Enhancing Synergistic Innovative Capability in Multinational Corporations: An Empirical Investigation

Abstract

A substantial amount of research has focused on determining and classifying the structures of the global research and development (R&D) organization of multinational corporations (MNCs). However, little research has been undertaken to show how the various R&D structures adopted by MNCs affect their abilities to generate and deploy innovations globally. This study initiates analysis and discussion of this latter dimension, providing empirical evidence of the relationship between the coordination structures and innovative capabilities. Specifically, this study investigates how intrafirm collaborative relationships among globally dispersed R&D units of MNCs enhance the synergistic innovative capabilities of the MNC group. The nature of the collaborative relationships among globally dispersed R&D units is evaluated in the context of four well-established structural constructs: autonomy, formalization, socialization, and communication. Synergistic innovative capability is defined as a higher-order ability to accumulate and deploy new knowledge or to recombine existing knowledge to create new innovations more effectively and efficiently due to collaboration among globally dispersed R&D units. It is measured using 10 items commonly used in innovation management research to measure the innovativeness of firms. The analysis is based on survey data collected from 79 R&D units belonging to North American, Japanese, and European MNCs in the telecommunications, biotechnology, pharmaceutical, chemical, and automotive industries. In addition to the survey data, seven highly experienced R&D executives who have worked for several companies were interviewed by telephone in order to obtain a richer perspective of issues and a better context from which to interpret the statistical results. Respondents included personnel from the levels of director, managing director, and vice president who were directly responsible for participating R&D units. The data were analyzed using partial least squares, a structural equation modeling technique that works well with small datasets. The results indicate that synergistic innovative capability has four distinct dimensions uniquely related to the structural variables defining the nature of collaborative relationships among globally dispersed R&D units. The four dimensions of synergistic innovative capabilities are labeled strategic R&D synergy, managerial and operational synergy, knowledge management synergy, and innovative proficiency synergy. The research and managerial implications of the findings are discussed in this article.

Bibliometric analysis of international researches on innovation metrics

“…Product quality (Prajogo and Sohal, 2006); coordination structure (Persaud, 2005;Alegre et al, 2009;Okon-Horodynska et al, 2011); capability coordination (Persaud, 2005). Performance (product and process innovation) (Prajogo and Sohal, 2006); behaviour and performance (Tsai et al, 2005).…”

Research Progress on Synergic Innovation Theory - A Literature Review

“…Connotation of synergic innovation: Persaud [13] pointed out that synergic innovation was the collaborative progress based on research and development (R&D) cooperation between multi participants to elevate enterprise's innovation abilities. Synergic innovation ability included four dimensions which were R&D strategic synergy, operational management synergy, knowledge management synergy and innovation skill synergy.…”

The quest for process operations variability reduction in manufacturing firms in South Africa

“…Hayes and Wheelwright (1984) and Clark (1996) argue that higher performance is eventually established depending on the people in an organisation (Lin & Wu, 2013;Kumlu-Ömer, 2014). The correct management principles, organisational systems and structures, and procedures are important (Persaud, 2005). However, the capabilities that generate competitive advantage derive from people: their skills, discipline, motivation, ability to resolve problems and their capacity for learning.…”