THE RELATIONSHIP BETWEEN INFORMATION TECHNOLOGY AND STRATEGIC KNOWLEDGE MANAGEMENT AND THEIR IMPACT ON THE FINANCIAL PERFORMANCE OF IRAQI COMPANIES.

Author:Ghali, Batool Abd Ali
Position::Report
 
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INTRODUCTION

Due to the recent rapid developments in the external business environment ,the increase competition between companies in order to obtain the available resources in order to achieve future goals, the increase financial performance in a way that strengthens its position in the markets, and the increasing dependence of many advanced organizations on modern IT in the management of administrative processes and productivity, modern information has become a key element in the continuation of administrative organizations. As a result of the decline of knowledge experiences as a basis for the consultative process in strategic decision-making in the administrative business organizations, and because of the impact of knowledge on the development of the financial performance of the organizations, the strategy of the administrative organizations is based on knowledge experience and IT in achieving strategic success in achieving future goals. The research provides an analytical and exploratory study on the relationship between management IT and strategic knowledge and their impact on the financial performance of a sample of Iraqi industrial companies. In order to achieve the objectives of the study, the researcher is divided into four parts. The first part includes the research methodology, problem, importance and objectives of research. The second part includes the theoretical framework for research, which explains the concept and importance of IT management and strategic knowledge management and their impact on the financial performance of business organizations. In the third part, the research deals with the description of the research sample that was tested, in addition to the analysis of study sample capability of IT, administrative experience and knowledge of its financial performance. Moreover, a survey was conducted through questionnaires distributed to the sample. Finally, the research ends with a number of concussions and recommendations based on the results of the practical part of the study.

RESEARCH METHODOLOGY

Research Problem

The problem of research is the lack of use of modern IT by the Iraqi industrial companies in the administration, although there is the possibility of the development of management techniques and that these companies do not manage technology knowledge appropriately in the case of possession, as that technology has a role in the development of performance financial institutions of Iraq. The research problem can be summarized as follows.

  1. Is there a possibility to use IT in the management of Iraqi industrial companies?

  2. Can industrial companies manage strategic knowledge management if they are available?

  3. Is there a relationship between management IT and strategic knowledge in the management of future corporate plans?

  4. Does the relationship between management IT and strategic knowledge management affect the financial performance of industrial companies?

    Research Importance

  5. It is hoped that this study helps industrial companies to use modern technology to manage knowledge and strategic information.

  6. To identify the role of information technology knowledge in providing appropriate solutions to administrative problems faced by the administration.

  7. Employing modern management IT in the provision of strategic plans to help the management of industrial companies in keeping up with modern administrative developments.

  8. The research helps companies manage the use of modern management IT as a basis for knowing the financial performance of companies to manage companies.

    Research Objectives

    The research aims to achieve the following objectives:

  9. Providing a theoretical framework on the concept and importance of modern IT in management.

  10. Determining the importance of strategic knowledge management and its integration with modern technology in the efficient management of companies.

  11. Identifying the relationship between modern information systems and strategic management in the efficiency of financial performance of Iraqi industrial companies.

    Research Hypothesis

    H1: Modern information technology and strategic management have an important impact on the financial performance of Iraqi industrial companies.

    Population of the Study

    The research population consists of Iraqi companies that possess modern IT in strategic knowledge management and operating in the Iraqi Stock Exchange (ISX).The population of the study are actually a group of various Iraqi industrial companies listed in the ISX (Al-Hilal Industrial Company, Baghdad Soft Drinks Company, and Iraqi Company for Carpets and Furniture).

    Statistical Methods Used

    The research relies on the measure of central tendency frequencies,, arithmetic mean ,and percentages) along with measure of dispersion, such as standard deviation in data and information analysis, in addition to using statistical program (SPSS) in order to find relationships between the research variables.

    Research Limits

  12. Spatial limits: Spatial limits are the sample of research represented by Iraqi industrial companies which are Al-Hilal Industrial Company, Baghdad Soft Drinks Company, and Iraqi Company for Carpets and Furniture.

  13. Period limits: The research period limits are the fiscal years (2014-2015) for the above sample companies.

    THEORETICAL FRAMEWORK

    Information Technology

    Defining information technology

    Technology is generally defined as the process of transforming the practical idea from theoretical to practical, i.e., transforming it into a productive commodity or a tool used by man in his daily life. IT means the skills possessed by man and the modern and sophisticated tools, whether audio or visual, used on daily basis (Bakshi, 2013). IT can also be defined as a useful and optimized investment for the various areas of knowledge owned by the company, i.e., it is the cognitive means that enable us to access the information quickly enough and can be used in a particular field (Nonaka et al., 2000). IT can also be defined as the revolution of information associated with the industry and the acquisition of information, marketing, storage and retrieval through modern and sophisticated equipment.

    Characteristics of the information Society

    As a result of the development of the administrative environment in the present day, information has become one of the familiar things of the administrative organizations. This means that the organizations which have better information than their competitors are considered to be the most capable of competitive advantage in the financial markets. Information has become an element of success and excellence, especially modern and advanced information which is useful in making appropriate decisions by the administration. Based on that, the characteristics of the information society can be defined as follows (Song, 2007):

  14. Explosion of information: Contemporary societies and administrative organizations have become the source of many types of information as a result of developments and the openness of societies to IT.

  15. Increasing the importance of information as a strategic resource: Information is one of the basic pillars on which management plans in organizations are based, as it is the raw material of the operations carried out by organizations of various kinds.

  16. Multiple categories of beneficiaries of modern information: As a result of developments in the business environment, the need for information users to make up a large part of the requirements of individuals and administrative organizations and quickly and timely.

  17. The emergence of modern IT and advanced systems: Information technology has become a leading element in many fields. Successful organizations have modern knowledge technologies that are used in successful strategic plans to achieve competitive advantage.

    IT components

    Due to the great importance of modern information based on IT that reflects the development of society, Serafica & Magno (2001) categorizes IT into the following components:

  18. Hardware components: It includes all tangible components that are utilized in the use of modern technological knowledge, which can be represented in computer and it accessories such as the storage memory.

  19. Software components: The intangible components that can be employed by the human to benefit from the process of generating modern knowledge and it include software and the communication between people.

  20. Individuals: This component refers to the employees of administrative organizations with sufficient experience and knowledge in the generation and processing of information, as well as their ease of interaction with the latest developments in the business environment.

  21. Data: This component refers to all the activities and exchanges that are stored, which are considered as a raw material to be processed in order to transfer them to valuable information.

    Figure 1 below best summarizes IT components:

    Knowledge Management

    Knowledge is one of the most recent factors of production that have been recognized as the basis for wealth creation in the economy. It is also a key source of competitive advantage. Knowledge is one of the factors of the modern economy. It expresses capital based on experience and knowledge and can be accessed through information (Maroofi et al., 2013). Innovative information is called knowledge, which offers a new addition or expansion of our previous knowledge. Through that, knowledge can be categorized into an implicit knowledge and explicit knowledge. Implicit knowledge is invented by its owners who have minds and are not expressed in other forms. This sort of knowledge is not applicable to all users. Whereas, explicit knowledge is visible and common among people and accessible to those who search for it and the means of obtaining it is multiple.

    Knowledge management definition

    Knowledge management is defined as planning, organizing, monitoring, coordinating and generating related knowledge and intellectual knowledge, as well as...

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