Managing Global Innovation
Afuah (2003)
Market information needs
Strategies for
Worldwide Innovation
Multidomestic
Transnational
Unilever
Caterpillar
International
Global
P&G
Intel
High
Low
Low
High
Technological information needs
Strategies for
Worldwide Innovation
Emphasis
Description
Local responsiveness Allows foreign subsidiaries to operate nearly
Multinational
autonomously; the firm can quickly sense and
(multidomestic) and differentiation
respond to local needs
Global
Global efficiency
Global activities are closely managed through central
control from the headquarter. The firm capitalizes on
economies from standard product design, global-scale
manufacturing, and centralized control of worldwide
operations.
International
Rapid deployment
worldwide
Foreign subsidiaries operate autonomously but are
critically dependent on the headquarter for new
processes, new products, and know-how.
Transnational
Global efficiency,
Integrate global activities through close
local responsiveness, interdependence and mutual cooperation between
high innovativeness
headquarter and foreign subsidiaries.
Factors Driving R&D
Internationalization
Boutellier et al. (2000)
Factors Affecting R&D
Internationalization
Five Organizational Concepts of
international R&D Organization
Dispersion of
internal
competencies
& knowledge
bases
Low
c) Polycentric
Decentralized
R&D
e) Integrated
R&D
Network
d) R&D
Hub
Model
a) Ethnocentric
Centralized
R&D
Competition
b) Geocentric
Centralized
R&D
Degree of cooperation between R&D sites
Cooperation
Different International R&D
Organizations
Configuration
Organizational structure
Behavioral orientation
a. Ethnocentric
centralized R&D
Centralized R&D
National inward
orientation
b. Geocentric centralized
R&D
Centralized R&D
International external
orientation
c. Polycentric
decentralized R&D
Highly dispersed R&D,
weak center
Competition among
independent R&D units
d. R&D hub model
Dispersed R&D, strong
center
Supportive role of
foreign R&D units
e. Integrated R&D
network
Highly dispersed R&D,
several competence
centers
Synergetic integration of
international R&D units
Different International R&D
Organizations
Configuration
Ethnocentric
centralized
R&D
Pros
•
•
•
•
Geocentric
centralized
R&D
•
•
•
Polycentric
decentralized
R&D
•
•
•
Protected core technologies
High efficiency
Low R&D cost (scale &
specialization effects)
Short cycle times
High sensitivity for local market
& technological trends
Efficiency due to centralization
Cost - efficient R&D
internationalization
Strong sensitivity for local
markets
Adaptation to local environment
Usage of local resources
Cons
•
•
•
•
•
•
•
•
•
Low sensitivity for local markets
Danger of missing external
technology
Not-Invented-Here syndromes
Tendency toward rigid
organization
Danger to neglect systematic
internationalization
Local content restrictions & local
market specifications
insufficiently considered
Inefficiency & parallel
development
No technological focus
Problems with critical mass
Different International R&D
Organizations
Configuration
R&D hub
model
Pros
•
•
•
•
Integrated
R&D network
•
•
•
•
High efficiency due to coordination
of R&D
Avoidance of redundant R&D
Exploitation of all available
strengths
Realization of synergies (quick
recognition of local demand & the
sustaining integration of global R&D
input)
Coupling of specialization & synergy
effects
Global before local efficiency
Organizational learning across many
locations
Exploitation & refining of local
strengths
Cons
•
•
•
•
High costs of coordination
and time
Danger of oppressing
creativity & flexibility
through central directives
High coordination costs
Complexity of institutional
rules and decision
processes
Trends in Organizing International
R&D
High
Dispersion of
internal
competencies
& knowledge
bases
Low
c) Polycentric
Decentralized
R&D
e) Integrated
R&D
Network
4
3
d) R&D
Hub
Model
2
a) Ethnocentric
Centralized
R&D
Competition
2
1
b) Geocentric
Centralized
R&D
Degree of cooperation between R&D sites
Cooperation
THE END