KNOWLEDGE NETWORKS’ MANAGEMENT OF MULTINATIONAL COMPANIES

Abstract

The article explores current practices of knowledge and innovation network management in multinational companies (MNCs). It is shown that knowledge is the key asset of such enterprises, and the ability to create and disseminate knowledge within a company's network is one of the main competitive advantages. The evolution of MNCs' approaches to innovation creation is analysed. The structural features of international knowledge networks are considered their division into networks of production and research and development units. The main factors influencing the operation of knowledge networks are identified: information technologies, management systems and procedures, and organisational culture. The geographical distribution of the innovation activity of multinational companies is investigated, and the strengthening of countries' specialization in certain technologies is shown. Current trends and challenges in the development of MNCs' international knowledge creation networks are analysed. In particular, the transition of MNCs to international knowledge-creation networks is explored first by European MNCs, followed by American ones. While Japanese MNCs demonstrate rapid growth in R&D work, they remain concentrated domestically. Knowledge creation networks organise their activity around various inter-organizational mechanisms to become globally distributed knowledge depositories. Subsidiaries gain more independence and autonomy in adopting the parent company’s philosophy and strategy. Various factors driving knowledge network formation are outlined, such as increasing knowledge volumes, needs for local adaptation, and shorter product lifecycles. The emergence of technologically related industries and cross-industry innovations syntheses leads to a combination of internal and external knowledge sources, blurring firms’ borders. Developing countries also benefit from dispersed production and innovation network expansion. Management of fluctuating project-based knowledge networks relies on informal agreements between participants. MNCs gain control over wider arrays of knowledge flows, integrating external elements into internally focused knowledge creation systems.