The capabilities perspective and the multinational corporation: rebuilding the internationalization process model

Abstract

The Internationalization Process Model, identified closely with the Uppsala School, provides International Management with a model of how firms expand beyond their national boundaries that is remarkable in terms of its spare and elegant construction. It has, however, been criticized on account of its inability to take explain the heterogeneous paths to foreign expansion that multinational corporations have taken over the past three decades. In this paper, I propose that the theoretical core of the internationalization process model can be reinvigorated and made richer by infusing arguments from the capabilities perspective into its organizational learning framework. I also propose, through the revised model, that agency at the subsidiary level is a key driver of the pace and pattern of internationalization. The revised model attempts to correct for several theoretical anomalies in the internationalization model and provides a plausible explanation for heterogeneity in the internationalization paths of multinational corporations.