Organizing Global R&D: Challenges and Dilemmas

After more than a decade of widespread global R&D expansion, top managers in multinational companies take decentralized competencies for granted, expecting their international research and product development functions to deliver results. However, based on more than 150 in-depth interviews and case research carried out with 18 multinational companies from three industry groups between 1996 and 2000, we have identified six fundamental dilemmas that make it difficult even for companies with carefully managed distributed R&D networks to exploit the full potential of global innovation. In addition to a root-problem analysis, we surveyed these companies about the drivers of R&D globalization, and how these drivers would affect their organizations over the next 10 years. Although some of the trends that emerged are industry specific with regard to technology development, we describe five common traits that are expected to shape R&D organization in the mid-term future.