Exploitation versus Exploration in Multinational Firms: Implications for theFuture of International Business

Given the economic weight of multinational corporations and their privilegedaccess to resources, many different scenarios can be built about the future ofinternational business and about the future impact of international business oneconomic, technological, and social development. In this paper, we argue thatmultinationals do not form a uniform organisational population, and we provideempirical evidence of the existence of traditional, rigid entities seekingbenefits from low-risk exploitative strategies on one hand, and of flexiblemultinationals seeking higher performance levels by balancing the trade-offsbetween exploration and exploitation on the other hand. As these two sub-populations compete with one another for resources, we use a population ecologyperspective to study likely ecological scenarios for the future. Our conclusionis that traditional multinationals tend to prevail over flexible multinationals,and the conditions required for a future society to allow a genuine growth offlexible multinationals are unlikely. This implies that multinationals remainprimarily exploitative, and that as such, they will only be associated withmarginal economic, technological, and social developments in the future. Otherorganisational forms, such as entrepreneurial small business and communities ofpractices are shown to be much more likely vehicles through which society canprogress and innovate.