Multidexterity: Combining Competing Business Models in Transforming Economies

Abstract

In an attempt to respond to recent calls for better understanding the coexistence of multiple business models, we develop the concept of ‘multidexterity’ – the ability to develop, nurture, and execute several distinctive BM strategies simultaneously across different levels and functions of the MNC and its host markets. To illustrate this approach, we describe a European healthcare firm entering the rapidly transforming economy of China and facing regulatory constraints and ambiguities in the application of industry standards. This situation is a generic challenge for MNCs entering rapidly transforming economies, which they help in turn to substantially alter and develop. We argue multidextrous business models are effective entry strategies for MNCs. They also help resolve two conceptual limitations in the BMI literature: (1) the problem of environmental contingencies and (2) the interrelatedness of factors at the macro, meso, and micro levels. We address these problems from a practice approach. We provide some implications for the concept of multidexterity and business models and address managerial challenges and prospects in developing multidextrous organizations.

The Impact of Networking With Knowledge-Intensive Professional Service Firms on Speed to Market and Product Innovativeness

“…This triggers an interesting debate regarding the role of ambidextrous network partners and whether they are beneficial for the long-term innovation activities of SMFs. Indeed, this debate could consider moving beyond ambidexterity to explore the opportunities for 'multidextrous' innovation activities (Demir & Angwin, 2021).…”

Business Model Innovation in Transforming Economies: A Co-evolutionary Perspective for a Global and Digital World

“…Thus, the study makes important contributions to understanding how MNEs can manage organizational tensions to allow business model innovation to take place in transforming economies. Demir and Angwin (2021) put forward the concept of 'multidexterity', which refers to 'the ability to develop, nurture, and execute several distinctive BM strategies simultaneously across different levels and functions of the MNC and its host markets'. They develop this concept based on a case study of a European healthcare firm entering China, a firm that also has operations in other parts of the world.…”

“…That is, MNEs that are pursuing global integration generally replicate their existing business models in transforming economies, making only incremental evolutionary changes in response to local market demands, local institutional settings, and regional regulatory requirements. However, the uncertain and volatile nature of transforming economies requires MNEs to experiment with fundamentally new business models while simultaneously exploiting their existing global business models (Demir & Angwin, 2021).…”

“…However, we need more research on how, in their internationalization strategies, MNEs can meet the unique requirements of transforming economies, which differ both from their global business model and from the unique local business models for other specific markets. The study by Demir and Angwin (2021) showed various ways in which MNEs can develop and combine competing business models in transforming economies, depending on the degree of ambiguity in the regulatory frameworks and industry standards. The concept of multidexterity seems to be an appealing one, as it would enable MNEs to deploy multiple conflicting business models during market entry, but we definitely need more empirical research on internationalization of this kind.…”

“…Similarly, Landau, Karna, and Sailer (2016) describe how a German luxury automobile manufacturer adapted its business model in India, using a phased process in which it paid differing degrees of attention at various points to value proposition, value creation and delivery, and value capture. However, while the transforming economies might provide opportunities for business model innovation, MNEs, being embedded in multiple contexts, need to develop capabilities that enable them to overcome the challenges of managing multiple business models (Demir & Angwin, 2021). Thus, both indigenous and foreign MNEs can take advantage of the vibrant environment of transforming economies to engage in business model innovation, even though they may be doing so in different ways.…”