A basic model for evaluating R&D performance: theory and application in Italy

Nowadays the public R&D laboratories have a fundamental role in countries' development, supporting businesses as they face the technological challenges in the turbulent world scenarios. Measuring the performance of R&D organisations is crucially important to decisions about the level and direction of public funding for research and development. This research considers the public laboratories like systems and develops a mathematical model based on the measurement of R&D activities with k‐indices. The score obtained from the research laboratories evaluation (relev) methodology synthesises in single value financial, scientific and technological aspects. It is an indicator, for R&D manager and policy maker, of performance in relation to other research organisations or in a time series. The method is an instrument of strategic planning and can be used for the improvement of individual activities and the overall performance of public R&D bodies.     

Multinationals and the globalization of R&D

In this paper we consider how the location, organization and output of knowledge production evolve within domestic firms following acquisition-FDI in order to understand the aggregate effect on an index of domestically produced innovations. We find strong differences according to how close the acquiring MNE is to the technologically frontier. Frontier MNEs are more likely to close R&D activities in acquired affiliates, but when they are retained they expand employment of high-skilled R&D workers and transfer R&D knowledge. Non-frontier MNEs make fewer changes to R&D. Overall the effect of acquisition-FDI on the domestic innovation index is positive.     

Identifying technology trends for R&D planning using TRIZ and text mining

The current pace of technological development has forced many companies to invest significant capital and resources in research and development (R&D) activities. A systematic and efficient method of identifying technology trends and their evolutionary potentials can help companies guide their R&D planning and wisely allocate their R&D resources. This study proposes a framework combining the evolutionary trends developed by the Theory of Inventive Problem Solving, or Teoriya Reshniya Izobretatelskikh Zadatch (TRIZ) in Russian, with the visualization technique of text mining to systematically identify technology trends from patent documents. As technological information in patent documents is stored almost entirely in text format, the text mining method allows R&D personnel to efficiently identify technology trends and effectively conduct R&D planning. Utilizing text mining method on patents of magnetic random access memory (MRAM) systems and the underlying principles of TRIZ evolutionary trends, this study shows that MRAM includes 10 important technology trends. These trends have almost reached the evolutionary limit phase defined by TRIZ, which means that MRAM is fast becoming a mature technology. Therefore, for businesses that intend to acquire MRAM technology they do not possess, a wise R&D plan may be licensing the technology, buying the technology from others, or participating in a joint venture rather than using in‐house R&D.     

Innovation and control in the multinational firm: A comparison of political and contingency approaches

This study focuses on control mechanisms used by multinational corporations (MNCs) to manage their extra‐national R&D units. Drawing on both the literature on organizational power and contingency theory, this study develops and empirically tests a set of hypotheses aimed at explaining how headquarters control their overseas R&D units. Data collected from 134 R&D units of German MNCs serve to test the hypotheses. Results highlight the importance of the units' R&D mandate and its interdependence in explaining control mechanisms. Moreover, they indicate a relatively weak predictive power of political approaches compared to contingency approaches. Copyright © 2007 John Wiley & Sons, Ltd.     

The path of R&D efficiency over time

In this paper we investigate the pattern of R&D efficiency in terms of the number of product innovations achieved by firms over time. Using a panel dataset of Spanish manufacturing firms for the period 1990–2006, we follow the innovative performance of R&D active firms and observe that innovation rates change over firms' R&D histories. To explain these facts we propose a model that explicitly acknowledges the twofold composition of firms' R&D expenditures, comprising spending on both physical capital for R&D projects and payments to researchers. We regard this latter component of R&D as a source for dynamic returns to firms' R&D investments. Consequently firms' innovation outcomes clearly depend on how long they have been investing in R&D and also on whether there have been any interruptions in the temporal sequence of R&D activities. Our results suggest that R&D activities exhibit dynamic returns that are positive but at a decreasing rate, and that interruptions in R&D engagement reduce R&D efficiency.     

The importance of internal and external R&D network linkages for R&D organisations: evidence from Singapore

This paper examines the importance of internal and external R&D networks for R&D organisations of multinational firms (MNCs) in Singapore and investigates corresponding R&D management requirements in this context, namely a late-industrialising country in Asia. A unique feature of Singapore is its ability to attract 'high quality' foreign direct investment, involving activities of higher value added and more complex technology without having developed full-fledged R&D activities among its business organisations, thus creating a challenging situation for subsidiary R&D managers, both in the internal R&D organisation as well as in the external research environment. This paper analyses these issues.
Based on in-depth interviews with 53 R&D subsidiaries of MNCs operating in Singapore, this paper identifies internal and external R&D management needs. Through our analysis of data gleaned from these interviews, we found that subsidiary R&D managers need to increase and/or maintain the strategic importance of their R&D site internally within their global corporate R&D organisation. This requires constant upgrading of the technological level at the R&D subsidiary and intense communication with headquarters as well as other R&D subsidiaries. Furthermore, our findings indicate that in the external research environment, subsidiary R&D managers need to create an efficient local network of external players. If these internal and external issues are properly addressed, the R&D subsidiary can effectively contribute to the corporate R&D organisation and be a critical partner in the local research network. Lessons learned from the Singapore experience include the need to develop sufficient local expertise as well as to change the mindset of managers to focus on creativity rather than precise execution.     

Principal researcher and project manager: who should drive R&D projects?

In this paper, it is analyzed the hypothesis that in R&D the principal researcher (PR) is accepted as the coordinator or project manager (PM), carrying out the search for financing and to manage contracts, resources, cost, time, scope, risk and uncertainty, communication, stakeholders and so on, in addition to internal research activities. Thus, this study tries to verify this hypothesis through a major literature review in different types of projects developed by university, but also with a look to industry and industry-university cooperation. Two case studies are also analyzed, centered in its R&D project management maturity level. It is concluded that there is an important issue in projects’ success and in the time spent by PR in management, work for which they are under trained; while at the industry there is a greater approach to project management by the proximity of the innovation projects to other industrial projects. Following these initial findings and according to the case study results, it is proposed that R&D Projects in universities would be separated into two synergistic knowledge areas: R&D Management and Project Management. It is also recommended to allocate them to two distinct roles, where they could add value to R&D through their better knowledge and skills.     

The effect of inducement prizes on innovation: evidence from the Ansari X Prize and the Northrop Grumman Lunar Lander Challenge

Inducement prizes are increasingly popular because of their potential to induce technological innovations and attain related goals. Academic research, however, has barely investigated these prizes. This paper investigates the motivation of prize entrants, the characteristics of their research and development (R&D) activities, and the overall effect of prizes on innovation using case study research and documentary data sources. The Ansari X Prize and the Northrop Grumman Lunar Lander Challenge, both considered successful technology competitions in the aerospace sector, are investigated. The findings show that, first, incentives created by competitions, particularly those that are nonmonetary, attract unconventional entrants. The market value of the prize technologies motivate entrants as well but do not attract traditional industry players. Second, limited technology development lead times and no up‐front funding characterize prize R&D activities, yet their differences with traditional industry practices are caused by participant‐level factors. Most importantly, the introduction of novel R&D approaches is associated with the participation of unconventional entrants. Third, these prizes induced innovations over and above what would have occurred anyway, with the caveat that they were linked to significant technology incentives and fundamentally, ongoing R&D processes. These findings put forward lessons that inform the design of more effective prize competitions.     

Achieving contextual ambidexterity in R&D organizations: a management control system approach

Research on how managers control R&D activities has tended to focus on the performance measurement systems used to exploit existing knowledge and capabilities. This focus has been at the expense of how broader forms of management control could be used to enable R&D contextual ambidexterity, the capacity to attain appropriate levels of exploitation and exploration behaviors in the same R&D organizational unit. In this paper, we develop a conceptual framework for understanding how different types of control system, guided by different R&D strategic goals, can be used to induce and balance both exploitation and exploration. We illustrate the elements of this framework and their relations using data from biotechnology firms, and then discuss how the framework provides a basis to empirically examine a number of important control relationships and phenomena.     

Emerging challenges for R&D executives — an American perspective

In recent years, many companies have witnessed dramatic changes in their business environment. Emergence of global markets and competitors coupled with new competitive strategies based on quality, speed and/or alliances have forced business managers — especially in the United States — to adopt new management strategies, structures and systems. These in turn have caused many R&D executives to progress from their traditional agenda of managing R&D activities in domestic laboratories to a new agenda of coordinating and integrating technology development and exploitation on a world-wide basis. This paper discusses this evolution of R&D management agenda in the United States and its implications. It also reviews the approaches being used and the experiences being gained by the American R&D management community to address the emerging challenges.     

Partial adjustment toward target R&D intensity

Existing research assumes that once firms have determined their target R&D intensity, they can adjust instantaneously and fully to their target R&D intensity, regardless of their past R&D intensity. In this study, we draw on the partial adjustment framework to examine the dynamics of firms' adjustment toward their target R&D intensity. We find that firms usually do not adjust instantaneously or fully to their target R&D intensity; they typically close half of the gap between their past and target R&D intensity in a year. Furthermore, we find that the speed of adjustment varies widely across firms. Firms with more cash flows, less debt, and more new equity financing have higher speed of adjustment. We draw implications for the dynamics of R&D investments and Schumpeterian competition.     

Motivations and barriers of foreign R&D activities in China

The continued growth of the Chinese economy accompanied with the expansion of international investment in China has led to an increase in foreign research and development (R&D) activities in the country. Aside from the rising importance of R&D internationalization, research on foreign R&D in China has been neglected in the past due to its emerging status. In this article we examine drivers and barriers for conducting R&D in China. The focus of our research is on transnational companies typically characterized by decentralized R&D activities. Our research is mainly based on qualitative interviews with senior R&D managers. The success of foreign R&D activities in China strongly depends on the realistic estimation of its advantages and the proper identification and handling of barriers.     

Entry mode,organizational learning,and R&D in foreign affiliates: evidence from Japanese firms

This paper develops hypotheses concerning the role of entry mode and experience‐based organizational learning as determinants of the R&D intensity of foreign affiliates and tests these hypotheses on a sample of 420 Japanese manufacturing affiliates abroad. Entry mode has a major impact on R&D activities: the R&D intensities of acquired affiliates substantially exceed those in wholly owned greenfield affiliates, while the R&D intensities of minority owned ventures are higher if Japanese parent firms lack strong R&D capabilities at home. For greenfield operations, support is found for an incremental growth pattern of foreign R&D as a function of organizational learning and affiliate capability building. The results are consistent with the view that part of the explanation for Japanese firms' relative lack of involvement in overseas R&D must be sought in their status as ‘latecomers’ in the establishment of overseas manufacturing networks. At the same time, a number of Japanese firms have actively used foreign acquisitions and joint ventures to gain access to overseas technology and to establish overseas R&D capabilities at a faster pace. Copyright © 2002 John Wiley & Sons, Ltd.     

Economic compensation compositions preferred by R&D personnel of different R&D types and intrinsic values

In order to enhance R&D performance, R&D managers make sure that R&D personnel are satisfied with their compensation, both economic and non–economic . An R&D compensation scheme would consist of many complex factors. In this research, we focus on 'compensation composition' as such a factor for the economic compensation system, i.e., the mix of compensation components such as team (or organization) performance based, individual (R&D personnel) performance based, and fixed (seniority based) portion of economic compensation. As part of non–economic compensation, intrinsic values such as social status and self–actualization perceived by the R&D personnel are influencing their level of satisfaction with the entire compensation system. Another critical factor we consider here is the difference in R&D types: there are three R&D types, i.e., basic, applied , and commercial R&D . We put forth two sets of propositions. First, there is statistically significant correlation among R&D personnel's job satisfaction, performance measurement satisfaction, and compensation satisfaction. Second, depending on the types of their R&D activities, R&D personnel prefer a certain composition of economic compensation. In addition, the relationships are mediated by whether the R&D personnel feel intrinsic values of their jobs.     

Unveiling dimensions of organizational culture: an exploratory study in Malaysian R&D organizations

Previous literature indicated that research and development (R&D) activities are influenced, to a large extent, by the culture of the organization. While these studies have identified elements of culture that are conducive to R&D, identifying the existing dimensions of organizational culture in Malaysian R&D organizations has not been empirically explored. The measures for this study were originally developed for the sole purpose of capturing cultural aspects in R&D organizations in the Malaysian context. These measures were developed based on the relevant issues discovered from exploratory case studies and nine categories of cultural values identified from the literature. A sample of employees (n = 198) from 45 R&D organizations took part in this study. Factor analysis was adopted to uncover common underlying dimensions (factors) of the organizational culture construct. The findings suggest that the organizational culture construct in R&D organizations may best be represented through a structure of eight factors. The eight factors are teamwork and knowledge sharing, empowerment and recognition, conformity and impediments to R&D, risk‐taking, customer orientation, autonomy, social networking, and organizational design. Despite some methodological issues that arose from this study, this model has the potential to become a management instrument to measure the underlying culture in R&D organizations. R&D managers can deploy this model to establish the baseline level of research culture in their respective units and thus provide the foundation for management initiatives to drive R&D activities. This model can also be used as benchmarking parameters when an R&D organization intends to evaluate various aspects of their organizational culture in relation to others that are considered to be leaders in the industry.     

External Technology and In-House R&D's Facilitative Role

A number affirms use external sourcing of technology to create technological change in their organizations. In this article, Falguni Sen and Albert Rubenstein develop a rationale to support the concept of an integrative technology development strategy which emphasizes the role of in-house R&D during the planning and implementation process for externally sourced technology. They divide the external sourcing process into two major components: an acquisition phase and an implementation phase. Next, they define five distinct stages within both phases. Based on a review of the literature, the authors identify some common problems with external sourcing and discuss potential ways that in-house R&D can alleviate them by becoming involved in specific steps in each of the ten stages. The data in the article have been obtained from thirty-one cases of external sourcing of technology from a diverse group of industries in the United States and India. R&D's involvement in the external technology process varies among firms and is generally low in the acquisition phase. In the research, R&D managers describe barriers to their involvement, and the article develops measures of effectiveness of the activities in each stage of the external sourcing process. The authors recommend removing relevant barriers, especially in those stages where the involvement of in-house R&D groups could increase the effectiveness of the process.     

Networks and the Decision to Persist with Underperforming R&D Projects

Drawing on aspiration level theory and the networks literature, this paper develops a model toward decision makers' persistence with underperforming R&D projects based on the perceived properties of their personal network. The assumption is that positive feedback from network partners motivates persistence, and that this effect is multiplied when the decision makers' network is larger and denser, when network ties are predominantly strong, and when communication frequency within the network is high. The model is tested by a field experiment and conjoint methodology. Analysis of 1632 persistence decisions nested within 51 scientists responsible for R&D projects reveals that more positive feedback enhances persistence of underperforming R&D projects, and that this effect becomes stronger with increasing network size, network density, and communication frequency. These findings extend the project management literature by focusing on the social environment of the decision maker as one so far neglected factor in empirical studies on persistence decisions. Moreover, this study is among the first to investigate contingency relationships between feedback received from network partners and network structure. Finally, while most studies have emphasized that individuals and organizations can profit from their engagements in social networks, this paper suggests a potential dark side of networks by showing that networks can encourage decision makers to persist with their investment in an underperforming—and potentially failing—project. These results can help project managers involved in networking activities to better understand the effects of these activities on their decision policies, and thus draw better and more accurate decisions. Second, this study provides insights into how organizational strategy with respect to dissemination of R&D results and involvement of the organization's R&D managers in the scientific community influences the persistence of underperforming R&D projects, and thereby the organization's R&D expenditures. This can assist top managers to design financial controls and allocate financial resources to managers of underperforming R&D projects in line with the organization's networking strategy.     

How Do Interaction Activities among Customers and between Customers and Firms Influence Market Performance and Continuous Product Innovation? An Empirical Investigation of the Mobile Application Market

Mobile application markets (MAMs) significantly differ from other existing marketplaces at least in two aspects. First, customers (app users) and firms (app providers) frequently interact with each other in real time, which is not common in the conventional marketplaces. Second, many app providers incorporate customers’ opinions or suggestions into their software upgrades, representing one of the most unique and interesting aspects of MAMs. Therefore, it has become critical to understand the impact of interaction activities not only among customers, but also between customers and firms on the market performances of new products in MAMs. One of the most significant issues firms face is whether firms reflect on customers’ postpurchase interaction activities, and the next interesting question is how firms respond to them. This study explores the effects of customer‐to‐customer (C2C), customer‐to‐firm, and firm‐to‐customer interaction activities on market performance. In addition, this study investigates how communication activities influence a firm's tendency to pursue continuous product innovation through research and development (R&D). Using data obtained from a major MAM, T store, three models that are respectively related to product sales, product lifetime, and a firm's R&D activity for product upgrades, are applied to empirically test hypotheses concerning the effects of interaction activities. In our analyses of market performance, a hierarchical log regression model with 10,840 weekly transactions data set related to product sales (model A) and 291 aggregate transactions related to product lifetime (model B) is used. Results indicate that C2C and customer‐to‐firm communication activities have a positive impact on sales, but little relationship with product lifetime. However, a firm's continuous product R&D has a positive impact on both sales and lifetime performance. Our analysis of a firm's R&D (model C) shows that C2C and customer–firm communication increases a firm's R&D activity. Taken together, these results have important implications for customer–firm interactions, market performance, and R&D strategies.     

R&D networking in a pharmaceutical company: Some implications for human resource management

A case-study of the R&D networking activities of Glaxo Group Research was carried out between June and November 1993. Different types of networking situation were identified using a simple 2times2 matrix –- the ‘networking uncertainty map’. This paper describes the background to Glaxo's R&D networking activities, introduces and illustrates the uncertainty map and then suggests the implications of each type of network. There are implications in general for R&D management and more specifically for the management of human resources in R&D. Managers might easily apply the uncertainty map to their own R&D networking situations.     

Cross-Pacific internationalization of R&D by U.S. and Japanese firms

Efforts by MNCs to develop coordinated international R&D networks have taken place from different historical bases of internationalization and in the context of differing trends in the role of R&D within the corporation, as the cross-Pacific R&D investment in leading U.S. and Japanese firms in the electronics industry shows. Japanese firms, although they espouse a strategy of 'localization', are establishing wholly-owned R&D centres in the U.S. with highly specialized technology mandates that to be used by the company must be networked with their parent organizations. U.S. firms rely on joint ventures or wholly-owned labs with a wider array of technologies that face strong pulls to a local orientation. The patterns are somewhat out of line with the models of internationalization each side is espousing.