Organisation of new product development in Asia and Europe: results from Western multinationals R&D sites in Germany, India, and China

Abstract

From research on Western new product development (NPD) practices a rich body of literature has emerged. However, the impact of country specific and cultural influences has not been examined in this context yet. This study is a first attempt to identify differences in NPD practices between Research and Development (R&D) subsidiaries in Germany, China and India within multinational companies. Data has been generated by qualitative interviews with R&D executives in those countries across multiple cases. The study samples strategic, organizational and operational aspects indicates definite differences in process coordination, rewarding systems, market orientation and the average age of NPD teams. Other aspects like strategic targets, the management involvement, etc. show rather slight differences across the countries. Hence, findings suggest that while some aspects are universally applicable across cultural frontiers, Western companies have to understand different expectations regarding NPD in India and China by adjusting practices accordingly.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Notes

  1. 1.

    Translated from German by the authors.

References

  1. Agarwal N, Brem A (2012) Frugal and reverse innovation-Literature overview and case study insights from a German MNC in India and China. In: Engineering, technology and innovation (ICE), 2012 18th international ICE conference on. IEEE, pp 1–11

  2. Ambos B, Ambos TC (2011) Meeting the challenge of offshoring R&D: an examination of firm- and location-specific factors. R&D Manag 41(2):107–119

    Article  Google Scholar 

  3. Amsden AH, Tschang T, Goto A (2001) Do foreign companies conduct R&D in developing countries?: a new approach to analyzing the level of R&D, with an analysis of Singapore (No. 14). Tokyo. ADB Institute Working Paper. Retrieved from http://adbi.adb.org/files/2001.03.rp14.conduct.research.development.pdf

  4. Barczak G, Griffin A, Kahn KB (2009) Perspective: trends and drivers of success in NPD practices: results of the 2003 PDMA best practices study. J Prod Innov Manag 26(1):3–23

    Article  Google Scholar 

  5. Berét P, Mendez A, Paraponaris C, Richez-Battesti N (2003) R&D personnel and human resource management in multinational companies; between homogenization and differentiation. Int J Hum Resour Manag 14(3):449–468

    Article  Google Scholar 

  6. Bozionelos N, Wang L (2007) An investigation on the attitudes of Chinese workers towards individually based performance-related reward systems. Int J Hum Resour Manag 18(2):284–302

    Article  Google Scholar 

  7. Brem A, Freitag F (2014) Internationalization of new product development: Results from a multiple case study on companies with innovation processes in Germany and India. Int J Innov Manag 19(1):1550010-1–1550010-32

  8. Brem A, Moitra D (2012) Learning from failure: Case insights into a UK–India technology transfer project. In: Technology transfer in a global economy, Springer US, pp 253–275

  9. Brem A, Wolfram P (2014) Research and development from the bottom up-introduction of terminologies for new product development in emerging markets. J Innov Entrep 3(1):1–22

    Article  Google Scholar 

  10. Busse R (2014) Is culture driving innovation? A multi-national quantitative analysis. Hum Syst Manag 33(3):91–98

    Google Scholar 

  11. Cantwell J, Piscitello L (2000) Accumulating technological competence: its changing impact on corporate diversification and internationalization. Ind Corp Change 9(1):21–51

    Article  Google Scholar 

  12. Cappelli P, Sherer PD (1991) The missing role of context in OB: the need for a meso-level approach. Res Organ Behav 13:55–110

    Google Scholar 

  13. CIA [Central Intelligence Agency] (2012a) The world factbook, India. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/in.html. 15 Dec 2014

  14. CIA [Central Intelligence Agency] (2012b) The world factbook, Germany. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html. 15 Dec 2014

  15. CIA [Central Intelligence Agency] (2012c) The world factbook, China. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html. 15 Dec 2014

  16. Cooper RG, Edgett SJ, Kleinschmidt EJ (2004a) Benchmarking best NPD practices—II. Res Technol Manag 47(3):50–59

    Google Scholar 

  17. Cooper RG, Edgett SJ, Kleinschmidt EJ (2004b) Benchmarking best NPD practices—III. Res Technol Manag 47(6):43–55

    Google Scholar 

  18. Cooper RG, Edgett SJ, Kleinschmidt EJ (2004c) Benchmarking best NPD practices—I. Res Technol Manag 47(1):31–43

    Google Scholar 

  19. Criscuolo P (2009) Inter-firm reverse technology transfer: the home country effect of R&D internationalization. Ind Corp Change 18(5):869–899

    Article  Google Scholar 

  20. de Brentani U (2001) Innovative versus incremental new business services: different keys for achieving success. J Prod Innov Manag 18(3):169–187

    Article  Google Scholar 

  21. DeSanctis G, Glass JT, Ensing IM (2002) Organizational designs for R&D. Acad Manag Exec 16(3):55–66

    Article  Google Scholar 

  22. Dorfman PW, Howell JP (1988) Dimensions of national culture and effective leadership patterns: Hofstede revisited. Adv Int Comp Manag 3:127–150

    Google Scholar 

  23. Dunning JH, Lundan SM (2009) The internationalization of corporate R&D: a review of the evidence and some policy implications for home countries 1. Rev Policy Res 26(1–2):13–33

    Article  Google Scholar 

  24. Ecker B, van Triest S, Williams C (2013) Management control and the decentralization of R&D. J Manag 39(4):906–927

    Google Scholar 

  25. Economist Intelligence Unit (EIU) (2004) Scattering the seeds of invention: the globalisation of research and development, Whitepaper, Economist Intelligence Unit. http://graphics.eiu.com/files/ad_pdfs/RnD_GLOBILISATION_WHITEPAPER.pdf

  26. Ernst D (2005) The complexity and internationalization of innovation: the root causes. In: Proceedings globalization of R&D and developing countries: proceedings of the expert meeting Geneva, 24–26 January 2005, pp 61–88

  27. Erramilli MK, Agarwal S, Kim S-S (1997) Are firm-specific advantages location-specific too? J Int Bus Stud 28(4):735–757

    Article  Google Scholar 

  28. Farquhar JD (2012) Case study research for business. Sage Publications, London, Thousand Oaks

    Book  Google Scholar 

  29. Flyvbjerg B (2006) Five misunderstandings about case-study research. Qual Inq 12(2):219–245

    Article  Google Scholar 

  30. Gerhart B (2008) Cross cultural management research: assumptions, evidence and suggested directions. Internat J Cross-Cultural Manag 8(3):259–274

    Article  Google Scholar 

  31. Gioia DA, Pitre E (1990) Multiparadigm perspectives on theory building. Acad Manag Rev 15:584–602

    Google Scholar 

  32. Giorgi S, Lockwood C, Glynn MA (2015) The many faces of culture: making sense of 30 years of research on culture in organization studies. Acad Manag Ann 9(1):1–54

    Article  Google Scholar 

  33. Griffin A (1997) PDMA research on new product development practices: updating trends and benchmarking best practices. J Prod Innov Manag 14(6):429–458

    Article  Google Scholar 

  34. Gulati R, Nohria N, Zaheer A (2000) Strategic networks. Strateg Manag J 21(3):203–215

    Article  Google Scholar 

  35. Gupta V (2008) An inquiry into the characteristics of entrepreneurship in India. J Int Bus Res 7(1):53–69

    Google Scholar 

  36. Hartley J (2004) Case study research. In: Cassell C, Symon G (eds) Essential guide to qualitative methods in organizational research. Sage Publications, London, Thousand Oaks, pp 323–333

    Google Scholar 

  37. Hickson DJ, McMillan CJ (1981a) Organization and nation: the Aston programme IV. Gower, Farnborough

    Google Scholar 

  38. Hickson D, McMillan C (1981b) Concluding comments on countries, context and culture. Or-ganization and nation: the Aston programme IV. Gower, Farnborough, pp 187–196

    Google Scholar 

  39. Hofstede G (1983) National cultures in four dimensions: a research-based theory of cultural differences among nations. Int Stud Manag Organ XIII(1):46–74

    Article  Google Scholar 

  40. Hofstede GH (2001) Culture’s consequences: comparing values, behaviors, institutions, and organizations across nations, 2nd edn. Sage Publications, Thousand Oaks

    Google Scholar 

  41. Hofstede G (2007) Asian management in the 21st century. Asia Pac J Manag 24(4):411–420

    Article  Google Scholar 

  42. Hofstede G (2013) The Hofstede centre. Retrieved from http://geert-hofstede.com/countries.html. 05 Feb 2013

  43. Hofstede GH, Hofstede GJ, Minkov M (2010) Cultures and organizations: software of the mind, 3rd edn. McGraw-Hill, Maidenhead

    Google Scholar 

  44. House R, Hanges PJ, Javidan M, Dorfmann GP, Gupta V (2004) Culture, leadership, and organizations: the GLOBE study of 62 societies. SAGE Publications

  45. Im S, Nakata C, Park H, Ha Y-W (2003) Determinants of Korean and Japanese new product performance: an interrelational and process view. J Int Mark 11(4):81–112

    Article  Google Scholar 

  46. Johns G (2006) The essential impact of context on organizational behavior. Acad Manag Rev 31(2):386–408

    Article  Google Scholar 

  47. Kleinschmidt EJ, de Brentani U, Salomo S (2007) Performance of global new product development programs: a resource-based view. J Prod Innov Manag 24(5):419–441

    Article  Google Scholar 

  48. Kluckhohn C (1951) The study of culture. In: Lerner D, Lasswell HD (eds) The policy sciences. Stanford University Press, Stanford, pp 86–101

    Google Scholar 

  49. Kornai J (2010) Innovation and dynamism: interaction between systems and technical progress. Econ Transit 18(4):629–670

    Article  Google Scholar 

  50. Leiponen A, Helfat CE (2010) Innovation objectives, knowledge sources, and the benefits of breadth. Strateg Manag J 31(2):224–236

    Google Scholar 

  51. Leonard-Barton D (1990) A dual methodology for case studies: synergistic use of a longitudinal single site with replicated multiple sites. Organ Sci 1(3):248–266

    Article  Google Scholar 

  52. Li Y, Liu Y, Zhao Y (2006) The role of market and entrepreneurship orientation and internal control in the new product development activities of Chinese firms. Ind Mark Manag 35(3):336–347

    Article  Google Scholar 

  53. Lin L-H (2009) Effects of national culture on process management and technological innovation. Total Qual Manag 20(12):1287–1301

    Article  Google Scholar 

  54. Lindell M, Arvonen J (1996) The Nordic management style in a European context. Int Stud Manag Organ 26(3):73

    Article  Google Scholar 

  55. Manning S (2008) Customizing clusters: on the role of Western multinational corporations in the formation of science and engineering clusters in emerging economies. Econ Dev Q 22(4):316–323

    Article  Google Scholar 

  56. Mansfield E, Teece D, Romeo A (1979) Overseas research and development by U.S. multinationals. Economica 46:187–196

    Article  Google Scholar 

  57. Mansfield E, Romeo A, Schwartz M, Teece D, Wagner S, Brach P (1983) New findings in technology transfer productivity and economic policy. Res Manag 26(2):11–20

    Google Scholar 

  58. Mayring P (2001) Kombination und integration qualitativer und quantitativer analyse. Forum Qual Soc Res 2(1, Art. 6):1–10

    Google Scholar 

  59. Miller DC (1991) Handbook of research design & social measurement. Sage Publications, Newbury Park

    Google Scholar 

  60. Moitra D (2008) Globalization of R&D: leveraging offshoring for innovative capability and organizational flexibility. ERIM Ph.D. Series Research in Management. Erasmus Research Institute of Management (ERIM)

  61. Nakata C, Sivakumar K (1996) National culture and new product development: an integrative review. J Mark 60(1):61

    Article  Google Scholar 

  62. OECD (2011) Education at a glance 2011: OECD indicators. OECD Publishing, Paris

    Google Scholar 

  63. Offereins A (2006) Organising R&D in globalised context: convergence or divergence? The relative influence of Dutch and foreign cultures on the organisational structure of R&D in multinational corporations. Manag Rev 17(4):466–483

    Google Scholar 

  64. Orlikowski WJ, Baroudi JJ (1991) Studying information technology in organizations: research approaches and assumptions. Inf Syst Res 2(1):1–28

    Article  Google Scholar 

  65. Ozer M (2011) Strategic, organizational, and operational challenges of product innovation in china: Chinese firms tend to engage in a narrower range of new-product development techniques and activities compared to Western firms. Res Technol Manag 54(4):46–52

    Article  Google Scholar 

  66. Ozer M, Chen Z (2006) Do the best new product development practices of US companies matter in Hong Kong? Ind Mark Manag 35(3):279–292

    Article  Google Scholar 

  67. Patterson O (2014) Making sense of culture. Annu Rev Sociol 40:1–30

    Article  Google Scholar 

  68. Persaud A, Kumar U, Kumar V (2002) Coordination structures and innovative performance in global R&D labs. Can J Adm Sci 19(1):57–75

    Article  Google Scholar 

  69. Prakash Y, Gupta M (2007) Relationship between organisation structure and firm-level innovation in the manufacturing sector of India. Indian J Ind Relat 43(2):191–216

    Google Scholar 

  70. Rapoza K (2011) Within a generation, China middle class four times larger than America’s. Retrieved from http://www.forbes.com/sites/kenrapoza/2011/09/05/within-a-generation-china-middle-class-four-times-larger-than-americas/. 15 Dec 2014

  71. Salomo S, Keinschmidt E, de Brentani U (2010) Managing new product development teams in a globally dispersed NPD program. J Prod Innov Manag 27(7):955–971

    Article  Google Scholar 

  72. Sarin S, Mahajan V (2001) The effect of reward structures on the performance of cross-functional product development teams. J Mark 65(2):35–53

    Article  Google Scholar 

  73. Schatzel K (1996) The R&D workers: managing innovation in Britain, Germany, Japan, and the United States. J Int Mark 4(2):95–97

    Google Scholar 

  74. Schwartz SH (1999) A theory of cultural values and some implications for work. Appl Psychol 48(1):23–47

    Article  Google Scholar 

  75. Siu W-S, Lin T, Fang W, Liu Z-C (2006) An institutional analysis of the new product development process of small and medium enterprises (SMEs) in China, Hong Kong and Taiwan. Ind Mark Manag 35(3):323–335

    Article  Google Scholar 

  76. Stummer C, Günther M, Köck AM (2010) Grundzüge des Innovations- und Technologiemanagements (3., aktualisierte Aufl.). Manual. Wien: Facultas.wuv

  77. Sun Y, Wen K (2007) Uncertainties, imitative behaviours and foreign R&D location: explaining the over-concentration of foreign R&D in Beijing and Shanghai within China. Asia Pac Bus Rev 13(3):405–424

    Article  Google Scholar 

  78. Tahir R (2014) The impact of national and organizational cultural differences on international joint venture performance. IBA Bus Rev 9(1):47–63

    Google Scholar 

  79. Tellis GJ, Prabhu JC, Chandy RK (2009) Radical innovation across nations: the preeminence of corporate culture. J Mark 73(1):3–23

    Article  Google Scholar 

  80. Tjosvold D, Wong ASH (2004) Innovation across cultural boundaries. Applying conflict theory to develop a common approach. Int Negot 9:291–313

    Article  Google Scholar 

  81. United Nations Conference on Trade and Development (UNCTAD) (2005) World investment report 2005: transnational corporations and the internationalization of R&D. World investment report: Vol. 2005. United Nations, New York, Geneva

  82. United Nations Conference on Trade and Development (UNCTAD) (2011) World investment report 2011: non-equity modes of international production and development. World investment report: Vol. 2011. United Nations, New York, Geneva

  83. Von Zedtwitz M (2004) Managing foreign R&D laboratories in China. R&D Management 34(4):439–452

    Article  Google Scholar 

  84. Wahyuni D (2012) The research design maze: understanding paradigms, cases, methods and methodologies. J Appl Manag Acc Res 10(1):69–80

    Google Scholar 

  85. Wang S, Guidice RM, Tansky JW, Wang Z-M (2010) When R&D spending is not enough: the critical role of culture when you really want to innovate. Hum Resour Manag 49(4):767–792

    Article  Google Scholar 

  86. Witzel A (2000) Das problemzentrierte interview. Forum Qualitative Sozialforschung/Forum: Qual Soc Res, 1(1, Art. 22). Retrieved from http://nbn-resolving.de/urn:nbn:de:0114-fqs0001228

  87. Yin RK (2003) Applications of case study research, vol 34., Applied social research methods seriesSage Publications, California

    Google Scholar 

  88. Zeng SX, Xie XM, Tam CM, Sun PM (2009) Identifying cultural difference in R&D project for performance improvement: a field study. J Bus Econ Manag 10(1):61–70

    Article  Google Scholar 

  89. Zeschky M, Widenmayer B, Gassmann O (2011) Frugal innovation in emerging markets: the case of Mettler Toledo: successful frugal innovation requires a strong local presence in the emerging markets that are demanding affordable, good-enough products. Res Technol Manag 54(4):38–45

    Article  Google Scholar 

  90. Zhang X, Williams A (2008) Strategic new product development in Chinese organizations: a case study in the high technology sector. Des Manag J 3(1):69–78

    Article  Google Scholar 

Download references

Acknowledgements

The authors would like to thank the Hans–Frisch–Stiftung (Nürnberg, Germany) for their financial support of this project. In addition, this research project would not have been possible without the support of Florian Freitag and Tamara Kürzdörfer, which is gratefully acknowledged.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Alexander Brem.

Appendix: Interview guideline

Appendix: Interview guideline

figurea
figureb
figurec

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Brem, A., Wolfram, P. Organisation of new product development in Asia and Europe: results from Western multinationals R&D sites in Germany, India, and China. Rev Manag Sci 11, 159–190 (2017). https://doi.org/10.1007/s11846-015-0183-7

Download citation

Keywords

  • New product development (NPD)
  • Research and Development (R&D)
  • Culture
  • Developing markets
  • Developed markets
  • Case study

JEL Classification

  • O320