Introduction to special topic forum on developing the dynamic capabilities of global companies across levels and locations

• Author: David J. Teece,Donald Lessard,Sohvi Leih
• DOI: http://doi.org/10.1002/gsj.1120
• Published date: 01 August 2016
• Date: 01 August 2016

INTRODUCTION TO SPECIAL TOPIC FORUM ON

DEVELOPING THE DYNAMIC CAPABILITIES OF GLOBAL

COMPANIESACROSSLEVELSANDLOCATIONS

DONALD LESSARD,

1

DAVID J. TEECE,

2

and SOHVI LEIH

2

*

1

MIT Sloan School of Management, Massachusetts Institute of Technology,

Cambridge, Massachusetts, U.S.A

2

Haas School of Business, University of California at Berkeley, Berkeley, California,

U.S.A

INTRODUCTION

The call for papers (CFP) for this special issue of

Global Strategy Journal noted that research on dy-

namic capabilities (DCs) has tended to ignore the ef-

fect of context. There is a clear need for more studies

that explicitly consider the contexts in which DCs

are developed and exercised. A context could be de-

fined in manyways, such as an industry, a timeperiod,

or even a strategic orientation. One important context

is the nation-state—or a subsystem, suchas a regional

bloc or local ecosystem. The multinational enterprise

(MNE) is a natural laboratory for observing how

DCs cross (contextual) borders. Yet, as the CFP ob-

served, most studies of global firms are ‘based on a

single country context, and typically with little or no

focus on the context’as such. Put metaphorically, an

increasing number of capabilities studies are telling

us what makes somewater creatures better swimmers,

but they do not tell us whetherthey can thrive on land.

MNEs gain their advantage from owning and con-

trolling a core set of intangible assets that are more

fungible that their physical assets/activities (Teece,

1981; Kogut and Zander, 1992, 1995). However,

knowledge and its applications do not move across

borders costlessly (Teece,1977), nor is there any guar-

antee of success outside a home market. In other

words, projecting domestically successful knowledge

and capabilities across borders do es not necessari ly

result in global competitive advantage. Investigating

under what circumstances intangible assets can be

profitablydeployed, combined, and redeployedacross

contextual boundaries is a core inquiry for IB and will

also be of great interest to those studying dynamic

capabilities.

Dynamic capabilit ies (Teece et al., 1997; Teece,

2014) help the MNE ensure evolutionary fitness.

However, achieving evolutionaryfitness over geogra-

phies and jurisdictions is a very different proposition

from expanding over time. Of course, in practice,

MNEs are exposed to and link ed with multiple hetero-

geneous business environments, but how well their

dynamic capabilities travel across geographies and ju-

risdictions is anopen question. Does strong sensing in

an information-rich context equate to strong sensing

where information is not rich, such as in ‘less devel-

oped’settings? Likewise, does strong seizing in a

highly regulatedconsumer market provide any advan-

tage when entering markets with limited consumer

protections?

The five articles in this issue address important is-

sues such as these at theintersection of global strategy

and capability theory. We briefly summarize them

here.

Nonaka, Hirose, andTakeda (2016, this issue) link

the concept of DCs to Nonaka’s well-established per-

spectives on knowledge—namely that tacit

knowledge inevitably is embedded in a local context

and that exploitingthis knowledge across multiple na-

tional contextsrequires a capability that willbe unique

to each organization. Using the casesof four Japanese

multinational companies, Fujifilm, Eisai, Mayekawa

*Correspondence to: Sohvi Leih, Haas School of Business,

University of California at Berkeley, 2220 Piedmont Avenue,

Berkeley, CA 94720-1900, U.S.A.E-mail: sleih@berkeley.edu

Global Strategy Journal

Global StrategyJournal, 6:165–167 (2016)

Published onlinein Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/gsj.1120

Copyright © 2016 Strategic Management Society