Integrating research and development in the subsidiaries of transnational companies: cultural and other issues

Globalization and subcontracting in high-tech areas of electronic engineering and software development and the implications of these developments are gaining increasing attention from the media. The authors investigate some of the implications for transnational companies moving along the spectrum from the traditional R&D management role to an approach where R&D activities are integrated so that the entire network behaves as a coordinated whole (Kuemmerle, 1997). A case is presented for considering the high sensitivity of R&D creativity to links with the local environment. The authors indicate a number of factors which will influence outcomes in the move from the traditional structure (where corporate headquarters and associated R&D facilities are placed in close geographical proximity) to a more responsive, more flexible and faster responding network structure