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Management Control of Research and Development
By Sheetal ThomasDean, GIMT
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R& D as a key factor
Many organisations operating in thesectors of
Biotechnology,defence,pharmaceuticals, and manufactureof mobile
phone devices dependheavily on the success on their
R&Doperations.Given the huge investments madeby organisations
in R&D it is criticalthat the org. ensure that there isadequate
return generated.
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Dilemmas in Controlling
Research and DevelopmentLinking R&D Activities to
Organisational andcustomer needs. Collection of relevant data from
the marketing
function. Integrating R&D with other
organisationalfunctions.
Differing time framesDiffering outlooks regarding assessment of
newtechnologyLack of available expertise to integrate R&D with
theother functionsDisagreement on controlDisinterest in creating
the link
Ensuring commercial viability
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R&D Project Planning and
controlAn effective plan includes: The technical obj of the
R&D function The issues that the R&D function will have
to
face during the research and developmentphase
Evaluation methods to be used to verify theresults obtained
The intermediate technical targets that have tobe achieved in
order to attain the final
technical objectives The time frame within which those
targetshave to be achieved
The budgets required to achieve the targets The people who will
be responsible for the
completion of the project
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R&D project control
Managers should set immediatetargets
Using R&D assessment systems
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V iewing R&D as strategic
infrastructureIt provides a competitive advantagedue to the
emphasis on the value of
knowledge, competencies,intangible assets such as brandname
etc.Evaluation of the value of strategicR&D should also be
done
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Impact of culture on R&D and
InnovationNational Culture and R&D Types of research
Basic researchApplied researchDevelopment research
R&D structures
Production structureControl structureEmployment relationship
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Cont
Dimentions of national culture Power distance
Uncertainty avoidance Masculinity/ femininity Individualism /
collectivism
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Organisational culture and
innovationOrganization culture fosteringinnovation
Managerial actions to foster innovativeness Balanced autonomy
Integration of technical skills and team
work Personalized recognition/ reward
system
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Measurement and control of
R&DTypes of control Financial controls
Behavioral controls Personnel controls
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Systems approach to R&D
performance MeasurementComponents of the R&D
systemInteraction between the components
of the R&D systemReasons for failure of
measurementsystemsConsideration to design effectiveperformance
measurement systems
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R&D activities and levels of
effectivenessActivities that portray R&Deffectiveness
Levels of effectiveness
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Measuring V alue of R&D
Assessing strategic infrastructure Inimitability
Durability Appropriability Substitutability Competitive
superiorityV alue from ongoing projects Finding out the NP V of
projects
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R&D audit
Guidelines for monitoring Set a definite R&D goal Set aside
an R&D budget every year Decide the extent of R&D required
for an
organisation Select broad research concepts keeping in
mind the organisations technological
capabilities Involve all the employees in the decision
regarding which project should be undertaken Conduct a trail run
of the project before
starting the research project on a full scale
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Evaluation of R&D activitiesAre the R&D objectives
aligned with the overallobjectives of the org.Has the org.
allocated specified amount as theR&D budgetAre the details of
exp.of each project maintainedseparatelyIs there control in
material usageAre the R&D personnel recruited on merit and
competencyDoes the org spend on non commercial R&DAre the
R&D activities well coordinated withother functionsDoes the
R&D centre have a good library
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Management control of new
product developmentStage gate framework Putting stage-gate
framework to use Significance of the framework
Balanced scorecard Implementation of balanced scorecard in
R&D Integration of balanced scorecard and stage-
gate frameworkFinancial perspectiveCustomer perspectiveInternal
business process perspectiveLearning and growth perspective
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Concurrent engineering
Concurrent engineering links thedemands of the markets with
theperformance of the new productdevelopment function.Types of
integrationMethods for achieving integration
Integration through strategy Integration through process
Integration through technology Integration through organisation
