The evolution of MNCs' R&D foreign units: the case of Swedish MNCs in India
Cross Cultural & Strategic Management
ISSN: 2059-5794
Article publication date: 5 May 2020
Issue publication date: 3 September 2020
Abstract
Purpose
The article aims to explain how the drivers of subsidiary evolution influence a multinational company's (MNC) research and development (R&D) subsidiary's evolution over time.
Design/methodology/approach
The article draws on insights from a longitudinal comparative case study of three Swedish MNCs' Indian R&D units.
Findings
The study shows that the evolution of R&D units is a triangular showdown among headquarter assignments, local market constraints, and opportunities, and that subsidiary choice is an important driver of both mandated extension and stagnation. We summarize our findings in various propositions that emphasize different drivers over time and that highlight the strong impact of a subsidiary's understanding of the corporate immune system on the evolution of that subsidiary's R&D mandate.
Research limitations/implications
Drawing on the common limitations of a case study approach, further research is needed to test the suggested propositions with larger samples, ideally with subsidiaries in other emerging and developed markets.
Practical implications
The study illustrates the risks involved for subsidiary managers when pushing an R&D mandate-related initiative too far and provoking the corporate immune system. For headquarters management, the study highlights the importance of understanding that the development of R&D competence and capability at a subsidiary cannot be guided solely by headquarter assignments and local market characteristics; rather, the subsidiary's initiatives also need to be considered.
Originality/value
The study contributes to the literature on R&D internationalization by showing how the drivers of subsidiary evolution influence a subsidiary's R&D mandates over time and that subsidiary choice is an important driver of both mandated extension and stagnation.
Keywords
Acknowledgements
The authors are grateful to the Torsten Söderberg Foundation (ET2/14) for funding this project.
Citation
Schweizer, R., Lagerström, K. and Jakobsson, J. (2020), "The evolution of MNCs' R&D foreign units: the case of Swedish MNCs in India", Cross Cultural & Strategic Management, Vol. 27 No. 3, pp. 365-388. https://doi.org/10.1108/CCSM-06-2019-0116
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited