International Dynamic Capabilities Transfer and Managerial Services

From survey and interview based research of International Motor Vehicle Project (IMVP)

Abstract

Previous international business studies on Dynamic Capabilities have omitted Japanese firms and therefore missed a chance to make a significant contribution to the theory. Earlier studies such as Teece (2014a) (2014b), Helfat and Winter (2011), and Penrose (1959) suggest that Dynamic Capabilities are necessary for the acquisition of competitive advantages in international competition, however they seem to conclude that Dynamic Capabilities exist mainly in company headquarters, not in overseas production bases. In other words, they consider that only operational and normal capabilities are transferred to overseas production bases.

However, Japanese firms have been trying to transfer and build Dynamic Capabilities in overseas production bases, through Kaizen activities. From the literature review, it can be inferred that this strategy of Japanese firms requires more managerial effort (Penrose, 1959) than in cases when mainly operational capabilities are transferred to overseas production facilities. This hypothesis is confirmed by the survey of International Motor Vehicle Program (IMVP) presented in this paper. Furthermore, we conclude that it is possible to manage the international transfer of Dynamic Capabilities successfully. To manage international transfer of Dynamic Capabilities successfully, it needs managerial effort to reduce coordination conflict among organizational actors in oversea factories. Of course this paper presents only a preliminary result. However it has important implications for future research.