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We analyze the role of Swedish competence-creating subsidiaries in the upgrading of local ecosystems within the Brazilian context. Using multiple cases we highlight the role of subsidiaries for job creation and economic development - via spillovers of knowledge and the critical role of subsidiary learning developed from sustained interactions with local actors. Highlighting how, after the initial investment by the MNE, interactions between competence-creating subsidiaries and institutions, organizations, and individuals in Brazil play a critical role in the emergence and development of local ecosystems. Subsidiaries form networks with both market and non-market stakeholders, contributing to the technological, economic, environmental and societal development in Brazil through both spillovers and their own requirements to collaborate with ecosystem actors to fulfill their competence-creating mandate. We provide managerial implications focusing on the scope of local businesses to collaborate with foreign organizations, to bridge resource and knowledge gaps to foster robust and collaborative business environments.

Foreign subsidiaries seek to gain attention from headquarters, often through strategic issue selling. It is therefore paramount to understand how the packaging of the issue and the process of issue selling affect headquarters’ attention. Cultural distance can influence the effectiveness of issue selling tactics. A study of 342 foreign subsidiaries reveals that when cultural distance is high, emphasizing corporate benefits becomes less effective, possibly due to headquarters' mistrust or misunderstanding. Interestingly, consistency with headquarters' practices matters less in culturally distant cases, offering opportunities for subsidiaries to propose more novel ideas. Joining efforts with other subsidiaries seems to pay off in low cultural distance situations but can backfire when distance is high, as headquarters may fear insurrection. Cultivating social relations with headquarters' executives is crucial for capturing attention, especially in high cultural distance scenarios, as they help bridge trust and compensate for communication gaps. Our sample, obtained from an online survey, contains 342 cases that comprise a broad coverage of 46 different subsidiaries’ countries and 26 different headquarters’ countries. 

The microfoundations perspective offers promising avenues for advancing theoretical and empirical research in international business (IB). However, two key challenges have limited progress so far: first, uncovering micromacro relationships in complex, often nested, IB phenomena; second, applying the multiple theoretical lenses offered by IB to coherently explain relationships. This paper addresses these challenges of applying microfoundations in IB by proposing a modular approach to its foundational framework, Coleman's (1990) bathtub. By breaking down the bathtub into its component parts or modules, each module relates to a specific, independent relationship between two constructs, that can be theorized and tested. We provide clear definitions of how modular (mono, abridged, partial, or full) explanations can be used as a tool for conceptualization and research design. In addition to enhancing our theoretical precision, a modular microfoundations approach also provides the architecture for existing studies to be connectable to new work focusing on other modules. This holds the potential of creating a full microfoundations explanation and thereby a rigorous and cumulative means for theory building in IB. We call for scholars to adopt this modular microfoundations perspective to better tackle the important questions of our time for global business and society.

In multi-unit organizations, such as multinational corporations (MNCs), knowledge developed in one business unit can greatly benefit the performance of another. However, employees and managers compete with others within intraorganizational competitive domains for resources, which may affect the willingness to share knowledge. We conceptualize the multi-unit organization as having multiple competitive domains depending on the main source for resource endowments for the knowledge-sharing actors. Our study draws on data from two surveys done in a global division of an MNC, comprising data from 342 individuals nested in 68 different units, across 24 countries. Our results show that social integration among individuals in different competitive domains boosts knowledge transfer between units, while social integration between individuals within the same competitive domain hampers knowledge transfer. These findings suggest that there is a different and darker side to social integration in multi-unit organizations than the previously established positive side leading to increased knowledge transfer. Our findings show that the willingness to share knowledge also depends on the internal competition for resources between the knowledge-sharing actors. 

Subsidiary networks are defined as webs of specific inter-firm and intra-firm relationships that a foreign subsidiary of an MNC has to host-country actors and units within the MNC, respectively. Network theory offers a pertinent view on critical resources and has shown that the most important resource is the web of specific relationships in which a unit (subsidiary) is embedded. Economic actions and the product of such actions are influenced by the unit’s dyadic relationships and all connected relationships, as are all social activities, which is why utilizing an embeddedness approach helps avoid the atomization of an actor when studying its behavior. Embeddedness is defined as a subsidiary’s interdependence with its network partners and is often specified by distinguishing a subsidiary’s external embeddedness in the host-country environment and its internal embeddedness within the global MNE environment.

PurposeThis paper aims to explore the relationship between strategic internationalization decisions and dynamic capabilities deployment for the internationally growing firm (IGF). Dynamic capabilities refer to a firm's ability to adapt proactively to a changing business environment, emphasizing the importance of "doing the right things" rather than just "doing things right. Design/methodology/approachLiterature-based, this paper proposes a model that links internationalization decisions and dynamic capabilities deployment, offering valuable insights for both research and practical application. FindingsThe study highlights that the IGF - focused on expansion and growth abroad - faces unique complexities that demand "doing the right things" in terms of strategic internationalization decisions. Three critical organizational capabilities - knowledge transfer, knowledge recombination and learning capabilities - are mechanisms linking strategic internationalization decisions to dynamic capability deployment in the IGF. These organizational capabilities enable the IGF to act entrepreneurially and deploy dynamic capabilities across borders. Research limitations/implicationsThe model provides a practical framework illustrating the interconnectedness of strategic internationalization decisions and their combined effects on the ability of IGF to deploy dynamic capabilities to adapt to a changing global environment. Originality/valueThis research addresses a gap in the literature, challenging the conventional assumption that dynamic capabilities precede firms' decisions to internationalize and that these dynamic capabilities can only be enhanced abroad.

The purpose of this editorial, and the special issue, is to initiate a dialogue about the role of time in international business (IB) scholarship. While time is inherent in IB phenomena, it has, to date, received limited attention in IB research and theorizing. When IB scholars do account for time, they generally adhere to assumptions representing time as linear and objective. We discuss the importance of time in the philosophical, conceptual, and methodological domains of IB, defining each of these three interconnected domains, problematizing their dominant assumptions about time, and suggesting potential avenues for rethinking time in IB.

Research Summary: We provide a more granular and comprehensive approach to subsidiary evolution and enhance the understanding of the complexity of the subsidiary's evolution in the era of value chain fine-slicing. We extend Birkinshaw and Hood's model of general processes of subsidiary evolution into a model of functional evolutionary paths that represents nine configurations of charter and capability changes. We examine initiative, autonomy, and track record as determinants of 1455 functional evolutionary paths identified in 266 subsidiaries operating in the Polish and Swiss manufacturing sectors. Through a two-level multinomial logistic regression model, we learn that subsidiary initiative and track record are positively related to an increase in subsidiaries' charter and capability enhancement, respectively. Subsidiary autonomy though, is negatively related to charter increase and capability enhancement. Managerial Summary: We consider subsidiaries' initiative, autonomy, and track record as factors shaping the changes in functional responsibilities and corresponding capabilities. Our results show that frequent and successful initiatives support a functional charter increase but do not necessarily enhance corresponding functional capabilities. Furthermore, a lower level of decision-making autonomy in efficiency-driven organizations does not translate into difficulties with a functional charter increase. A subsidiary can benefit from lower autonomy by focusing subsidiary-development efforts on areas aligned with the headquarters' interests. A proven track record does not translate into a functional charter increase; in some cases, it even increases the likelihood of charter depletion. Nonetheless, it increases the likelihood of enhancing functional capability.