Going digital EMNEs: The role of digital maturity capability

Abstract

International Business (IB) has increasingly focused on born-digital multinationals, but less attention is being directed to traditional multinationals aiming to remain competitive by digitally transforming themselves (that is, achieving greater digital maturity). This phenomenon cannot be extrapolated from born digitals. This gap is deeper with emerging market multinationals (EMNEs), which find major challenges to joining the digital age. Recalling that strategically located subsidiaries are critical for EMNEs’ success, we ask: How do EMNEs pursue digital maturity and how do their subsidiaries contribute to this process? A capability-based view of multinational enterprises and relevant EMNE literature help us to conceptualize Digital Maturity Capability as a complex capability paramount to developing competitiveness in the digital age. Using survey data from 91 Brazilian multinationals, we found that EMNEs build elements of competitive advantage in modern markets through enhanced digital maturity while leveraging foreign subsidiaries for increasing value chain and ecosystem integration.We contribute to making the capabilities framework more relevant within IB and advance the analysis of going digital multinationals with the experience of EMNEs. Such results have practical implications for managers navigating the digital era's choppy waters.