The internationalisation of R&D by multinationals:: a trade-off between external and internal proximity

Overseas production is frequently seen as a force inducing the decentralisation of R&D. A complementary explanation can be provided if we admit that the acquisition of knowledge is one of the key factors behind the internationalisation of R&D. Multinational firms which adopt such a technology-oriented posture must create an external organisation that is designed to scan and absorb external scientific and technological capabilities, a process which we refer to as a quest for 'external proximity'. However, the multinational firm's external organisation should not be constituted to the detriment of its organisational coherence; it should, on the contrary, be completed by the implementation of relations of proximity internal to the firm, which we refer to as 'internal proximity'. From this perspective, the multinational firm that manages dispersed R&D units is seen as facing a tension-an organisational trade-off-between external proximity and internal proximity.