3.6 GENERALIZABILITY OF FINDINGS, LIMITATIONS AND FUTURE RESEARCH
The process model presented in this paper is based on one specific organization. However, aspects of the model are generalizable to other cases of capability development in an offshoring context. The roles of the catalyst, organizational restructuring and development mechanisms apply to other similar situations. As the capabilities developed and the facilitating mechanisms are not exhaustive, they can be built upon in future research.
There are some inherent limitations to the method applied in this study. It can be difficult to predict whether the findings from the case will be generalizable ex ante (Flyvbjerg, 2006). Although efforts were made to include a large number of interviews and observations in this study, they may not be representative of all R&D-relocation processes. Moreover, the interviewee responses may have been subject to hindsight bias in cases where the data were retrospective.
The case used in this study relates to a widespread phenomenon, and the propositions developed cover causal relationships that can form the basis of investigation in studies with a larger number of observations. Findings from this study can also be extended by examining the relocation process longitudinally and across different industries. In addition, the strength of the salient mechanisms identified in this study can be tested using quantitative data. I have aimed to explicate the process of capability development. In so doing, I have identified certain challenges in the process, such as cultivating the mindset required to perform R&D. Future longitudinal, qualitative research could also examine how firms attempt to cultivate such mindsets.
3.7 CONTRIBUTION AND IMPLICATIONS
Few studies examine the process through which capability development takes place –this paper addresses that gap in our understanding. I attempt to explain how this process unfolds, as well as the different capabilities and the mechanisms through which they develop. I also present a case of a pre-existing unit that has limited resources but is assigned new R&D responsibilities, and must therefore make investments in capability development.
My aim has been to examine the process of capability development and shed light on this often black-boxed process. I have adopted a learning perspective to explain capabilities and their development as a deliberate firm-level investment involving a search and learning
process to modify or enhance existing capabilities in response to an internal or external change agent resulting in improvements within the firm. This definition allows for a clearer understanding of what capabilities are, and where and how they develop. R&D is increasingly being disaggregated and performed in a distributed context (Contractor et al., 2010). Therefore at varying levels of disaggregation the capabilities required to perform R&D may differ. In this study I identify learning and integrative capabilities to be the stepping stone for a relative novice to perform R&D. As mentioned, these capabilities could potentially lead to new innovations; however, they signal a departure from performing standardized tasks with high levels of predictability to performing for abstract tasks. I have also attempted to identify the capabilities (structural and interface management) that are essential to deal with the configuration and coordination challenges associated with offshoring. Capabilities related to offshoring are no longer niche as offshoring increasingly becomes ubiquitous.
To the offshoring literature, I add the dimension of a unit’s transition and I extend the ‘either-or’ typology. On the basis of rich, in-depth qualitative interviews, I articulate the upgrade process for an offshore unit and the corresponding challenges. I also show that such an upgrade requires the participation of both the home and offshore units because of the increased interdependencies between the units. While the availability of talent may be high in a particular location, the ability and motivation of the unit plays a crucial role in the success or failure of capability development and subsequent R&D relocation.
Finally, I add to the subsidiary-mandate literature. By presenting a case in which the mandate precedes the requisite capabilities, I deviate from the common assumption that subsidiaries always attempt to upgrade their roles within the organization, and show that such upgrades can be accomplished through the undertaking of R&D or complex activities. The Biztek case demonstrates that opportunities to perform R&D are not necessarily met with positive responses, as they place significant demands on internal and scarce resources.
This paper also has several managerial implications. First, the relocation of R&D to a unit performing standardized activities is a real-world phenomenon that presents managerial challenges. This paper was inspired by conversations with managers attempting to maximize the functioning of an offshore unit. Therefore, its focus has been on identifying specific challenges as well as mechanisms appropriate for dealing with them. More specifically, it has centred on identifying mechanisms for addressing the capability-development challenge. Second, by
conducting interviews at various hierarchical levels, this paper provides perspectives from different organizational levels. These diverse viewpoints can provide management with a holistic perspective on capability development and possible barriers at different levels within the organization. Third, this paper attempts to pinpoint specific capabilities that may be lacking in the home and offshore units that can facilitate the relocation of R&D. By identifying such capabilities, I have attempted to simplify the process of relocating R&D and upgrading capabilities in an offshore unit.