A Study On The Location And Organiziational Model Of Overseas R&D Of China Enterprises

The R&D globaliziation of multinational starts from1960th, and it have significant development from1980th. The multinational companies with the purpose of expanding competition of advatages transfer the R&D resources around the globe. Starting from the1990th, the R&D investment from developed countries to developing ones is a new trend for multinational companies. China, as the lagest developing country in the world, becomes a country that is adopting the most foreign investment. Meanwhile, the enterprises from China start to try internationaliziation. Accodring to the WIR2011, in2010, the FDI of China has the first time passed that of Japan, with the68billiam USD, ranked the top5in the world, and the percentage of inward/outward of foreign investment has reached2:1. With the development of outward FDI from China, the overseas R&D has increased sharply in recent years. According to Zhang(2010), till2010, there are total88overseas R&D center established by China enterprises,70%of which were established from2003to2010.Although the development of internationaliziation of China enterprises, comparing with multinational companies, they are still in the early stage. Because of lacking of data, the majority of research about internationaliziation of China enterprises still focus on adopting inward FDI, and few research on internationaliziation by China enterprises is till in desription and summary status. This research is exploring location selection and organization structure of overseas R&D by China enterprises.There are6charpers in this desertation. The first chapter is the introduction. The second chapter is the literature review, which reviews the framework of overseas R&D theory of multinational companies. And based on the overseas R&D theory framework of multinational companies, we create a theory framework on overseas R&D motivation, location selection and organization structure for China enterprises. The third chapter of this dissertation is the analysis of current status of overseas R&D by China enterprises. This chapter reviews the progress of gloabliziation of China enterprises, and analyzes the current status of the motivation, location selection and organization structure of overseas R&D by China enterprises. Followed by Chapter four, it is a cross-case study of overseas R&D by three famous China companies, Lenovo, Huawei and Haier. By analyze of the motivation, location selection and oganiziation structure of overseas R&D of these three companies, the findings are for the empirical study in the next chapter. Chapter five is the empirical study of overseas R&D by China enterprises. By doing the analsyis of105samples, it gets some conclusions on movitation, location selection and organization structure as well as the relationship between the three of China enterprises. Chapter six is the last chapter of this dissertation, it summarize the conclusion of the whole dissertation and states the limitation of this research.Based on the cross study and empirical study of overseas R&D activities by China enterprises, we can get below conclusions. The movitation of overseas R&D by China enterprises can be classified into4types:expanding overseas markets, aquiring overseas skills and technology, supporting manufacturing overseas, and strategic R&D investement. Location selection can also be summarized into4types: techniques transfer model, global techniques model, resources aquiring model, and markets orientated model. Oganiziation structure of overseas R&D is also classified into4types:ethnocentric centralized R&D, geocentric centralized R&D, polycentfie decentralized R&D, and integrated R&D network. The movitation of overseas R&D by China enterprises has diversified, and the organization structure has become more and more decentralized.Moreover, it founds that the overseas R&D motivation of China enterprises has impact on the location selection. Specifically speaking, with the movitaion of supporting overseas manufacturing, the R&D centers tend to adopt technique transfer model and markets orientated model as location selection model. These kinds of R&D center are usually established in the locations close to the target markets, overseas manufacturing plants and suppliers. With the motivation to enhance the technical capabilities of China enterprises with a strategic view, the overseas R&D center tends to adopt global technique model as location selection model, whose location is developed counties and areas with advanced skills and technology. If the overseas R&D movitvation is to aquire R&D resources, the R&D centers tend to adopt R&D resource aquiring model, whose location is countries and areas with plenty of R&D resources, like human resources, and R&D infrastructure. Finally, with the movitaion of expanding overseas markets, the oversease R&D center incline to adopt markets orientated model as location selection model, whose location is close to target markets.Finally, it found that the location selection model also has impact on the organization structure. The overseas R&D centers with technique transfer as location selection model tend to use centralized oganiziational structure:ethnocentric centralized R&D and geocentric centralized R&D. The overseas R&D centers with global technique as location selection model, tends to adopt geocentric centralized R&D and integrated R&D network organiziational structure. The resources aquiring model is incline to be established as decenteralized organiziational structure: integrated network and polycentfie decentralized R&D. The markets orientated model also adopts decentralized organiziational structure, hence the ethnocentric centralized R&D is not suitable, and the other three organizational structures could be adopted. In summary, within the four kinds of location selection model, apart from technique transfer model, the overseas R&D centers with other three models are incline to be established with decenteralized structure. This finding is different from the classical theory on overseas R&D conducted by multinational companes from developed countries. According to the classical thery on overseas R&D, the technology orientated overseas R&D centers tend to be established in centralized structures. That is because the R&D activities are more efficient with centralized structure. But markets orientated R&D centers tend to be established in decentralized structure, which makes the R&D centers responds to the markets more quickly. That is because the merge and acquisition is an important entry model for China enterprises’ internationaliziation currently; therefore the decentralized structure is more efficient for overseas R&D activities.