Summary:

A common perception in the field of strategic management is that incumbent multinational
companies (MNCs) usually fail to remain relevant in their industry and rarely introduce
radical product innovation when they confront certain types of market or technological
changes. The existing theory on dynamic capabilities suggests that MNCs attempting to
change when faced with market discontinuities can draw on a certain set of capabilities to
innovate their business model. The micro-foundations of the dynamic capability framework
(the distinct skills, processes, procedures organisational structures, decision rules and
disciplines, which undergird the enterprise-level sensing, seizing and transforming
capabilities) are difficult to develop and deploy due to their idiosyncratic nature.
The purpose of this paper is to study the dynamic capability phenomenon on a real case
setting; adopting a longitudinal case study approach. The research object of this project is the
incumbent multinational company Telenor, who needs to adjust its business strategy in order
to remain a pertinent actor in its sector. This paper investigates the mechanisms through
which, the company’s research unit develops dynamic capabilities in order to sustain change
at Telenor. The sensing, seizing and transforming roles of Telenor Research are assessed
through a qualitative analysis where data have been collected through the interview of seven
research unit managers. In doing so, the findings provide an example of case application
towards the concept of dynamic capabilities.
The qualitative data collected have been analysed following a template analysis method and
sensing and seizing capabilities have been identified. These are notably supported by the
corporate open innovation philosophy and engagement towards new technologies.
Evaluation of the transformation capabilities could not, however, be fully assessed in this
research since Telenor Research does not have the responsibility to transform knowledge
into business value.