The Role of ICTs and the Management of Multinational Intellectual Capital

Prolegomena

The current global economical 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 reports 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.” Hence, this evolution in the IC is highly correlated with the growth of Knowledge Management (KM) as a new management discipline. Meso & Smith (2000) testify that with the developments in KM, intellectual capital is gaining a reputation as the only strategic asset.

It has been reported by many investigators that ICTs help to establish social networks through their deployment via digital networks. In addition, ICTs provide channels for communication and learning for the improvement of products and services (Jitsuzumi et al. (2001), Hedelin & Allwood (2002), Mansell (2002), Baddii & Sharif (2003,Mohamed (2007b) . Galán et al. (1999) report that ICTs form one of the pillars for global competitive advantage, in which there is a high competition in the marketplace. Furthermore, Stromquist & Samoff (2000) report that “as globalization expands the twin forces of the market and information technologies are pervading the educational arena. One instance is the Knowledge Management System (KMS), which proposes to produce easily retrievable materials via the Internet and hypertext. KMS attempts to be more than a mere data bank, for it seeks to provide highly selected and targeted knowledge”. However, Duffy (2001) states that it is difficult to capture all valuable knowledge needed by the organization. There is an opportunity now to harvest, transform, share, and reuse knowledge instantaneously though modern technology. We would add that it is unlikely that competitors will have the same mixture of technology and human capital to replicate the same kind of knowledge. Nevertheless, Mohamed (2007b) states that “ICT tools compress global business life-cycle through the ease of data exchange and analysis at various global levels. The mobilization of explicit knowledge through virtual communication significantly contributed to the sharing of knowledge, but mostly at the operational levels and less at the managerial level; this can be attributed to the fact that ICTs lack the ability to transform knowledge as they transfer it.”