Abstract:
This research study develops a dynamic capability perspective to analyse alliance and acquisition management capability of Indian multinational enterprises (MNEs) and its performance outcomes. The thesis first reviews the theory of emerging multinational enterprises (EMNEs), the resource-based view (RBV) and the seminal work of dynamic capabilities, a key framework in international strategic management and international business. The growing scholarly attention devoted to explaining firm performance through the dynamic capability lens has motivated the development of this research. This study has modelled a conceptual and empirical framework to link EMNEs’ dynamic capabilities to firm outcomes. This research analysed 217 Indian EMNEs from 19 industry types to measure specific outcomes of value generation and firm performance as important consequences of alliance and acquisition management capability. Quantitative analysis was undertaken to empirically test the hypotheses and findings have been reported, suggesting that dynamic capabilities have a positive effect on firm performance, and they generate value to build strong competitive advantages. A theoretical contribution to the dynamic capability framework includes the development of a new concept - ‘scattered practice of dynamic capabilities. The concept is explained further in the discussion section with visual representations for better understanding. The development of this new concept builds on the earlier understanding of “higher-order dynamic capabilities” and “distributed practice” from the field of strategic management from which the new concept of ‘scattered practice of dynamic capabilities” has been derived. These scattered practices in EMNEs will result in the outcome of ‘highest-order dynamic capabilities’ which will allow firms to direct and utilize them in different geographical locations. The purpose of the study is to analyse dynamic capabilities empirically and to prove that a positive relationship exists between dynamic capabilities and firm performance. In order to establish this result six hypotheses have been developed. Quantitative analysis was conducted to test them. Analysis found support for five of the hypotheses – longevity of experience, geographical depth, quantum of mergers and acquisitions (M&As), co-marketing and joint ventures have a positive significance on firm performance and value generation. The implications, theoretical contributions, and future research directions are discussed.