Patrick Regnér

When multinational firms enter new markets, they have to choose how to manage the formal and informal local rules that can vary greatly. Local institutions and rules matter, and there are clear risks for top executives at headquarters who don’t take them seriously. But constantly adapting to local practices could jeopardize a company’s ability to integrate operations across markets. A study of five globally successful Scandinavian companies identified six tactics that firms can use to address local rules while maintaining competitive advantage: Avoid, alter, adapt, imitate, influence, and innovate.

The unique attributes of the internal and external contexts of multinational corporations (MNCs) make effective management of organizational change not only a necessity but also a challenge for these firms. The key to success lies in ensuring that the content, context, and process of change efforts are aligned and coherent. In this chapter, we will review each of these change dimensions with a particular focus on the specific issues and concerns faced by MNCs.

Introduction Although strategy-as-practice research has thrived during the last decade, the resource-based view (RBV: Barney 1991; Peteraf 1993; Wernerfelt 1984) and capabilities perspectives (Dosi, Nelson and Winter 2000; Eisenhardt and Martin 2000; Winter 2003) have continued to dominate mainstream strategic management research. Recent work has also started to show an increased interest in the micro aspects of strategy, emphasizing micro-foundations as essential in understanding organizational capabilities and resources and their origins (Abell, Felin and Foss 2008; Felin and Foss 2005; Gavetti 2005; Teece 2007). There have been repeated calls for examinations at the intersection between these research directions and SAP research (Jarzabkowski and Kaplan 2010; Johnson et al. 2007; Johnson, Melin and Whittington 2003; Regnér 2012; Vaara and Whittington 2012), but surprisingly little of this nature has materialized so far, with a few exceptions (for example, Ambrosini 2003; Ambrosini, Bowman and Burton-Taylor 2007; Kaplan 2008; Regnér 2003; 2008; Salvato 2003; 2009). This chapter examines the intersection between strategy as practice and perspectives that have dominated strategy content research during the last couple of decades. Specifically, it examines differences and commonalities, potential relationships and synergies between strategy as practice and the RBV, capabilities perspectives and the micro-foundations approach. It further investigates extant strategy-as-practice research at this intersection and identifies potential future research opportunities. What can possibly be gained from investigating this intersection? There are four points that are of particular importance. First, besides underlining the importance of strategy practices and activities generally for strategic management, it may provide insights into how practices, praxis and practitioners underlie resources and capabilities that maintain competitive advantage. If we accept that there is a relationship between what managers do and strategy content and outcomes, a key issue is determining how practices both enable and impede managers in their strategy praxis concerning resources and capabilities. By linking strategy as practice to resource-based, capabilities and micro-foundations research, it is thus possible to demonstrate the prominence of practices, social contexts and interactions for strategy. This is, of course, in contrast to extant assumptions in these strategy content research areas that often primarily emphasize rational top managers and individuals. The link to the resource-based and capabilities views may thus strengthen the main theoretical traits of the SAP approach and consolidate it. 

International business scholars increasingly emphasize regional strategies based on an optimal location of downstream sales. There has been less scholarly attention, however, to the relationship between international strategy and upstream knowledge creation including R&D. Building on contemporary strategic management theory and the knowledge-based view we remedy this. The viability of home-regional or bi-regional strategies is based on common assumptions that imply negative consequences of distance and foreignness for downstream sales and marketing and benefits from agglomeration for upstream knowledge creation activities including R&D. In contrast, we propose that upstream knowledge creation, radical innovation in particular, rather gains from distance and foreignness and from being dispersed, suggesting the effectiveness of a global strategy. Based on the resource-based view and recent research on the economics of strategic opportunities and competitive advantage, we provide theoretical explanations for this. We demonstrate how a global multinational corporation is uniquely equipped with knowledge extensity including heterogeneous social-identity frames in multiple sub-units. Thanks to arbitrage advantages between the sub-units' separate and often locally embedded knowledge, a global multinational corporation can address complex interdependences and interactions between knowledge sets required for knowledge creation. This suggests that maximum exploration capabilities are made possible by a global rather than a home-regional or bi-regional strategy. © 2014 British Academy of Management.