The microfoundational view of capability creation and environmental alertness of multinational corporations in emerging markets

In this study, we delve deeply into the detailed strategy of employing Open Innovation (OI) within multinational corporations (MNCs) as a means to cultivate and strengthen Dynamic Capabilities (DC) amidst the complex and opportunity-laden landscapes of African emerging markets. The discourse navigates through the delicate act of balancing the incorporation of external collaborative endeavors with the fine-tuning of internal resources, aiming to bolster both agility and innovative prowess within these corporations. The foundational theories of OI and DC are thoroughly examined, illuminating their pivotal roles in shaping international business strategies. The narrative underscores the inherent complexities tied to OI practices, highlighted by intricate social interactions and the formidable challenges of harmonizing external resources with a firm’s internal capabilities. These challenges are further magnified by the unique business environments in Africa, characterized by varied cultural, regulatory, and economic landscapes, making the integration of OI not just a strategic move but a critical necessity for survival and growth. Thus, our study revealed the microfoundational view of resource and capability creation of multinational corporations through open innovation. The exploration continues by shedding light on empirical insights derived from analyzing open innovation initiatives, unveiling seven core microfoundations that act as the linchpins connecting the adoption of OI with the evolution of DC: environmental alertness, exposure to diverse knowledge streams, outward projection of firm capabilities, nurturing of strategic relationships, systematic accumulation of resources, and ensuring fluidity, among others. Each microfoundation was meticulously examined against the backdrop of the African emerging markets, revealing how they serve as the bedrock for the OI–DC interplay and potentially hasten the process of acquiring novel capabilities and resources. We concluded by emphasizing the strategic ramifications of these insights for MNCs operating within these markets. It stresses the importance of remaining vigilant to environmental shifts, actively engaging with a broad spectrum of knowledge sources, and fostering robust relationships. Such strategic imperatives are crucial for MNCs looking to capitalize on OI for the enhancement of DC, thereby securing a sustainable competitive edge in the emerging markets of Africa. This comprehensive analysis aims to arm both academic scholars and industry practitioners with a deeper understanding of the strategic value embedded in OI for nurturing DC, providing a strategic blueprint for thriving in the multifaceted business environments.