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Our study examines the transfer of entrepreneurial legacy within the parent-subsidiary relationship that exists in the geographically diversified firm. We propose that at the time when foreign subsidiaries evolve into technologically capable units, the time-sensitive transfer of entrepreneurial legacy from the parent company determines their long-term exploration activity. We predict and find that the effect of this legacy imprint operates independently of broader corporate exploration trends and other variables that affect subsidiary exploration. Our findings provide novel insights into the mechanisms through which entrepreneurial legacy is transferred and sustained, highlighting variability on the part of the sender (the parent company) and inertia among the receivers (the subsidiaries). We introduce a novel explanation for persistent differences in levels of exploration among units of the geographically diversified firm, and propose the presence of a unique form of "familiness" that helps maintain a balance between exploration and exploitation that is difficult to achieve for other types of firms. Our findings broaden the perspective on legacy change and its long-term consequences in the wider entrepreneurial legacy literature.

Vi lever i en tid präglad av intensiva omställningar, där teknologiska språng, geopolitiska konflikter, klimatförändringar och snabbt skiftande marknadslogiker tillsammans formar en komplex och osäker spelplan för företag. I denna nya verklighet räcker det inte längre med att förvalta framgång – företagens långsiktiga konkurrenskraft och överlevnad beror alltmer på förmågan att kontinuerligt förnya sig.

Mot denna bakgrund framträder intraprenörskapet, det vill säga innovation och entreprenörsanda inom befintliga organisationer, som en avgörande strategi. Det är inte bara ett sätt att öka anpassningsförmågan och motståndskraften i tider av förändring, utan också en källa till stärkt medarbetarengagemang, ökat välmående och hållbart värdeskapande. I en värld där förändring är det enda konstanta, måste varje organisation odla förmågan att tänka nytt – inifrån.

This report sets out to explore possible adaptations in the strategies of Swedish multinational corporations (MNCs) following changes in economic globalization. Specifically, it investigates the possible shifts and future directions of strategies to the global drivers of technology, politics, and sustainability, and how these drivers may impact the future competitiveness of Swedish firms. Using data from 20 in-depth interviews with CEOs, CFOs, and other executive decision-makers, representing 19 Swedish MNCs, the results suggest this is a major question for both concern and opportunity with regards to the future competitiveness of these firms. Specifically, the report highlights the following main conclusions:

A strong global corporate identity coupled with a Swedish moral compass: Swedish MNCs view themselvesas global but with strong local embeddedness. Yet, interestingly, a moral compass with a Swedish flavor suggests a ‘Swedish way’ of conducting business, even in far-away locations.

Parallelism in changing value chains: The political risks of being a global firm are evident. The firms areacutely aware of risks associated with disruptions in their value chains, and some firms have responded byconsidering their value chain configurations or are even developing several sets of value chains. This parallelism is deemed to facilitate de-coupling of regions and lower the risks stemming from external shocks.

Reshoring to Sweden is not an option: Surprisingly few firms seem to consider reshoring value chain activitiesto Sweden to be an attractive option. This is despite movement in the locational footprint where the firms are abandoning or considering pulling out of markets due to unfavorable conditions relating to political andsustainability issues.

The big bet on sustainability: Many firms are positioning their businesses based upon a vision of providing sustainable products and services. The big bet on sustainability offers many opportunities and could propel Swedish MNCs to a strong position on the global market for sustainable products, rendering a price premium.

To conclude, the last 18 months have made firms well aware of the strengths and the weaknesses in their strategic orientation. Firm resilience appears as generally high with few firms reporting that the pandemic itself will have significant long-term effects on MNC strategies. Moving forward, Swedish MNCs seem equipped to combine a business strategy of new technology with sustainable solutions. The activity strategy shows indications of becoming increasingly regional, which could prove to be supportive of the often-decentralized strategies adopted by the Swedish MNCs.

Integrating insights from the literature on the multinational corporation into current perspectives on resource allocation, we argue that the ability of headquarters to create value through resource allocation to subsidiaries within the multinational corporation is contingent on the complementary fit between the resource allocation strategy and the dominant behavior of the receivers of the resources. We expound on a theory and an explanation for the volatility of value creation generated by headquarter resource allocation that includes multiple layers of hierarchy. As a corollary, we extend and contribute to the theorizing on headquarters-subsidiary relations and resource allocation by illustrating different scenarios of the resource allocation process. More specifically, we develop a two-by-two matrix of the resource allocation process that corresponds to different resource allocation strategies of headquarters (winner-picking and cross-subsidization) and subsidiary behavior (collaboration or competition) in multinational corporations. We argue that, depending on which scenario within the matrix is brought to the fore, our understanding of how the resource allocation process plays out between headquarters and subsidiaries will differ and therefore influence value creation within the multinational corporation.

Unique knowledge and proprietary innovations are key to the competitive advantages on which most multinational enterprises (MNEs) are expected to base their initial international expansion. Moreover, their subsequent fortunes and survival typically depend on MNEs’ continued ability to upgrade and renew these advantages, as competition, imitation, and environmental change erode the value of existing ones. This chapter reviews key literatures around the nature, management, and effects of knowledge creation in MNEs. The chapter centers on the processes through which geographical patterns of international R&D have evolved, along with the structures, systems, and procedures through which MNEs have sought to govern and coordinate these activities. Finally, the chapter offers a summary and critique of the way that much of the inherited literature has portrayed and interpreted the strategic knowledge creation process in MNEs.

This article concerns the integration of technological knowledge within multinational corporations (MNCs). We empirically investigate the degree of technological knowledge integration of competence-creating subsidiaries with headquarters and sister subsidiaries and explore the effects of intersubsidiary differentiation. Data on the complete US patenting activity of 22 Swedish multinationals from 1893 to 2008 reveal significant differences in degrees of technological knowledge integration. As expected, the results show that greenfield subsidiaries are more integrated with headquarters and other greenfield subsidiaries than with acquired subsidiaries. In contrast, acquired subsidiaries do not appear to be as easily integrated into the MNC, and for this group the empirical evidence shows very little integration of technological knowledge. The findings provide extended insights into the role of competence-creating subsidiaries as providers of technological knowledge to headquarters and other MNC subsidiaries, and suggest a distinct pattern of subsidiary knowledge integration, ordered by what appears to be in-groups and out-groups, that has been overlooked in the prior MNC literature.

We investigate “dual headquarters involvement”, i.e., corporate and divisional headquarters’ simultaneous involvement in innovation development projects hosted by subsidiaries of multibusiness firms. Drawing on selective hierarchical involvement theory and the literature on subsidiary network embeddedness, we analyze 83 innovation projects in 22 multibusiness firms and find that the number of partners in the projects, rather than subsidiary intra- and inter-divisional embeddedness acts as a driver of dual headquarters involvement. We do however find that intra- and inter-divisional embeddedness is positively related to dual headquarters involvement when the number of partners in the innovation project is relatively large. These results lend support to the idea that parenting in complex organizations entail complex headquarters structures. Our results suggest that we need to go beyond simple conceptualizations of headquarters and that considering different dimensions of the innovating subsidiary’s network helps in explaining dual headquarters involvement.

This paper probes the extent to which the rise of the ‘modern’ multinational corporation (MNC) has come with significantly altered patterns in the emergence and diffusion of technological capabilities across units of the MNC network. It draws upon a database containing the complete U.S. patenting history of 24 Swedish multinationals over the 1946–2008 period, which allows us to trace both the emergence and subsequent intra-firm diffusion of technological capabilities throughout the post-war period. The findings show that, over time, foreign subsidiaries have become an increasingly important source of new technological capabilities within the MNC network, and also indicate that the overall pace of capability diffusion has become faster over the observed time period. Notably, however, the results reveal substantial heterogeneity of individual firms’ approaches to organizing and managing technological capabilities within the MNC network. The relationship between evolutionary change and strategic choice emerges as a continually relevant issue in the organization and management of technology in the modern MNC.