R&D management responses to the environment: current theory and implications to practice and research

The environmental problems faced by society are often regarded as global in importance. The global imperatives linked to environmental concerns pose critical questions about the international management of R&D. This theme is developed in this paper which was initially written as the basis for a workshop on R&D management responses to the environmental challenge held as part of the 1992 Conference on Managing R&D Internationally at Manchester Business School.
The paper considers recent literature on R&D management responses to the environmental challenge drawn primarily from English language sources out extending beyond traditional R&D management literature. The intention was to identify current theories about R&D management and the general business context for R&D and to consider the implications of environmental concerns for R&D management practice.
The paper suggests that R&D management and the environment is still at a relatively early stage of development. Nevertheless, there is a demonstrable gap between the approaches to environmental problems adopted by R&D practitioners and those chosen by R&D theoreticians. This mirrors a more general gap between theory and practice seen in the basic R&D management literature.
In general, R&D management and the environment has been constructed in the literature as a set of tools and techniques, rather than a strategic management issue. However, there is a developing body of literature which links R&D management and environmental management in a more strategic way and focuses on the need to consider organizational as well as technological change.
The paper concludes that an important way forward for research in this area is to establish an R&D Management and Environment Focus Group to bridge the gap between theory and practice and to explore the application of environmental concepts to R&D management.     

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.     

Research findings in strategic management with implications for R&D management

Abstract
The author has reviewed the literature, predominantly North American, on the relationships between corporate strategy and corporate performance.
The general context is the question of where and how a firm should diversify. The author considers three areas of decision: corporate strategy, (where to compete), business strategy, (how to compete), and corporate organization (receptiveness to diversification). It appears that the most advantageous corporate strategy is to diversify into a high-profit area but to maintain a substantial relatedness to existing businesses; the best business strategy is to have a market-related perspective, to use R&D to develop new products with a marked competitive advantage rather than new processes, to minimise investment but to enter the market on a sufficiently large scale. This last condition presupposes a high degree of top-management commitment to the venture. Furthermore, consideration has to be given to whether the organizational culture is such as to nurture rather than stifle the venture by insisting on administrative controls appropriate to the firm's traditional base.
The author points to three areas deserving of further investigation: How a firm in a mature industry can find a related area that is sufficiently attractive; how to fix on the correct scale of an entry taking into account the long lead times before the venture shows a net return; and how to ensure that the corporate culture will be able to accommodate novel interests and procedures.
All the above matters pose questions for the management of technology and the direction of R&D.     

The boundary relevance of the project manager's job: findings and implications for R & D management

Much of the stress and conflict in the project manager's job can be attributed to the boundary nature of that position. This study explores the relevance of recent developments in organizational role theory for clarification and understanding of the project manager's job. Findings are reported from a study which show that traditional management thought is inadequate for understanding the factors which regulate the project manager's behavior. One must recognize the boundary relevance of the project manager's role in order to avoid organizational or administrative arrangements that would be undesirable for project management. Several implications, which logically follow from the theory and findings on boundary role behavior, are noted for their relevance for R & D management.     

Stakeholder analysis for R&D project management

R&D projects affect the interests of different stakeholders in different ways. Understanding the stakeholders and analysing their interests helps in the better management of R&D projects. In this paper we discuss a methodology to systematically analyse the stakeholders of R&D projects. This methodology includes Freeman's (1984) three levels of analysis: rational, process and transactional. Based on these three levels, the stakeholder management capability of an R&D project is determined. The final stage is based on Mitchell et al . (1997) approach to analysing the dynamics of stakeholders. This methodology is illustrated using a New Zealand case relating to a road pricing R&D project.     

Strategic evaluation and selection of R&D projects

The most important families of R&D project evaluation and selection methodologies and associated techniques are briefly reviewed. For each family, generally one or two methods were chosen to be analysed from the point of view of the integration with the strategy. But, first some definitions and some aspects of the new strategic role of the evaluation and selection of R&D projects, which were in mind during the interviews, are presented.
Finally, some empirical results of the use of these methodologies in France and Japan are presented. The strong and weak points of the most prevalent methods are described as they are considered by the users.     

Technology analysis and R&D management

Technology analysis is a new field of knowledge aimed at creating a fuller understanding of the technological setting within which business operates. It provides a macro-discipline and is specifically aimed at improving the effectiveness of management of technology. As such it is of direct relevance to R&D management.
The essential tools of technology analysis constitute a set of analytical frameworks covering aspects such as: (i) a common approach to describing individual technological artefacts, (ii) a taxonomy of technologies, (iii) a classification of technological trends, (iv) a chart of technological limits, and (v) a socio-technical preference profile.
These frameworks help the R&D manager to dissect and debate typical R&D management problems such as: (i) selecting R&D projects, (ii) setting broad R&D objectives in the case of a given project and (iii) setting specific R&D goals to meet the said objectives. The frameworks also help the R&D manager to portray and present research achievements within a simple and intuitively appealing framework.     

Applying a system concept to R&D management

The author has long been an advocate of the systems approach to forecasting, particularly in the area of resource allocation. In making a number of seminar presentations to middle and senior management, both in the U. K. and the U. S. A., questions from the floor revealed that systems thinking is not as widespread as had been believed. While the media's past attention to the ‘Limits of Growth’ (Meadows, 1972) has communicated the impossibility of infinite expansion, many decision makers remain unaware of the closed-loop characteristics of the systems in which they work. On the contrary. While activities are often seen as the prime raison d'etre, the nature and origin of the driving force is often mis-interpreted and the modifying feed-back controls completely ignored. This paper, therefore, attempts to show that a basic closed-loop system is the only rational precursor to methodology development for decision making. If this action reveals the genuine system parameters then the researcher may well be performing his most helpful service to the decision maker.     

Establishing the determinants of internal reputation: the case of R&D scientists

This paper discusses the factors which determine the human resource reputations of science-based organisations. Reputation, in this context, refers to the extent to which scientists regard the department in which they work as a good employer, and implicitly, a good place to practise science. As a consequence, this study is concerned with internal rather than external reputation. The R&D departments of ten science-based organisations employing approximately 1500 scientists were included in the study. The sample of 402 respondents was representative, in terms of age, sex, qualifications and experience, of the population of scientists in the organizations included in the research. All employees were educated to at least the level of a Bachelor of Science degree (BSc) and in many cases had obtained a higher degree, Master of Science (7.0%), or Doctor of Philosophy (35.6%). The perceptions of employees are reported; it was beyond the scope of the research to examine the managerial views on reputation.     

R&D project selection for promoting the efficiency of energy use

Screening criteria for selecting energy R& D projects are discussed and applied to a dozen projects currently underway. The impact on energy balance and environmental quality cannot be seen as the only, nor even the dominating, attribute. In the cases studied, the R&D portfolio seeks to achieve a balance between these factors and the other criteria related to technology and the market. In the event the development work is carried out at an independent R&D centre, it will be necessary to have a committed industrial partner from an early stage onwards in order to ensure objectivity, market perception and provide the best chance of commercialisation.     

An application-oriented guide to R&D project selection and evaluation methods

The purpose of this paper is to provide managers with a set of guidelines to help them to choose the project evaluation and selection model that best suits their business environments. To this end the authors have surveyed the literature of the subject and used contacts made in training workshops with Swiss industry.
From this information the authors have identified five key issues — signposts that mark the route towards the appropriate project selection method. Once a sufficiency of project proposals has been identified — more than could be implemented with the resources available — then one takes into account successively how far the selection parameters can be quantified, how far one project interferes with or depends on the completion of another, whether a project has one or more than one objective, and the degree of acceptable risk. The procedure is presented in the form of a binary decision tree the various branches of which lead ultimately to twelve archetypal groups of methods. Each group is in principle suited to a practical situation represented by some combination of the key issues recognizable by a manager.
The paper discusses the strengths, weaknesses, limitations and practicality of the methods falling into each group. It concludes with suggestions about how a framework could be extended and refined. Keywords: Research and Development, Project Selection.     

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.     

Large European manufacturers and the management of R&D

At the end of 1984, for the third consecutive year, a research team from INSEAD administered a survey of the largest manufacturers in Europe. This survey attempts to provide an insight into the technological and manufacturing strategy designed and implemented by these large manufacturers.
Each year since 1982 about 150 companies have completed the questionnaire, and of these 150 replies about one third are repeat answers. The database thus covers about 350 companies. As a consequence this allows us not only to analyse the static picture for a single year, but also to draw a dynamic picture of how thinking about technological and manufacturing strategy is changing within the European Manufacturing Industry.
An analysis of the questionnaire's results allows us to assert some hypotheses about:
a. Changes in the length of the product lifecycle.
b. The importance of process engineering and proprietary process know-how.
c. The interface between manufacturing and research and development as perceived by the manufacturing side.
Since a similar survey is conducted for North America and Japan at the same time, it is possible to posit the European manufacturers vis-à-vis their global competitors for some of these issues.     

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.     

R&D project selection and scheduling for organizations facing product obsolescence

Research and development is very crucial in an organization that faces rapid product obsolescence. Our thesis is that R&D project scheduling and resource planning should be born out of the optimum product launch plan which, in turn, should be in adherence to the growth rate targeted by the organization. Such an approach would ensure that the R&D activities of the organization are in tune with the Organization's goals. The absence of such coordinated R&D planning would hamper the productivity and profitability of the organization. This paper attempts to develop a methodology and model that would enable the streamlining of R&D project schedule. A real life case application has also been illustrated.     

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 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.     

Online R&D management: the way forward

The development of an intranet system in BT delivered far greater savings in 1996 than was originally estimated. BT decided to look at the advantages of online R&D management processes. Various features of the evolving system are described, including the proposal submission system or project requirements document, and tools and techniques to manage a global virtual laboratory.