Dynamic capability development in multinational enterprises: Reconciling routine reconfiguration between the headquarters and subsidiaries
Author ORCID Identifier
Global Strategy Journal
Starting from the premise that firms need dynamic capabilities to adapt to changing environments, we discuss how multinational enterprises (MNEs) develop dynamic capabilities from internationalization. Unlike domestic firms that develop dynamic capabilities within one organizational system, MNEs are inherently multi-level systems with the headquarters and subsidiaries. In this paper, we focus on how internationalization depth and breadth function as sources of learning and unlearning in the headquarters and subsidiaries, and how this serves as the antecedent for routine reconfiguration and dynamic capability development in the MNE. We theorize that the headquarters' and subsidiaries' brokering capabilities are critical for reconciling routine reconfiguration at the two levels so that dynamic capability development can occur, and the MNE can adapt to environmental changes.
Our model of dynamic capability development in multinational enterprises (MNEs) via internationalization makes dynamic capabilities actionable for managers in three main ways. First, we emphasize both learning and unlearning from internationalization as important for both the subsidiaries and headquarters to reconfigure routines to adapt to changing environments. Second, the routine reconfiguration that occurs from the subsidiaries or the headquarters serves as the impetus for dynamic capability development in the MNE. Third, for dynamic capability development to occur in the MNE, both the headquarters and the subsidiaries must be able to reconcile routine reconfigurations via the headquarters' and the subsidiaries' brokering capabilities.
Riviere, M., Bass, A.E., & Andersson, U. (2020). Dynamic capability development in multinational enterprises: Reconciling routine reconfiguration between the headquarters and subsidiaries. Global Strategy Journal, 11(3), 380-401. https://doi.org/10.1002/gsj.1389
"This is the peer reviewed version of the following article: "Dynamic capability development in multinational enterprises: Reconciling routine reconfiguration between and headquarters and subsidiaries" by M. Riviere, A.E. Bass, & U. Andersson in Global Strategy Journal, which has been published in final form at https://doi.org/10.1002/gsj.1389 . This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited."