The Digital Multinational Management on the Cutting Edge series Robert W. Holland Jr., series editor Published in cooperation with MIT Sloan Management Review The AI Advantage: How to Put the Artificial Intelligence Revolution to Work Thomas H. Davenport The Technology Fallacy: How People Are the Real Key to Digital Transformation Gerald C. Kane, Anh Nguyen Phillips, Jonathan Copulsky, and Garth Andrus Designed for Digital: How to Architect Your Business for Sustained Success Jeanne W. Ross, Cynthia Beath, and Martin Mocker See Sooner, Act Faster: How Vigilant Leaders Thrive in an Era of Digital Turbulence George S. Day and Paul J. H. Schoemaker Leading in the Digital World: From Productivity and Process to Creativity and Collaboration Amit S. Mukherjee The Ends Game: How Smart Companies Stop Selling Products and Start Delivering Value Marco Bertini and Oded Koenigsberg Open Strategy: Mastering Disruption from Outside the C-S uite Christian Stadler, Julia Hautz, Kurt Matzler, and Stephan Friedrich von den Eichen The Transformation Myth: Leading Your Organization through Uncertain Times Gerald C. Kane, Rich Nanda, Anh Nguyen Phillips, and Jonathan R. Copulsky Winning the Right Game: How to Disrupt, Defend, and Deliver in a Changing World Ron Adner The Digital Multinational: Navigating the New Normal in Global Business Satish Nambisan and Yadong Luo The Digital Multinational Navigating the New Normal in Global Business Satish Nambisan and Yadong Luo Foreword by Conny Braams The MIT Press Cambridge, Massachusetts London, England © 2022 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher. The MIT Press would like to thank the anonymous peer reviewers who provided comments on drafts of this book. The generous work of academic experts is essential for establishing the authority and quality of our publications. We acknowledge with gratitude the contributions of these otherwise uncredited readers. This book was set in ITC Stone Serif Std and ITC Stone Sans Std by New Best-set Typesetters Ltd. Library of Congress Cataloging- in- Publication Data Names: Nambisan, Satish, author. | Luo, Yadong, author. Title: The digital multinational : navigating the new normal in global business / Satish Nambisan and Yadong Luo; foreword by Conny Braams. Description: Cambridge : The MIT Press, 2022. | Series: Management on the cutting edge | Includes bibliographical references and index. Identifiers: LCCN 2021000760 | ISBN 9780262046329 (hardcover) Subjects: LCSH: International business enterprises—Technological innovations. | Regionalism. | Globalization. Classification: LCC HD2755.5 .N38 2022 | DDC 658/.054678—dc23 LC record available at https://lccn.loc.gov/2021000760 10 9 8 7 6 5 4 3 2 1 To Ashok, Bharat and Priya—S atish Nambisan To Rosalie, Edward and Jady— Yadong Luo Contents Series Foreword ix Foreword by Conny Braams xi 1 Globalization in Transition in the Digital Age 1 2 Digital Global Business Connectivity 27 3 Connecting with Global Markets and Customers Digitally 49 4 Connecting with Global Partners, Platforms, and Ecosystems Digitally 71 5 Connecting with Foreign Subsidiaries and Managing Global Activities Digitally 91 6 Connecting with Global Innovation and Knowledge Digitally 109 7 Internationalizing Business Models Digitally 129 8 Global Entrepreneurship in the Digital Age 141 9 Managing Risks in Digital Global Business 155 10 Digital Intelligence and Digital Resilience: Putting Digital Global Business Connectivity into Practice 175 Acknowledgments 195 Notes 199 Index 217 Series Foreword The world does not lack for management ideas. Thousands of research- ers, practitioners, and other experts produce tens of thousands of arti- cles, books, papers, posts, and podcasts each year. But only a scant few promise to truly move the needle on practice, and fewer still dare to reach into the future of what management will become. It is this rare breed of idea—m eaningful to practice, grounded in evidence, and built for the future—t hat we seek to present in this series. Robert W. Holland Jr. Managing Director MIT Sloan Management Review