Management Functions
Chapter 5 1. What is the theoretical background of international R&D management?
Research has suggested that large MNCs undertake between 5 percent and 25 percent of their R&D outside their home country. International R&D units may have originally been established to undertake adaptation work or because of host country demands, but increasingly the evidence suggests that they are becoming active contributors to the MNC’s global innovation effort, and even members of the core development group in ‘global innovation projects’.
The MNC management literature has shown, first, that foreign subsidiaries develop over time and take on increasingly specialized roles. Specialized roles can best be managed, it is argued, by tailoring control and coordination mechanisms to the specific situation of each subsidiary. The second key insight from the MNC management literature is that traditional assumptions of head office super-ordination and hierarchical control break down as subsidiaries take on these increasingly specialized roles. Alternative models, such as the Transnational and the Heterarchy, are needed to understand the emergent organizational forms. There is considerable evidence of a differentiation of roles across international R&D units, and some discussion of the need to manage different units in different ways. The implication is that it should be possible to narrow the issue identified at the outset into a more specific question, namely ‘How do control modes and communication systems vary across international R&D unit roles?’ Of course, certain systems may be uniformly used across the whole sample, but if we accept that distinct types can be identified, the appropriate starting point from theory is an expectation that modes of control and communication also vary.
2. Which studies have developed comprehensive typologies of foreign R&D units?
The preference has been to type R&D units primarily according to the nature of
Research has suggested that large MNCs undertake between 5 percent and 25 percent of their R&D outside their home country. International R&D units may have originally been established to undertake adaptation work or because of host country demands, but increasingly the evidence suggests that they are becoming active contributors to the MNC’s global innovation effort, and even members of the core development group in ‘global innovation projects’.
The MNC management literature has shown, first, that foreign subsidiaries develop over time and take on increasingly specialized roles. Specialized roles can best be managed, it is argued, by tailoring control and coordination mechanisms to the specific situation of each subsidiary. The second key insight from the MNC management literature is that traditional assumptions of head office super-ordination and hierarchical control break down as subsidiaries take on these increasingly specialized roles. Alternative models, such as the Transnational and the Heterarchy, are needed to understand the emergent organizational forms. There is considerable evidence of a differentiation of roles across international R&D units, and some discussion of the need to manage different units in different ways. The implication is that it should be possible to narrow the issue identified at the outset into a more specific question, namely ‘How do control modes and communication systems vary across international R&D unit roles?’ Of course, certain systems may be uniformly used across the whole sample, but if we accept that distinct types can be identified, the appropriate starting point from theory is an expectation that modes of control and communication also vary.
2. Which studies have developed comprehensive typologies of foreign R&D units?
The preference has been to type R&D units primarily according to the nature of