Organizing for reverse innovation in Western MNCs: the role of frugal product innovation capabilities
Journal
International Journal of Technology Management
ISSN
0267-5730
ISSN-Digital
1741-5276
Type
journal article
Date Issued
2014-03
Author(s)
Abstract
The burgeoning phenomenon of reverse innovation - i.e., innovations which are adopted first in the developing world - has attracted much academic and managerial attention. However, while existing literature has extensively discussed the risks and opportunities of reverse in-novation for Western multinational companies (MNCs), there is little empirical insight in the question how reverse innovation is organized in the firm. This article investigates how Western MNCs of the healthcare and electronics industries organize their international R&D for reverse innovation. Based on the insights of four case studies, we find that the location of the product mandate (i.e., at the headquarters or the subsidiary) is independent of the MNC's ability to generate reverse innovation. In contrast, we find that the design and development of reverse product innovations are always located in the MNC's subsidiary based in a resource-constrained environment. We argue that the development of frugal product innovation capabilities is a critical success factor in the development of reverse innovation. The article holds important implications for theory and management practice.
Language
English
Keywords
reverse innovation
frugal innovation
Western MNCs
global product mandate
emerging countries
China
global R&D
HSG Classification
contribution to scientific community
HSG Profile Area
SoM - Business Innovation
Refereed
Yes
Publisher
Inderscience Enterprises Ltd.
Publisher place
Geneva
Volume
64
Number
2-4
Start page
255
End page
275
Pages
21
Subject(s)
Division(s)
Eprints ID
226602