Developing dynamic capabilities in culturally distant service multi-units

Purpose – The purpose of this paper is to provide a more robust understanding of the development of dynamic capabilities (DCs) in service multi-units with different cultural distances (CD) (high (HCD) and low (LCD)) through the routines of embedded social capital (structural and relational) and knowledge archetype (exploitative and exploratory) learning. Design/methodology/approach – The authors used survey questionnaires and structural equation modeling to discriminate the relationships among variables. Findings – The authors found that structurally embedded social capital has a positive influence on exploratory knowledge learning in HCD service multi-units; relationally embedded social capital has a positive influence on knowledge archetype (exploitative vs exploratory) learning in both HCD and LCD service multi-units; and knowledge archetype learning has a positive influence on the development of DCs in both HCD and LCD service multi-units. Research limitations/implications – The results identify the central role of social capital (structurally and relationally embedded) in enabling knowledge archetype learning and the development of DCs in service multi-units. In addition, this study provides a description and comparison of how structurally and relationally embedded social capital are key antecedents in knowledge archetype learning and the development of DCs in the context of service multi-units with different HCD and LCD. Originality/value – The results provide a practical trajectory for the development of DCs in multi-units of multinational corporations in the service industry with different HCD and LCD.