The Dynamic Capabilities of Meta‐Multinationals

• Author: David J. Teece,Sohvi Leih,Donald Lessard
• DOI: http://doi.org/10.1002/gsj.1126
• Published date: 01 August 2016
• Date: 01 August 2016

THE DYNAMIC CAPABILITIES OF META-

MULTINATIONALS

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

Plain language summary: Tod ay ’s multinational enterprises (MNEs) exhibit characteris-

tics that have not been discussed very much in previous studies. They are stateless in the

sense that operations are spread across nations, but also maintain some central authority.

We ca ll suc h MNE s ‘meta-MNEs’and analyze them using the Dynamic Capabilities frame-

work, a key framework in strategic management. We find that the capability of MNEs to

shape and adapt to changing environments is necessary for the emergence and success

of the meta-MNE. We also discuss prospects for meta-MNEs in the context of China.

Technical summary: Established theories of the multinational enterprise (MNE) were

created for a different, less globally competitive world. Today’s MNEs are movingtoward

the stateless ideal type knownas a metanational. Because considerablecentral authority

remains, we call the emerging model the meta-MNE and use the Dynamic Capabilities

framework to analyze this phenomenon. Strong dynamic capabilities, including asset

orchestration, are necessary bothfor the very existence of the meta-MNEand for sustain-

ing its competitive advantage. We draw contrasts between the meta-MNE and the

traditional, home-centric MNE. We consider the ways in which nations still matter and

the policy implications of the emergence of the meta-MNE. We also discuss recent

developments in China that have greatly shaped the environment facing existing and

future meta-MNEs. Copyright © 2016 Strategic Management Society.

INTRODUCTION

The multinational enterprise (MNE) is one of the

world’s most innovative organizational forms,

morphing from the globe-spanning trade of the Dutch

East India Company(founded in 1602) and the British

East India Company (in 1603) to today’ssprawling

networks of factories, offices, and research labs that

connect cities and regions throughout the world.

MNEs are the handmaiden of globalization, and their

stakeholders are among globalization’s largest

beneficiaries.

Today’s MNEs are, in fact, getting closer and

closer to yet a new organizational form, that of the

metanational, which was first described by Doz,

Santos, and Williamson (2001). The metanational

can be based anywhere, but is able to sense and

mobilize knowledge from leading customers and,

especially, fromkey industry-specific centers of inno-

vation anywhere in the world.

Home/host country dichotomies live on, but the

distinction should no longer be emphasized as

strongly as in most theoretical frameworks.

Know-how and markets have become more widely

dispersed and diversified, and the structures of

Keywords: dynamic capabilities; meta-multinationals; location

and capability development; competitive advantage; theory of

the MNE

*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, 6:211–224 (2016)

Published onlinein Wiley Online Library (wileyonlinelibrary.com).DOI: 10.1002/gsj.1126

Copyright © 2016 Strategic Management Society