Exploratory Results on the Importance of R&D Knowledge Domains in Businesses with Different Strategies

A number of studies have described the consequences of the changing patterns in the business environment for R&D departments. Fewer studies have addressed the specific implications of the changing business environment for the agenda of R&D managers. Gupta and Wilemon (1996) have provided R&D managers with a priority list for action designed to be applicable to R&D departments independent of business strategy. However, a substantial body of literature suggests that the priority listing may be different for R&D departments in businesses with different strategies. Against this background this study sets out to determine whether the priority listing is different for Miles and Snow's (1978) strategic archetypes of prospectors, analyzers, defenders and reactors. A total of 72 R&D managers of businesses competing in industrial markets in the Netherlands provided the data to test for the existence of these differences. The results indicate that the priority listings are indeed different for R&D departments in businesses with different strategies. This finding has important practical implications. The priority listings can be used by R&D managers to assess which R&D capabilities have to be developed in order to match R&D strategy with business strategy and meet the criteria for getting more commercial payback from R&D in a changing business environment.     

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.     

Profitability Goals,Control Goals,and the R&D Investment Decisions of Family and Nonfamily Firms

Research and development (R&D) investments can help build sustainable competitive advantages and improve firm performance. Nevertheless, managers also acknowledge the difficulties associated with managing R&D and the low chances of success of innovation programs. For this reason, researchers have long been interested in understanding how managers make R&D investment decisions. Research grounded in the behavioral theory of the firm suggests that a primary driver of R&D investment decisions is profitability: when profitability goals have not been met, managers are more likely to initiate a problemistic search through increasing R&D investments. While emphasizing profitability goals and their relationship with R&D investments, prior research largely downplays the role of goals beyond profitability that exist in a significant number of firms (family firms) that are owned and managed by family members whose primary concern is preserving their control over the organization. Research indicates that these family‐centered noneconomic goals lead family managers to minimize R&D investments and that the coexistence of multiple goals produces highly variable R&D investment behavior. Yet, how family‐centered goals for control and profitability enter decision‐making in family firms is not fully understood. In this study, we propose that family managers form distinctive reference points that capture supplier bargaining power and are used to evaluate the degree of external obstruction to their managerial control. The empirical analysis of panel data on 431 private Spanish manufacturing firms observed over the period 2000–2006 shows that the importance of profitability and control goals follows a sequential logic in family firms, such that family firms react more strongly to increasing supplier bargaining power when their profitability reference points have been reached. This study extends current understanding of the distinctive organizational processes engendered by family management in business organizations leading to new research opportunities at the intersection of the innovation management and family business literatures.     

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.     

Core competencies and the strategic management of R&D

There is an increasing concern amongst R&D managers and their immediate 'customers' and sponsors within companies to have reliable mechanisms to direct R&D simultaneously toward effective rapid innovation and accumulation of long term technological strength. This is leading R&D managers to seek analytical tools to help them identify technologies which have particular significance for competitive advantage, for multiple SBUs, and for longer term strategic positioning, and to manage them in ways which do not leave them at the mercy of business unit strategies, but situate them closer to the core of corporate strategies. This paper conducts an examination of the parallel literature on the idea of core competencies as a new paradigm in corporate strategy and shows that core competencies can be useful focusing devices for assisting in the creation of this linkage between the technological and non-technological aspects of the corporate strategy agenda. Implications are drawn out for: R&D decisions in the areas of shaping strategic research programmes; funding and organisation regimes for R&D and measuring the effectiveness of R&D.     

Reshaping European metrology research – the role of national research managers

This paper deals with the role of research and development (R&D) managers in shaping the landscape of public research in Europe. These R&D managers work in the sphere of public research within national government laboratory services. The case we present is of the reconfiguration of metrology research. Metrology is the science of measurement. We examine why scientists and research managers in nationally embedded institutes, which are performing R&D in support of national policy and local industry needs, have chosen to co‐operate in a shared research programme. This means giving up, in part, their national sovereignty over funds and decision making. Furthermore, we examine how they have achieved the shared programme, which was launched as a European Commission (EC) programme through the Article 185 ¹ initiative, which allows the European Union to participate in research programmes undertaken jointly by several Member States.     

Problems faced by R&D managers in Canadian federal government laboratories

The paper conducts a critical review of the problems faced by middle to first-line managers in managing R&D in Canadian government laboratories. The data come from the published literature, interviews with R&D managers, and information obtained from government employees undergoing training as R&D managers.
The problems are numerous and serious. They arise from a multiplicity of causes related to underfunding and bureaucratic management practices that do not allow for the special nature of R&D. Hiring freezes, staff reductions, travel restrictions and reductions in training budgets are all consequences of underfunding, resulting in an aging workforce and technological obsolescence. Bureaucratic administration rules set by central agencies constrain the freedom of R&D managers to manage effectively, and limit low-level participation in policy-making and planning. The result is that too many management posts are filled by under-achieving scientists and engineers, with resultant consequences for originality and efficiency.
The authors believe that the only cure is to undertake proper funding, recognise the special operational needs of R&D management, and select managers for managerial ability in addition to technical competence.     

System modeling of the R&D domain through the object–process methodology: a practical tool to help R&D satisfy its customers' needs

Research and Development is an intricate process involving a host of challenging technological frontiers. This paper presents a practical tool to help R&D personnel satisfy the needs of customers by a systematic evaluation of R&D performance. To establish a sound methodology for R&D performance evaluation, we employ the object-process analysis (OPA) part of the object–process methodology. Using OPA, we gradually expose the constituents of the R&D system, its environment and the interaction between them. Through this systematic top-down refinement, we provide a comprehensive generic view of the R&D domain. The framework presented in the paper allows the user to describe, order, and inter-relate the issues that R&D managers should consider when managing, evaluating and planning R&D. As the approach addresses structure and behaviour in a unified, integrated manner, the analysis provides insights into both the static and dynamic aspects of the R&D domain and establishes a solid basis for its enterprise modeling.     

Critical issues facing R&D managers in China

R&D managers in China experienced significant changes in the past decade, in particular because of Government policies of economic reform and opening to the outside world. These developments have brought about a number of rather specific R&D management issues and problems. The paper addresses the main problems faced by R&D managers in China. First, the current situation of R&D management in China is discussed, as well as the future developments. The paper then presents a case study of the CISRI (Central Iron & Steel Research Institute), a large comprehensive R&D organisation in Beijing. The analysis leads to the critical issues in CISRI's R&D management. After that, a further investigation is described into the trends of Chinese R&D management. The outcomes described focus on the future of R&D management in China as well as on the integration of Western R&D management theory in China. The paper concludes with the major issues and recommendations for the further development of R&D management in China.     

The budgeting process for R&D laboratories

The author had been associated with the writing of a short series of case studies into the process by which companies allocate their R&D budgets to individual departments or projects. A key question became the location of responsibility for determining the objectives of work under-taken in R&D, and also responsibility for the allocation of resources in R&D.
The cases revealed that decisions were taken by senior R&D managers at one extreme, and by marketing or production managers at the other, but also most often jointly between the functions with different weightings of authority. The parameter most clearly differentiating between the loci of responsibility was the project duration. This led to the development of a two dimensional diagram correlating the expected remaining duration of the project, with the locus of responsibility for its management.
It is expected that this model which fits current practice into a normative framework will enable organizations to review and adjust their present methods of coping with the complexities of R&D budgeting.     

Performance measurement in R&D: exploring the interplay between measurement objectives, dimensions of performance and contextual factors

Measuring research and development (R&D) performance has become a fundamental concern for R&D managers and executives in the last decades. As a result, the issue has been extensively debated in innovation and R&D management literature. The paper contributes to this growing body of knowledge, adopting a systemic and contextual perspective to look into the problem of measuring R&D performance. In particular, it explores the interplay between measurement objectives, performance dimensions and contextual factors in the design of a performance measurement system (PMS) for R&D activities. The paper relies on a multiple case study analysis that involved 15 Italian technology-intensive firms. The results indicate that firms measure R&D performance with different purposes, i.e. motivate researchers and engineers, monitor the progress of activities, evaluate the profitability of R&D projects, favour coordination and communication and stimulate organisational learning. These objectives are pursued in clusters, and the importance firms attach to each cluster is influenced by the context (type of R&D, industry belonging, size) in which measurement takes place. Furthermore, a firm's choice to measure R&D performance along a particular perspective (i.e. financial, customer, business processes or innovation and learning) is influenced by the classes of objectives (diagnostic, motivational or interactive) that are given higher priority. The implications of these results for R&D managers and scholars are discussed in the paper.     

Uncertainty and stress in an R&D project environment

Abstract
R&D project managers work in an environment in which the uncertainty and complexity of engineering development problems are an important source of episodic job stress. A study of the US. Navy's top major project R&D managers (N = 118) was conducted to test the use of various coping skills and social support as preventive stress management techniques for this population. It was found that perceived environmental uncertainty (PEU) had a direct, positive effect on psychological distress of these project managers while social support had a therapeutic effect on their experience of burnout. While problem focussed coping had a small, positive effect on burnout, neither coping skills nor social support were found to have a primary prevention effect upon perceived environmental uncertainty (PEU).
Engineering managers engaged in high technology R&D are confronted by a wide range of uncertainties, risks and changing demands that give rise to the stress response with its attendant physiological and psychological changes (Asterita, 1985). Adams (1980) has argued that an episodic versus chronic dichotomy of stressors is valuable because it distinguishes between intermittent stressors of finite duration (episodic) and ongoing stressors of indeterminant duration (chronic). This article reports the results of a study of uncertainty as an episodic work stressor for the U.S. Navy's high technology R&D project managers. The results suggest that R&D project managers should develop social support systems and structures to maintain well-being and avert distress and strain.     

Research and development alliances and accounting

Very little is known about the information used by managers to evaluate, plan and control R&D alliances. This paper focuses on the R&D accounting numbers that may be used and points to their inherent limitations and their potential to mislead. Alliance partners, in particular, need a clear agreement on the activities they include in R&D and on the costs they attribute to those activities.     

The effects of funding source and management ownership on the productivity of R&D

This study investigates the influence of the source of R&D funds and management ownership on R&D productivity. The lagged effect of the source of R&D funds on R&D output is investigated for a sample of US manufacturing firms in five industries over the 1996–99 period. Estimates based on 779 firm-years show that R&D productivity increases with the proportion of stock held by managers and directors of firms primarily in the Other Electronics industry. The estimates also show that recipients of government-sponsored R&D funds in the Chemicals industry have lower levels of output (sales) for each dollar committed to R&D. In addition, output for firms in the Chemicals industry worsens as management stockholding increases, implying an agency cost rationale for the observed difference in output. The implication is that firms with high manager-owner content are less productive with government-sponsored R&D than with company-financed R&D. The reported results suggest that potential agency costs should be incorporated in government-sponsored R&D contracts. It also suggests that the source of R&D funds should be disclosed and incorporated into the valuation of intangible assets attributable to research and development.     

Managing foreign R&D laboratories in China

This paper focuses on the management of R&D units established by foreign companies in China, investigating R&D missions, site build-up, integration with the parent organization, and overall performance measurement. The research is based on 37 qualitative expert interviews with local R&D directors and managers conducted between 2001 and 2004, using a semi-structured research questionnaire, and semi-quantitative research done on 199 foreign R&D labs in China. Cultural influences on R&D management, location advantages, expatriate involvement, and organizational evolution of local laboratories are discussed. We find that foreign R&D laboratories in China are not only important vehicles for local market development but also increasingly important sources of locally developed technology.     

New directions in R&D: current and prospective challenges

This paper investigates the paradox of research and development (R&D), that is being increasingly undervalued by firms and nations, and yet continues to grow and prosper in terms of overall size and reach. The analysis outlines key developments that are currently affecting the growth and development of R&D activity and highlights the issues and problems that R&D managers and policymakers may likely face over the next decade.     

Initial directors of international R&D laboratories

Technology intensive companies establish new R&D laboratories in regions of high innovation and near centers of scientific excellence. Identifying the right R&D director to head up such greenfield investments is central to the success or failure of the new lab. Analyzing 162 interviews with senior R&D managers, we identify eight different directorship profiles. Examples of new R&D sites and their directors include IBM, Daimler, Leica, Microsoft, Xerox, Lucent and Ciba. The initial mission and the intraorganizational and intraregional integration of the new lab are principal factors for director selection, determining expatriate or national management, cultural and ethnic familiarity, as well as local or international transfers. The analysis of succeeding R&D directors indicates a trend towards locally rooted yet organizationally competent R&D managers. The paper concludes with desired qualifications of director candidates for newly established international R&D sites.     

Research and development target‐setting difficulties addressed through the emergent method: technology forecasting using data envelopment analysis

The aim of this study is to provide a foundation for researchers and managers to discuss and resolve difficulties associated with research and development (R&D) target‐setting. While multiple studies mention the difficulty of R&D target‐setting, few have compiled reasons for these difficulties or addressed this issue in detail. This paper provides one of the first studies outlining reasons for R&D target‐setting difficulties through a literature review. It also provides an initial set of analyses and results after applying an emerging quantitative method, Technology Forecasting Using Data Envelopment Analysis (TFDEA), to illustrate these difficulties step‐by‐step to commercial airplanes. Results include determining the state of art in commercial airplane technology and technological rate‐of‐change variants in setting R&D targets.