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Using Multi-hub Structures for international R&D Organizational Inertia and the Challenges of Implementation

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  • Paola Criscuolo
  • Rajneesh Narula

Abstract

Over the last decade or so, multinational enterprises (MNEs) have shifted from centralised hub structures to multi-hub structures. While these new structures provide greater potential for crossfertilization of technologies and access to location-specific competences, promoting effective knowledge transfer within an MNE – especially in their R&D activities - presents significant managerial challenges. Using evidence collected on the R&D activities of MNEs in the pharmaceutical sector, this paper analyses the challenges associated with complexities of promoting and integrating knowledge flows in the face of inter-unit geographical, organizational and technological distance. MNEs are faced with organizational inertia that hinders efficient lateral communication and inter-unit knowledge transfer, and the evidence suggests that while socialization mechanisms help overcoming some of these bottlenecks, there remain a number of obstacles in optimising knowledge flows in physically and technologically dispersed R&D facilities

Suggested Citation

  • Paola Criscuolo & Rajneesh Narula, 2005. "Using Multi-hub Structures for international R&D Organizational Inertia and the Challenges of Implementation," DRUID Working Papers 05-13, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:05-13
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    References listed on IDEAS

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    More about this item

    Keywords

    Multinational enterprises; R&D; Geographical distance;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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