Studies on R&D internationalization have identified the decentralization-recentralization pattern of many multinational corporations (MNCs). Studies have also indicated that MNCs tend to pursue a transnational emphasis during R&D recentralization. This research focuses on recentralization of new product development (NPD) in MNCs and aims to reveal different processes of it towards a transnational emphasis. Through a qualitative case study of four MNCs, the NPD recentralization process was explored in two important dimensions – power centralization and pluralistic input. Four process variants were discovered, showing different approaches to power centralization and pluralistic input. The processes of recentralization are novel to the area of R&D internationalization. This study also advances our understanding of R&D recentralization with a focus on NPD fulfilling market demand, which has not been well addressed in prior studies. In addition, this study generates some insights into transnational management.

Introduction

R&D internationalization has received considerable attention over the past decades (Asakawa and Som, 2008; Awate et al., 2015; Hsu et al., 2015; Patel and Vega, 1999; Von Zedtwitz et al., 2004; Wortmann, 1990). With internationalized R&D (owning overseas R &D centers), multinational corporations (MNCs) can gain competitive advantage through accessing local knowledge and leveraging locational innovation advantage (Un and Rodríguez, 2018; von Zedtwitz and Gassmann, 2002). Research has revealed the decentralization-recentralization pattern (or embeddedness before integration) of R&D internationalization of many MNCs (Chen et al., 2012; Christensen, 2002; Gassmann and von Zedwitz, 1999; Granstrand, 1999; Håkanson, 1990; Niosi, 1999). For companies adopting this path, they tend to adopt a decentralized R&D structure at an early stage of R&D internationalization. Local R&D units are granted local autonomy to achieve local embeddedness which helps to access local technological and market knowledge and cultivate new knowledge (Lehrer and Asakawa, 2003). However, with the increasing number of autonomous R&D units, coordination becomes more difficult and duplication of efforts is more likely to happen (Gassmann and von Zedwitz, 1999; Granstrand et al., 1993). With “growing coordination problems” (Chen et al., 2012, p. 1545), MNCs will then recentralize R&D for better control and coordination. Such recentralization is necessary for MNCs to efficiently leverage knowledge at the global scale and avoid duplication. While recentralization can lead to a higher innovation performance in the long run, it has great challenges as well, such as the conversion loss (Chen et al., 2012). The conversion loss is caused by the autonomy-control tension and the disruptive effect on projects during the recentralization process. However, we still have very limited knowledge of the processes of R&D recentralization – how R&D recentralization can be done in MNCs. It is also unclear whether there are different processes.