Success Factors of Managing Japanese R&D Centers in China and the United States

Purpose - The purpose of this paper is to find out success factors of Japanese companies in managing R&D centers in China and in the United States and the differences between the two countries. Design/methodology/approach - In parallel with interviews with managers of R&D centers of Japanese companies in China and managers in charge of overseas R&D in Japan, the research is mainly based on a questionnaire survey conducted in October 2009. Companies surveyed are Japanese companies that are listed on "Overseas Operating Companies 2008" issued by Toyo Keizai and that possess overseas production subsidiaries or R&D subsidiaries, their shares of which exceed 50 percent. The companies that possess R&D centers in China and those that possess R&D centers in the United States are divided into three categories according to the satisfaction levels in the light of the purpose of establishment. Then, R&D management practices are analyzed by these categories. Then, the differences of the success factors of Japanese companies in managing R&D centers between the two countries are examined. Findings - The marked differences of the success factors in China and those in the United States are found. For example, in China, one of major positioning reasons is "for Japanese market" for satisfied companies; in the United States, one of major positioning reasons is "for global market" for satisfied companies. On one hand, in China, localization is low for unsatisfied companies; on the other hand, in the United States, localization is low for satisfied companies. Originality/value - This paper finds out some successful management practices to make R&D centers of Japanese companies in China and in the United States satisfactory in the light of the purpose of their establishment. The analysis is based on an original questionnaire survey reinforced by the interviews with Japanese R&D center managers in China and managers in charge of overseas R&D in Japan and others. Since Japanese companies established R&D centers in China only recently, this kind of research work is still scarce. The results provide valuable information input to multinational company managers responsible for R&D in China as well as to those responsible for R&D in the United States.