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Digitalization

The multinational enterprise, capabilities, and digitalization: governance and growth with world disorder


This essay revisits my 2014 JIBS article about the potential for integrating international business internalization theory with a strategic management capabilities perspective. It recaps the capabilities framework with an emphasis on the learning required of emerging market multinationals and illustrates this with the case of Hyundai Motor Company’s internationalization and growth.

It also discusses two aspects of the global economy that have become more prominent since 2014 in shaping international business: geopolitical uncertainty and digitalization. A rise in geopolitical tensions appears to be rebalancing the relationships between multinationals and home/host governments. Digitalization facilitates international business; but it adds new vulnerabilities by (further) accelerating competition, enabling new rivals, and introducing systemic risks into digital supply chains. Implications for managers, board members, and international business scholars are drawn.

I will end by repeating the call in my 2014 paper for a serious rethink of our textbook theories of the MNE. Its major contribution was to highlight the importance of technological and organizational capabilities, which has been expanded on in this paper to encompass capability development and deployment. I encourage IB scholars to analyze the forces and processes behind the dynamic reallocation of resources within MNEs in response to geopolitical tensions and other stressors.

In this paper, I’ve also highlighted the importance of digitalization and broken global governance. These two new factors have equally profound implications for theory building within a capabilities framework. I hope the brief analysis above will stimulate others to take up the task.

The era of unbounded globalization based on comparative advantage and cost efficiencies is over. Escalating geopolitical tensions and the compression of time and space in the digital economy affect MNEs everywhere. Companies and countries need to adjust to the new, still-emerging economic order; and scholars need to incorporate these new issues into their research. For IB scholars, this means looking to other disciplines, such as international relations, for applicable geopolitical insights

network, data transmission, cloud networking, 5G connectivity, cybersecurity, wireless technology, IoT integration, SDN, communication efficiency, network infrastructure, scalability, automation, artificial intelligence, machine learning, reduced latency, data security, real-time analytics, hybrid networks, edge computing, VPNs

#NetworkTechnology, #DataTransmission, #CloudNetworking, #5GConnectivity, #CyberSecurity, #WirelessNetwork, #IoTIntegration, #SDNInnovation, #NetworkInfrastructure, #DigitalTransformation, #NetworkAutomation, #AIinNetworking, #MachineLearning, #EdgeComputing, #HybridNetworks, #VPNConnection, #DataSecurity, #NetworkOptimization, #SmartConnectivity, #TechInnovation

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