Strategy Formation and Dynamic Capabilities: Motorola’s Entry into China

Using a longitudinal case study of Motorola’s Energy Systems Group in Tianjin, China, we examine the interplay between corporate strategic directives and capability development within strategic business units (SBUs). Through semi-structured interviews and an in-depth analysis of archival data, we illuminate the tension between corporate headquarters and lower-level SBUs, identifying the sources of strategic misalignment and pathways to overcoming them. Our findings emphasize the importance of developing dynamic capabilities within SBUs, which enable the integration of top-down, deliberate strategies with bottom-up, emergent initiatives. This adaptability allows SBUs to form and execute integrated strategies that are responsive to both corporate directives and local imperatives. Our finding underscores the dual role of dynamic capabilities in enhancing strategic responsiveness and achieving alignment within complex organizational structures. In an increasingly volatile, uncertain, complex, and ambiguous environment heightened by recent global disruptions, our study underscores the critical role of dynamic capabilities in enhancing SBU agility.