R&D, Organization Structure, and the Development of Corporate Technological Knowledge

Strategic Management Journal Special Issue, 2004

Posted: 30 Jun 2004

See all articles by Brian S. Silverman

Brian S. Silverman

University of Toronto - Rotman School of Management

Nicholas S. Argyres

Boston University - School of Management

Abstract

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.

Keywords: Organization Structure, Research and Development, Innovation

JEL Classification: D21, D23, L22, L23, O31, O32

Suggested Citation

Silverman, Brian S. and Argyres, Nicholas S., R&D, Organization Structure, and the Development of Corporate Technological Knowledge. Strategic Management Journal Special Issue, 2004, Available at SSRN: https://ssrn.com/abstract=481762

Brian S. Silverman

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Nicholas S. Argyres (Contact Author)

Boston University - School of Management ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
(617) 353-4152 (Phone)
(617) 353-5003 (Fax)

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