Abstract: There are very few existing studies that focus on internal headquarter organization in relation to knowledge transfer or innovation in overseas units. It is almost as if there is an implicit assumption that headquarter members ought to be proactive in transferring knowledge or information to overseas units. Thus, this study investigates bottlenecks of process in transfer of product development tasks to overseas units, with particular focus on psychological resistance of headquarter engineers. A detailed case study of a automobile supplier revealed following problems that were faced by headquarter engineers: lack of motivation to business in emerging markets, perception gaps about original developers, and a high turnover rate of local engineers. Next, how psychological resistance of headquarter engineers, which originate from these problems either directly or indirectly interferes with transfer of development tasks, was explained by two paths, that is, decline in motivation toward information sharing and technical advices, and lack of communication channels. To promote overseas expansion of development tasks, which is necessary for emerging market strategies, it will be critical to manage causes and effects of psychological resistance of headquarter engineers.Keywords: global product development, task transfer, psychological resistance of headquarter engineers, emerging marketsIntroductionCases of firms trying to expand their product development tasks abroad have been increasing since late 2000s. A number of major firms, including Toshiba, Fuji Film, Clarion, Hitachi, Toyota, Honda, and TDK, have sought ways for speedy response to emerging market needs by establishing product development units onsite and increasing employment of local engineers. 1 Furthermore, according to Survey of Overseas Business Activities, conducted by Ministry of Economy, Trade, and Industry in July 2013, expenditure ratio on overseas research and development for 2012 was a record level of 4.4%, which was highest ever. From these facts, Prahalad and Doz (1987) and Bartlett and Ghoshal's (1989) observations that Japanese business are characterized by products standardized by headquarters that are expanded overseas in a globally integrated manner are becoming less and less applicable to current businesses. This is because need for dealing with diversified overseas markets and number of overseas development units to meet that needs have been increasing for products deployed overseas.In most cases, development functions intended for overseas expansion are limited to minimal tasks necessary to promptly respond to local customers' various and heterogeneous needs.2 This is because process of transmitting each of local customers' demands to requesting applied development works, and waiting for responses are inadequate for emerging market businesses that are highly competitive and require more speed than usual. In other words, there has been a shift of dividing development tasks, which used to be concentrated on between advanced technology development and standard product development at headquarter side, and tasks necessary for locally adapted design of existing products at local units.3However, although a number of firms are challenging overseas expansion of product development tasks, it seems difficult. The author conducted field researches of multiple firms on this topic from 2008 to 2014, and found out that both in local units and headquarters have complaints and dissatisfaction toward each other. For instance, in local units often express dissatisfactions such as the only concerns of expatriates are decisions and evaluations made by headquarters, engineers in headquarters do not share information timely, and they would not understand, no matter how hard we explain issues of local markets to them. …