Coordinating decentralized research and development laboratories: A survey analysis Dimitris Manolopoulos a, ⁎, Klas Eric Söderquist a,1 , Robert Pearce b,2 a Department of Management Science and Technology, International MBA, Athens University of Economics and Business, Evelpidon 47 A and Lefkadas, Athens11362, Greece b John Dunning Centre for International Business, Henley Business School, University of Reading, Whiteknights, Reading, RG6 6UD, UK article info abstract Article history: Received 3 August 2010 Accepted 19 September 2010 Available online 5 November 2010 The growing internationalization and strategic diversity of research and development (R&D) activities create important managerial challenges for the globally competing multinational enterprise (MNE). Driven by recent theoretical considerations and empirical studies, we provide complementary insights to the international management literature by investigating the impact of strategic variables (roles of decentralized R&D units) and some commonly studied FDI characteristics (industry, size and country of origin) on the coordination patterns used in the context of international R&D. As a conceptual background, five categories of coordination mechanisms are generated (structural, formal hierarchical, people-based, social and information technology platform infrastructures). Our findings, based on a quantitative inductive analysis, reveal that laboratory-related characteristics (roles, age and size) stand out as the most influential determinants of coordination mechanisms and instruments. The study also highlights that MNEs are moving towards a more complicated and multifaceted integration pattern of their decentralized technology strategies. Implications for international managers, academic researches and decision makers are discussed. © 2010 Elsevier Inc. All rights reserved. Keywords: Multinational enterprises Decentralized R&D laboratories Coordination mechanisms and instruments Greece 1. Introduction Early analysis (e.g., Caves, 1971; Vernon, 1966) of the capability of firms to become multinational enterprises (MNEs) saw sources of innovation as entirely centralised and conceived the only international knowledge-related function as being the transfer to overseas use of centrally generated technologies (Manolopoulos et al., 2007). Hence, initial perceptions on the internationalization of technology saw no systemic role for decentralised research and development (R&D) activity, but only the limited one of supporting the ability of subsidiaries to adapt parent company technologies to the needs of their market environments (host countries and local conditions). This traditional explanation though, seemed unable to account for the acceleration in the worldwide diffusion of MNEs' elements of knowledge-related competitiveness and the redefined missions of expatriate R&D (Niosi, 1999). Current work (e.g., Cantwell and Piscitello, 2007; Marin and Bell, 2006) has recorded a quantitative expansion of MNEs' basic research and industrial R&D activities, which now takes place at a much faster pace and spreads more widely with significant international cross border flows (Criscuolo and Narula, 2007). In addition, it involves more than the effective application of the parent's creative inputs to host environments, including also the generation of other asset-augmenting activities; derived mainly by the need of MNEs to employ distinctive technological competencies from geographically dispersed locations (Papanastassiou and Pearce, 1999). Three factors underpinning the gradually more advanced positioning of decentralized laboratories can be extracted from the literature. Journal of International Management 17 (2011) 114–129 ⁎ Corresponding author. Tel.: +30 210 82 03 660; fax: +30 210 88 28 078. E-mail addresses: dmanolop@aueb.gr (D. Manolopoulos), soderq@aueb.gr (K.E. Söderquist), r.d.pearce@henley.reading.ac.uk (R. Pearce). 1 Tel.: +30 210 82 03 679; fax: +30 210 88 28 078. 2 Tel.: +44 118 378 5044; fax: +44 118 378 4029. 1075-4253/$ – see front matter © 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.intman.2010.09.012 Contents lists available at ScienceDirect Journal of International Management