Strategic planning for research and development

This paper examines the need for and the difficulties in implementing strategies for planning the research and development activities of a company. The author does not accept that research planning reduces creativity, though he is of the view that planning's exclusive concentration on economic aspects of a company's activities, such as turnover or profit, can lead to erroneous decisions in the research and development field. This paper outlines a number of specific and explicit research strategies which can be followed, and relates them to the company's strategic objectives. Furthermore, the author explicitly categorizes different types of research and comments upon the relevance of strategic planning to each.     

Competitive analysis—Its role in purchasing

In all cases a company's perception of its strengths/ weaknesses reflects that of its view of its relative power position vis-à-vis the other parties in the system. Tecognition of power/weakness can be a stimulant to redressing the balance in the company's favour. This paper seeks to emphasize the potential for such action in supply markets, for supply markets are sources of considerable potential worthy of careful attention from corporate strategists. The paper illustrates in outline one approach to competitive analysis in supply markets. The approach is not intended to have universal application. However, it should suggest a framework which can be tailored to most situations where input costs are a significant element in output revenue.     

Can technology be managed strategically?

The purpose of this article is to investigate techniques for inserting strategic management of technology into the overall business planning process. The method developed here begins with defining the technological profile of a company and then proceeds to expand the method to incorporate analytical procedure for technology futuring, and finally combining these long-range forecasts with the company's policies and plans into an integrated planning model. An illustrative case study of the NCR Corporation is appended to demonstrate the application.     

Delayed creative destruction and the coexistence of technologies

Disruptive innovations often engage in a fierce battle with incumbent technologies for hegemony. Past studies on technological innovations are silent about factors that extend the duration of the ‘era of ferment’—that is, the period during which competing technologies fight for dominance. We argue that complexity of the underlying technology, ecological and institutional dynamics may permit coexistence of competing technology regimes. The paper illustrates such coexistence by discussing the persistence of disparate technologies in steel making and kidney disease treatment. We conclude that the process of ‘creative destruction’ can be delayed in certain settings.     

Assessing opportunities for diversification—An analytical approach

This article demonstrates a system for the selection of industry sectors for diversification. It provides an analytical method for assessing both the attractiveness of an opportunity area as an investment and the extent to which it will match a company's current operations and their strengths and weaknesses, and describes how the system has been used in practice by a large consumer goods company.     

Strategy and the “business portfolio”

In this article the author goes on to develop the conclusion reached in his previous article which appeared in the December edition of Long Range Planning. These conclusions concerned the requirements for strategic success for an individual business, here they are developed into their implications for strategy development in the typical multibusiness company.It is argued that relative competitive position and growth are the two fundamental parameters which must be considered in determining the strategy that an individual business should follow when viewed within the context of the company's overall ‘business portfolio’. The likely patterns of business strategy which will lead to overall corporate success are discussed and contrasted with those which can lead to disaster.The key is that strategies should be made to differ widely from business to business, as a function of the growth and relative competitive position of each business and the company's overall resource position particularly with respect to cash. The ‘across the board’ defensive measures which many companies have adopted in recent years as their response to the pressures of inflation and recession are therefore argued to be singularly inappropriate for the long term. The ‘business portfolio’ concept provides a superior approach for developing the differentiated strategic business objectives which are necessary for any company to make the most of its opportunities.     

Measuring the leanness of manufacturing systems—A case study of Ford Motor Company and General Motors

In spite of the vast research published on lean manufacturing systems in several disciplines in the last decade, the concept remains underdeveloped for two reasons. First, it lacks a generally accepted definition. Different authors define lean in terms of its objectives, which vary, overlap and differ in different firms. Second, no study has developed a systematic and relative measure of lean production systems. With the lack of such a measure, two companies cannot be rated objectively on their progress toward becoming lean. This paper has two goals: first, to define manufacturing leanness as a unifying concept, and, second, to develop a systematic, long-term measure of leanness. Manufacturing leanness is a strategy to incur less input to better achieve the organization’s goals through producing better output. The systematic measure of leanness has seven characteristics: relative, dynamic, long-term fuzzy logical, objective, integrative and comprehensive. The leanness measure utilizes the fuzzy-logic methodology since lean is a matter of degree. Applying the measure to compare the production leanness of Ford Motor Company and General Motors, the paper selects Honda Motor Company as the benchmarking firm. Selecting just-in-time (JIT), Kaizen, and quality controls as lean attributes, the paper uses surrogates for these attributes extracted from audited financial statements over the years 2001–2003. The results show that Ford’s system is more than 17% leaner than GM’s system vis-à-vis the benchmarked company’s system.     

Mechanisms for environmental scanning

Over the past decade long range planning for industrial concerns has needed to take into account an everbroadening spectrum of environmental influences. Whereas at one time planning largely concerned itself with those aspects of the environment to do with the company's markets, nowadays the influence of other parts of the environment may have equal, or even greater influence than markets on the company's operation. The current environment of most industrial concerns appears to be characterized by three main components. Firstly, the environment is increasingly turbulent and uncertain. Secondly, organizations are increasingly less autonomous. Thirdly, other formal organizations are increasingly important components of a company's environment. The environment of most companies is therefore complex and uncertain. This complexity and uncertainty can only be reduced by attempting to analyse and understand the environment as an ongoing process, this process is now being called ‘environmental scanning’. The aim of this article is to describe some of the mechanisms which have been used to help companies scan their environments as a way of planning and controlling their destiny in the turbulent environment in which industry operates.     

Planning and control of purchasing performance: A new concept

The slowdown in sales growth experienced by many companies in Western Europe during the 1970s has led to an increasing awareness of the importance of measuring a company's operating performance relative to that of its competitors, and to a resurgence of interest in the production function. Production managers have traditionally enjoyed a very low status within the management hierarchy and this is particularly true of purchasing managers, yet many industrial companies with high manufacturing costs find that material costs constitute a major element in total factory cost, and any improvement in purchasing costs has an immediate and beneficial impact on company profitability. In this paper, the authors suggest three ways in which management can better measure, plan and control their company's purchasing performance: they emphasize the importance of concentrating on each product rather than each commodity; they outline a simple and practical way in which to measure and monitor a product's material costs over time so as to enable realistic purchasing objectives to be set; finally, they suggest a way of separating the effects of commodity price fluctuations from the performance of the purchasing manager so that the latter can be properly judged.     

Adapting a Lean Production Program to National Institutions in Latin America: Danone in Argentina and Brazil

This article argues that national institutions identified in the varieties of capitalism approach have a significant impact on the degree of fidelity and extensiveness of best practices adapted by geocentric multinational corporations in host countries in emerging markets. To illustrate this argument it shows how differences in national institutions between Brazil and Argentina caused Danone to adapt a lean production in radically different ways in each of these countries. Both of the programs implemented had low degrees of fidelity and extensiveness to the original best practice. This article contends that in Argentina strong labor laws and the ability of unions to negotiate significant salary increases combined with a desire of workers to have individual pride in their jobs caused Danone to empower them individually instead of creating teams as foreseen in this company's original lean production program. In Brazil the weakness of unions combined with labor laws that promote employee turnover and the desire of workers to improve their salaries caused this company neither to empower workers nor create teams. Instead, it motivated workers by providing them the previously unavailable opportunity to become a manager.     

Evaluating the Evaluators: Should Investors Trust Corporate Governance Metrics Ratings?

Companies are under increasing pressure to have their corporate governance rated by an independent corporate governance metrics firm, such as Institutional Shareholder Services (ISS) or Governance Metrics International (GMI). These rating firms claim to be able to determine how effective and responsive a company’s board is. Institutional investors have begun using these board governance ratings when deciding which firms to include in their stock portfolios. This paper considers whether investors, many of whom claim to be socially responsible, should be relying upon board governance metrics. We find that these metrics are not good indicators of either the quality of a firm’s earnings or of its ethics.     

Impacts of government high-tech policy: a case study of CAD technology in China

Rapid growth of technology innovations promotes governments world-wide to actively explore the best way to realize its economic benefits. Likewise, Chinese government has positioned advances of high technology a driving-force to continued economic achievements, and launched various high-tech policies. This case study focuses on computer-aided design (CAD), a key field under policy support, discloses policy’s critical role. Interview/survey data from corporate and academic leaders were also collected and synthesized. The emergence of university–industry collaboration, capitalizing university intellectual property, and new modes in CAD innovation and technology diffusion are among those major findings. A Model is also proposed. The study provides new observations for debates to high-tech policy-makers and can benefit scholars and business managers seeking to understand the environment in China, and serve as a foundation for further policy and management research.     

Productivity improvement through reduced labour turnover

Labour turnover has both direct and hidden costs to the organization since it represents wastage of its human resources. Even in times of contraction, undue reliance on ‘natural wastage’ can lower morale, distort age profiles, and build up problems for the future. A strategic approach to its control must rest on an accurate diagnosis and must go beyond the improvement of particular personnel practices into a reappraisal of the company's total approach to its employees. It can provide the key to a new approach to planning and productivity.     

Corporate planning at Rolls-Royce Motors Limited

In this article the authors describe the introduction to date of a formal planning process at a British manufacturing company which, according to its recent performance, had no pressing need to implement radical change. Is Rolls-Royce Motors' decision the symptom of a new trend in industry to overhaul planning techniques while the going is good? How was company morale used to justify a new planning style? Why did an evidently capable organization choose to engage consultancy assistance? While the company's intentions are not yet fully achieved, its experience may be of benefit to others contemplating a similar decision.     

Introducing corporate planning— A case history

This article is a summary of the stages through which a U.K. public company passed in producing its first corporate plan, the problems, and the lessons learnt.To introduce planning from scratch requires experience, drive and political skill. This is already known. How these skills were found and developed is analysed in the history of one company's attempts to formalise its planning.     

When and with whom to cooperate? Investigating effects of cooperation stage and type on innovation capabilities and success

In times of saturated markets and decreasing product life cycles, the continuous development and successful launch of innovations are essential for profit-oriented organizations of any kind. Interorganizational cooperation enables companies to get better access to knowledge and capabilities in order to generate and successfully introduce innovations. While scientific research and management practice have acknowledged the importance of cooperation, little research effort is dedicated to empirically determine the effectiveness of cooperation intensity within different stages of the innovation process (cooperation stage) and with different partners (cooperation type). This article aims to fill these gaps by empirically examining the effects of cooperation intensity with different kinds of partners (horizontal, vertical and institutional cooperation) in different stages of new product development (concept and product development as well as implementation stage) on innovation capabilities and success of individual companies. Drawing upon a sample of 154 high-tech companies from the German B-2-B sector, our results reveal that it is in general beneficial for a company to cooperate. However, cooperation in concept and product development primarily improves a company's innovation capabilities while cooperation in the implementation stage primarily enhances innovation success of a company. With respect to cooperation type, vertical, horizontal as well as institutional cooperation significantly enhance innovation capabilities and success of a company. However, cooperation with institutional partners was found to be the most important contributor throughout all stages.     

The impact of government policy on technology transfer: an aircraft industry case study

This case study explores the interaction between domestic and foreign governmental policy on technology transfer with the goal of exploring the long-term impacts of technology transfer. Specifically, the impact of successive licensing of fighter aircraft manufacturing and design to Japan in the development of Japan’s aircraft industry is reviewed. Results indicate Japan has built a domestic aircraft industry through sequential learning with foreign technology transfers from the United States, and design and production on domestic fighter aircraft. This process was facilitated by governmental policies in both Japan and the United States.     

技术独立董事可以提高R&D产出效率吗?——来自中国证券市场的研究

与以往大量探讨研发投入影响因素的文献不同,本文从R&D产出效率视角,考察了技术独立董事制度对其的影响。结果发现,我国上市公司增加研发投入并未带来创新水平的显著提高。而聘请技术独立董事的公司能够提升R&D产出效率,并且当上市公司同时设置技术执行董事和技术独立董事时,R&D产出效率更高,但本文没有发现技术独立董事薪酬对R&D产出效率起到激励作用。本文的结论为我国政府和公司制定创新战略以及独立董事制度建设提供了参考价值。     

What kind of corporate planner do you need?

The planning literature ignores distinctions among types of plans and types of planners. Consequently, a systematic pairing of planners and a company's level of planning need is not well understood or implemented in practice. This paper provides two missing links in order to bridge this shortfall between theory and practice. One is a planning matrix which establishes six possible planning modes for a company based on its stage of development and management style. The second is a distinction between three types of planners who would be appropriate to each planning mode. The matrix plus the three categories of planners provides a new tool for management in its responsibility for planning the job of the corporate planner. In doing so, it also surfaces some underlying causes of organizational strain and stress associated with the corporate planner's position.     

Strategic planning could improve your share price

From a financial point of view the long-term ultimate goal of the firm is to maximize its stock price. A high P/E multiple keeps existing stockholders satisfied, reduces the chances that a corporate pirate will attempt to raid the company, and also facilitates the company's own acquisitions.Therefore, financial managers are especially interested in answers to the questions of if and how strategic planning can help to improve the price-earnings multiple. The results of the study summarized in this article answer the first question in the affirmative and give at least a partial answer to the second. Contrary to the conclusion of some other recent studies, this study finds a definite long-term financial payoff from strategic planning. Furthermore, it suggests that strategic planning may be more effective if it is conducted at the corporate rather than solely at the division level.If maximization of stock price is a corporate goal, delegation of strategic planning entirely to the division level may result in a high cost to stockholders.