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Using multi-hub structures for international R&D: Organisational inertia and the challenges of implementation

Author

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  • Paola Criscuolo

    (Tanaka Business School, Imperial College)

  • Rajneesh Narula

    (University of Reading Business School)

Abstract

Abstract Abstract and Key Results MNEs are moving away from a ‘centralised hub’ to a ‘multi-hub’ network of R&D units. Using evidence from European pharmaceutical MNEs, this study analyses the challenges associated with promoting and integrating knowledge flows in multi-hub R&D organisational structures. While these new structures provide greater potential for cross-fertilization of technologies and access to location-specific competences, firms also need to overcome greater levels of inter-unit geographical, organisational and technological distance. Firms also suffer from organisational inertia, which further hinders lateral communication and inter-unit knowledge transfer. There are important variations in the way in which integrated network structures have been implemented, but in general, these new structures have increased the need for coordination mechanisms, but ironically most companies have reduced or eliminated this ‘traditional’ headquarters function. While socialization mechanisms help to overcome 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, 2007. "Using multi-hub structures for international R&D: Organisational inertia and the challenges of implementation," Management International Review, Springer, vol. 47(5), pages 639-660, September.
  • Handle: RePEc:spr:manint:v:47:y:2007:i:5:d:10.1007_s11575-007-0038-9
    DOI: 10.1007/s11575-007-0038-9
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    Cited by:

    1. Borje Johansson & Hans Loof, 2008. "Innovation Activities Explained By Firm Attributes And Location," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 533-552.
    2. Manolopoulos, Dimitris & Söderquist, Klas Eric & Pearce, Robert, 2011. "Coordinating decentralized research and development laboratories: A survey analysis," Journal of International Management, Elsevier, vol. 17(2), pages 114-129, June.
    3. 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).
    4. 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.
    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. 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.
    7. 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).
    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.
    9. Rabbiosi, Larissa, 2011. "Subsidiary roles and reverse knowledge transfer: An investigation of the effects of coordination mechanisms," Journal of International Management, Elsevier, vol. 17(2), pages 97-113, June.
    10. Narula R., 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).
    11. Keupp, Marcus Matthias & Gassmann, Oliver, 2009. "Why do transnational approaches to international innovation fail?," Research in International Business and Finance, Elsevier, vol. 23(2), pages 206-222, June.

    More about this item

    Keywords

    R&D; Multinational Enterprise; Organizational Design;

    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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