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Abstract
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In this research, we explored how organizational positioning of R&D activities, especially distance from the operating environment, affects researchers’ problem solving routines by conducting an in-depth comparative case study for ArF resist materials (resist materials for an argon fluoride laser lithography) development carried out throughout 90s at four main players: Fujitsu, NEC, IBM, and Toshiba.<br>Our analysis demonstrated that differences in distance from the operating environment significantly affect innovation processes along three aspects of problem solving routines: the priority order of performance requirements, the sequence of problem solving, and the scope of technology searches. <br>The result also implied that divisional-level R&D, surrounded by contextual environments, may reach an innovative solution faster than corporate-level research since it faces more complex trade-off problems to be solved simultaneously at the earlier stage, which drives researchers to generate the breakthrough solutions. <br>
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