An exploratory study of capability building among African multinational enterprises

Uduma, Idika Awa (2020) An exploratory study of capability building among African multinational enterprises. PhD thesis, Birkbeck, University of London.

Abstract

This study explored the fundamental question of the capabilities that African multinational enterprises build, especially before undertaking cross-border asset seeking endeavours and how the MNEs build such capabilities. Using multiple case study design, I obtained the data for the study from a combination of archival and interview data obtained from eight African MNEs which originate from four African countries, including South Africa, Nigeria, Togo, and Zimbabwe. The informants were 48 senior executives, including corporate executives, regional managers, and the Chairmen, of the selected MNEs. The data was analysed using the recommended guideline for building theory from cases study approach, covering within and cross case analysis processes. The findings reveal that African MNEs develop scalable advantages in the areas of product, people, and processes (PPP). In addition to uncovering the capabilities that the MNEs build, my most fundamental contribution is a process theory of how African MNEs enhance their scalable advantages by undertaking three interrelated activities, namely skilling, transcending, and consolidating. Also, another central contribution of the study is a framework of how African MNEs integrate internally developed and externally acquired capabilities through a combination of transcending and spanning processes. Based on the foregoing findings, I propose that emerging markets firms that develop scalable (product, process, and people) advantages would be able to engage in cross-border value creation by combining internal and external capabilities. The study contributes to the growing literature on emerging markets multinational enterprises (EM MNEs’) capability development. More specifically, the study contributes to EM MNEs-focused frameworks, notably Mathews’ LLL framework, by explaining the capabilities that EM MNEs possess prior to engaging in linkage, leverage and learning activities. Also, within the wider IB literature, the study contributes to the categorization of the O sub-paradigm of Dunning’s OLI paradigm, by showing the link between static and dynamic advantages. Finally, the implications of the present study to research, practice and policy were discussed.

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