From TMT multiculturalism to strategic agility: business model innovation in MNEs

Abstract

Purpose This study aims to theoretically explore the relationship between potential antecedents of business model innovation (BMI) in multinational enterprises (MNEs) and the paths through which BMI unfolds in such contexts. This study theorizes how multiculturalism in top management teams (TMTs) influences team-level cultural intelligence (CQ), which enhances firm strategic agility and helps develop BMI in MNEs. Design/methodology/approach This study’s cross-level theoretical framework describes the mediating role of CQ of TMTs in the relationship between team multiculturalism and strategic agility, which subsequently influences BMI. This study discusses contributions, limitations and future directions. Findings MNEs’ capability of developing and recombining disruptive knowledge from globally dispersed sources and integrating them to innovate is subject to the knowledge-sourcing paradox. Despite the importance of intra-member diversity in the form of multicultural individuals in multicultural teams, inter-member diversity is more prominent in the literature. Regardless, the applicability of a comprehensive conceptualization of diversity in multicultural teams to BMI has yet to be examined. This study’s theoretical model links multiculturalism in TMTs with BMI in MNEs through a cross-level framework. Originality/value This study contributes to the International Business literature by proposing a novel conceptualization of team multiculturalism and leverage theoretical underpinnings of the Dynamic Managerial Capabilities perspective to develop a cross-level model of factors influencing BMI in MNEs.