Human aspects of R & D organization

Abstract. The organization structure of an R & D Division should seek to establish conditions in which creative ideas flourish. The nature of the R & D activity and needs of its staff must be clearly understood. The essential core of the organization should comprise a number of commercial target groups around which lie a flexible array of disciplinary and service groups. It is essential that group managers are seen to be scientists or engineers of distinctive competence. There should not be more than three tiers of management.     

Literature indexing systems for corporate R & D strategy: a case-study in the pharmaceutical industry

Abstract . Information retrieval systems in R & D laboratories are normally used to provide information about the state of the art in fields of corporate interest and to help to solve day-to-day problems. The authors show that such systems can also be used as a tool for planning by R & D managers, corporate planners and others involved in evaluating and setting strategic objectives for the firm. Their approach is to use the Science Citation Index to ascertain the specific institutional setting and geographical locations of researchers in whom material published by the subject firm excited a 'resonance'.
In their study they used the publications lists covering a five-year period provided by two West German companies. They point out that it is possible not only to assess the scientific standing of the R & D laboratory but also to get early warning of spin-offs into hitherto unrecognized fields, to identify 'markets' for the profitable exchange of information and to locate complementary sources of expertise.     

Budgets for research and development: an empirical study of 69 Swedish firms

Questionnaires were sent out to 124 large Swedish firms, asking how they determined budgets for research and development (R & D) and who decided about the size of these budgets. 94 firms answered and 69 of these undertook R & D.
It was found that, as a rule, firms decide upon individual projects and do not specify in advance a fixed level for the R & D budget. The decision about individual R & D projects and/or the R & D budget was most frequently made by the president of the company.
The implication of our results for various kinds of research on the economics of R & D are discussed.     

Suspending Group Debate and Developing Concepts

The ability of new product development (NPD) teams to generate ideas and develop high‐quality concepts for new products is a crucial determinant of NPD success. Although prior research in this area has developed various interventions to enhance the ability of teams to generate ideas, such interventions have limited impact on innovation management theory and practice. Partly, this is because of practical reasons: The interventions are often costly and impractical. However, there are also more fundamental, theoretical issues regarding these interventions: Knowledge of which interventions are effective in what situations is lacking. Even more importantly, there is no theory (or empirical evidence) about the effects of these interventions on the success of developing initial ideas into concepts. Together, this has caused the usefulness of these interventions for NPD teams to be uncertain at best. To remedy this situation, this study focuses on a costless and easy‐to‐implement intervention: suspending group debate. Suspending group debate refers to a team idea generation and concept development process in which groups debate a problem, ideas for solutions are generated individually, and these ideas are debated and developed into concepts collectively. The authors developed a new theory about the impact of suspending group debate on idea generation and on further concept development. Specifically, they argue that suspending group debate causes groups to generate a higher number of ideas, a higher number of original ideas, and a more diverse set of ideas, but that only the number of original ideas and the diversity of the set of ideas will translate into higher concept quality. The authors also developed new theory about when suspending group debate is especially effective. Specifically, they argue that suspending group debate is especially effective when at least one group member is low on extraversion. This theory is tested using an experimental design in which groups generated ideas and developed concepts for a specific organizational problem. Some groups suspend group debate, while others do not. Results show that suspending group debate indeed causes groups to generate a higher number of ideas, a higher number of original ideas, and a more diverse set of ideas. Importantly, results demonstrate that the effects of suspending group debate are more pronounced for groups with one or more group members that are low on extraversion. Furthermore, suspending group debate also affects concept quality, mediated by the number of original ideas and the diversity of ideas that groups generate (and thus not by the sheer number of ideas generated). Specifically, results show that both the diversity of the idea set as well as the number of original ideas positively influence the innovativeness of the final concept, while only the diversity of the idea set influences the comprehensiveness of the final concept.     

Private and social incentives to form R & D joint ventures

R & D patent pools induce individual firms to reduce investment in R & D, but are socially beneficial because they ensure greater competition in the post-innovation market. It is not usually optimal for all firms to combine in a single cooperative R & D venture. If R & D combinations are formed voluntarily by firms that seek to maximize their expected value, they will not, in general, adopt the socially optimal structure of R & D joint ventures.     

Which pathway to good ideas? An attention‐based view of innovation in social networks

Research Summary: This study introduces the notion of attention allocation in networks to argue that individuals with different types of network structure produce good ideas via different pathways. Using survey data on communication networks at a software company, we find that people with highly constrained networks generate good ideas by following a logic of interrogation, by which they focus their attention on information from a particular contact. Conversely, individuals with less constrained networks produce good ideas by following a logic of recombination, whereby they divide their attention to information coming from across multiple contacts. The results show that in highly constrained networks, interrogation is a more reliable pathway to good ideas than recombination. We discuss the implications of these findings for behavioral strategy, social networks, and innovation. Managerial Summary: People can develop good ideas when they recombine diverse information inputs shared by non‐redundant communication partners that span multiple local clusters. But, in an organization, most individuals are embedded in constrained networks of people who know each other and thus typically receive redundant information from work colleagues. This study suggests that they can innovate via a different pathway: through interrogation. We find that people who focus their attention on information coming from a particular person succeed at generating good ideas because they deeply interrogate local knowledge and develop domain‐specific insights.     

Applications of computers in R & D management

R & D Managers use computers extensively in solving technical problems. This paper examines the use they make of computers in solving Management problems. Applications of computers to various aspects of R & D programme formulation, project planning, technical information storage and retrieval, management information systems, and computer-aided training have been investigated by many companies and, in some cases, have been implemented. Some of the techniques have become well established but others are still at a development stage. No attempt has been made to evaluate the techniques described.
This topic was the subject of a study by a Working Group of the European Industrial Research Management Association (EIRMA), and a report 'Computers as Aids to R & D Management' was distributed to members of the Association. EIRMA has now agreed to release information contained in that report and this paper is based on that information updated by the author, who was Chairman of the EIRMA Working Group.     

Ten years of R & D Management-some major themes: the role of communication in R & D

Fifteen papers on the role of interpersonal communication in R & D appearing in the first ten volumes of R & D Management are reviewed. The conclusions reached by the various contributors on three major themes are compared. The themes are: the relation of communication to performance, the effect of physical separation on communication rate, and the role of communication stars in information transfer. A clear division of opinion emerges on the extent to which managers can impose or create effective communication patterns as distinct from merely being able to stimulate those that already exist. Differences in experimental approach and the existence of methodological gaps prevent any judgment being made between the two viewpoints based only on the evidence in the papers under review.     

A Note on Endogenous Spillovers in a Non-Tournament R & D Duopoly

The paper analyzes a simple non-tournament model of R & D where firms are engaged in cost-reducing innovation. It is shown that when spillovers of information are treated as endogenous firms never disclose any of their information when choosing their R & D non-cooperatively. Under cooperative R & D, firms will always choose to fully share their information, i.e., a research joint venture will operate with a maximal spillover value.     

R & D,Foreign Direct Investment and Technology Sourcing?

The U.S. experienced a surge in foreign directinvestment (FDI) during the 1980s.To date, we do notfully understand what the research and development(R & D) effects of FDI are. FDI can affect the hostcountry's R & D activities in at least two ways. First,if domestic firms perceive foreign entrants as seriousthreats to their domestic market share, they willchange their R & D policies hence industry-wide R & Dintensity also changes. Second, the increase in R & Dintensity may be attributed to foreign firms' R & Dactivities to acclimatize to U.S. conditions. Using apanel of 4-digit SIC industries from 1981–91, there issome evidence that the latter scenario may be apossible explanation for the observed changes inindustry-wide R & D intensity.     

Technology development in developing countries: The case of a private R & D institution in Brazil

Research Development (RD) is concerned with the conversion of inventions (i.e. new ideas) into innovations (i.e. new products, processes and services in the market-place). Empirical evidence indicates that the rate of success of RD is small. In the innovation chain of events the scientific or technical accomplishment is but one link, a necessary but not sufficient condition of success. Often the market is the decisive factor.
Many research and development organizations (R & DOs), especially those funded privately, allocate their resources with a strong orientation towards satisfying perceived market needs. If this incentive persists during the R & D work the RD effort will probably be much facilitated.
In the light of the above concepts, the Brazilian R & D and RD experiences are reviewed with practical examples and emphasis on the efforts of Centro de Tecnologia Promon—CTP (Promon Technology Center). CTP works on non-conventional energy, industrial process development and telecommunication product development.
The experience reported is not intended to serve as a general solution to R & D or RD problems in the developing world. The purpose is rather to suggest alternative pathways and to point out the importance of a diversified approach to the tough task of closing the innovation loop.     

Effects of R & D Spillovers on the Profitability of Firms

This cross-section study of a sample of 278 firms from the COMPUSTAT II database explores the relationship between a firm's profitability and other variables, notably its own R & D capital, knowledge and market spillovers and appropriability. The proxy for knowledge spillovers is based on technological distance. Market spillovers are based on a patent input-output matrix. Both spillover proxies combine information on R & D expenditures and patent counts.The results do not reject the hypothesis that R & D has a direct, positive effect on profitability, especially in industries with effective patent protection. Information spillovers affect profits negatively, market spillovers positively.     

Some evidence on the accuracy of forecasts in R & D projects

In recent years many formal attempts, e.g. Baker & Pound, (1964), have been made to help R & D management assess the worth of R & D projects and select those most worthy of inclusion in the R & D programme. Most of these attempts are based on financial appraisals of a project's worth and require estimates of the costs and likely revenues that will result from the adoption of a given project. It is clear, therefore, that the validity of any measure of a worth for a project is dependent upon the accuracy of the estimates of cost and revenue associated with that project. Unfortunately the limited amount of evidence so far presented suggests, in particular, that cost estimates are extremely inaccurate.
In this paper, therefore, we try to add some further evidence on forecast accuracy for a number of industrial R & D projects. We begin with a short review of the existing literature evidence and continue with an analysis of the past effectiveness of R & D work and, in particular, of forecast accuracy.     

Critical comments on the gatekeeper concept in science and technology

The concept of the gatekeeper as a means of improving information dissemination in science and technology has been given much attention. The criticism of the two-step flow model has been extensive in mass-media research. In principle, this criticism should also apply to studies of gatekeepers in R & D organizations. The two-step flow model does not tell us with whom the gatekeeper is communicating, what is being discussed, and what effect the gatekeepers have on the internal information dissemination. Using an empirical study of an R & D organization, the thesis is presented that gatekeepers can contribute to an eliteist pattern of distribution rather than to a reduction of the information gap. Finally, it is argued that studies of internal communication in R & D organizations should deal with communication relationships rather than with individuals as units of analysis.     

Towards networked R&D management: the R&D approach of Sonera Corporation as an example

In this paper the authors delineate the challenges of a dynamic environment to R&D management. The authors build on most recent ideas, such as the dynamic capability view of the firm, as strategic foundation for modern R&D management. Collaboration is emphasized as a meta-capability for innovation. These ideas are merged into a 'Networked R&D Management' approach that emphasizes internal and external collaboration networks as critical for companies operating in a dynamic business environment. The approach is illustrated with ICT industry as an example. The implementation of Networked R&D Management is reflected in the illustrative case discussion of R&D management of Sonera Corporation.     

Effectiveness of Individual and Aggregate Compensation Strategies

Based on a sample of 175 scientists and engineers, this study shows that individual-based rewards (either in the form of merit pay or individual bonuses) are perceived as less effective than aggregate incentive strategies for R & D workers. The pay effectiveness measures used here include pay satisfaction, propensity to leave, project performance, and individual performance. All things considered, team-based bonuses are perceived as the most effective rewards in an R & D setting. The findings also indicate that employees with a low willingness to take risks are more likely to experience withdrawal cognition if they work for a firm that relies on variable compensation.     

虚拟研究与开发组织的理论及其在医药行业的实践

目的 为有效利用、整合现有资源,提升制药企业新药研究与开发能力提供参考,方法探讨虚拟研究与开发组织的理论及特点,结合新药研究与开发的特点,对我国应用虚拟研究与开发组织模式提升新药研发效率相关问题进行分析论证结果及结论虚拟研究与开发组织是一种适合我国制药企业新药研究与开发工作的新思路,制药企业可以选择三种模式进行虚拟研究与开发的实践政府可以通过建立合作研究中心推动虚拟研究与开发工作．     

The effect of individual roles on performance in innovative groups*

Innovative performance of groups of scientists was related to performance of ‘colleague roles', utilizing a model of organizational decision making proposed by Farris (1971). In more innovative groups, supervisors were named less often by group members as useful for original ideas, but more often for providing critical evaluation. Members of more innovative groups named one another more often as useful for providing technical information and help in thinking about technical problems. Organizational information was available from fewer sources inside or outside the more innovative groups. Supervisors of more innovative groups named more outside sources as useful to them for original ideas. These trends are very consistent with Maier's (1967) emphasis on the leader's ‘integrative function’ in group problem solving.     

The Determinants of Innovation: R & D,Technology Transfer and Networking Effects

The traditional analysis of innovation has focused on the Schumpeterian hypothesis of a positive link between market power and innovation. This often includes an implicitly linear view of the innovation process, with R & D as a necessary first step. This paper widens the determinants of innovation beyond R & D to include technology transfer and networking effects, thus extending the standard Schumpeterian analysis. When tested on a dataset of c. 1300 UK manufacturing plants, R & D, technology transfer and networking are found to be substitutes in the innovation process, with the two latter intensities especially important in increasing the extent of innovation. There is no evidence that (actual) monopoly power increases the extent of innovation, but there are significant plant and sectoral effects on innovation.     

Why Do Established Firms Enter Some Industries and Exit Others? Empirical Evidence on Italian Business Groups

In this paper the determinants of entry and exitdecisions are analysed empirically on a sample of wellestablished business groups operating in Italianmanufacturing. The focus is on the role of sunk costsas entry barriers. Two competing hypotheses aretested. On the one hand, setup costs, R & D andadvertising outlays act as barriers to entry for bothnew and already established firms because of theirindustry-specific commitment value. On the other hand,they may induce established firms, which operate insimilar industries, to enter. This is the case if R & Dand advertising are firm-specific investments whichgenerate externalities to be efficiently exploited inadjacent industries. Overall results suggest that thesecond hypothesis gives a better picture of thebehaviour of our sample of firms.