Building R&amp;D capability in subsidiaries – conceptualization of a process perspective

Lagerström, Katarina; Schweizer, Roger; Jakobsson, Johan

doi:10.1108/mbr-01-2018-0007

Cited by 12 publications

(16 citation statements)

References 68 publications

(160 reference statements)

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“…When subsidiaries operate in the host country’s market, they often need to improve their performance through cooperation. According to Lagerström et al (2019), a subsidiary identifies an opportunity in the host country that triggers the establishment of specific capabilities. The second stage is the gathering of support and resources from the host market and from MNEs internally.…”

Section: Discussionmentioning

confidence: 99%

“…The literature on foreign direct investment in MNEs’ activities has followed a rather static approach and has not emphasized the development and management of research and development (R&D) capabilities within a subsidiary. However, a phased process can be distinguished to describe the evolution of the leveraging of capabilities in subsidiaries (Lagerström et al , 2019). These capabilities induce subsidiaries to create better performance and they also increase the possibility of cooperation between subsidiaries.…”

Section: Introductionmentioning

confidence: 99%

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“Of course, cooperation first”: the effect of subsidiary capability and perception gaps for subsidiary development

Chen

Tsou

2020

MBR

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Purpose This study aims to discuss not only the relationship between performance and cooperation but also discusses whether a subsidiary should prioritize performance above cooperation or whether a subsidiary should prioritize cooperation above performance. In addition, because the headquarters-subsidiary relationship influences the subsidiaries, the perception gaps (PGs) between headquarters and subsidiaries are taken as moderators to explore when there are perception differences between headquarters and subsidiaries and the effect on the relationship between subsidiaries’ cooperation (SCO) and performance (SP). Design/methodology/approach This study obtained the data through a survey of 170 subsidiaries in China; chief executive officer or senior managers were selected as the data collection sources. AMOS analysis was used to address sophisticated data analysis issues. Findings The empirical evidence indicates that subsidiary capabilities have direct impacts on SCO and SP. In addition, SCO and performance have mediating effects. More specifically, SCO has a full mediating effect and SP has a partial mediating effect. For the moderating effects, the PG weakens the effect of SCO on SP. Originality/value This study contributes to the literature on subsidiary capabilities by offering a headquarters-subsidiary relationship model. As both the conceptual and empirical research studies on this topic are still underdeveloped, the study provides fresh insights into collaborative management and offers significant theoretical and managerial implications. Specifically, this study focuses on the impacts that subsidiary capabilities and PG have on cooperation and performance.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“Of course, cooperation first”: the effect of subsidiary capability and perception gaps for subsidiary development

Chen

Tsou

2020

MBR

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“…Since Ronstadt's (1977, 1978) influential study, numerous researchers have suggested typologies for MNCs' foreign R&D units (Cantwell and Mudambi, 2005; Cantwell and Piscitello, 2000; Håkanson and Nobel, 1993; Jha et al , 2018; Kuemmerle, 1999b; Lagerström et al , 2019; Medcof, 1997; Pearce, 1989; Qi et al , 2014; Vrontis and Christofi, 2019). Though they have used differing terminologies, several studies have distinguished between two main types of local R&D units: (1) home base competence exploiting units and (2) home base augmenting (competence creating) units (e.g., Cantwell and Mudambi, 2005; Kuemmerle, 1999b).…”

Section: Internationalization Of Mncs' Randd Activities: An Evolutionary Perspectivementioning

confidence: 99%

“…Partly inspired by Ronstadt's (1977, 1978) seminal work, the above-mentioned categorizations' underlying assumption is that a foreign R&D subunit's role changes, and most likely improves, over time as the capabilities and technological resources of the unit evolve (Lagerström et al , 2019). Furthermore, the literature on MNCs' internationalization of R&D activities has also incorporated insights from the subsidiary evolution literature (Birkinshaw, 1997; Birkinshaw and Hood, 1998; Dörrenbächer and Gammelgaard, 2006) by relating subsidiaries' R&D mandate evolution to the drivers of subsidiary evolution – namely, headquarters (HQ) assignment, local environment adaptation and subsidiary choice (Birkinshaw and Hood, 1998; Paterson and Brock, 2002).…”

Section: Introductionmentioning

confidence: 99%

The evolution of MNCs' R&D foreign units: the case of Swedish MNCs in India

Schweizer

Lagerström

Jakobsson

2020

CCSM

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PurposeThe article aims to explain how the drivers of subsidiary evolution influence a multinational company's (MNC) research and development (R&D) subsidiary's evolution over time.Design/methodology/approachThe article draws on insights from a longitudinal comparative case study of three Swedish MNCs' Indian R&D units.FindingsThe study shows that the evolution of R&D units is a triangular showdown among headquarter assignments, local market constraints, and opportunities, and that subsidiary choice is an important driver of both mandated extension and stagnation. We summarize our findings in various propositions that emphasize different drivers over time and that highlight the strong impact of a subsidiary's understanding of the corporate immune system on the evolution of that subsidiary's R&D mandate.Research limitations/implicationsDrawing on the common limitations of a case study approach, further research is needed to test the suggested propositions with larger samples, ideally with subsidiaries in other emerging and developed markets.Practical implicationsThe study illustrates the risks involved for subsidiary managers when pushing an R&D mandate-related initiative too far and provoking the corporate immune system. For headquarters management, the study highlights the importance of understanding that the development of R&D competence and capability at a subsidiary cannot be guided solely by headquarter assignments and local market characteristics; rather, the subsidiary's initiatives also need to be considered.Originality/valueThe study contributes to the literature on R&D internationalization by showing how the drivers of subsidiary evolution influence a subsidiary's R&D mandates over time and that subsidiary choice is an important driver of both mandated extension and stagnation.

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“…MNC and EMNC literature agrees on the importance of external and internal knowledge linkages in firm technological competence creation (Andersson and Forsgren, 2000;Asmussen et al, 2009;Buckley and Munjal, 2017;Cantwell and Mudambi, 2005;Frost et al, 2002;Gupta and Govindarajan, 1991;Kotabe and Kothari, 2016;Lagerström et al, 2019;Luo and Tung, 2007;Mathews, 2006;Monteiro et al, 2008;Mudambi et al, 2014;Rugman and Verbeke, 2001;Tsai, 2001;Verbeke and Kano, 2015;Zhang et al, 2019). It provides a platform, through which we can evaluate EMNCs' external and internal knowledge flow patterns by benchmarking their counterparts from mature industrialized countries (MMNCs).…”

Section: Introductionmentioning

confidence: 99%

EMNC technological knowledge flow patterns: an overview of the US patents granted

Feng¹

2019

MBR

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Purpose With considerable attention paid to the motives and process of idiosyncratic internationalization trajectory of multinationals from emerging economies (EMNCs), little is known on whether, and if so how, new competitive advantages of EMNCs are created and accumulated over time. MNC and EMNC literature agrees on the importance of external and internal knowledge linkages in technological competence creation. By building upon this framework, this paper aims to evaluate EMNCs’ external and internal knowledge flow patterns by benchmarking their counterparts from mature industrialized countries (MMNCs). Design/methodology/approach This study analyzes US patents granted between 2000 and 2014 to leading innovation-oriented EMNCs from China and India, and their matched MMNCs. Being the first to use the US patent and citation data in studying leading innovation-oriented EMNCs, the authors use a descriptive statistical method. Findings The findings offer empirical insights of the scale, scope and quality of EMNC technological competence creation. Moreover, in contrast to existing EMNC literature, it is found that EMNC parents have been the most important center of EMNC technological knowledge generation. The matched group comparisons of external and internal knowledge flows further reveal detailed similarities and differences of competence creation between EMNCs and MMNCs, and among EMNCs. Originality/value This study represents one of the first attempts to investigate the post-internationalization technological competence creation of EMNCs by using a novel data source. This study sets the foundation to deepen the understanding of EMNC technological competence creation. The findings suggest interesting propositions and offer important implications for future researches.

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Building R&D capability in subsidiaries – conceptualization of a process perspective

Cited by 12 publications

References 68 publications

“Of course, cooperation first”: the effect of subsidiary capability and perception gaps for subsidiary development

“Of course, cooperation first”: the effect of subsidiary capability and perception gaps for subsidiary development

The evolution of MNCs' R&D foreign units: the case of Swedish MNCs in India

EMNC technological knowledge flow patterns: an overview of the US patents granted

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