The impact of R&D organizational structure on developing technological capabilities and the moderation of R&D slack

Purpose Developing technological capabilities to enhance innovation performance is essential for firms to respond to external changes and competition. Based on the effect of organizational structure on organizational capability development, this study assesses whether a specific R&D organizational structure design can be used to develop different technological capabilities. Design/methodology/approach Combining organizational theory and the resource-based view as an integrated view, we propose several contrasting hypotheses to show the effects of three general R&D organizational structure designs (centralized, decentralized, and hybrid) on developing exploitative and explorative capabilities. We propose R&D slack as a moderator. 82 Taiwanese listed manufacturing firms were selected. Data on the firms' annual reports and their patent applications to the Taiwan Patent Office from 2005 to 2017 were collected. Findings Firms’ adoption of centralized and decentralized R&D structures has a significant positive effect on developing exploitative capability and an opposite effect on developing explorative capability. A high or low R&D slack can moderate the impact of R&D organizational structure on non-routine capability development. Research limitations/implications This study concludes that R&D organizational structure affects the development of different technological capabilities and that the effect of R&D organizational structure on the development of technological capabilities can be changed under the moderation of R&D slack, which means that the possibility of developing different technological capabilities under the same organizational structure will increase. Practical implications The top manager should consider the relationship between R&D structure design and technological capability development to manage the R&D routines to influence the generation of technological capabilities. Also, they must utilize the provision of R&D slack to modulate technological capability development. Originality/value This study reexamines the relationship between organizational structure and capability development. It shows that organizational structure can shape unique technological capabilities and that firms may be able to change structural elements through slack resources, enabling ambidexterity or dynamic capability development without organizational change.