Addressing Multiple Competitive Pressures in the MNE through Recombination

Many multinational enterprises (MNEs) face simultaneous pressures of global integration and local responsiveness. While extant literature acknowledges that differentiated MNEs are neither entirely geared towards achieving integration nor local responsiveness, scarce attention is given to how MNEs address multiple and shifting strategy pressures. Through a qualitative, longitudinal case study covering 12 years, we draw on the dynamic capabilities literature to understand the MNE’s recombination capabilities. We identify three key recombination capabilities that enable the organizational flexibility needed to combine global integration with local responsiveness, while overcoming organizational impediments. We also find that the recombination capabilities improve the MNEs ability to sense and seize new opportunities. Our study contributes theoretically to a more nuanced understanding of FSA recombination by unbundling the concept into three key capabilities. We also extend the dynamic capabilities literature by making macro level concepts actionable in the MNE context. Furthermore, our findings have managerial implications, illustrating that launching new strategic initiatives may fail if the organizational does not have the capabilities to legitimize the new initiatives and to ensure that existing organizational strengths are properly leveraged to support the new initiatives.