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R&D, organization structure, and the development of corporate technological knowledge
Author(s) -
Argyres Nicholas S.,
Silverman Brian S.
Publication year - 2004
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.387
Subject(s) - transaction cost , control (management) , industrial organization , database transaction , business , knowledge management , empirical research , range (aeronautics) , computer science , economics , management , mathematics , engineering , database , finance , statistics , aerospace engineering
We explore the link between a firm's organization of research—specifically, its choice to operate a centralized or decentralized R&D structure—and the type of innovation it produces. We propose that by reducing the internal transaction costs associated with R&D coordination across units, centralized R&D will generate innovations that have a larger and broader impact on subsequent technological evolution than will decentralized research. We also propose that, by facilitating more distant (‘capabilities‐broadening’) search, centralized R&D will generate innovations that draw on a wider range of technologies. Our empirical results provide support for our predictions concerning impact, and mixed results for our predictions concerning breadth of search. We also find that control over research budgets complements direct authority relations in contributing to innovative impact. We propose several extensions of this research. Copyright © 2004 John Wiley & Sons, Ltd.