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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

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Bibliographic Info

Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 05-13.

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Date of creation: 2005
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Handle: RePEc:aal:abbswp:05-13

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Keywords: Multinational enterprises; R&D; Geographical distance;

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  1. Hannan, Michael T. & Polos, Laszlo & Carroll, Glenn R., 2002. "Structural Inertia and Organizational Change Revisited III: The Evolution of Organizational Inertia," Research Papers 1734, Stanford University, Graduate School of Business.
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  4. Gassmann, Oliver & von Zedtwitz, Maximilian, 1999. "New concepts and trends in international R&D organization," Research Policy, Elsevier, vol. 28(2-3), pages 231-250, March.
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  6. Chiesa, Vittorio, 1996. "Separating research from development: Evidence from the pharmaceutical industry," European Management Journal, Elsevier, vol. 14(6), pages 638-647, December.
  7. Arora, Ashish & Gambardella, Alfonso, 1994. "The changing technology of technological change: general and abstract knowledge and the division of innovative labour," Research Policy, Elsevier, vol. 23(5), pages 523-532, September.
  8. Reger, Guido, 2004. "Coordinating globally dispersed research centres of excellence--the case of Philips Electronics," Journal of International Management, Elsevier, vol. 10(1), pages 51-76.
  9. Weijian Shan & Jaeyong Song, 1997. "Foreign Direct Investment and the Sourcing of Technological Advantage: Evidence from the Biotechnology Industry," Journal of International Business Studies, Palgrave Macmillan, vol. 28(2), pages 267-284, June.
  10. Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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Cited by:
  1. Suma Athreye & Martha Prevezer, 2008. "R&D offshoring and the domestic science base in India and China," Working Papers 26, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  2. Vandana Ujjual & Parimal Patel & Rishikesha T. Krishnan & Srivardhini Keshavamurthy & RueyLin Hsiao & Frank Yan Zhao, 2011. "Management and Organisation of Knowledge Creation in Emerging Markets: a Perspective from subsidiaries of EU MNEs," SPRU Working Paper Series 192, SPRU - Science and Technology Policy Research, University of Sussex.
  3. Johansson, Börje & Lööf, Hans, 2006. "Innovation Activities Explained By Firm Attributes And Location," Working Paper Series in Economics and Institutions of Innovation 63, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  4. Narula, Rajneesh & Michel, Julie, 2009. "Reverse knowledge transfer and its implications for European policy," MERIT Working Papers 035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  5. Fragiskos Archontakis & Nikos Varsakelis, 2011. "US patents abroad: Does gravity matter?," The Journal of Technology Transfer, Springer, vol. 36(4), pages 404-416, August.
  6. TODO Yasuyuki & SHIMIZUTANI Satoshi, 2007. "Overseas R&D Activities and Home Productivity Growth: Evidence from Japanese Firm-Level Data," Discussion papers 07008, Research Institute of Economy, Trade and Industry (RIETI).
  7. Narula, Rajneesh, 2013. "Exploring the paradox of competence-creating subsidiaries: balancing bandwidth and dispersion in MNEs," MERIT Working Papers 046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  8. Dorra Yahiaoui & Hela Chebbi, 2008. "The limits of top-down transfers within a multinational corporation: the need for knowledge hybridization," Journal of Innovation Economics, De Boeck Université, vol. 0(2), pages 85-104.

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