How R&D is coordinated in Japanese and European multinationals

What are the suitable forms and mechanisms for the coordination of international R&D and innovation processes in multinational corporations? This paper sets out to answer this question by exploratory research and interviews in 18 European and Japanese companies. As a conceptual background, four different categories of coordination mechanisms are generated (‘structural’, ‘hybrid’, ‘informal’ and ‘internal markets’). The empirical results show that Japanese companies make intensive use of personal contacts, informal communication and socialisation whereas European enterprises rely more on internal markets in R&D.     

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.     

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.     

Top management roles in R&D projects

The work described in the paper is aimed at a better understanding of decision processes in ‘directed’ R&D. Specifically it focusses on the questions: What aspects of innovation does top management influence significantly?, and What are the effects of this influence? The kinds of influences looked at include technological, financial. marketing, timeliness and personnel factors as well as company characteristics. The overall hypothesis was that top management would be interested not only in ultimate objectives but also in intermediate objectives of shorter timespan. The research material consisted of answers to a 29-item questionnaire given by 107 management-level respondents in 13 sites. The questionnaires related to data on 154 projects including the degree of success data achieved. The results were analyzed to bring out main-effect factors on success and intercorrelations between factors. Overall the results supported the initial hypothesis that top management is concerned with shorter-term R&D matters as well as with the effects of R&D on long-term strategy. The influence appears to be more marked during early some stages the of factors projects than later. Interestingly of correlated with economic success are not correlated with top management support, although support is correlated directly with succes. On the whole, top management intervention appears to be operational rather than primarily strategic. The authors interpret observations as meaning that top management intervenes at irreversible decision points and on matters that affect other functions of the company but keeps out of some important issues that are beyond their control.     

Evolving headquarters‐subsidiary dynamics in international R&D: the case of Japanese multinationals

The paper identifies the evolving nature of headquarters‐subsidiary relations during the whole process of R&D internationalization. In‐depth data on five Japanese multinationals revealed that the role of overseas laboratories actually evolved over time, from the 'starter' to the 'innovator' and then to the 'contributor'. Such a shift in role of overseas laboratories affected the nature of headquarters‐subsidiary relationship accordingly. 'Semi‐connected freedom' was identified as an optimal condition for the overseas laboratories to reconcile the two competing pressures: need for local autonomy and need for internal information connectivity. Various managerial steps were suggested for the laboratories to reach that state: increase in process linkage, active broker's role, short‐term socialization, and project‐level socialization. Some practical and theoretical implications were drawn from this research, and future research direction was suggested.     

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.     

Clarity of manager roles and performance of R&D multidisciplinary projects in matrix structures

The matrix structure recommends itself as a convenient framework for implementing cross-disciplinary projects. However, this structure tends to generate conflict between project and disciplinary managements. In excess, conflict can reduce performance. The aim of the work described in this paper was to see whether conflict could be controlled by better definition of the respective roles of project and functional managers.
The study was carried out in a large laboratory in Brazil. A group of project managers, responsible for 58 cross-disciplinary projects, quantified their perceptions of the strength of their responsibilities for ten management activities, via a specially devised questionnaire. A Clarity about Responsibilities Index (CRI) was constructed to represent the fraction of these activities each respondent felt responsible for. Project performance was measured according to four criteria, technical, cost, schedule and client satisfaction.
The results show that better technical performance was associated with higher role clarity; no significant association was found with the other performance measures. The author discusses the reasons for these results, the validity of the measures used and the generality of the conclusions.     

Management of R&D for reduction of technological delay: a strategic viewpoint

The establishment and effective use of R&D potential is considered as a way to reduction of technological delay. On the basis of analysis of alternative starting positions of a follower on the technological scene the adequate trajectories for technological pursuit are drawn. Five strategies are indicated as the most typical ones. Illustration is given for respective strategies of pursuit based on S-shaped performance development within given technological generation. Conditions and limitations are indicated in order to adapt general analysis to the practice of a company willing to overcome the technological gap and/or reduce the existing delay.     

The roles of R&D team leaders in Korea: a contingent approach

This study empirically examines the relationship between the role of R&D project leaders and their team performance using data from 87 project teams in 6 R&D organizations in Korea. The results reveal that:
(1) R&D project leaders played five different roles in performing their jobs – strategic planner, team builder, gatekeeper, technical expert, and champion;
(2) All but the champion role of a leader is positively related with project team performance;
(3) However, this relationship between the role of leader and project team performance varies according to the characteristics of R&D project teams and their tasks.
Specifically, it becomes important for a leader to focus less on the team building role as the team gets older. The team building role of a leader, however, is more important for higher performance of relatively certain R&D projects, while for uncertain R&D projects, the strategic planning role appears to be more crucial. Based on these results, this study discusses several managerial and theoretical issues related to the role of a leader in R&D project teams.     

From R&D to strategic knowledge management: transitions and challenges for national laboratories

The past two decades have witnessed unprecedented changes to national laboratories as they have adjusted to globalized and technology based competition. These transitions are reviewed in the context of how Canada's National Research Council has progressed from an internally oriented R&D organization into a more externally focused innovation organization, now coping with the challenges of strategic knowledge management. The paper traces the steps and paradigms involved in this transition and offers some commentary on the extent of the corporate cultural learning that has been required to effect these changes.     

R&D 'programmes-competencies' matrix: analyzing R&D expertise within the firm

The author suggests that the systematic identification of a firm's technologies opens up the possibility of evaluating, protecting, optimizing, enriching and exploiting these technologies to the full. A firm's technologies fall into two parts: those embodied and exploited in current operations and those evolving from the collective competencies of its R&D staff. The author's aim is to evaluate and describe the firm's R&D competencies.
The identification of R&D competencies proceeds in three steps: tracing the background of the current and past programmes, constructing a programmes/competencies matrix, and deriving an expertise profile. The construction of the matrix is the key activity and requires much care in its execution, if competencies are to be properly defined and truly existing, and if it is to be exhaustive. The author sketches a procedure for constructing a matrix and discusses problems of implementation and draws attention to some of its limitations.
The author claims that such an inventory of expertise could improve the efficiency of the use of the R&D resource, identify a laboratory's strengths and weaknesses, direct R&D into hitherto neglected channels, assist individuals to identify and evaluate their own expertise, justify obtaining funding for building expertise in shortage areas. The method should be considered as a starting point to formulate appropriate strategies to gain access to technology.     

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.     

R&D competition versus R&D cooperation in oligopolistic markets with evolving structure

This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to implement a product innovation. Production capacities of both firms are product specific. It is shown that firms anticipate a future product innovation by under-investing (if the new product is a substitute to the established product) and higher profits, and over-investing (in case of complements) and lower profits, compared to the corresponding standard capital accumulation game. This anticipation effect is stronger in the case of R&D cooperation. Furthermore, since due to R&D cooperation firms introduce the new product at the same time, this leads to intensified competition and lower firm profits right after the new product has been introduced. In addition, we show that under R&D competition the firm that innovates first, overshoots in new-product capacity buildup in order to exploit its temporary monopoly position. Taking into account all these effects, the result is that, if the new product is neither a close substitute nor a strong complement of the established product, positive synergy effects in R&D cooperation are necessary to make it more profitable for firms than R&D competition.     

In-house R&D management development — strategy and implementation in a major government R&D agency

Abstract
The paper describes the experiences of CSIR in developing an in-house capability and implementation process of R&D management development programmes. The conceptual approach of the laboratory-based R&D management development programmes is described. Different phases in the process of implementation are presented along with the case studies of recent training programmes in two different laboratories. Some of the key aspects of the training programmes —- successful implementation, relationship with policy-making, and improving R&D performance have been examined. The role of international co-operation in R&D management development is suggested. The paper also discusses the future prospects of R&D management development programmes in the country.     

Research and development (R&D) beyond manufacturing: the strange case of services R&D

The share of business research and development (R&D) expenditure stemming from the services sector of the economy has been growing rapidly in many (though not all) OECD countries, according to official statistics. The same data sources also indicate, however, that services contribute less to R&D than would be expected given their large shares of employment and output in national economies. In part, incomplete sampling of services in R&D surveys may lead to some underestimation of their R&D activity, but this is unlikely to account for their apparently poor performance. This paper draws on an analysis of existing statistical sources, and on interviews and workshops with service firms' managers. It finds difficulties associated with the ways in which R&D has been operationalised in survey questions. Examination of survey questionnaires suggests that the formulation of these questions, focusing on technological R&D and ruling out much social scientific R&D, disproportionately reduces the reporting of R&D by service firms. But beyond this, the R&D concept itself has some problematic features where it comes to documenting innovation in service firms. This was investigated through a programme of interviews and workshops with service firms, where a lack of familiarity with the R&D concept and R&D management practices was found to be commonplace. R&D performance and innovation activities vary across services of different sorts, even though most service subsectors appear to be low R&D investors. It is thus important to examine services' innovation patterns and processes, to establish what types of R&D‐like activity are underway in these subsectors. While some modification in R&D measurement would be desirable to capture services' activities, effort to understand the non‐R&D elements of services innovation is also important – for management and for policy (given that governments are seeking to create R&D incentives and targets for services and other sectors). There are grounds for expecting (a) services' share of business R&D to continue to grow; (b) this share to continue to be well below what would be expected from the prevalence of services in economic activity, and (c) for many services' innovation to continue to rely heavily on sources that are not directly associated with R&D.