prepare a report on this topic ( related to TECHNOLOGY MANAGMENT)

THE JAPANESE MULTINATIONAL COMPANYS CORPORATE R & D LABORATORY Japanese electronics was one of the industrial success stories of the second half of the

twentieth century. Throughout Japans development, from catching up with the indus- trialized economies after the Second World War to its present position of international

technological leadership in many fields, its firms have engaged in substantial R & D. Most Japanese electronics firms support centralized R & D laboratories close to the corporate headquarters. Ohsaki Electronics is an example of a major multinational company rethinking the role of its corporate R & D laboratory. The company is part of a conglomerate with business operations in fifty countries, whose divisions produce consumer electronics, industrial power systems, heavy plant and equipment, hotel and retailing services, and office equipment. Its present governance structure was created in the late 1940s. Ohsaki is one of the worlds most successful consumer electronics companies. It spends nearly $3

billion on R & D each year, mostly on the companys fifteen decentralized divisional lab- oratories. Around 10 per cent of the companys totalR&D spending is allocated to the

central laboratoryOhsaki Electronics Laboratory (OEL)which employs 400 people in Japan and 120 overseas, and has responsibility for longer-term research, defined as having expected outcomes beyond five years.

OEL has been successful in providing scientific support to the companys divisional research functions, and its researchers are highly productive, measured by the number of academic publications and patents produced. It has successfully contributed to the development of the firms technological base. Masao Yamamoto, OELs Director, is facing a number of conflicting pressures. He has to extend the range of expertise in the firm to meet the technological requirements of the businesses he supports. At the same time, because of adverse macroeconomic circumstances, his budget is being reduced and he is under strong pressure to speed up the returns to research efforts. The core areas of science underpinning the companys activities are becoming broader and therefore less controllable, and he no longer has the breadth of knowledge in his staff, or the range of scientific equipment, required to undertake the research he considers necessary. He understands the reasons for the firms desire for faster results from its R & D investments, but knows OELs major contributions to the company in the past have been through longer-term, more basic R & D. The expertise required by OEL ranges from abstract theoretical particle physics to the

development of new generations of embedded software. Its overseas research laborato- ries are linked to universities with particularly advanced expertise in these areas. While

this system is working quite well in searching for and bringing excellent information back to Japan, Yamamoto is concerned that OEL may be locked into some rather inflexible university relationships. He is also worried about whether the lab is missing out on the potential of research conducted in emerging collaborative e-science networks and he has difficulty managing the international R & D labs. Their culture is different from that found in Japan, and tends to be much less hierarchical with a greater focus on individual creativity. He is also apprehensive about maintaining sufficient levels of expertise within his organization to be receptive to the wide range of inputs he needs.

Yamamotos major challenge lies in converging the laboratorys mission of under- taking basic research with the greater demands he is facing for quicker returns to the

Ohsakis investment. He knows there are many instances of disruptive technologies emerging with the potential to threaten existing business strengths, but appreciates that in the present economic conditions Ohsakis focus is getting the best returns from current investments. He is also under some pressure from within his company and from his contacts in the Japanese government to increase the amount of work with local universities, whose scientific expertise in required areas is gradually increasing, but is still some way behind that found elsewhere. Discussions are taking place at board level in Ohsaki about securing funding for longer-term R & D investments. As part of this process, Yamamoto has been encouraged to explore new methods for justifying and measuring the returns to R & D projects, and for making earlier decisions about which projects to support or terminate. There is continual pressure from the board to improve R & D productivity.

One opportunity Yamamoto sees for achieving this lies in collaborative and subcon- tracted R & D. OEL has been engaged in a number of Japanese government-sponsored

collaborative R & D projects, with varying degrees of success. While his staff have been uncomfortable sharing scientific research with companies with which they vigorously compete, experiences of working collaboratively with smaller overseas firms, which are generally much quicker at commercializing basic research, have been very positive. Yamamoto is also aware of the potential of a number of highly specialized local small research and software firms, whose creativity he wishes to access. He is aware, however, of the dangers of imposing Ohsakis large-firm management controls and reducing the distinctive advantages brought about by partners flexible, unbureaucratic structures and incentive systems, despite the management problems that such structures would pose for him.