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The rapid adoption of digital technologies has transformed the organizational structures of multinational corporations (MNCs) and altered how they coordinate geographically dispersed knowledge activities, centralizing some value‑chain activities while decentralizing others. Yet, despite growing scholarly interest, IB research continues to conceptualize digitalization largely as a unidimensional phenomenon, overlooking the heterogeneous and sometimes opposing effects of different forms of digital technologies on intra‑MNC coordination and knowledge transfer. This dissertation addresses this conceptual and empirical gap by examining how distinct forms of digital technology adoption trigger different organizational conditions and, in turn, influence subsidiaries’ capacity to transfer knowledge within the MNC network and their market-facing agility to contribute strategically. It comprises four papers: one conceptual study and three empirical studies based on two datasets.

The first empirical study builds the theoretical and methodological foundation for this dissertation by conceptualizing and operationalizing a firm’s digital technology adoption from a functional perspective. It develops a psychometrically validated 19-item scale manifested in four core dimensions: digital communication technology (DCT), digital in situ technology (DST), digital data analytics technology (DDAT), and digital networking technology (DNT), which reflect the coordination, optimization, data access, and location access functions that digital technologies perform within firms. The resulting measurement instrument, based on survey data from 113 technology-intensive Swedish firms, offers scholars a precise means to examine how digital technologies influence organizational processes. 

The second study advances a theoretical argument suggesting that MNCs’ adoption of distinct forms of digital technologies shapes value-chain activities through opposing centrifugal and centripetal forces associated with DCTs and DSTs, respectively. These opposing dynamics generate differentiated organizational conditions, leading to variations in subsidiaries’ capacity to disseminate knowledge to headquarters.

The third and fourth studies empirically demonstrate how MNCs’ adoption of different forms of digital technologies affects lateral knowledge transfer and subsidiaries’ responsiveness to market changes, drawing on data from 100 foreign subsidiaries of 14 Swedish MNCs. The findings reveal that while DST alone enhances operational efficiency but limits knowledge transfer, a combination of DST and DNT reduces a focal subsidiary’s dependence on local embeddedness and enhances lateral outward knowledge transfer via digital platforms. Moreover, lateral inward knowledge transfer and DDAT adoption enable subsidiaries to interpret market insights and respond rapidly to emerging opportunities.

Overall, this dissertation contributes to the IB literature by demonstrating that MNCs’ adoption of different digital technologies has heterogeneous organizational effects on knowledge flows and subsidiary roles. The findings offer guidance for managers assessing digital technology investments and strategic positioning.