Involving suppliers in product development: Insights from R&D directors and project managers

While there is increasing evidence that involving suppliers in new product development (NPD) is important, and for many firms even inevitable, there is also evidence that not all such efforts are successful. Firms aiming at implementing this strategy effectively have to pay close attention to several contingency factors on the organizational level and properly manage supplier involvement on the project level. The exploratory case study research underlying this article explores key issues to be considered when involving suppliers in NPD and the counter measures they can take. Our research shows that companies differentiate between so-called “know-how” and “capacity” projects, and that they manage them differently. Furthermore, this research shows that firms outside the automotive and high-tech manufacturing industries are likely to intensify supplier involvement in the future.     

The lasting qualities of PERT: Preferences and perceptions of R&D project managers

This survey was conducted on the perceived popularity of PERT and PERT-type management systems; whether PERT'S applications were static, increasing, or decreasing, and whether its use was by choice or imposition. The extent of applications of PERT for managing various types of research and development (R&D) was examined with the view to ascertaining its individual popularity when applied to (a) basic research, (b) applied research, or (c) development projects. In addition, an inquiry was made into the estimated expense of PERT systems to plan and control projects as a percentage of the budget. The results of the survey are presented and discussed relative to various sizes of R&D organizations.     

Analysis on product rollover strategies: The innovation level perspective

We focus on the firm's decision on product rollover strategies from the view of innovation level. Consider an innovative firm produces and sells durable goods to strategic consumers over two periods. In period one, the firm offers a product with a low innovation level. During that period, the firm continues to innovate such that a product with a high innovation level can be offered in period two. The analysis is separated into two parts: minor-to-moderate innovation and major innovation. We find that the rollover decision is considerably different when the innovation is minor-to-moderate from when the innovation is major. In the former case, the optimality of each rollover strategy is fully determined by the innovation level of the product introduced in period two and the customers' discounter factor; whereas in the latter case, the single rollover strategy always dominates the dual rollover strategy. Moreover, the firm's pricing policy under single rollover is strongly dependent on the innovation level of the product introduced in period two. Whereas under dual rollover, the firm's pricing decision is independent of the innovation level. Finally, it is to be noted that the findings in this research are mainly contingent on the model framework.     

The national innovation system and foreign R&D: the case of Taiwan

R&D internationalization has increasingly involved countries outside the developed world. In addition, there has been a growing trend for countries in East Asia to seek to attract the R&D facilities of multinationals (MNCs). For such countries, they are faced with a fundamental question as to what kinds of impact MNCs' offshore R&D facilities will have on their own countries, especially in terms of technological innovation and industrial development. Set against the above backdrop, this paper sets out to examine a relatively new aspect of R&D internationalization related to global innovation networks and to open up the blackbox of the spillover effect regarding foreign R&D by examining the interplay of foreign R&D and Taiwan's national innovation system. The empirical part of the paper draws mainly upon intensive case studies of four high-profile foreign R&D facilities in the IT industry. The way foreign R&D interplays with Taiwan's NIS is examined in terms of the market & technology linkages.     

Groupware and teamwork in R&D: limits to learning and innovation

In recent years the re-engineering of R&D functions in large multinationals has often been accompanied by the emergence of groupware applications as strategic decision-making tools, while the organization of work has shifted towards various forms of teamworking. There is however, little empirical evidence on the conditions and processes through which groupware and teamworking practices can be efficiently linked. This paper examines the experience in groupware adoption by two large multinationals, Hoffmann la Roche and Unilever, in selected areas of new product development: the final New Drug Application phase for a new anti AIDS drug in Roche and the development along an 'innovation funnel' of new oral care products in Unilever. Despite the variety of tasks, organizations, missions and technology deployed, similar themes seem to emerge regarding how large organizations are able to 'host' the new groupware applications. Learning processes seem to play a key role in the final integration of the technology in the workflow. Still, what seems to emerge is that despite its critical role, learning is not a sufficiently valued competence, at least in the organizations examined. As a consequence, the innovations tend to drift, lead to unexpected outcomes and many opportunities for learning from (mistakes and) innovations are simply missed. Factors responsible for such a state of affairs seem to be the power of the hierarchical context into which groupware and teamwork are introduced; the continuous jolts to which such context must undergo because of radical shifts in management and R&D strategy; the dialectics between local and global changes.     

R&D networks and innovation: decentralised product development in multinational enterprises

This paper documents the ways in which overseas R&D in MNEs now plays roles in what are innovative new approaches to innovation itself. Networks of laboratories are seen as supporting both the short-term and long-term competitive evolution of the MNE group's globally-effective product innovation.
In terms of the immediate commercial application of new products for global markets it is argued that product development labs work within creative overseas subsidiaries in MNEs. These aim to derive variants of the new product that fully meet the distinctive needs of each key regional market.
Another separate network of decentralised MNE labs carry out precompetitive (basic or applied) research, embodying particular areas of technological comparative advantage of their host countries. This network of labs therefore provides inputs into a centrally-articulated programme whose objective is to provide the basis of the longer-term technological evolution of the MNE, by upgrading the core knowledge from which future generations of innovative products can emerge.     

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.     

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.     

The impact of EC R&D programmes on corporate R&D practice in Europe: a knowledge-base approach

This paper examines the role of additionality in the impact of EC R&D pro-grammes on firms. It comes from a study of the Impact of the EC Framework Pro-gramme on European Industry, which was sponsored by the Support Programme for Evaluation Activities in Research (SPEAR) of the EC. The argument is that there is an interaction between ie use of additional R&D resources, the organization of the R&D process, and the exploitation of R&D results. The analysis of the R&D process takes place within a framework based on the concept of the knowledge-base of the firm. A number of case studies are discussed and conclusions are drawn as to the impact of the EC Framework Pro-gramme on European firms.     

Problem–solving and idea-generation in R&D: the role of informal communication

This paper is a part of the study on the pattern and role of communication in small R&D projects which was carried out on two ongoing projects in one of the national laboratories of C.S.I.R. Here an attempt has been made: (i) to examine the types of problems solved and ideas generated by the scientists; (ii) to investigate the role of formal and informal communication channels actually used for problem-solving and idea-generation and the association, if any, between the type of channel used and the type of problem solved or idea generated; and (iii) to study the role of technological gatekeepers in the processes of idea-generation and problem-solving.     

Postgraduate scientists and R&D: the role of reputation in organisational choice

This paper reports on a series of interviews with postgraduate scientists in a number of UK universities. The interviews were designed to investigate the attitude of young scientists to employment in the pharmaceutical industry. The sample consisted of postgraduates in the biological sciences and included a broad cross-section of universities. The primary objective was to ascertain each student's ideal employer and to establish the role organisational reputation played in that choice. Students not intending to seek employment in commercial R&D were asked to explain why they had made that decision. The research established that knowledge of potential employers in the pharmaceutical industry was concentrated on two major companies, ICI and Glaxo. Students not considering the pharmaceutical industry indicated that lack of academic freedom was their major concern.     

Incomplete contracting in an R&D project: the Micronas case

Systematic empirical evidence on the consequences of incomplete contracts is meagre, because contracts are often classified as business secrets, and are accordingly difficult to obtain for research purposes. In this study we employ the extensive information from the life of a Finnish research joint venture, Micronas, during 1980–1992 to cast light on this issue. Of particular interest is the principal-agent relationship between the owners and the management of the research joint venture. Our investigation confirms the strong message of the incomplete contract theory. Hold-up problems are pervasive in R&D projects, and the allocation of power and ownership is important to the success of the projects.     

Organizational energy: an empirical study in Indian R&D laboratories

Analyzing the way organizations function and the processes that operate within these organizations is an important managerial responsibility. We have adopted a people–oriented approach called organizational energy to develop a simple process for diagnosing the level of satisfaction of scientists working in R&D laboratories. Psychic energy as reflected in different work activities in an organization is manifested in energy generating and energy draining activities that can be reduced to an energy count. The present study assesses the use of mental energy by scientific personnel working in three national laboratories in India with the objective of increasing the energy count for improving organizational effectiveness. We hope that the results can be used as the basis for initiating action to improve the motivation and utilization of scientists in India, to support the overall goal of self–reliance in science and technology.     

R&D Project Selection Strategy: an empirical study in Spain

The author has investigated the role played by project selection methods in defining a firm's technology strategy, as exemplified by a sample of innovative companies in Spain. The information was collected by a combination of questionnaire and interview with key personnel.
The author was able to classify strategies into four groups: (1) a planning strategy, essentially a negotiation comprising top-down and bottom-up elements; (2) an economic strategy in which a large number of economic criteria set in advance by top management are used to evaluate projects; (3) a market strategy in which R&D is seen more or less as an adjunct to the Marketing function, which defines the products needed and negotiates the programme with top management; (4) a technical strategy, used in circumstances in which technological innovation is essential and in which, therefore, economic factors take a subsidiary place.
The author's data show that in companies operating a planning strategy project selection methods of various, perhaps ad hoc kinds play a key role in reaching a company consensus. For those using an economic strategy the selection criteria are predetermined and selection methods inflexible. In the case of the market strategy, evaluation methods are used solely to help to rank projects prior to selection. Firms employing the technical strategy clearly base their decisions purely on the technical merit of the various projects put up for implementation.
The paper includes information on the types of selection method used, broken down by company size and other similar criteria, and comparisons with practice in the USA, France and some other countries.     

R&D investment,business performance,and moderating role of Guanxi: Evidence from China

Conventional wisdom posits that a long-term orientation with important partners such as key suppliers and clients is essential for superior performance. This study critically examines this business tenet by studying the relationship between duration of partnerships with major suppliers and clients and company performance. Based on a dataset comprising over 10,000 Chinese manufacturing firms obtained through a probability sampling procedure, results show that relationship duration with major clients not only has a direct, negative effect on total income (sales), but also has a negative moderating effect on the association between research & development (R&D) and total income. However, relationship duration with major suppliers has a positive moderating effect on the association between R&D and total profits. Furthermore, relationship with government has a positive effect on total income, and it also has a negative moderating effect on the R&D-performance chain. Managerial and research implications are also discussed.     

International management of R&D: The Swedish Experience

This paper summarizes the results of in-depth case studies of international R&D management in four Swedish multinational corporations. The results suggest that foreign volumes and shares of R&D expenditures are rapidly increasing. Through a rapidly increasing number of foreign acquisitions, foreign R&D laboratories have been added. As part of international rationalization of production, foreign units have been given global product mandates with responsibility both for manufacturing and R&D. In maturing foreign subsidiaries, routine technical activities have often evolved into proper R&D. Tight labour market conditions for engineers in Sweden have made it increasingly necessary to exploit existing technical capacity, regardless of location.
Concurrently, companies face new pressures for international coordination and control of R&D. Coordination is required to reduce product differentiation, to facilitate technology transfer and to ensure the technical and market compatibility of products and components developed at different locations but sold as part of total systems. Drawing on the experience in the four investigated companies, the paper discusses how systems and procedures can be developed to meet the need for coordinated international R&D management.     

R&D in China: an empirical study of Taiwanese IT companies

This study extends the research on R&D (research and development) internationalization to a new environmental context (two Asian newly-industrialized economies, mainland China and Taiwan). Based on a survey of 56 major Taiwanese information technology (IT) companies, the status of R&D internationalization with Taiwan as the home and mainland China as the host is investigated. Human-capital-augmentation is found to be the key motive for Taiwanese IT companies to extend R&D activities to the mainland. Accessing capable yet cost effective local engineers with an additional benefit of geographical and linguistic proximity is the major context of this motive. The location decision is based on three considerations – access to engineers, proximity to manufacturing site, and competition avoidance. Finally, three operational patterns of conducting the international design and development (D&D) activities are categorized, which are 'home-base-integration', 'host-base-integration', and 'product life cycle'.     

The effects of privatization on corporate R&D units: evidence from Italy and France

Over the last two decades privatization programmes in a variety of different countries have radically reduced the role of the state as a major owner of productive assets. While there is empirical evidence to show that the switch in ownership generally improves productive efficiency and profitability at company level, its effects on research and development (R&D) activities, which can impact strongly on long–term performance, have been largely ignored in the literature.
In this paper we address this issue by analyzing seven cases of privatization that have recently occurred in Italy and France in order to gauge how R&D activities may be affected by privatization in terms of objectives and organization. The organizations studied show that R&D units within privatized companies are subject to profound restructuring actions, generally designed to boost efficiency and to strengthen integration with the goals of the business units and of the final customers. A new role for R&D thus emerges: the aim is no longer to generate new knowledge in the broad national interest, but rather more directly to create value for the company and its clients, by emphasizing the assessment and integration of external knowledge.     

The growth and management of R&D outsourcing: evidence from UK pharmaceuticals

Outsourcing of research and development (R&D) activities has become a major management issue for R&D and technical managers within firms. It has also been of growing concern to academics who are trying to chart the implications of the increasingly distributed nature of research and innovative activities in advanced economies. This study is based on a survey of research-based pharmaceutical companies operating in the United Kingdom conducted in 2004–2006. The aim of this paper is to outline the main reasons for pharmaceutical firms to outsource R&D and the management practices followed by such companies in relation to outsourcing. The research results provide interesting findings in relation to, for example, the reasons behind outsourcing, the decision-making processes behind such practices and barriers to outsourcing arrangements. These issues are evaluated together with the characteristics of the firms and the specific project outsourced.