Designing a performance measurement system for the research activities: A reference framework and an empirical study

Designing a performance measurement system (PMS) for R&D activities is a very critical but challenging task for supporting decision making and people motivation. Therefore, the subject is widely discussed in literature, but the use of a PMS for R&D is still uncommon among companies.The paper aims at making a step further in the field, elaborating a reference framework that describes the logical steps for the definition of a PMS for R&D. Moreover, the problem of designing an effective PMS is in-depth studied in a real context, a biotech company that operates in the field of pharmaceutical research.     

Patent portfolios for strategic R&D planning

Empirical research has found a discrepancy between the perceived importance and the actual level of information on competitor's R&D strategies. It has been argued in the literature that patent information might be used to overcome this information deficit. However, empirical research further reveals that patent information is rarely used in strategic R&D planning. The present paper explores this issue and introduces two types of patent portfolios for strategic R&D planning. In patent portfolios on the company level, patenting strategies are identified and the quality of overall technological positions is benchmarked against relevant competitors. In addition, we present a patent portfolio on the technological level, which, as it is known from various technology portfolios, helps companies to manage the allocation of R&D resources effectively. Based on patent data from 21 German, European and Japanese mechanical engineering companies we show the application of both patent portfolios for strategic R&D planning purposes. The patent portfolios prove to be a very valuable tool for R&D decision makers in companies. Based on the experiences made in the case study, recommendation for the effective use of patent portfolios are formulated.     

Cognitive and interpersonal abilities related to the primary activities of R&D managers

This study attempted to identify the primary activities performed by R&D managers at different supervisory levels, and the cognitive and interpersonal ability requirements that underlie these activities. A task inventory containing 244 managerial tasks was completed by 117 R&D managers in nine organizations. The 48 tasks which managers rated as having spent the most time were factor analyzed, resulting in the identification of three primary activities: project management, personnel supervision, and strategic planning. Furthermore, these activities varied with supervisory level, with R&D managers performing a wider range of these activities with the progression from first-line to upper-level management.Thirty R&D managers later rated the degree to which 19 cognitive and interpersonal abilities were required for performing these primary activities. Strategic planning was rated as requiring significantly higher levels of oral expression, logical reasoning, originality, fluency of ideas, oral defense, and resistance to premature judgement than was required for the other two primary activities. Personnel supervision required a higher level of social sensitivity than was required for the other two activities. Project management required high levels of information ordering, oral fact- finding ability, problem sensitivity, and oral and written comprehension. Implications of the findings for understanding R&D managerial performance and personnel staffing functions are discussed.     

An empirical analysis of innovation strategies of biotechnology firms in the U.S.

The paper explores the strategies of biotechnology firms in the U.S. through a mail questionnaire study. Based on the responses of 89 companies we have developed strategy archetypes of these firms in R&D, marketing, and technology acquisition. In R&D, we found the firms to follow either incremental or radical strategy. In marketing, the firms use either a defender or an innovator strategy. In technology acquisition, firms differ in terms of their emphasis on licensing or developing new technology. The interrelationship among the strategy groups is weak. The R&D and technology acquisition strategies are related in the sense that aggressive technology strategy dictates radical R&D behavior with emphasis on development of new technology. We have found that firms following aggressive technology strategy tend to follow conservative marketing strategy. This is consistent with an earlier study by of German firms where it was found that firms tend to balance their technical and marketing risks. The paper also provides additional information about the factors considered to be important in product decisions for various strategies.     

Key variables in technology transfer: A field-study based empirical analysis

Research and development (R&D) consortia represent a new organizational form which highlights barriers and clarifies solutions to efficient and timely technology transfer. Using interview, archival, and survey data collected on one of the nation's oldest and most prominent R&D consortia, the MCC (Microelectronics and Computer Technology Corporation), this study refines and contributes to established technology transfer theory by suggesting that four variables—communication interactivity, cultural and geographical distance, technology equivocality, and personal motivation—are central to technology transfer processes within and between organizations. Research hypotheses are presented in terms of a Technology Transfer Grid which depicts different combinations and managerial implications of the four variables.     

The moderating effects of home region orientation on R&D investment and international SME performance: Lessons from Korea

Drawing from the resource-based view, we investigate how firm and country combinations affect international SME performance. Using a sample of 2676 international Korean SMEs, we explore the relationships among SME R&D investment, home region orientation and financial performance. Results show that R&D investment has a horizontally inverted S-shaped relationship with performance reflecting cost leadership, stuck in the middle, and differentiation strategies. We also find that a home region orientation moderates the relationship between R&D investment and performance. Home region orientation positively moderates the relationship when R&D investment reflects cost leadership or differentiation but negatively moderates a stuck in the middle strategy.     

Separating research from development: Evidence from the pharmaceutical industry

From an organisational point of view, corporate research and development (R&D) has always been viewed as one function. That view, however, has undergone some changes in the last few years, and many major corporations have changed their R&D organisation or re-thought their overall structure on the basis of their technical competencies.With the example of the pharmaceutical industry, in which R&D has a particularly strong role to play, Vittorio Chiesa reports on a survey of nine major pharmaceutical firms which have recently instigated such changes. Among the changes are a separation of the ‘research’ and ‘development’ activities organisationally and sometimes physically. The author puts forward explanations for this trend and weighs the advantages and disadvantages.     

Creating competencies through collaboration:: The case of EUREKA R&D consortia

This article discusses the originality of European EUREKA consortia. Formed at the initiative of member firms, these consortia generally adopt a decentralised structure. Their main purpose is to conduct applied research, with the ultimate goal of exploiting its commercial opportunities. The consortia strive to ensure collaboration among firms in different countries, and at times, from different industries. Examining the management of R&D consortia, this article focuses primarily on the creation of new knowledge and competencies and on the benefits that member firms can reap from collaboration. Based on 20 interviews with project managers, the article brings to light two main observations: (1) the leader's positioning is a determining factor, and (2) a perfect balance between the firm's technological development and the consortium's strategic orientation facilitates the acquisition of competencies.     

Technological change and technology monitoring process: Evidence from four Italian case studies

Technology monitoring (TM) may take on different meanings in a company’s day-to-day activities. In some cases it can be interpreted as a technology intelligence methodology, while in others it is understood as technology forecasting or even as technology assessment. These different interpretations are confirmed by an analysis of the literature. This case study examines the technology monitoring process in four Italian companies.For each of the cases considered, first we analysed the way technology monitoring is carried out and then we tried to understand what factors influence the company approach to technology monitoring. Four factors that can be expected to influence a company’s technology monitoring approach came out of this empirical research study: the industry a company operates in, the business model it uses, the importance of technology in the corporate culture, and the level of its R&D resources.     

Wholly proprietary versus wholly open knowledge strategies: some empirical evidences from Italian biotech firms

This paper focuses on biotechnologies and biotech companies. Our aim is to develop a model for assessing the openness degree of knowledge governance strategies, applying it to the biotech firms. Biotech production is described as an emerging meta-industry in the global economy, fostering through new products, many socio-economic fields. Its main features are: a close relationship among knowledge, innovation and competitiveness; the need for collaborative research; the importance of small firms. Our paper begins with a brief characterization of the biotech meta-sector. We then review the literature regarding the advantages and disadvantages of ??wholly proprietary?? versus ??wholly open?? knowledge strategies. Next we propose a model and report the main results of its application to biotech companies in Italy. In conclusion, we evaluate the degree of openness of the company knowledge strategies based upon empirical evidence from our research in the field.     

Collaboration experience in the supply chain of knowledge and patent development

Abstract

In this paper, we aim at understanding the role of collaboration experience in supply chains of knowledge (SCoK). The SCoK of a company is its supply chain not related to the flow of physical goods but to the flow of R&D commodities. R&D commodities are for example patents, technologies, research services, studies, and projects, and, in high-tech industries, their development and commercialisation are considered as important as real products. To accomplish our aim in this paper, we fulfil the following research objectives: (1) investigate the relationship between the collaboration experience in SCoK and the propensity of the firm to develop new patents; (2) examine how the structural embeddedness of the firm within its SCoK mediates this relationship. We ground our conceptual model on the supply chain, open innovation and social capital literatures and empirically test our hypotheses on a cross-sectional data-set of 208 biotech companies that have signed 612 SCoK agreements in the years 2006–2010. The key findings of this study are: first, accumulating experience in SCoK collaborations facilitates the development of new patents; second, being central and bridging structural holes within the SCoK are two means by which the experience in SCoK collaborations is translated into new patents.     

The characteristics of industrial R&D—A study of major manufacturing industries in Hong Kong

An empirical study of 69 firms in Hong Kong identifies the characteristics of industrial R&D activities. Results of the study show that R&D intensity is highest in the manufacture of professional equipment, electronics, scientific, photographic and optical goods; the type of R&D activities is mainly confined to product research and development, and R&D strategies are mainly the ‘follow-the-leader’ strategy complemented by the ‘me-too-strategy’. Through the analysis of the results, recommendations have been made for the promotion of industrial R&D activities in Hong Kong.     

Effect of R&D expenditures and funding strategies on the market value of biotech firms

Market value of biotech firms is important to investors and venture capitalists who keep this industry alive and dynamic. It is a particularly valuable index of investors' estimate of current and future success of the firms in this industry because other conventional indices of performance and success are inappropriate. Our hypothesis is that market value in this industry can be explained in terms of funding strategies and R&D expenditures. Using all sixty publicly-held biotech firms, that are included in a national directory for such firms engaged in the research of biotech products for human use, we estimate multiple regression models that explain most of the variance in market value using funding strategies and R&D expenditures (R-squared = 0.93). Our models also demonstrated that small biotech firms (< $10 million in total revenue) are substantially different from larger ones.     

R&D internationalization,product diversification and international performance for emerging market enterprises: An empirical study on Chinese enterprises

One motivation behind R&D internationalization for emerging market multinationals (EM MNEs) is to expand international markets. This paper analyzes whether the R&D internationalization of EM MNEs contributes to an improvement in international performance measured by foreign sales as a percentage of total sales (FSTS). Using panel data on China's listed companies, this paper introduces more scientific and normative indicators for measuring R&D internationalization in terms of geographic distribution (breadth) and overseas investment (depth). The results reveal an inverted U-shape relationship between R&D internationalization and international performance that is initially positive and eventually becomes negative. Product diversification has a significant moderating effect on the relationship between R&D internationalization breadth and international performance.     

Developing new innovation models: Shifts in the innovation landscapes in emerging economies and implications for global R&D management

Over the past two decades, there has been a substantial shift in the global innovation landscape. Multinationals from developed economies are increasingly globalizing their R&D activities and are developing an “open innovation” model to source innovations from outside the firm, including from emerging economies such as those in Asia. In addition, emerging economy firms, which traditionally have played a secondary role in the global innovation landscape, have now begun to catch up in developing their own innovative capabilities. This study explores the implications of this new innovation landscape for CEOs of multinationals and emerging economy firms, as well as for international management scholars and educators. While the multinationals might appropriate rents from their existing capabilities and source new ones in emerging economies, they may be threatened by weak intellectual property rights regimes and unintended knowledge spillovers to local firms, creating potential competitors. Firms in the emerging economies can learn from and catch up with investing multinationals, but to do so they need to develop their own innovative capabilities and move from a process to a product focus and from imitation to innovation.     

The Distinctive Patterns of Dynamic Learning and Inter‐firm Differences in the Indian Pharmaceutical Industry

Technological or institutional change has proven to be a major cause of the failure of established firms, and history is full of examples. In a globalized world the capability of a firm to reconfigure existing competencies and create new knowledge for innovation has emerged as a dynamic capability to succeed. I examine the learning processes involved in the development of innovative R&D capabilities in Indian pharmaceutical firms as a response to the strengthening of patent law. The strong patent law represented a major institutional change for Indian firms which had grown in a weak patent era. The analysis shows that the development of new capabilities involved the removal of rigidities and the acquisition of new knowledge, and reveals that Indian firms are adopting strategies such as hiring of Indian scientists educated or working overseas in pharmaceutical R&D and collaborative R&D to acquire innovative R&D capabilities. It further points out the inter–intra firm heterogeneity in learning processes and suggests that the move from basic to advance level capabilities is neither linear nor automatic. It requires a deliberate effort and investment by firms in different mechanisms of learning. The Indian pharmaceutical firms' responses provide important insights for firms from other developing countries.     

Explaining performing R&D through alliances: Implications for the business model of Italian dedicated biotech firms

In recent years management scholars and practitioners have been interested in Research and Development (R&D) partnering, especially in high-tech industries. While the motivations of research partnership formation have been widely explored in literature, little attempt has been undertaken to examine the effects of research partnerships on R&D productivity and the implications for business models of the new ventures. In this paper we try to shed some light on the business models of the young ventures involved in R&D partnerships and their effect on R&D productivity. Our hypotheses are that experience in previous alliances, repeated partnerships and tight relationships have positive effects on R&D productivity while rigid governance structures and public R&D subsidies have negative effects on such productivity. We discuss how these aspects affect the business models of biotech firms. We test our hypotheses on a sample of 55 Italian DBFs (Dedicated Biotech Firms). Results support our hypotheses. Managerial implications and further issues for future research are discussed.     

Inter‐Firm R&D Networks: the Importance of Strategic Network Capabilities for High‐Tech Partnership Formation1

We examine the role of different network capabilities of companies that influence the formation of R&D partnerships in pharmaceutical biotechnology. Strategic network capabilities, specifically centrality‐based capabilities and the efficiency with which companies choose their partners, are found to facilitate the formation of new partnerships. Unlike general experience with partnering, these strategic network capabilities play a crucial role in enabling companies to continue to interact with other companies through partnerships in a complex network setting.     

Is advertising for losers? An empirical study from a value creation and value capturing perspective

Does advertising lead to higher profits? This question has preoccupied company executives and academic researchers for many decades. Arguments have been put forth in both directions, and evidence is mixed at best. In this article, we re-examine the question from a value creation and value capturing perspective, which allows us to re-interpret and reconcile the different views and empirically validate the resulting hypotheses. Using a database of the top 500 brands of established companies during the 2008–2015 period, we find that advertising spending has no significant impact on profitability, while both brand value and research and development (R&D) spending have a clearly positive effect. In addition, we observe a positive interaction effect between advertising spending and R&D spending and a negative interaction between brand value and R&D spending on profitability. These findings corroborate the view that advertising in and of itself does not improve profitability; rather, its effect is positive only when it acts in support of customer value creation as a result of R&D.     

A framework for understanding commitment in the R&D organization

The complex and long-range nature of technological innovation makes commitment particularly important to the R&D organization. Using findings from previous and current research, this paper develops a conceptual framework for understanding commitment in the technology-based organization that may be more precise and meaningful than the traditional, global conceptions. Three general conclusions emerge. First, organizational commitment has positive benefits not only for the organization but also for the individual. Second, given the popularity of the project form of organization in R&D and the deep commitments individuals sometimes make to those projects, some allowance should be made for multi-commitments. Third, one of the most important and least investigated antecedents of organizational commitment is the verbal behavior of the project manager. Some implications of this perspective for future research are presented.