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

Abstract

Purpose

The 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/approach

The authors build the conceptualization not only on the prevailing literature on resource management, subsidiary evolution and subsidiary initiatives, but also on empirical observations.

Findings

A 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/implications

By 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/value

By 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.

Citation

Lagerström, K., Schweizer, R. and Jakobsson, J. (2019), "Building R&D capability in subsidiaries – conceptualization of a process perspective", Multinational Business Review, Vol. 27 No. 1, pp. 35-53. https://doi.org/10.1108/MBR-01-2018-0007