Using multi-hub structures for international R&;D: Organisational inertia and the challenges of implementation

Abstract and Key Results

•	MNEs are moving away from a ‘centralised hub’ to a ‘multi-hub’ network of R&D units. Using evidence from European pharmaceutical MNEs, this study analyses the challenges associated with promoting and integrating knowledge flows in multi-hub R&D organisational structures.
•	While these new structures provide greater potential for cross-fertilization of technologies and access to location-specific competences, firms also need to overcome greater levels of inter-unit geographical, organisational and technological distance. Firms also suffer from organisational inertia, which further hinders lateral communication and inter-unit knowledge transfer.
•	There are important variations in the way in which integrated network structures have been implemented, but in general, these new structures have increased the need for coordination mechanisms, but ironically most companies have reduced or eliminated this ‘traditional’ headquarters function.
•	While socialization mechanisms help to overcome some of these bottlenecks, there remain a number of obstacles in optimising knowledge flows in physically and technologically dispersed R&D facilities.