Resource-constrained innovation in Western MNCs: The role of headquarters in achieving low-end disruption and new market creation in emerging economies

Western multinationals are increasing their efforts to innovate for resource-constrained customers in emerging markets. Past studies highlight how this unique context influences and shapes the characteristics of products and services developed for these emerging economies. However, extant literature lacks empirical insights on how firms organize for these kinds of innovation. This study employs a multiple case study approach at 12 Western MNCs who developed resource-constrained innovation for emerging and developing markets. Contrary to extant notions in literature, this study finds that the first resource-constrained innovation within a Western MNC is initiated by the HQs and that strategic autonomy in emerging market subsidiaries is no prerequisite for success. The initial target market defined and the operational autonomy assigned by the HQs influence the degree of product novelty achieved. The degree of product novelty has effects on the type of market disruption caused by