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

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  • Criscuolo, Paola
  • Narula, Rajneesh

    (MERIT)

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 cross-fertilization of technologies and access to locationspecific 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

  • Criscuolo, Paola & Narula, Rajneesh, 2005. "Using multi-hub structures for international R&D: Organizational inertia and the challenges of implementation," Research Memorandum 025, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:umamer:2005025
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    More about this item

    Keywords

    economics of technology ;

    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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