Challenges in Strategy and Management of Multinational R&D Centers in Emerging Markets: Perspective from a German Headquarters in the Chemical Sector

Abstract

The expansion of multinational company (MNCs) operations abroad represents an observed trend for decades. The news is that in recent years the research and development (RD) activities also have become internationalized, including more intensified focus on emerging countries. Among the implications is the challenge for the MNCs to implement effective organizational structures with the intention to facilitate the articulated coordination of strategies and RD management between the headquarters and their global RD centers. The purpose of this study is to evaluate the strategy from the perspective of the corporate headquarters of a multinational company and the challenges in the formulation of the global RD strategy and management of each center located inemerging and developed markets. For this reason, we developed an empirical research based on qualitative multiple case exploratory study in a German chemical MNC company in its five global RD centers located in Germany (headquarters), USA, Brazil, China and India. The results suggested the needs to creation of organizational management capabilities for constant re-evaluation of its RD strategy in order to capture the demands and the temporary windows of opportunities from these markets. These capabilities lead to reducing the strong observed centralization level and assigning more responsibilities to the subsidiaries with global RD center status.