Regional networks for research and development have many benefits. By implementing a global R&D strategy, businesses are better able to utilize local talent, gain access to inexpensive labor, and affordably hire local experts. By establishing regional operations, engineers, managers, and technicians are motivated to address regional issues, which speeds up the customization of product features. An organization benefits from growth, customer satisfaction, and competitive advantage. A company’s global presence is strengthened when autonomy is transferred to regional hubs (Thomke & Nimgade, 2002). Consumer interests can be incorporated by R&D networks during the product development process, resulting in improved features and increased sales. Even though foreign subsidiaries are willing to explore new markets, implementing a research and development strategy improves corporate culture while raising the work productivity standard.
Global R&D networks face some difficulties. For instance, if a subsidiary loses money, it transfers those losses to the parent business (Thomke & Nimgade, 2002). Additionally, offering technical advice is a significant challenge for international firms, claim Thomke and Nimgade (2002). Notably, strategic direction affects the value and product quality. Nevertheless, it can be difficult given that global R&D centers are characterized by the interdependence of sub-projects, coordination of cost variances, and hiring relevant personnel from various locations, as Lehdonvirta, Kässi, Hjorth, Barnard, and Graham (2018) illustrate (p. 568).
The fiercely competitive workplace in which subsidiaries operate is another difficulty. For instance, rivals like Cisco and Lucent searched for talented workers at lower rates in the Indian market. Regional development centers face operational risks that must be managed effectively.
Issues with governance and culture in the Siemens Centers
Operating a company with subsidiaries requires an integrated strategy considering political, legal, and cross-cultural environments. For instance, Siemens Company was impacted by German immigration laws. They denied entry to Indian software developers due to the stringent regulations (Thomke & Nimgade, 2002). The denial of visas and other pertinent travel support to professionals from Indian subsidiaries prevented the company from conducting test runs to integrate services (Thomke & Nimgade, 2002)…