Coordination in global R&D organizations: An examination of the role of subsidiary mandate and modular product architectures in dispersed R&D organizations |
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Authors: | Marco Zeschky Michael Daiber Bastian Widenmayer Oliver Gassmann |
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Institution: | 1. University of St. Gallen, Institute of Technology Management, Dufourstrasse 40a, 9000 St. Gallen, Switzerland;2. ABB Turbo Systems Ltd, Bruggerstrasse 71a, 5400 Baden, Switzerland;3. Bystronic Laser AG, Industriestrasse 21, 3362 Niederönz, Switzerland |
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Abstract: | International research and development (R&D) operations require a significant amount of coordination between the headquarters and the subsidiaries in order to integrate the dispersed activities in one final product. This article explores what mechanisms multinational companies (MNCs) use to coordinate their overseas R&D units. Based on a multiple case study involving nine MNCs with overseas R&D subsidiaries of varying mandates, we find that R&D sites with high technology and/or market orientation tend to be coordinated by informal mechanisms while sites with little technology and/or market orientation tend to be coordinated by formal mechanisms. Furthermore, it appears that this relationship is strongly affected by the product’s architecture: while rather complex R&D activities are conducted at the systems level and at sites with high technology orientation, less complex R&D activities are conducted at the component level at sites with low technology and market orientation. Finally, the findings suggest that modular product architectures have a coordinating effect in global R&D activities which have the power to lower firms’ overall coordination effort. The findings bear important implications for the effective coordination of MNCs’ international R&D subsidiaries. |
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Keywords: | Formal coordination Informal coordination Hybrid coordination Subsidiary mandate Product architecture Product modularity Global R& D MNCs |
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