Organization

Facilitating the Use of Intellectual Capital in a Matrix Multinational Organization

Alan M. Thompson (Production Services Network Ltd., Scotland)
DOI: 10.4018/978-1-60566-679-2.ch001
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Abstract

This chapter looks at the issues surrounding how to encourage the generation and manage the use of innovation within the organizational environment of being a flat, matrix-shaped, international services contractor. The influence of organizational structure on communication and trust is examined in comparison to traditional hierarchical-shaped organizations. The importance of organizational strategy, particularly in terms of how that strategy is communicated and how to manage when events disrupt that strategy, are looked at in detail. Organizational culture can rest on some more heavily than on others; how those responsible for sustaining and promoting a culture of innovation can be supported is the next layer analysis. Finally the skill sets required of managers are considered along with issues of motivation, influence and handling indirect sources of innovation. Illustrations of the issues and some solutions in action are taken from the company Production Services Network, (PSN) to build a bridge between academic theory and practical application.
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Introduction

Two relatively modern concepts like intellectual capital (IC) and matrix multinational organization might sound like an ideal partnership. This chapter looks at the tensions and benefits within that partnership, and some ways of capitalizing on them. In knowledge-based industries, innovation – the creation of new knowledge – is essential for survival and growth. Facilitating innovation and managing the intellectual capital engendered along the way is a challenge, but when placed in the context of differing organizational structures, cultures and technological and economic trends, it may seem hard to know where to start. By looking at a service company, contracted to customers, in a matrix-shaped organization spread around the globe, this chapter addresses several layers of complexity and illustrates the points with examples from the company itself. The discussion moves from issues associated with the matrix structure, through the impact made by organisational strategy and how that strategy is communicated, to human factors and issues of organisational culture, before looking finally at the skills sets required by managers working within such organisations and attempting to meet strategic demands for greater facilitation of intellectual capital. To help the reader gain an understanding of the contextual setting of the chapter, some definitions of the terms used are given below.

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