R&D as a business – what are the implications for performance measurement?

There have been considerable changes in the way that Research and Development (R&D) has been managed over recent years, many of which have been influenced by the external environment. These have been discussed in a number of publications with much of the debate centring around the movement from the so‐called first generation to fifth generation models of R&D management.
What has not been debated to the same extent are the implications of recent and likely future trends in R&D management for the way performance is, and should be, measured. In this paper we focus on these implications, drawing upon both the existing literature on performance measurement (PM) in R&D and our own research into organisations which have chosen to move towards a more profit‐centred approach to the management of their technical resources.
Finally, we present and discuss the findings of our review, which indicate that although there are common features, some differences, requiring careful consideration by management, can be identified when movement from a cost‐ to a profit‐centred approach occurs.     

Is the Short Rate Drift Actually Nonlinear?

Aït-Sahalia (1996) and Stanton (1997) use nonparametric estimators applied to short-term interest rate data to conclude that the drift function contains important nonlinearities. We study the finite-sample properties of their estimators by applying them to simulated sample paths of a square-root diffusion. Although the drift function is linear, both estimators suggest nonlinearities of the type and magnitude reported in Aït-Sahalia (1996) and Stanton (1997). Combined with the results of a weighted least squares estimator, this evidence implies that nonlinearity of the short rate drift is not a robust stylized fact.     

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.     

Business orientation: Cliche or substance?

This paper reviews the orthodox treatment of production, product, sales and marketing business orientations in introductory marketing texts and suggests changes. Orientation is an important issue which has a profound effect on long run business success, particularly on the effectiveness of business strategy. It is recommended that the orthodox orientations should be revised to the following: marketing/customer orientation; accounting/cost orientation; production/technology orientation; R&D/innovation orientation. The examination of orientation suggests they should not be regarded as mutually exclusive, but rather that organizations need, to some extent, to be oriented to all four. This treatment of orientation may be a little more complex than the former but it remains simple enough for inclusion in introductory texts.     

The dark side of financial innovation: A case study of the pricing of a retail financial product

The offering prices of 64 issues of a popular retail structured equity product were, on average, almost 8% greater than estimates of the products' fair market values obtained using option pricing methods. Under reasonable assumptions about the underlying stocks' expected returns, the mean expected return estimate on the structured products is slightly below zero. The products do not provide tax, liquidity, or other benefits, and it is difficult to rationalize their purchase by informed rational investors. Our findings are, however, consistent with the recent hypothesis that issuing firms might shroud some aspects of innovative securities or introduce complexity to exploit uninformed investors.     

Rational expectations for large CGE models: A practical algorithm and a policy application

We describe a simple iterative method for solving large dynamic CGE models under rational expectations. Details are given for Australia's MONASH model but the approach applies to a wide range of CGE models. The method is automated in the RunMONASH Windows software, putting CGE modelling under rational expectations within the reach of non-specialist modellers. We provide an illustrative application in which MONASH results under rational expectations are compared with results under static expectations. The application and supporting software can be downloaded. Results from the application are interpreted in terms of elementary economic mechanisms.     

Ethical perceptions of Asian managers: evidence of trends in six divergent national contexts

Global link building is having a substantial impact in every sphere of Asian managerial activity. The economic upheavals of the Asian ?nancial crisis have cast a long shadow, and ethical clarity has become a social issue. For instance, corporate performance in terms of long-term survival, growth and global competency is seen to depend to a considerable extent upon the ethical infrastructur of managers and emerging managerial culture in Asia. One ?eld in which Asian managers and their managerial practices are often considered weak is the area of ethical clarity. Corporate managerial leaders in Asia need to develop new responses to the ethical complexities arising out of the increasing global interfaces. In spite of a growing awareness of the importance of ethical centrality in an intensely competitive international business arena, very little empirical work has been conducted to strengthen the relevant management literatures. The purpose of the research reported in this paper was to examine the perceptions of ethical probity among managers in six Asian countries. The results of the study indicate interesting convergences and divergences across countries and organisational demographies. The ?ndings lead to observations of the apparent similarities of ethical conceptualisation in global, societal and often in the organisational arena while revealing noticeable divergences in the domain of individual ethical perceptions.     

A note on business replies to consumer letters of praise and complaint

Business firms require feedback from the marketplace to determine whether or not the needs of the firm's customers are being satisfied. When feedback takes the form of consumer letters, it seems obvious that it is simply good marketing practice to respond to letters of complaint and good consumer relations to respond to any letter from a consumer. With the dual objectives of providing introductory marketing students with a meaningful and participatory exercise in consumerism and of exploring an apparently virgin research area, a project was undertaken which generated 250 letters to business firms concerning their products and services. The analysis of the business firms' responses attempted to find out: What types of business firms replied? In what from did these firms reply? And, how did the “customers” react to their replies?