New technology and corporate strategy: The international management of R&D by multinational firms

The emergence of new technologies as well as globalization of markets has brought radical institutional changes to high technology based MNCs in recent years. Instead of generating R&D knowledge solely in central laboratories in home countries, their strategy has come to focus more on how to develop the capability to absorb and utilize cutting-edge technologies worldwide by reconfiguring their R&D management and organizational structure internationally. The capability to evaluate, internalize, and utilize external R&D knowledge from abroad is termed organizational absorptive capability (OAC) in this research. This project, which is work in progress, analyzes what the key determinants of OAC are and how large high technology multinational companies (MNCs) in Japan and Europe have tried to absorb new technologies from abroad, particularly during the 1990s. The examination of over fifty exploratory interviews with mainly electronics and pharmaceutical companies in the three regions, Europe, Japan and the US, provides four approaches to analyze the evolution of OAC of Japanese and European MNCs: including their R&D missions, the management and organizational structure of their headquarters, and the architecture of technologies and institutions in their home and host countries.