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In a service business, it is difficult to cope with all your customers’ needs. They come and go with various wants and when it comes to their own good there are complaining. Such variances in the service business interfere the operation resulting in inefficiency. To come against all those fluctuate wants, Frei is suggesting a new way how to cope with this customer variability in the service business: Low‐Cost accommodation and uncompromised reduction. However, his assertion that these solutions can reduce cost and enhance service quality at the same time is empirically not proved. Thus, the following research will be dedicated in the empirical proof whether the solutions mentioned above can enhance service quality while reducing cost by pursuing efficiency in the service business.

Many companies are trying to acquire innovative technologies and relevant knowledge by sending R&D work overseas. Although recent research has been focusing on the aspects that motivate MNCs to establish offshore R&D facilities, such as cost reduction and market expansion, little is known about external or circumstantial factors influencing the performance of global R&D activities. Searching for enhancers of offshore R&D facilities, we investigated the relationships between the performance of offshore R&D and the technological capabilities of a parent company, its home country, and its R&D hosting country. Both patent data of EU and the EU R&D scoreboard of 134 overseas R&D labs from 46 MNCs, dating from the period of 2003 to 2005, are used in the analysis. The same time period is applied in calculating the RTA of each country. Regression analysis results support our main hypothesis that the technological capabilities of the parent company and the hosting country positively affect the performance of overseas R&D.