Dynamic Capabilities, Management Innovation, and the Role of the Corporate Center in Diversified Firms

In this research, I focus on the value-adding role of the corporate center in multibusiness firms. I propose that performing management innovation may result in a corporate advantage, while accumulating dynamic management innovation capabilities is critical for sustaining it.

In the first part, I review research on the value-adding role of the corporate center in multibusiness firms and find that explaining sustainable corporate advantage in changing environments requires a dynamic understanding of corporate strategy. Complementing recent literature on dynamic capabilities, I propose a framework that distinguishes a corporate center's particularities related to the environmental complexity, asset bases, and value creation mechanisms. I argue that, in order to create and sustain a corporate advantage, the corporate center must develop dynamic sensing, seizing, and transforming capabilities that fit with the firm's organizational and environmental context.

In the second part, I explore the role of management innovation in multibusiness firms. I develop a conceptual model of corporate management innovation arguing that multibusiness firms benefit from innovation driven by the corporate center. I hypothesize that the strength of this relationship is moderated by several characteristics of corporate management innovation, the organizational context, and the environmental dynamism a firm faces. To test my hypotheses, I apply a large-scale quantitative research design with listed European multibusiness firms.

In the third part, I derive a process framework of sensing corporate management innovation. Drawing on literature of management innovation, dynamic capabilities, and organizational learning I attempt to analyze how a firm's corporate center senses management innovation and how accumulating a related dynamic sensing capability contributes to sustained corporate advantage. I follow a multiple case studies research design with large European multibusiness firms.

This research project contributes to research on the value-adding role of the corporate center in multibusiness firms, on dynamic capabilities, and on management innovation.