Building radical innovation capabilities in emerging market subsidiaries: The Case of Intel India

Abstract

The paper explores the processes that lead to new capability development in emerging market subsidiaries of MNCs. The capability in question is that of bringing about radical innovation in a reliable and repeatable manner. In this exploratory research, we study the radical innovation capability building process at Intel India using the Charter- Competence co- evolution model proposed by Birkinshaw and Hood (1988). The inferences we offer are, firstly, capability evolution process adopts multiple, intertwined pathways which are shaped by choices and actions of the head-office and subsidiary. Secondly, a subsidiary’s local embeddedness leads to newer insights, but the global connectedness renders the necessary legitimacy and head- office attention for executing such insights. Finally, a pre- requisite for a radical innovation capability is a subsidiary’s initiative in setting up an incremental program that offers a run rate of ideas to build on, and that such a capability can’t be imported from the parent organization.