Four structures of research, development and innovation utilized by multinational companies

mapa mundi brasilMore and more companies invest in technology to develop new products. In many cases, multinational companies invest on research in foreign countries which demonstrates that the internationalization, or globalization on a more popular term, became a part of the research and business development departments. Brazilian multinational organizations that develop new products abroad, such as WEG and Natura for example, have alternatives to structure their research and development departments.

These companies need to assess the level of independence that should be given to laboratories abroad and identify their own capacity to integrate research units that are in other countries to establish the best setup of organizational structure that should be employed. An interesting study published by Vittorio Chiesa, who studied multinational technology-intensive sector from industrialized countries, shows the most common settings that multinationals use to develop research and development on a global scale. Chiesa identified four organizational structures for R & D in multinationals, which are:

a. Center of Excellence: in this model, the global mandate of developing a technology / product / process is assigned to only one laboratory. The objective is to increase efficiency of R & D on a global level by concentrating all resources needed in one place.

b. Supported Specialization: in this model, like in the previous one, the resources are concentrated in one location and a ​​global R & D center is created.  In this case, small and globally scattered units provide technical and marketing information for the R & D center. This type of organization seeks to obtain the benefits of specialization and concentration (efficiency and scale economies) without losing innovation opportunities that can arise in any market.

c.  Network Structure: This type of structure consists of a network of laboratories scattered over different countries where the units operate in the same products / technologies / processes. Usually there is a supervisory unit that deals with the mechanisms for coordinating efforts to avoid overlap of work.

d. Specialized Contributors: In this structure, each unit is specialized in one or a few subjects and contributes to the development of some of the work of R & D. This structure attempts to combine the benefits of specialization with the potential of innovation  of the network structure.

Chart 1 presents the four global organizational structures of research and development for multinational companies.

Imagem1

Center of Excelence              Supported Specialization

Imagem2

Network Structure                Specialized Contributors

Chart 1 – Types of organizational structure of global R & D proposed by Chiesa (2000)

Imagem3

research-integrator unit
network supervisor unit
information providing unit
admin unit
research renter

Among the results of their study, Chiesa noticed that the transfer of knowledge and technology occurs more easily in structures based on specialization, such as Centers of Excellence and Supported Specialization. Another finding is that the Chiesa structures based on integration, Network Structure and Specialised Contributors, require a lot of coordination effort, whose costs are partially offset by the lower cost of transfer.

One of the limitations found in the structures of R & D described by the author, is that it has not evaluated if the organizational culture of multinational can facilitate or undermine the decentralization of R &D.  In other words, some companies have organizational cultures that facilitate the decentralization of its activities, regardless of whether they are R & D activities or not.

Referênces: 

CHIESA, VGlobal R&D Project Management and Organization: A Taxonomy. Journal of Production Innovation Management.v. 17, n. 5, p341–359, 2000.

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