Global connectedness and dynamic green capabilities in MNEs

Abstract

We study how global connectedness can help MNEs become more environmentally sustainable. Based on the idea that environmental sustainability requires dynamic capabilities, we define dynamic green capability as the ability to build complementary green competences and reconfigure organizationally embedded resources to pursue competitive advantage in a rapidly changing stakeholder environment. We argue that MNEs with greater global connectedness in terms of international diversification or international environmental certification possess knowledge advantages in cultivating dynamic green capabilities. We extend the sensing–seizing–reconfiguring framework and propose that global connectedness substitutes for sensing as a driver of seizing by providing direct access to relevant green knowledge pools around the world, and that it complements seizing as a driver of reconfiguring by strengthening the knowledge routines needed to integrate green competences.