Decentralization of R&D Units
"MNEs, particularly international projectors, are wisely decentralizing their R&D by building worldwide networks of R&D labs" (Verbeke 2013). Kuemmerle has devided R&D labs in two categories:
1. Home-based Exploiting Sites - prominently receive information from central lab in their home nation and work on to adapting products according to local demand. In context of labs in foreign nations, the information flows from home lab to the foreign labs situated close to the production units and key markets so that company's technological innovations can be rapidly transformed and absorbed to the host country's requirements as and when needed.
2. Home-base Augmenting Sites - these labs generally collect local information and send it back to the central lab.
Propounder strongly recommends the both type of units interact at regular bases with the rest of R&D units of the firm. MNCs instead of keeping their R&D units limited to their home country, have been building their networks with in the foreign laboratories to determine and perform specific roles within the firms. In that case, foreign based labs transfer information directly to the home based central lab. These foreign based labs should hire capable local analysts in order to access local information resources. (Verbeke 2013).
It is essential for multinational enterprises to decentralize and interconnect their R&D units across the world because of two reasons: first, they need to develop conformity with the various cultures, information bases and innovation clusters around the world. At the same time, they need to present in their home country in order to accumulate information from foreign resources, new developments, home universities and social and scientific institutions. Second, to process the information quickly in the home country production units, so that innovative ideas could be swiftly launched into the market in shape of a product and this can be done only through information exchange on the regular bases as quickly as possible. "For effective knowledge recombination to occur, each lab must become integrated as quickly and seamlessly as possible with the other parts of MNE" says Verbeke (2013).
1. Home-based Exploiting Sites - prominently receive information from central lab in their home nation and work on to adapting products according to local demand. In context of labs in foreign nations, the information flows from home lab to the foreign labs situated close to the production units and key markets so that company's technological innovations can be rapidly transformed and absorbed to the host country's requirements as and when needed.
2. Home-base Augmenting Sites - these labs generally collect local information and send it back to the central lab.
Propounder strongly recommends the both type of units interact at regular bases with the rest of R&D units of the firm. MNCs instead of keeping their R&D units limited to their home country, have been building their networks with in the foreign laboratories to determine and perform specific roles within the firms. In that case, foreign based labs transfer information directly to the home based central lab. These foreign based labs should hire capable local analysts in order to access local information resources. (Verbeke 2013).
It is essential for multinational enterprises to decentralize and interconnect their R&D units across the world because of two reasons: first, they need to develop conformity with the various cultures, information bases and innovation clusters around the world. At the same time, they need to present in their home country in order to accumulate information from foreign resources, new developments, home universities and social and scientific institutions. Second, to process the information quickly in the home country production units, so that innovative ideas could be swiftly launched into the market in shape of a product and this can be done only through information exchange on the regular bases as quickly as possible. "For effective knowledge recombination to occur, each lab must become integrated as quickly and seamlessly as possible with the other parts of MNE" says Verbeke (2013).
With the emergence of (IT) internet, extensive use of emails and strong database management systems has made the communication process very easy across far distances. With that it has become possible to utilize the gathered information as soon as possible to foster and implement the innovation process effectively across the borders.