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

Abstract

PurposeThe purpose of this paper is to contribute to the literature discussing the internationalization of research and development (R&D) among multinational companies by proposing a process description to capture the development of local R&D capabilities in subsidiaries.Design/methodology/approachThe authors build the conceptualization not only on the prevailing literature on resource management, subsidiary evolution and subsidiary initiatives, but also on empirical observations.FindingsA process in four phases is distinguished to describe the evolution of R&D capabilities in subsidiaries: the identification of an opportunity in the host country that triggers the establishment of local R&D capabilities; the gathering of support – from the host country and from MNC internally – and resources; the bundling of the resources to build capabilities; and finally the leveraging of the capabilities.Research limitations/implicationsBy offering a conceptualization of the process through which subsidiaries build R&D capabilities, the authors contribute to the literature on R&D internationalization that hitherto has neglected the central role played by subsidiaries and the fact that a subsidiary needs to develop and manage resources and capabilities to change its R&D related role and/or mandate within the MNC.Originality/valueBy providing a process perspective on MNCs internationalization of R&D focussing on the development and management of R&D capabilities at subsidiaries, the paper adds a more dynamic dimension to the previously rather static view on R&D internationalization.