Functional versus capability-oriented innovation management in multinational firms

Summary form only given. This paper argues that the function-based classification of laboratory sites into research and development sites is less useful for laboratory site management than an innovative classification of laboratory sites into home-base-augmenting and home-base-exploiting sites. The innovative classification is developed in the paper. Based on a large survey of 156 laboratory sites abroad established by 32 multinational firms in over 15 countries, the authors find that there are two motives for the establishment of R&D activities abroad. Firms invest in laboratory activities abroad either in order to acquire new knowledge or in order to exploit knowledge that is already available within the firm. They call the former type of laboratory “home-base-augmenting” and the latter type “home-base-exploiting”