The rapid reshaping of the global economic order requires fundamental shifts in international business scholarship and management practice. New forms of protectionist policies, new types of internationalization motives, and new tools of techno-nationalism may lead to what we call ''bifurcated governance'' at the macro-level and ''value chain decoupling'' at the micro-level. As a result, innovation networks will require novel reconfigurations. We examine the emerging constraints on multinational enterprises, imposed by a bifurcated world order. We also discuss how the dynamic capabilities framework can guide scholars and managers alike to achieve new forms of evolutionary fitness.
A growing body of research highlights the importance and development of dynamic capabilities as well as the contingencies that can affect such development. However, existing research pays limited attention to the demands of competition in today's dynamic, volatile, and ambiguous international markets. The international business (IB) realities and contexts require companies to develop and effectively deploy dynamic capabilities to achieve evolutionary fitness, adapt, and successfully exploit opportunities (and neutralize threats) stemming from technological, social, geopolitical, institutional, and economic changes and interdependencies among various layers of embeddedness. Consequently, in this article, we discuss dynamic capabilities that tailor to the specifics of IB contexts, underscore their conceptual properties relevant for the IB realities, and articulate the processes involved in their building and leveraging by established and young MNEs. We further clarify the entrepreneurial foundations and actions essential for development and effective deployment of dynamic capabilities for IB. Finally, we offer our suggestions on how future IB research should explore these issues so as to make dynamic capabilities thinking actionable.
In this chapter we argue that traditional approaches to modeling the growth of the multinational enterprise (MNE) that focus on costs and efficiencies are too narrow to adequately and comprehensively address the foundations of MNE growth trajectories. Today’s global realities and the changing view of the MNE require a more focused and explicit capability-based perspective. In particular, we posit that contemporary theories of the MNE require frameworks and explanations that should simultaneously account for the uncertainties that firms face in their external environment and the complexities of often competing internal, organizational alternatives. To develop our reasoning in support of capability-based thinking, we discuss the changing nature on the international business (IB) landscape, the evolving views on the nature of the MNE, and present the core building blocks of capability-based thinking in managing MNE growth. We conclude the chapter by offering some thoughts on how capability-based thinking could be applied in future scholarly efforts.
Purpose The purpose of this paper is to explore two distinct subsets of dynamic capabilities that need to be deployed when pursuing innovation through inter-organizational activities, respectively, in the contexts of broad networks and specific alliances. The authors draw distinctions and explore potential interdependencies between these two dynamic capability reservoirs, by integrating concepts from the theoretical perspectives they are derived from, but which have until now largely ignored each other – the social network perspective and the dynamic capabilities view. Design/methodology/approach The authors investigate nanotechnology-driven R&D activities in the 1995–2005 period for 76 publicly traded firms in the electronics and electrical equipment industry and in the chemicals and pharmaceuticals industry, that applied for 580 nanotechnology-related patents and engaged in 2,459 alliances during the observation period. The authors used zero-truncated Poisson regression as the estimation method. Findings The findings support conceptualizing dynamic capabilities as four distinct subsets, deployed for sensing or seizing purposes, and across the two different inter-organizational contexts. The findings also suggest potential synergies between these subsets of dynamic capabilities, with two subsets being more macro-oriented (i.e. sensing and seizing opportunities within networks) and the two other ones more micro-oriented (i.e. sensing and seizing opportunities within specific alliances). Practical implications The authors show that firms differ in their subsets of dynamic capabilities for pursuing different types of inter-organizational, boundary-spanning relationships (such as alliances vs broader network relationships), which ultimately affects their innovation performance. Originality/value The authors contribute to the growing body of work on dynamic capabilities and firm-specific advantages by unbundling the dynamic capability subsets, and investigating their complex interdependencies for managing different types of inter-organizational linkages. The main new insight is that the “linear model” of generating more innovations through higher inter-firm collaboration in an emerging field paints an erroneous picture of how high innovation performance is actually achieved.
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