A utility approach to R & D decisions

The traditional monetarily based economic model is inadequate as a guide to responsible R & D decisions. Modern utility theory, on the other hand, can incorporate intangible factors and has a value system base. Both techniques are compared via a case example, which results in some social implications of utility based decisions.     

Coordination of multinational R & D: A Swedish case study

The need to coordinate multinational R & D increases in many corporations which want to take advantages of scale, synergy and multinationality on a world-wide basis. The Swedish engineering corporation SKF has tackled this problem as an early internationalized but lately diversified corporation working in mature technologies and markets. Substantial coordination has been achieved through a heavy resource commitment in a foreign corporate R & D lab, and a subsequent build-up of a rather elaborate system for R & D management throughout the corporation. The structure and processes of the system are described, together with experiences of coordinating effects, and a project case is given. The chosen mode of coordination is finally compared with situations in other industries.     

The management of R & D technological progress as an object for applied systems analysis

Mankind's prospects both for finding new types of resources and for ensuring efficiency in resource utilization and substitution depend upon our success or failure in solving the problems of organizing and managing technological systems. A generalized scheme describing interaction among the basic elements of the management of national science and technology (ST) activity is outlined, and one particular element isolated for detailed examination: the system analysis and systematic assessment of new technology (SANT). The role of SANT in the context of decision-making in the management of ST progress is described, together with the methodological arsenal available. No one technique is universally good; the problem is to find systematic means of using a selection of methods which mutually compensate for each other's weaknesses. Further difficulties are encountered over the non-comparability or absence of initial data, and a framework for viewing the various classes of data available and making use of them is outlined. Examples are given of the practical application of SANT to problems such as the development of a macro-model., for the planning of national ST policy, and a model of technological change in the area of the science, technology, and exploitation of computers. A system is described which handles the data stores and information flows necessary for performing SANT routines.     

A study of communication behaviour in an R & D laboratory

There is still much uncertainty about the determinants of technical communication flow in UK R & D laboratories and even more uncertainty about the causal link between communication behaviour and performance. Hence it is not clear what managerial action should be taken to improve technical communication flow and what effect such action would have on research productivity. In this study the main factors influencing communication flow are identified and the role of basic human characteristics in determining both communication behaviour and performance are studied and discussed.     

An R & D planning and control servosystem: A case study*

This paper describes a planning and control system (PACS) to aid R & D decision-making which has been developed and used at the Monsanto Company, St. Louis, Missouri, U.S.A. The planning model portion of the integrated system is a two-dimensional dynamic programming resource allocation algorithm which performs project selection, budgeting and scheduling. Behavioral parameters that can be used to simulate certain organizational factors are included in the planning model. The control model portion of the integrated system develops cost-effectiveness measures of variances between actual and planned performances for ongoing projects over time, which provide early warnings of pending project failures and guide control action. Applications of the system at Monsanto indicate that it significantly aids the development of satisfactory organizational decisions and also provides a laboratory for pretesting decisions.     

The organization of applied R & D with particular reference to the customer-contractor situation

This paper reports on certain aspects of the management of R & D in three types of establishment: contract research organizations, research associations and industrial research laboratories. Discussions with the directors of twenty-five establishments revealed that a number of important changes had occurred over a relatively short period of time, particularly with regard to the management of work of a more applied nature. These changes include the introduction of a number of new and separately identifiable roles within the organizational structure, and a movement towards a more market-oriented, profit-centred approach on the part of senior personnel. The study suggests that these changes have in general been accepted and are bringing benefits to all parties.     

Assessment of profiles in R & D: a tool for analysis and development of R & D potential

A study sponsored by the State Committee for Science and Technical Progress of Bulgaria aimed at providing a theoretically sound and easy to apply method for the needs of R & D management on government, organization and team levels, to be used in assessing and managing both present and future R & D potential.
The method draws inferences about R & D potential from the accumulated experience and performance of the researchers, analysed along research topics. A specific 'man-topic unit of analysis helps identify individual researchers, teams and projects' profiles and also helps translate the specific characteristics of R & D work and the requirements for R & D internal effectiveness into the language of R & D management.     

R & D and the company's requirements

Numerous models have been put forward in the literature for the selection and evaluation of projects, many of which are based on optimizing the return on investment by the company in R & D projects. This is a noble aim but in practice the financial data available are often of dubious accuracy and so many other factors are involved in actually adopting a portfolio of selected projects that project selection often becomes a theoretical exercise. It is suggested that the selection of projects is in essence the adoption of a strategy which is within the policy and long-term aims of the company and also within the policy and scientific development of the R & D part of the company. Such a strategy is usually sub-optimum for both the company and the R & D division, as it is a compromise between a desire for high pay-back investments by the company and the maintenance of a scientifically balanced R & D involving some long-term, unknown return, investments. A method is currently being experimented with by Unilever Research which illustrates where conflicts arise between the policy of the main company and that of research, and assists management in arriving at a strategy which most closely fulfils the needs of both policies. Both the concept of the method and its practical use are described in this paper.     

A Kantian Analysis of Pricing and R & D

Review of Industrial Organization - Can cooperation offer an innovative alternative to competition among firms? This design problem is analyzed in the context of Kantian cooperation among firms in...     

A correlation of R & D laboratory performance with critical functions analysis

Five similar government R & D laboratories have been studied using ‘Critical Functions Analysis’ to determine the relative fractions of their staffs performing one or more of seven critical functions; a profile was developed for each laboratory. In order to test the hypothesis that variations in these critical functions profiles would be recognized by laboratory users, fifteen different customers of these laboratories—weapons system project managers and headquarters staff technology managere—were asked questions—designed to determine their perceptions of the relative performance of the five laboratories. Significant variations were found in role profiles among the several laboratories: important variations were also identified in customers' perceptions about laboratory performance. In general, the three laboratories that had higher percentages of their professional staff performing the critical functions also were rated higher in performance by their customers. This difference was particularly striking when an aggregate performance parameter, which summed the numerical values of several performance-sensitive customer questionnaire responses, was used. Customers were found to be especially sensitive to the strength of the laboratories' manufacturing/marketing gatekeeper functions.     

A study of the diffusion of management concepts and techniques amongst R & D managers

The management of R & D has been the focus of a great deal of research and writing during the past decade. It is, however, by no means certain that these have produced a significant effect amongst R & D decision makers. This paper describes a study of the extent to which R & D managers are aware of management concepts and techniques. The subjects were 57 senior R & D managers from British and Continental organizations who attended courses at the Management Centre, University of Bradford in 1974/5. The study was conducted by means of a questionnaire and a 100 question forced choice Quiz. The paper suggests that knowledge of modern management thinking has, to date, made only a limited penetration into R&D.     

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 simple model of R & D project dynamics

A simple dynamic model is developed that describes some of the important aspects of research and development projects. Its purpose is illustration of the applicability of dynamic modelling to understanding the key factors affecting R & D performance. The model recognizes the differences among real, perceived, and reported progress on the job. It also includes the effect of schedule pressures on productivity. Simulation results are presented that, among other things, illustrate the trade-off between meeting schedule and maintaining organizational stability, the effects of rapid problem detection and response, and the difficulties due to the intangible nature of R & D progress.     

Forecasting as an aid to R & D decision making in the nuclear power field

The pay-off from a new power system does not begin to accrue until many years after the initial research; and perhaps not until 10 years or more after major development programmes are launched. The ensuing benefit to the community in terms of reduced power costs may be spread over 30 to 40 years—combining the lifetime of the stations with the period over which they might be installed. Ideally therefore, the Atomic Energy Authority would like to have accurate forecasts of electricity demand and its characteristics in terms of load factors, etc., 30 to 40 years ahead. This paper describes attempts by the Authority to forecast electricity requirements at and beyond the end of the century as a background to their consideration of the relative merits of alternative future nuclear power systems and the distribution of research effort between them. The study was conducted between 1969 and 1971. The danger of the Middle East countries restricting oil supplies and raising prices was foreseen but in a less acute form and later than has actually occurred. The recent developments are likely to lead to pauses in economic growth followed by growth at lower rates than otherwise. Where forecasts in this article are given in the form of ranges, the lower bounds of the range are likely to apply—at least in the short and medium term.     

Forecasting as an aid to R & D decision making in the nuclear power field

Abstract The pay-off from a new power system does not begin to accrue until many years after the initial research; and perhaps not until 10 years or more after major development programmes are launched. The ensuing benefit to the community in terms of reduced power costs may be spread over 30 to 40 years—combining the lifetime of the stations with the period over which they might be installed. Ideally therefore, the Atomic Energy Authority would like to have accurate forecasts of electricity demand and its characteristics in terms of load factors, etc., 30 to 40 years ahead. This paper describes attempts by the Authority to forecast electricity requirements at and beyond the end of the century as a background to their consideration of the relative merits of alternative future nuclear power systems and the distribution of research effort between them.
The study was conducted between 1969 and 1971. The danger of the Middle East countries restricting oil supplies and raising prices was foreseen but in a less acute form and later than has actually occurred. The recent developments are likely to lead to pauses in economic growth followed by growth at lower rates than otherwise. Where forecasts in this article are given in the form of ranges, the lower bounds of the range are likely to apply—at least in the short and medium term.     

Introduction of a matrix structure into an R & D establishment

Matrix organization is increasingly being written about in terms which suggest that it is almost axiomatic that it is the best way of structuring an R & D lab. In this paper we wish to introduce a note of scepticism into the discussion, for the following reasons. Firstly, we suspect that not everyone has the same thing in mind when discussing matrix organizations. Secondly, we believe that there are many circumstances under which it clearly is not the best way of organizing, although there are plenty under which it is. Thirdly, we have seen in use many variants of the structure, suggesting to us that while there is an underlying, unifying concept at work, it needs to be much modified in most cases before it can successfully be applied. Finally, any reorganizing is a hazardous business, and a change to matrix involves particular difficulties of its own which need highlighting.     

Industrial R & D and the British economic problem

Britain's poor industrial and economic performance over at least the past fifteen years is closely related to a national pattern of R & D activities that—by comparison with our main competitors—has been insufficient in volume, heavily concentrated in sectors of relatively minor industrial significance, and inadequately coupled to the problems and possibilities of production and the market. Reversing what in the 1970s was a strongly downward trend in British R & D and other innovative activities will require, amongst other things, more professionalism and skills in British engineering and management, and deliberate long-term strategies in industry and government to develop products, processes and markets that enable British industry to compete on the basis of quality and skills rather than low wages.     

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.     

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.