The implementation of change in incumbent multinational companies
Aa case study analysis using the R&D unit of a Norwegian MNC as a research site.
A common perception in the field of strategic management is that incumbent multinational companies (MNCs) usually fail to remain relevant in their industry and rarely introduce radical product innovation when they confront change.
The existing theory on dynamic capabilities suggests that MNCs attempting to change when faced with market discontinuities can draw on a certain set of capabilities to innovate their business model.
Due to their idiosyncratic nature, the foundations to the concept of dynamic capabilities have been here observed through a case study analysis.
Using the R&D unit of a Norwegian MNC as a research site, I conducted in-depth interviews with seven managers, in order to study the presence of sensing, seizing and transforming capabilities within the unit.
The empirical findings reveal that the R&D unit contributes significant sensing and seizing capabilities to the MNC further supported by the company’s open innovation philosophy.
However, the analysis reveals that the R&D unit has insufficient influence to ensure that knowledge developed internally is transformed into business value. That is, its transforming capabilities are limited.
Furthermore, barriers to the concept of dynamic capabilities, such as legacy, scale or data, have been identified. The findings also reveal a lack of social capital (cross-unit bonding) within the company.
In conclusion, this study reveals that the R&D unit is lacking in transforming capabilities, a critical aspect of the dynamic capability concept. This may be critical for the ability of the MNC to engage with radical change.