Organizational design mechanisms for the R&D function in a world of offshoring

SummaryLater years’ globalization and increased competition has forced firms to re-evaluate their current configuration and location of activities. An emerging shortage of talent and a recognition of knowledge sources far more spread around the globe have induced firms to re-think their configuration of knowledge-intensive activities, such as R&D. Disaggregation and dispersion of activities is though a double edged sword as it simultaneously enhances the access to resources and talent increasing the value of knowledge development activities in the firm, but also add to the costs of management and coordination. In this article we discuss how designing the configuration of R&D activities and the utilization of organizational coordination and control mechanisms help firms to stay on top of the costs induced by inter-task interdependencies among the disaggregated R&D activities and thereby leveraging the knowledge and capabilities developed in the offshored activities. We utilize the Danish wind mill company Vestas as an empirical example to illustrate our discussion.