The Impact of Global Dynamic Capabilities on Governance Structure Choice of Partnership: The Moderating Effect of...

Research on multinational inter-organizational relationships has demonstrated that the capabilities of small and medium sized enterprises (SMEs) can be developed via partnerships, but at present, we lack studies that relate the development of such capabilities to the management of business governance structure. This study provides a new perspective on internationalized SME marketing strategies in the global context. Using a dynamic capability view of firms, the study develops hierarchical regression models linking global dynamic capabilities and governance structure. This study empirically verifies the research framework from 206 internationalized SME Taiwanese firms. The results confirm previous studies that indicate positive correlations between market orientation, learning orientation, and global dynamic capabilities. The results also indicate that the development of global dynamic capabilities impacts the choice of governance structure in firms. Our study suggests that internationalized SMEs strategically manage their autonomy and strategic options by choosing combinations of different relationship types while they decide to develop global marketing capabilities and global design capability, or both. The study also found that market orientation and learning orientation act as enabling mechanisms for building global dynamic capabilities.