#4935. Dynamic capability development in multinational enterprises: Reconciling routine reconfiguration between the headquarters and subsidiaries

July 2026publication date
Proposal available till 02-06-2025
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Journal’s subject area:
Strategy and Management;
Business and International Management;
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Abstract:
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. 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. 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.
Keywords:
dynamic capability development; internationalization; multinational enterprise; routine reconfiguration

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