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Global R&D Project Management and Organization:

A Taxonomy
Vittorio Chiesa

This work studies the management and organization of global R&D projects, i.e.
projects leading to innovations to be exploited in multiple countries. It provides
a taxonomy of how firms conduct such projects. The empirical base is composed
of twelve multinational companies, from the three major areas (Europe, Japan,
North America), operating technology-intensive businesses. Two basic structures
are identified: the specialization based, where one foreign lab (the firms center
of excellence) is assigned the responsibility for developing a new product, process
or technology on the basis of a global mandate, and the integration based, where
different units contribute to technology development programs and global innovations are the result of the joint work of these units. In each categories two
sub-cases have been found: the center of excellence and the supported specialization, on the one hand, and the network and specialized contributor structures,
on the other. The four structures have been studied in relation to: the key
characteristics of the organization and management of global projects (in each
phase, from conception to introduction into the market), the organizational
factors affecting the success, the context conditions in which the structure is
considered appropriate. 2000 Elsevier Science Inc.

Introduction

n important aspect of the general process towards the globalization of business activities
is the increasing amount of technical activities
carried out abroad. The traditional explanation is that
foreign manufacturing and marketing need to be technically supported and the geographical dispersion of
technical facilities facilitates the penetration into
foreign markets [26]. This is still a reason to go
abroad, and the growing globalization of manufacturing and marketing pulls that of R&D. However,
there are also other factors intrinsic to the process

Address correspondence to Vittorio Chiesa, LIUC (Libero Istituto Universitario, Carlo Cattaneo), Corso Matteotti 22, 21053 Castellanza (Varese), Italy.
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2000 Elsevier Science Inc. All rights reserved.
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itself of technical knowledge building and innovation within firms.


First, companies have recognized that the specialized skills and talents producing new technologies or
pieces of knowledge often develop locally in pockets
of excellence around the world. To become part of the
development system a firm needs to be there. Firms
are therefore forced to disperse their R&D units to
access such knowledge that develops and accumulates
locally. A local technology development capacity facilitates and accelerates the processes of learning and knowledge absorption from foreign sources [7,16,21]. This
explains why firms spread technical capabilities
around the world to a larger extent than in the past.
Second, multinational firms recognize that their innovative capability relies on the ability to capitalize
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BIOGRAPHICAL SKETCHES
Vittorio Chiesa is Associate Professor of Business Economics and
Organization at LIUC (Libero Istituto Universitario Carlo Cattaneo,
Castellanza). He teaches Business Economics and Organization at
LIUC and at Politecnico di Milano. He also teaches Technology
Strategy and Economics of Technical Change at LIUC. He obtained
his Masters Degree in Electronic Engineering at Politecnico di
Milano. He was previously with CibaGeigy and Pirelli, and with
the National Research Council of Italy (Istituto di Tecnologie
Industriali e Automazione, Milano) as Senior Researcher. He was
Visiting Researcher at London Business School at the Operations
Management Department. Since 1992, he is responsible of the
research project R&D Strategy and Organization at the Centre for
Strategy and Strategic Management at Politecnico di Milano. His
main research areas are: technology strategy, international R&D,
R&D organization.

resources and entrepreneurship of their various subsidiaries, to integrate resources and capabilities of
their different units and to leverage the uniqueness of
resources of each unit to generate innovations to be
exploited world-wide. Pockets of excellence, which
may have developed foreign locations as the result of
the firm history and administrative heritage, need to be
exploited on a worldwide basis [2].
Therefore, companies tend to assign their R&D
company units different roles, creating organizations
that can be viewed as networks of differentiated units,
linked by tight and complex controls and flows of
people, information, materials, technology [11].
Global R&D organizations are created, in which the
contributions of the dispersed units, each with a differentiated mission, are interlinked and integrated each
other. The roles of the dispersed units are defined
according to global plans and links among the various
units are established. Such global R&D structures
cover a wide range, from those very simple in which
there is one foreign center of excellence to carry out
the firms R&D in a certain field, to the most complex
where multiple centers are linked each other in a
network [2,6,17]. This means that technical activities
and the product development process become more
and more complex and involve a number of units that
integrate each other.
So far, research works have mostly investigated
certain specific aspects of distributed R&D: determinants for going abroad [5,9,14,19], establishment processes of R&D activities in foreign countries [10], types
of foreign R&D labs [5,13,19,20,22,23], locational factors [15]. Fewer studies have attempted to take a more
comprehensive view of global R&D organization, that
is, whether there are international R&D structures,

V. CHIESA

forms of division of labor, interdependencies and coordination among geographically dispersed units
[1,2,8,12,18,25,27].
From a managerial perspective, much attention has
been paid to how to manage a foreign R&D unit,
especially how to balance central control and autonomy [3,4]. De Meyer [7] casts light upon the mechanisms that support global R&D management, identifying the planning system (seen as a learning
procedure), the communication system, and individual
roles (such as the ambassador of foreign units) as key
elements of a global R&D structure. However, the
management and the organization of global R&D
projects have been rather neglected. This paper attempts to fill this gap. It studies the management and
organization of global R&D projects, meant as
projects leading to innovations to be exploited in multiple countries. It provides a taxonomy of how firms
conduct such projects. It is based on the results of an
empirical analysis including 12 companies.
The paper is composed of three sections, the first
presents the field research and describes the organizational structure of the international R&D of the sample
firms, the second deals with the management and
organization of global projects in each category of
international R&D structure, the third draws conclusions and implications.

The Field Research


The empirical study involved a sample of twelve multinational companies in different industries: automotive (2 firms), chemicals (1), electro-mechanical (1),
electronics (3), pharmaceutical (1), telecommunications (3), white goods (1) (Table1). Four companies
are North American, two are Japanese and six European. Some are widely diversified into unrelated businesses. In these cases, the analysis has concerned only
a certain set of related businesses (those mentioned
above) and the respective R&D activity. The firms
were selected among those investigated in a previous
research on the internationalization process. The firms
selected indicated the international management of
R&D and the globalization of their R&D organization
as a key priority to ensure that their innovations could
be marketed on a global basis. Furthermore, they all
operate businesses where technology plays a central
role. The selection was made to have firms from the
three major industrialized areas and from different
industries. The more general aim of the research is in
fact to identify whether there are relations between the

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

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Table 1. Foreign R&D Data of the Sample Company

Company
A
B
C
D
E
F
G
H
I
L
M
N
Total

Research
Labs

Development
Labs

Adaptive
Units

5
3
4
4
2
5
4
2
1
34

10
4
5
1
2
2
3

3
2
3
35

10
5
9

2
9
12
4

58

global R&D organization and the type of industry, and


between the global R&D organization and the home
country culture. To this end, the sample studied will be
larger and will consider thirty firms. These topics will
be treated in future works. This paper treats the management and organization of global R&D projects and
aims to provide a taxonomy of such global organizations.
Data and information on the R&D organization and
management were collected through the analysis of
company publications (annual reports, internal reports,
project reports) and direct interviews to CTOs, R&D
directors and R&D managers. Interviews were made
personally and involved managers at both corporate
and business unit level. In each firm, at least four
managers were interviewed. Answers were crosschecked and resubmitted when uncertainties and differences emerged. The number of managers interviewed in each firm and the cross-checking of the
answers reduced the risk that data and information
might be biased by personal views or interests (Table
1).
The field research was articulated into three steps.
The first aimed to classify the types of foreign R&D
units; the second to identify the firms organizational
structure of R&D at the international level; the third
part to identify how global R&D projects are organized and managed.
The first interviews in each firm were done to the
R&D director, R&D managers and/or the CTO. These
interviews initially focused on the first two steps of the
field research, classification of the foreign units and
description of the organizational structure. Then, the

Scanning
Units

% of Foreign
R&D (Personnel)

6
11
9
4
2

35

30
33
60
30
35
15
28
5
3
42
26
30

Number of
Employees in
R&D
7,500
7,000
16,400
10,350
8,000
7,500
4,950
7,600
12,000
8,000
2,800
3,600
95,600

interview concentrated on the organization of global


R&D projects, on the success factors, that is, factors
making a certain organization work, and on the context conditions making an organization appropriate.
Finally, the interviewees helped identify one significant global R&D project to study in depth1. These
interviews took about one day (usually two half days).
The other interviews were done to people directly
involved in the management of the global project
selected. These interviews concentrated on the third
part, the organization and management of specific
global projects. These interviews took about half a
day. Details about each step of the field research
follow.

Field researchstep 1
The first step aimed to classify the foreign R&D units.
The following data and information were collected for
each R&D unit:
The profile of the unit, especially the technological
scope of the activities, that is, the range of technologies or products developed;
The time scale of the projects carried out by the
unit;
The objective of the projects carried out by the unit
(developing new products, developing new technologies, exploring new technologies), so identifying
whether or not there is a business focus;
The organizational position of the unit (corporate
or business unit level);

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The reason for decentralization, that is, why the


R&D unit was located at a given site;
The geographical scope of the activity, which
defines the geographical mandate, that is, whether
the unit is assigned innovation program for the
global or local markets.
The following categories of units were identified: support/adaptive unit, local development labs, global development labs, research labs, scanning units. This
classification is similar to those found in the literature
[3,13,19,20,22]. For example, among the others, Hewitt [13] classified foreign R&D lab types into: adaptive R&D labs (adapting products to local markets),
local original R&D labs (developing new products
suitable to local markets), global original R&D labs
(playing a specialized role in a centrally coordinated
plan). More recently, Pearce [19] proposed a classification into: support labs (that assist production and
marketing facilities), locally integrated labs (involved
in development activities for the local market), internationally integrated labs (playing a centrally determined role in an R&D initiative). The only difference
is that a distinction was introduced between research
and development labs as the former are typically globally oriented, whereas the latter may have a local or
global mandate. Moreover, it was added the category
of the scanning units, which appeared to play a role in
the organization of R&D at global level. In more
details, the categories found in the field study are:
1. Support/adaptive units, which provide technical
support to other firm functions located abroad and,
if needed, adapt products developed elsewhere to
local market requirements. Their geographical
scope is by definition local or at most regional;
2. Development labs, which manage one-to-three
year projects that have a clearly stated objective of
leading to an innovation, such as a new product to
be marketed or a new process to be used. These are
business unit labs focused on a single product line
or corporate labs developing products for a set of
related businesses. In any case, they have a strong
business and market focus. On the basis of their
geographical mandate, they can be distinguished
into global development labs (involved into global
R&D projects) or local development labs (making
projects leading to innovations purely for the local
market). For the purpose of this paper, the former
type is of interest;
3. Research labs that manage projects with longer

V. CHIESA

time scale (more than three years), with the objective of exploring new technologies, researching for
new technical paradigms, or accumulating knowledge in a certain field, not directly related to a
single innovation. Usually, they are at corporate
level and define their mission on the basis of the
range of technologies developed. Some labs are
highly focused on one technology, others conduct
research on a wide range of technologies. Their
mandate is by definition global because they do
not serve a specific market or business, but develop technologies that will be subsequently exploited in new product development activities;
4. Technology scanning units that monitor the technological progress and/or market evolution2 in foreign countries. As later described, although these
units do not carry out actual technical activities,
they are part of a firms international R&D structure and thus are relevant to the present study.
Once identified the types of foreign R&D units, the
following step was the description of the international
R&D structure.
Field researchstep 2
The second step aimed to identify whether and how
geographically dispersed units are structurally interlinked each other. In other words, the international
R&D organizational structure was identified.
Various research works studied the management
and coordination of dispersed R&D capabilities and
efforts within firms. Most concluded that firms are
moving towards network organizations, in which there
are forms of division of labor and interdependencies
(among the others, [7,12]). However, they often focused on the managerial implications of such organizations and treated these network organizations as of
one type. Bartlett and Ghoshal [2] identified two major
ways of organizing activities on a transnational basis:
the locally-leveraged (in which the resources of individual national subsidiaries are leveraged to create
innovations to be exploited on a worldwide basis) and
the globally linked (where resources and capabilities
of dispersed units are linked and innovations are generated jointly). The field research looked at the different forms of links among dispersed units and attempted to provide a taxonomy of global R&D
organizations.
The topics treated during the interviews were aimed
to identify for each unit:

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

How the mandate of the unit is tied with the


mandate of other units;
The interaction with other R&D units within the
firm, identifying whether, how and with whom such
relationships are maintained during the R&D work;
The interaction with external bodies (Universities,
Research Institutes, customers, suppliers), identifying the importance of the external context for the
R&D work of the unit.
This allowed us to identify how many units work in a
certain product/process/technology area, how these
units are linked each other. In other words, how the
organization of the R&D activities in that area is
structured.
Two major categories of global R&D structures
were found:
Specialization-based structure, where one foreign
lab (the firms center of excellence) is assigned the
full responsibility for developing a new product/
process/technology on the basis of a global mandate;3
Integration-based structure, where different units
contribute to technology development program and
global innovations are the result of the joint work of
these units.
In both, two subcases were found. Among the specialization-based organizations there are:
1. The center of excellence structure, where the center is the only one of the firm to do R&D in a
certain field and acts as the center of excellence or
center of competence of the firm in that field;
2. The supported specialization structure, in which
there is a center of excellence that is assigned the
global responsibility of the R&D work in a certain
area and there are a number of small units supporting the center. Such units can be simply scanning units that do not carry on technical developments but provide innovation stimuli and new
product ideas. They listen to and monitor the
evolution of needs and requirements of the local
environment. In other cases, they are support/
adaptive units, which technically support foreign
manufacturing and marketing and, at most, adapt
the product developed at the center to make it
suitable for commercialization in foreign countries.
Among the integration-based structures there are:

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3. The network structure, in which various foreign


labs work and perform innovations in the same
technological field or product area. Their works
and initiatives are centrally monitored and supervised. This aims to avoid duplications, to coordinate the dispersed efforts and involve different
labs in joint R&D program of which the results are
exploited across different markets. This structure
corresponds to the globally linked case of Bartlett
and Ghoshal [2];
4. The specialized contributors structure, based on a
structural division of labor among units, which
leads to specialize each unit in a certain technological discipline or product component. A unit is
assigned the task to integrate ad coordinate the
R&D works so that R&D program are centrally
managed and controlled. Each unit is assigned an
individual task within the program consistently
with its own specialization (the structure is starshaped with a central unit, which keeps coordination and control over the work, and the various
units which do specific parts of the R&D program). The individual units have not the competencies to carry out an innovation on their own;
innovations are the result of the integration of the
works of the units belonging to the structure.
These structures concern both research and development activities. The next step was to identify how
global projects are organized and managed in each
structure.
Field researchstep 3
This step focused on how global R&D projects (i.e.,
projects of which the objective to generate an innovation to be exploited in multiple countries) are carried
out, and, especially, how the interactions among units
in global R&D projects take place. To make easier the
comparison of the different project organizations
within each of the identified international R&D structures, a stylized view of the R&D project was considered. The R&D project is seen as composed of the
following phases:

R&D project conception, which is the process


leading to generate the concept of a new R&D
project (identifying the objectives, estimating the
feasibility and the duration, identifying the concerned competencies, evaluating the potential reward, estimating costs and resources involved).

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During this process it may be critical the process of


information intelligence that is the activity devoted
to acquire technological and market information to
be used to formulate the R&D project concept;
R&D project definition that leads to a more detailed definition of the project characteristics described in the project conception and also defines
how the project is managed (including assignment
of responsibilities, definition of coordination mechanisms, team building, planning and control systems);
R&D project development, that is the real process
by which a new product (and the related new production process) or a new production process is
actually developed;
Transfer of R&D project result, when the result of
the R&D work is transferred to the production and
marketing for commercialization onto the various
country markets.4
The interviews to the people involved directly in the
management and organization of global projects focused on:
The interactions among the R&D units during the
global R&D project, especially with whom and how
such relationships are maintained during each stage
of the R&D project;
whereas the interviews to R&D directors and/or CTOs
concerned the following topics:
When a certain organization of global projects is
appropriate,
The organizational factors that influence the success of global projects.
This work focuses on the organization and management of global R&D projects. The next section describes and discusses the organization and management of global R&D projects in each international

Figure 1. Center of excellence structure.

V. CHIESA

R&D structure identified, as emerged from the field


research.

Global R&D Project Organization and


Management
This section describes the organization and management of global R&D projects in each international
R&D structure identified above. Each subsection is
structured as follows:
Key characteristics of the organization and management of global project in each phase,
Organizational factors influencing the success and
context conditions in which the organization is considered appropriate.

Specialization Based Structures


In this section the two specialization based structures,
that is, the center of excellence structure and the
supported specialization are treated.
Center of excellence structure
In this structure, one lab is assigned a global mandate
in a certain technology/product/process area. The objective is to increase the R&D efficiency at global
level, concentrating the resources needed for the product/process/technology in one location. Such concentration allows achieve economies of scale and greatly
facilitates coordination (Fig. 1).
Most R&D directors and managers interviewed
stated that
. . . the center of excellence structure is the most
preferable. Competencies related to a certain field are
concentrated, coordination is easier, economies of
scale can be achieved. Any R&D director has the

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

dream to structure its R&D in such a way. However,


the appropriate conditions seldom occur.

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ture market tendencies and the degree of differentiation among the different markets where to
commercialize the innovation.

Global project organization and management


Given that the technological resources in a certain
field are concentrated in one unit, there is no interaction between units in the project conception and
project development phases. The phases involving
geographically dispersed units are the project definition and the transfer of R&D project results. The
transfer takes place in a variety of ways. Technical
people are temporarily transferred from the center to
the subsidiary, where the innovation has to be introduced. They may be either members of the project
team (the most frequent case) or personnel appointed
to understand the project and transfer the results to the
subsidiary (creating a sort of liaison group). In other
cases, subsidiarys technical people are trained at the
center to be able to technically support the product
introduction into the market. The former two ways are
often used when the production process specifications
need to be transferred as products are manufactured
locally; the latter is more frequent when production
does not take place at the subsidiary.
The project definition is critical to give the project
a really global character. As a matter of fact, although
developed in one center, the project needs to be conceived as a global one and has to take into account
stimuli and issues coming from other country markets.
The funding mechanism plays a key role to ensure that
there is a global attitude and that the subsidiaries
where the innovation will be marketed are early involved. A widely used mechanism is that of the internal markets. Those subsidiaries that are interested to
exploit the results of a certain technology development
program, sponsor or finance it. In Matsushita and
Toshiba, annual forums are held to this end, where
projects are presented and the various subsidiaries
have the opportunity to select those of interest for
commercialization in their countries. The results of
such forums are then the basis to allocate resources at
the R&D center of excellence.
In the project conception, a key role is played by
gatekeepers. These are technical people of the center
of excellence whose task is to orient R&D activities in
such a way to meet technical and market needs on a
global basis. In research projects, they have to keep
project managers informed about the evolution of the
technical progress in the concerned field in other corners of the world. In development projects, they cap-

Organizational success factors and appropriate


context
A critical element for the success of global R&D
projects in the center of excellence structure is to
create and diffuse the appropriate culture among the
R&D managers of the center. This is especially true
when most R&D managers of the center come from
the local country. The point is to give them a global
mentality and to ensure that there are good relationships with home country managers. To this end, often
local R&D managers spend time at the parent company to be trained on firms procedures, absorb corporate culture, establish good relationships with central planners. This helps give them a global attitude
and make them feel part of an international corporation. Parent company managers are often employed in
key positions to ensure that the R&D strategies formulated at the center of excellence are consistent with
the overall firms strategies and that a global perspective is taken to fulfil the labs tasks.
Managers stated that the center of excellence structure is preferable when:
The country hosting the center is a leading producer of market/technical knowledge useful for innovation in the concerned product/process/technology area,
The product is global and markets are undifferentiated, and
The R&D resources of the firm in that field are
concentrated or can be concentrated in one location.
A case is the center of Hoechst in U.S. for photoresistant and separation materials, developing innovations to be commercialized world-wide (it is a case of
undifferentiated products). Alcatel assigned its U.S.
subsidiary the responsibility for the telecommunication transmission systems as the U.S. market is the
most advanced in that field. Other examples, more
research oriented, are that of the pharmaceutical company of the sample who located its research division
for biotechnology in U.S. close to the scientific centers
in California where this discipline mostly progresses.
An example of R&D concentrated in a home country
center of excellence is that of Matsushita in the microwave oven business. The development of new
products is entirely carried out by home country labs.

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The product is a real global product that requires


minimal adaptation (often limited to the electric plug)
in the various countries. Therefore, both production
and R&D facilities are kept in Japan.
Supported specialization
In this structure, as in the case of the center of excellence organization, resources in a technology/product/
process area are concentrated in one location and a
global R&D center is created. A number of small units
are dispersed worldwide to supply market and technical information to the global center. This organization
attempts to reap the benefits of specialization and
concentration (efficiency, economies of scale, low coordination costs), without missing innovation opportunities that may rise worldwide (Fig. 2).
Global project organization and management
The task of small foreign units is that of providing
information on the adaptations to existing products
required by the local market. They act as monitoring
or listening posts in countries where the innovation is
likely to be introduced. Often they are located close to
local customers to identify technical problems during
the product use. On the one hand, this helps focus the
technical problem solving activities; on the other, it is
often source of ideas and improvement actions. Therefore, their contribution is significant in providing the
information base (in terms of market innovation stimuli, product ideas and key technical problems to be
solved) to conceive and define the content of the R&D
projects. Therefore, the scanning units interact with
the center mainly in the information intelligence phase
and in the project definition. The interactions mostly

V. CHIESA

take place through a wide use of electronic linkages


(often simply the electronic mail). Usually, in Matsushita, before projects are defined in details, global
meetings are held where members from the various
units get together and exchange ideas and views. The
technical development is then entirely carried out at
the R&D center. At most, the dispersed small units
finally adapt the innovation to make it suitable for the
local market. The transfer takes place with the mechanisms described above in the center of excellence
structure.
Organizational success factors and appropriate
context
The factors considered for the center of excellence
structure are also sound for the supported specialization structure.
The context conditions where the structure is appropriate occur when:
Sources of innovation (customers, suppliers, research institutions, etc.) are dispersed but the degree of market differentiation is rather limited, and
The resources of the firm are concentrated or can
be concentrated in one location.
An example of supported specialization is that of
Japanese consumer electronics companies (Toshiba,
Matsushita) that have kept their R&D capabilities in
their home country and have dispersed a number of
very small units (of few product designers or researchers) in foreign countries close to key customers or
technology centers of excellence. Small units are
therefore of two kinds. Those supporting product development activities are located close to major customers to monitor trends and evolution, especially
esthetic and industrial design requirements of foreign
markets. For example, Toshiba developed the last generation of TV sets on the basis of the different inputs
coming from its scanning units located in Europe and
U.S. Although it seemed to be a global product, significant differences emerged in the esthetic and industrial design of the audio components. Other small units
support research activities. They are located close to
technology centers of excellence in U.S. and U.K. to
monitor the technical progress and basic research advancements in such countries.

Integration Based Structures


Figure 2. Supported specialization structure.

In this section the network and the specialized contributors structures are analyzed in details.

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

Network structure
This organizational structure consists of a network of
labs dispersed in different countries working in the
same product/process/technology area. Each lab is
usually free to undertake its own R&D initiatives, and
allocate a certain amount of resources to projects developed locally and suitable for local exploitation.5
The central problem is to create mechanisms to coordinate these dispersed efforts and avoid duplications.
Usually, there is a supervisor unit fulfilling these tasks.
As a result of this coordination, labs are often involved
in cross-border projects aimed to develop global innovations. For the purpose of this paper, these cases are
examined. Figs. 1 and 2 describe two cases of global
projects in network structures.
Global project organization and management
Different organizations are usually adopted in research
and development activities. In research, each unit carries on its own research program; there is coordination
but a certain duplication is allowed. Allowing that
different units approach the same problem in parallel
(from different perspectives and/or in different ways)
is recognized as a means to accelerate the process of
learning. As a matter of fact, this increases the creativity and/or creates a form of internal competition
among units. The R&D manager of the pharmaceutical
firm of the sample stated that
. . . although it increases research costs, the need to
speed up the research process and shorten time to

Figure 3. Network structure.

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market forces us to allow units to undertake projects


addressing the same problem. When projects are assigned to people of different units who well know each
other and are reciprocally acknowledged, there is a
cross-fertilization effect as people exchange their findings. Therefore, also the individual learning process
accelerates. In any case, units become subject to a
form of internal competition which puts pressures on
researchers and produces an acceleration.
Therefore, in research activities, the coordination
mostly concerns the exchange of the project results
among units and their consolidation. Forum and global
meetings are held to make the state of the art on
research areas (Fig. 3).
Development projects are jointly carried out by
different units. Communication is critical and interactions very frequent. It is often not feasible to carry out
joint R&D program where resources stay in their usual
location and interact only through communication systems and electronic networks. The concentration in the
same physical location is very often necessary to ensure that information is exchanged and communication
frequent. Strong interactions take place among the
various units in all the R&D project phases.
A manager of Ericsson emphasized that colocation
is still the key to success in development:
. . . although our structure is a real network structure, the operating procedures are shared and we all
use the same systems and tools to develop new products, colocation is still necessary. The information
technology is often not a good substitute to face-to-

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face communication. Often decisions are taken on the


basis of intense and personal communication. In development projects, time pressure is so strong and
schedule so tight, that frequent and personal contacts
are required to manage projects successfully.
Managers of global projects play different roles in
research and development. In research, usually, there
is a project manager in each unit who participates to
global committees where views are exchanged. There
may be a coordination manager of global committees;
however, he/she does not act as the manager of a
global project. In development, the definition of clear
responsibilities, the assignment of the project leadership and of the different tasks, and the design of the
project coordination and organization are key decisions to be taken from the beginning. The project
leader is responsible for costs, time and quality of the
project and often also for the reward of people assigned to his/her project.
As arguable, also the intensity and frequency of the
interaction among units strongly vary from research to
development. In research, the interaction among units
is limited to the exchange of views, perspectives and
results. In development, in all the phases of global
projects there is an intense interaction. The project
conception and definition are faced collectively by
representatives of the units in the network. The project
conception needs to take into account stimuli, issues
and requirements from the various countries: this is
critical to ensure that the products/processes can be
commercialized/used in multiple countries or adapted
with low efforts. The project definition is critical as
the management and organization of the project is
defined: the units involved, the project team, the responsibilities of the various units and people, the
project leader and the coordination mechanisms
among the various units/people. As mentioned above,
in the project development phase, international teams
are created, gathering people from the different units
involved into one of the existing sites. Therefore, there
are cross-border assignments, exchanges of technical
people, shared use of technical systems. R&D projects
are actually carried out jointly.
The critical decisions concern the team building and
the assignment of the project responsibility. As far as
the team is concerned, given that people from different
units work together, and share rooms and technical
systems, personal characteristics are taken into account such as socialization, propensity to group working, technical credibility among colleagues.
The assignment of the project responsibility is cen-

V. CHIESA

tral as it also means the assignment of responsibility


for a certain innovation program (or part of program)
to a particular country. The main factors influencing
the decision (in order of importance) are:
The availability of the critical competencies for the
project;
The international credibility (within the corporation) of the R&D manager who may be assigned the
responsibility for the project;
The importance of the external sources of technical
and market knowledge (customers, suppliers,
sources of technology);
The importance and costs of internal transactions
(mostly with manufacturing plants for the phases of
engineering and preproduction) and
Costs related to the movement of people from the
various units to the chosen site.
In Nissan case, discussed in exhibit I, the decision to
assign the leadership of the project to the U.S. subsidiary was related to the importance of the U.S. market
for minivans. The assignment of the responsibility to
the U.S. subsidiary stated the growing importance of
that R&D unit and was also a means to increase its
credibility within the corporation.
Organizational success factors and appropriate
context
The effectiveness of global projects in the network
structure strongly depends on the use of common
procedures, operating systems and development tools
that ensure that there is a common language to communicate and interact, exchange results and transfer
technologies. From an organizational perspective, the
human resource management system is of central importance. It needs to be designed on a global basis.
Recruitment for vacant positions and for acquiring
experts in new disciplines takes place on a global
basis. A common reward system is adopted at regional
level (in few cases, at global level). Career development is designed to involve multicountry experience,
which leads to frequent exchange of people from different regions. The Nissan case (see Appendix A)
emphasizes the importance of the human resource
policy in building up such structure and make it work.
Such global personnel policy has two main objectives:
to create a global mentality, and to favor the exchange
of experience throughout the firms technological
community. This concept of creating a firms scientific community is emphasized in such companies

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

(e.g., Ericsson and ABB). Technical people constitute


themselves a global community within the organization. Annual forums, international meetings of all
R&D managers and senior professionals help create
the feeling of being part of a supranational group.
Independently from the assignments and needs related
to specific projects, in each unit there is usually a mix
of local people and technicians, technologists and
managers coming from other countries (both the home
country and foreign countries). This helps create the
required organizational ground to make units cooperate each other and feel part of one structure. Of course,
it becomes critical that power is balanced and project
responsibilities are rather equally distributed among
the units of the network. This ensures that units effectively support also the projects in which they do not
play a leading role (as described in Appendix B, this
was a key factor to make the global R&D structure
work in the case of the white goods producer).
The network structure is effective when a firms
resources are dispersed and the permanent concentration in one location would lead to eliminate pockets of
technological excellence within the organization. In
other words, as the consequence of a firms organizational history and administrative heritage,6 technical
capabilities related to a certain (set of) product(s) have
dispersed and have progressively grown. Various units
may have developed deep, specific and unique competencies. Concentrating resources in one location
would mean loosing these resources.7 The other case
is when markets are differentiated and/or external
sources of critical knowledge (key customers, centers
of technological excellence) are dispersed. The presence in different countries and the availability of technical resources close to major sources of innovation
allow to capture market needs and develop products
suitable for global commercialization.8
A manager from Ericsson said that
. . . having centers of excellence would mean to have
the most efficient structure. However, the contexts in
which this organization can work effectively are rare.
On the one hand, the number of sources of innovation
to be accessed increases; on the other, multinationals
like us with a strong tradition of autonomy need to
take into account where excellent competencies have
grown and are located. Organizations cannot neglect
such historical processes of competence accumulation.
IBM organized the ThinkPad Notebook Computer development project as a network [24]. It was the result

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351

of the joint work of the Japanese IBM Design Center


at Yamato, the IBMs Almaden Research Center (San
Jose, CA, U.S.A.), the IBM Corporate Design unit at
Stamford (Connecticut) and industrial designers located in Milano, Italy. The project responsibility was
assigned to the Japanese Center as Japan was the
largest market and was the most advanced country for
the required manufacturing technologies that were
provided by external sources (especially the collaborations with Ricoh and Sharp).
Specialized contributors
A fourth case is that of the specialized contributors
structure. Each (contributor) unit is specialized in one
or few disciplines and contributes developing a piece
of the R&D work of which the overall management
and control is in charge of an (integrator) R&D center.
The knowledge/technology/component developed in
each unit is transferred to the center of the structure.
Therefore, the contributor units carry out narrow and
specific R&D works which constitute part of a chain
of activity planned and managed by the center,
whereas the center coordinates and integrates the
works of the contributor units into one R&D project.
This structure attempts to combine the benefits of the
specialization with the superior creativity and innovation potential of the network structure (Fig. 4).
Global project organization and management
In the project conception and information intelligence
phase, there is a strong flow of information from the

Figure 4. Specialized contributors structure.

Global
R&D
Structures

Global
R&D
Structures

Network

Information exchange through


electronic linkages

Specialized
Contributors

Temporary assignments of
people to other units
Information exchange through
electronic linkages

Flows of information from


scanning units to the center
through electronic linkages
and/or forums

Gatekeepers of the center to


capture technical and market
needs

Supported
Specialization

Center of
Excellence

Project Conception

Table 2. Interaction Among Units During Global Projects

Transfer is required to subsidiaries


not involved in the project.
Mechanisms are those listed above
(Personnel flows from the center to
the subsidiaries, Creation of liaison
groups, Subsidiary people trained at
the center)

Exchange through electronic


linkages, global meetings at
the end (research projects)
Division of labour among
units, use of common
development systems, global
meetings at project
milestones (development
projects)
Exchange through electronic
linkages, global meetings at
the end (research projects)
Use of common development
systems, cross-border
assignments, global meetings
at project milestones; colocation of international
teams (development projects)

Creation of
international
teams

Creation of
international
teams

Transfer is required to subsidiaries


not involved in the project.
Mechanisms are those listed above
(personnel flows from the center to
the subsidiaries, Creation of liaison
groups, Subsidiary people trained at
the center)

Personnel flows from the center to


the subsidiaries
Creation of liaison groups Subsidiary
people trained at the center

Personnel flows from the center to


the subsidiaries
Creation of liaison groups Subsidiary
people trained at the center

Gatekeepers of
the center to
capture technical
and market needs
Early
involvement of
subsidiaries as
sponsors

Product/Technology
Transfer

Global meetings
with people of the
center and of the
scanning units
Early
involvment of
subsidiaries as
sponsors

Project
Development

Project
Definition

Project Phase

352
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V. CHIESA

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

units to the center and among the various units. The


phase of project definition is often carried out by
international teams where people from the various
units are involved. The project definition phase establishes the division of the R&D work among the different units.
During the project development phase, there are
remarkable differences between research and development projects. Research activities are carried out at the
various units rather independently. Interaction occurs
mostly through electronic linkages (electronic mail).
Meetings are held to consolidate results, exchange
knowledge, define shared technological scenarios. Development projects require much stronger interaction.
Although each unit works on modules or subsystems,
there needs to be a strong coordination. There is a
shared use of electronic systems (technology development tools, design tools, CAD/CAM systems). International meetings are held at project milestones. Specific tasks of the projects often require colocation.
People from the various units gather in one place, not
necessarily the center. In development activities, there
is colocation at least in one phase of the project, often
the final (in the case of the development of Ford
Mondeo (see Appendix C) resources were co-located
in the engineering phase).

Organizational success factors and appropriate


context
Although there is a structural division of labor among
labs, which reduces coordination efforts, the managerial and organizational implications of the structure are
similar to those of the network based one. Units contribute to joint processes of innovation. Therefore,
there need to be the appropriate cultural background
and the managerial mechanisms described in the network structure.
This structure is appropriate under the same conditions of the network structure, that is, when the firms
resources and/or the external sources of (market and
technical) knowledge are dispersed. It reveals feasible
when there is the opportunity to create a division of
labor among units. This strongly depends on the intrinsic nature of the technological innovation process.
When a new product or production process can be
divided into modules or subsystems, the development
work can be divided into different tasks clearly defined, and consequently different units can be specialized into different technological/subproduct areas and

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353

given the responsibility for the different tasks. The


development of a new car or of a telecommunication
system is often organized in this way (Appendix C
describes the case of Ford Mondeo).
In two firms, R&D managers stated that the specialized contributors structure is the result of the evolution
of the network structure. Units are progressively specialized on their key competencies and a structural
division of labor is defined among them. This strongly
lowers coordination costs.
Table 2 provides a synthesis of the intensity and the
forms of interaction that take place during global
projects in each international R&D structure. This
synthetic comparison allows to draw some remarks:
1. Strong differences emerge between the organization and management of global projects in the
specialization-based structures (center of excellence and supported specialization) and the integration-based structures (network and specialized
contributors). The former are based on the specialization of units and essentially bring to concentrate
the resources and R&D activities in one location.
There is not cross-border management during the
project development activity. The latter are based
on the principle of integration, manage dispersed
resources and activities, and involve different units
in all the phases of the project activity, including
the project development. This phase is the most
difficult to manage and coordinate on a global
basis. Therefore, the integration based organizations require much stronger coordination efforts;
2. Whatever structure is chosen, global projects require significant efforts in the phase of conception
and definition to ensure that issues and elements
from the various countries are taken into account.
To this end, the different structures lie upon different organizational solutions: from the definition
of specific individual roles (gatekeepers), to the
establishment of small units scanning foreign environments, to the involvement of the different
R&D units dispersed with the creation of international teams. Specialization based organizations
need to pay great attention to this phase to avoid
NIH syndrome effects, that is, the rejection of an
innovation developed elsewhere during the transfer and introduction of that innovation in a certain
country. In integration based organizations, the
project definition is central as the management

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principles of the project is defined: the units involved, the project team, the assignment of tasks
and responsibilities, the definition of the project
manager, the coordination mechanisms among the
various units/people. These choices are often critical for the success of global projects;
3. The involvement of different units in the development phase of global project (that occurs in the
integration based structures) requires the use of a
wide range of coordinating mechanisms such as
global meetings, global committees, shared use of
technology development systems, creation and colocation of international teams. However, the coordination effort strongly varies from research to
development. Whereas, in research, doing global
projects means doing research works in multiple
locations, and compare results once research activities have been done; in development, it means
doing things jointly, putting together competencies
coming from different subsidiaries and sources,
and often co-locating people coming from different units. Therefore, in development activities,
face-to-face communication is still strongly preferred to the use of telecommunication and teleconferencing systems. Also, in the specialized
contributors structure, although the R&D work is
divided into different tasks carried out by different
units, the colocation of the team is required in
certain phases. This especially occurs in later
phases of the new product development process
such as prototyping, engineering and preproduction activities;
4. Transfer of results is facilitated in integrationbased structure as multiple countries are involved
from the beginning in the conception, definition
and development of the innovations (this, of
course, concerns countries of which the R&D unit
is involved in the R&D project; in the other, the
introduction of the innovation needs to be supported as in the specialization based structures).
In the specialization based structures, different
mechanisms can be adopted to support this
phase (personnel flows, liaison groups, training
program);
5. Generally speaking, given the dispersion of resources and the coordination efforts, the integration based structures are more costly. However,
their higher cost of coordination is partially compensated by lower costs of transfer of results and
innovation introduction.

V. CHIESA

Remarks and Conclusions


Remarks and conclusions that can be drawn on this
work are the following.
1. R&D directors and CTOs strongly prefer R&D
organizations privileging specialization, as these
are more efficient, through achieving economies of
scale and saving coordination costs. However,
there are factors of the present competition that
force firms to adopt more dispersed organizations
(Table 3 summarizes the appropriate context of
each structure):
Sources of knowledge relevant to a firms innovation process are often multiple and dispersed. Such
knowledge concerns both technology and market.
This is a major force to locate R&D units abroad
and adopt integration based organizations. The case
of Nissan is of this kind. The R&D unit in U.S. was
created because of the importance of that market.
The U.S. subsidiary was assigned the leadership of
the minivan global project (Appendix A), as the
U.S. market was the largest and most advanced in
that segment, and provided the required market
knowledge;
A firms internal capabilities may be dispersed.
Pockets of excellence may have historically developed in different countries. Integration based organizations are created to leverage such capabilities to
global benefit. The case of Mondeo shows that a
motivation to globalize the product development
process is the opportunity to exploit the key competencies of a firms labs and design centers located
in different countries. Similar motivation is behind
the organizational choice of the white goods producer (Appendix B).
2. Structures are essentially of two categories: specialization based and integration based. The basic
structures are the center of excellence in the first
category and the network in the second category.
The supported specialization and the specialized
contributors appear as their evolution. These both
attempt to combine the benefits from both specialization and integration. The supported specialization structure integrates the activity of the center of
excellence with that of small scanning/adaptive
units that identify the specific requirements of foreign countries or regions, and provide innovation
ideas and opportunities. The specialized contribu-

Supported
Specialization

Global attitude of the R&D


managers of the center
Creation of a global culture
among the R&D managers of
the center
Early involvment of
subsidiaries in funding R&D
projects with global potential
(internal markets)
R&D resources concentrated
Market differentiation
limited
External sources of innovation
dispersed

Center of
Excellence

Global attitude of the R&D


managers of the center
Creation of a global culture
among the R&D managers of
the center
Early involvment of
subsidiaries in funding R&D
projects with global potential
(internal markets)

R&D resources concentrated


Products global and
undifferentiated
External sources of innovation
concentrated

Organizational
Success
Factors

Appropriate
Context

Network

R&D resources dispersed


Strong market
differentiation
External sources of innovation
dispersed

Use of common procedures


and operating systems
Global human resource
management (global
recruitment, international
careers, global reward system)
Cross-border exchange of
technical people
Balanced distribution of
power and responsibility
among units

Global R&D Structures

Table 3.
Global R&D Structures: Organizational Success Factors and Appropriate Content

R&D resources dispersed


Strong market
differentiation
External sources of innovation
dispersed
R&D work divisible

Use of common procedures


and operating systems
Global human resource
management (global
recruitment, international
careers, global reward system)

Specialized
Contributor

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION


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tors structure introduces forms of specialization in


a network of R&D units, to reduce coordination
costs and duplication of efforts (its feasibility is
limited to the case of systemic or modular products
and, therefore, of divisible R&D work).
3. The success of global projects depends on whether
the global R&D structure is supported by the appropriate managerial and organizational tools and
mechanisms. Table 3 summarizes the organizational factors that emerged as critical for the success of global projects in each structure. In specialization based structures, the key factor seems to be
the funding mechanism. The involvement of subsidiaries in funding projects done at the center
allows to identify the projects of interest at global
level and ensures that subsidiaries are willing to
introduce the innovation onto their markets. In integration based structures, the success strongly depends on the supervision activity and the coordination mechanisms used during the definition and
development of the R&D work. The supervision
has to balance the power among units, distributing
the responsibilities of tasks and projects within the
structure. This factor is central to ensure that there
is an effective cooperation among units. The coordination is complex and relies upon a variety of
instruments; especially, a human resource management system applied at global level (see the next
point), the sharing of procedures (for example, the
project management procedures), the sharing of
technical systems and tools used in the R&D
project development.
4. A central element of the organization and management of global R&D structures is the human resource policy. In the specialization based organizations, the key factor is the global attitude and
multinational culture of the R&D managers. They
have to think global, orient the R&D activities
towards projects that show the potential for global
exploitation, early involve the other subsidiaries. In
the integration based organization, such global
mentality needs to be part of the whole organization. Technicians, researchers, technologists often
move to other R&D sites, spend time at other units,
work in international teams. They need to feel part
of a global community. To this end, it is central to
have a global resource management system. This
means that recruitment for vacant positions and
acquiring experts takes place on a global basis;
career development patterns are designed to in-

V. CHIESA

volve multicountry experience; a common reward


system is adopted at regional or global level.

Notes
1. The selection of the project on which to make the
case study was left to the managers. The request
was that the project was among the most important
projects of the last 3 years (the importance was
evaluated on the basis of the financial effort).
2. Monitoring market evolution means that the technical implications of the evolution of market characteristics are captured and studied.
3. The case in which the center of excellence is located in the home country corresponds to the hub or
central model of innovation [2]. Here emphasis is
given to the cases in which such center of excellence is located abroad.
4. This stylized view of the R&D project does not
mean that the process is linear and sequential. Here,
the main logical steps that take place during an
R&D project are identified. They continuously
overlap each other, and feedback or feed-forward
systems help modify the project characteristics in
terms of content and/or organization.
5. The amount of resources left for local innovations
varies from firm to firm, but may still be a significant part of them. It is difficult to give percentages
and the managers interviewed were reluctant (maybe for confidentiality reasons) to provide numbers.
The impression is that the desire to keep a certain
autonomy and to manage autonomously the resources dispersed is still a strong factor against full
integration of activities at global level. As explained later, the problem concerns development
activities rather than research activities. However,
the distinctive characteristic of this structure is that
there is a global supervision and coordination.
When opportunities are identified to develop global
products, the supervisor unit explores the potential
for units to cooperate each other and carry out
innovation jointly.
6. The organizational history and the administrative
heritage is at the origin of the dispersion of resources. Firms with a strong tradition of decentralization give subsidiaries strong autonomy. This favors the creation and development of autonomous
R&D resources in foreign locations.
7. Concentration would mean to increase the efficiency of the structure but also to rationalize the

GLOBAL R&D PROJECT MANAGEMENT AND ORGANIZATION

structure: closure of several centers, movement of


people from one site to another and integration
among different groups who may have different
ideas and approaches to the problems and may also
use different practices. This usually means that key
people and the embodied unique competencies get
lost.
8. When markets are strongly differentiated and key
customers are dispersed, another structure can be
chosen. Each foreign R&D unit is assigned a local
scope to perform innovations suitable for the local
market. Then, an R&D unit (generally, the home
country lab) is assigned the supervision task to
avoid duplications and identify the innovations
(performed by each lab for its local market) that
can be exploited across different countries. This
structure corresponds to the locally leveraged structure of Bartlett and Ghoshal [2]. Each unit actually
performs its own innovations that are developed for
the local market and may be later exploited worldwide. However, there is not an actual global management. It is similar to the case of the center of
excellence structure. The main difference is that in
the center of excellence structure there is the
awareness from the beginning that the innovation
has to be marketed on multiple countries. An example found has been the development of new
ac-drives in ABB that was conducted by the Finnish subsidiary and then commercialized in the other
countries.

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V. CHIESA

Appendix A
It is the case of Nissan, the Japanese car manufacturer, who developed a minivan to be commercialized initially
in U.S. and then globally. The product was conceived first for the U.S. market as it was the largest. Moreover,
it could provide the required market knowledge. The product was produced and commercialized in U.S. jointly
with Ford. However, the product development was entirely carried out by Nissan. This was the result of a
transnational project involving the Technical Centre at the headquarters and the three technical centers of Nissan
in US, the Nissan Design International in California, the Nissan Research and Development in Michigan, and the
Nissan Motor Manufacturing Centre in Tennessee. The U.S. subsidiary was responsible for the styling (Nissan
Design), stamping (Nissan Motor Manufacturing), and engineering (Nissan R&D), whereas engines and transmission systems were developed in the home country labs.
The product concept was defined in U.S., and Nissan accessed market information collected on the minivan
market by Ford. Nissan also did surveys in Japan and on a smaller sample of car drivers in Europe. The product
development process took over 4 years. A strong effort of standardization was done in advance to ensure that
there was coordination among units. Quality and design standards were fixed, the elements defining the
characteristics of a generic project task were defined, common procedures were used to transfer technologies and
especially design works. The centers shared one design system and one CAD-CAM system. The development
phase involved also about 200 U.S. suppliers, operating in a simultaneous engineering approach. Nissan
succeeded in establishing Japanese-style relationships with part suppliers. To this end, it was fundamental the
approach taken in the establishment of R&D facilities in U.S. that is explained below.
A project committee was established to coordinate works, take key decisions and solve conflicts. The initial
part of the work was carried out at the various locations, although there were frequent reciprocal visits (on the
average two in a month). In the second half, mostly the engineering phase, a group involving people from the
various centers established in the U.S. lab.
This project was the first carried out by the U.S. subsidiary and the home country jointly. The organization was
appropriately shaped to ensure that there was collaboration among units. When the American technical centers
were established, Nissan sent few Japanese researchers and mostly recruited people locally. The (few) Japanese
researchers sent to the U.S. lab were very well known and had a very good reputation at the home country center.
This gave the foreign unit credibility within the corporation. They spent time at local Universities and research
institutes. This favored the establishment of first forms of collaborative research with local institutions. In the
meanwhile, many U.S. technicians and researchers were recruited and employed at this unit. This facilitated the
establishment of good relationships with local actors, such as, in particular, part suppliers that play a key role in
product development (as mentioned above, this allowed to establish Japanese-style customer-supplier relationships in the product development, involving suppliers in a simultaneous or black box engineering approach). As
part of the training period, U.S. technicians were sent to the Technical Centre in Japan. On the one hand, this
allowed to make them familiar with development systems and procedures used at the headquarters; on the other
hand, it enabled the firm to bring in creativity from the interchange of different approaches. The long term
objective was that of establishing a lab well interfaced with the home country centers able to bring in the
creativity and the effectiveness of the U.S. research and technology system.

Appendix B
Another example of network structure is the case of a white goods manufacturer, who recently decided to increase
the coordination of its R&D activities in the areas of production process technologies. In the past, each plant and
the annexed technical development activities were allowed to carry out their own technical projects. This brought
to duplication of efforts and resources. The decision was to establish a body to coordinate R&D activities in
production process technologies. This coordinating body (Technology Committee) provides leadership and clear
directions for the projects of global interests. The Technical Committee is composed of headquarters top
managers, representatives of each region and CTOs of the labs around the world developing new process
technologies. At the moment, its scope encompasses the (five) key production process technologies that are used
at the firms plants. Every year, projects of global interests and with great potential (which means that they aim

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at improving key parameters of the concerned process) are proposed by the various subsidiaries and few are
selected. These are carried out jointly by different labs and usually the proposing lab has the leadership and hosts
the project. People from the other labs are moved to the leading lab. The process technology developed during
the project, if successful, is then implemented at global level in each plant using that technology. The first global
project concerned the casting technology and was assigned to the Brazilian subsidiary.
The projects are selected and directly supported by the Technical Committee that are chaired by a top manager
of the home country. Subsidiaries are motivated to have global projects assigned as this brings credibility and
importance within the corporation and higher amount of resources to manage. Non-leading subsidiaries are
willing to involve their own people to affect the project and to ensure that results can be of use for them. Given
that the responsibility varies from project to project, subsidiaries are forced to collaborate to ensure that when
they lead projects, they can rely on the collaboration of technical people from other subsidiaries. Moreover, the
involvement of technical people of the various labs and subsidiaries in the projects facilitates the transfer of the
project results to the various plants for their implementation.
The next step (not implemented yet) is that of assigning the responsibility for the progress in each technology
to one lab favoring a process of specialization of the labs. In other words, the objective is that of moving to a
center of excellence structure.

Appendix C
It is the case of the development of Mondeo, the global car of Ford. The idea of a global car came in mid 80s
as the company recognized that requirements in the various areas of the world were converging and there were
the opportunities to exploit new products globally. Moreover, there were opportunities from the exploitation of
the knowledge, experience and specialization of both the European and the U.S. R&D centers. Therefore a project
was launched with the objective to generate a model that had to substitute both the Sierra model in Europe and
the Tempo in U.S. with one car to be commercialized on both markets. The project started with the assessment of the
requirements and a benchmarking exercise with other car models to identify key parameters and their degree of
satisfaction. Then, a survey on thousands of car drivers in triadic countries was done to identify the areas where to
stretch car performance. A project was defined and the global car project started its development phase.
Ford Europe had the leadership of the project, as the car concept was more similar to that of an European car.
Gand, the largest assembly center of Ford in Europe, where the Mondeo had to be produced, was selected as the
location of the project leadership and coordination center. The project was transnational. The project coordination
was achieved through project committees at various levels: working groups operating on specific technical
problems, Program Control Group composed of the chairmen of the working groups and the Product Committee
chaired by the President of the Ford Europe. There was a coordination group (50 people), responsible for keeping
communication and relationships among the groups, which ensured that the works were consistent each other.
Also suppliers were selected on a global basis: 47 were European and 20 American.
The work among units was divided on the basis of the specialization of the units.
In the product design phase, they were involved groups in Dearborn, U.S. (6V engine and transmission),
Merkenich, Germany (aesthetic design and 4 cylinders engines), Dunton, U.K. (interiors package). However,
technical people were mixed (35 American technicians worked in European labs).
In the prototyping phase, they were involved plants responsible for developing the production processes for
new products and pilot plants. Again the responsibilities were assigned on the basis of the specialization of the
units: Bridgend (Wales) for 4 cylinders 1.6 and 1.8 engines, Dagenham (U.K.) for diesel engines, Cleveland
(Ohio) for 6 cylinders engines, Chihuahua (Mexico) for 4 cylinders 2.0 engines. The development of processes
was supported by the use of CAD-CAM systems that were shared with the product designers.
In both design and prototyping phases, the coordination of the works took place through a wide use of
teleconferencing and telecommunication systems. The coordination of the R&D work changed during the
engineering phase. The engineering phase was conducted in Gand by engineers coming from the various units
involved in previous stages: the co-location was necessary. The Gand team was then partially transferred to
Kansas City to take care of the engineering pre-production phase in US.
The Mondeo was presented at the Geneve exhibition in 1993, in U.S. it was introduced 15 months later. In
Japan it was commercialized through a joint venture with Mazda.