Research and development strategy of corporations
Executive Summary
The report revolves around the implementation of research and developmental strategies in organizations and the different ways by which these strategies can be managed through suitable tools and methods. All these strategies center on various factors, such as customer preferences, investment choices, product functionality, and communication across teams. Through these ways, all global corporations have come up with advanced techniques of research and development. Virtual teams are created, enabling cross-functional connections across boundaries that facilitate the sharing of ideas and information. On the other hand, SMEs have limited knowledge, infrastructure, and fund. These factors have continuously hindered their process of strategy implementation. The report will focus on the comparative study of these two kinds of the organization, along with a summary of the key points.
Table of Contents
Research and developmental tools and techniques. 4
A comparative study of R&D techniques used in global corporations and SMEs. 6
Management of research and development in Small and medium enterprises. 6
Management of research and development in large corporations. 7
Introduction
The main objective of the paper is to discuss the various ways by which corporations can use ideas of research and development in their core functional areas. The report will talk about the tools and techniques used by the organizations for strengthening their research and developmental areas. The different strategies applied by the organizations following the ideas of the research and development will also be summarised. A comparison will be drawn between a large corporation and small and medium scale enterprise of the manufacturing sector for justifying the proposed techniques. The benefits and challenges of implementing research and development in the business will also be enumerated in the light of global corporations and small and medium-sized organizations. Further, the above discussion will be summarised by extracting out the critical points related to the research and development strategies of organizations and the ways they could be applied in the business scenario.
Discussion
Research and developmental tools and techniques
Management of research and development is a significant activity in the modern business environment as it requires tasks like innovation management and technology management. Innovation management relates to the creation and commercialization of the newly launched products and services of an organization (Hu et al. 2019). Technology management refers to the nature of technological know-how of a business process through internal and external ways. Research and developmental functions include an extensive set of activities such as basic research, fundamental research, advanced development, concept development, new product, and process development, creation of a prototype, and portfolio management.
Through many studies, it has been found out that organizations use a variety of tools and techniques for managing their research and developmental activities. The different tools used by organizations for formulating strategies through research and development can be summarised below.
- Failure Modes and Effects Analysis (FMEA) – This is a popularly used tool, which helps in minimizing the risk of a business through the improvement of the design of a product, process, or system of an organization (Fong et al. 2017). It is a systematic approach, which assesses the potential sources of the products, processes, and systems that are used in the organizations and also tries to find out the consequences of applying such elements in the business.
- Kano Model technique – This approach was first proposed by Japanese research and a consultant named Noriaki Kano in 1984. This approach finds out a relationship between product features and the satisfaction of the customers (Sayegh et al. 2017). The underlying idea is the dependency of customer satisfaction with the functionality level of a product. This determines the performance of a particular product in the market.
- Net present value technique – This technique is used for finding out the returns of investments made on the areas of research and development. The metric tries to compare the present value of all the cash inflows with that of the initial investment to judge the profitability of the investment (Schut et al. 2016). The process helps in mitigating the debate related to the amount of capital that should be invested in research and development.
- Quality function deployment – This has been considered as one of the best management tools for understanding the needs and desires of a customer while developing a new product or a service. Many global companies like Packard, Ford, and ITT have used this approach and have formulated cross-functional product development teams for understanding the customer attributes and draw up measurable objectives.
- Road-mapping – The road-mapping techniques are required for planning and integrating the different disciplines or departments of an organization such that there is a shared vision to move forward (Allen et al. 2018). Some of the strands of this process could be building consensus and communication for driving a change in a planning-oriented manner. Motorola first adopted this strategy for synchronizing its technology with product development.
- Scenario planning – This method is generally used for making flexible long-term plans for the organizations. The fundamental driving forces of this approach are social, technical, economic, environmental, as well as political factors (Grando et al. 2017). The plan considers systematic thinking and combining these factors in complex ways to create a surprising element in the future. It always allows the inclusion of non-formalized factors such as values and unprecedented regulations or inventions.
- Scoring methods – These are the methods used for prioritization of a different set of activities involved in the management of research and development. The activities and projects related to research and development are ranked according to their measures of opportunity and feasibility (Beaumier et al. 2016). The organizations score the processes being logical and objective as far as possible and also consider the inevitable uncertainties.
- Stage-grate product innovation process – This model is used for complex and chaotic operations of the organization. This process involves all the stages starting from inception to the launching of the final product (Park and Liang, 2016). This method is divided into two phases, that is, stages and gates. In the first stage, the project activities take place, whereas in the second stage, these activities are evaluated, and appropriate decisions are made.
- TRIZ (theory of inventive problem solving) – These tools direct the research and development team for searching out multiple methods of solving a problem and thinking about new routes for initiating a product development (Johnston et al. 2016).
A comparative study of R&D techniques used in global corporations and SMEs
Management of research and development in Small and medium enterprises
While studying the management of research and developmental areas of small and medium enterprises, four important topics are essential. These topics are the impact of research and development in an SME business, levels and patterns of investment made in the R&D area, factors that influence the investments in the above field, and internationalization of business R&D of the SMEs (Robert et al. 2017). In the discussion of R&D business in SMEs, certain factors should be kept in mind, that is, availability of limited resources and financial capabilities in the hands of SMEs, challenges of diseconomies of scale related to the expansion of R&D activities and developmental stage of the firm.
Considering the different stages of research and development as investigated in SMEs, it can be stated that the process takes place distinctively by three stages. The first stage is the stage of innovation, where the value of a product or a process is enhanced through creative ideas (Moral-Muñoz et al. 2020). The next stage is the development of incremental innovation, where the process is further improved upon evaluation such that a change can be noticed from the previous stage. The third stage is to research for the next step through in-house experts or outsourcing of knowledgeable and skillful experts from other enterprises.
In the pathway for investment in the research and developmental areas, the SMEs face several obstacles. Most of the innovation and investment barriers can be attributed to the limitation of financial resources, knowledge, human intelligence, and management competencies. These four factors are especially noticed in the SMEs belonging to the manufacturing sector (Bou Ghantous and Gill, 2017).In addition to these factors, the risks persisting in the economy, technical fields, and market also pose equal threats to the investment of SMEs in the research and developmental areas. Another significant factor contributing to this phenomenon is the growth and developmental stage of an SME that is the number of years of its operation. Despite all the challenges, the SMEs gradually realize the importance of research and development and incorporating the tactics concerning research and development into the operational stages of their business.
Management of research and development in large corporations
The management of research and development in global corporations is the process that is concerned with the designing and leading of the research and developmental processes at the global platform. The process is conducted across borders under multi-cultural and multi-linguistic settings involving multiple time zones. The process ensures a smooth transfer of technological know-how across boundaries among the different departments or groups involved in the process (Clark, K.D. et al. 2019). The global research and development teams of large organizations enjoy the benefits of local responsiveness, local insight, and synergy at the global level. Through the internationalization of the research and development, the companies can cost-effectively achieve their objectives and often seek resources outside the confinement of their own. Outsourcing can be of many types, starting from non-core activities, co-development to the collaboration of activities. Research and development at the global platform require competent people such as engineers, scientists, and managers who would be directly involved in the process.
The process of management of research and development takes into account various methods and techniques. The research and development are mostly conducted virtually through web-based platforms, which should be managed frequently. The organizations are flexible and are always open to new innovative techniques. The corporations are also engaged in setting up different centers for research and development. The different locations in which research and development teams will be set up are also decided by the management. Cross border project management is carried out by these global corporations concerning research and development.
Technology is transferred suitably across all the online channels, where all the participating companies get an insight into the technical know-how required for the development of products and processes. The different research and development networks are consequently managed. The merger and acquisition activities also take place where knowledge and ideas could be shared across companies. Finally, there is a post-merger integration of all the units of research and development (Wong and Molina, 2017). After the successful launch of the new product or the meeting up of other activities, the research and development centers are dissolved. The final step has been to evaluate and measure the productivity and performance of the entire chain of activities for taking corresponding measures.
Summary
Research and development is a very critical part of the business of an organization, and it provides an organization with a competitive advantage in the market at different levels like business level, industrial level, and national level. The rewards of having an excellent research and development team can be very high, while at the same time, the process can be very complex and risky. Due to incompetence, the majority of the research and development projects fail to provide the desired financial results and are ultimately terminated by the management. Therefore, it is the sole responsibility of a company to organize, control, manage as well as evaluate its research and developmental efforts.
To apply the research and developmental strategies effectively, companies use a variety of tools and techniques. Some of the important tools used by the organizations are FMEA, kano model, scenario planning, scoring method, and quality function deployment. These methods have distinct utilities (Dixon and Telles, 2017). Some of them are used for minimizing the risks of the organization and improving the design of products and processes. Some of them are used for improving customer experiences through the proper functionality of products. Other methods are required for assessing the profitability of the investments by comparing them with the returns projected from the research and development activities.
The management of the research and developmental activities have been analyzed in the light of an SME as well as a global corporation. In an SME, the process takes place in three stages, starting from the innovative techniques to making a change and finally outsourcing experts for further experts. Mostly, the SMEs are faced with a lot of barriers due to budgetary constraints and lack of infrastructure. On the other hand, global corporations have suitably developed research and development projects across borders such that knowledge and technological know-how can be easily transmitted from one firm to another.
Conclusion
From the above report, it can be inferred that in the modern business environment, the companies are engaging more in research and developmental activities to gain a competitive edge in the industry. Though it has been a long-term debate regarding the optimal capital investment into the research and developmental projects, still the companies have taken the risk of investing in considering funds for generating the desired results. Many techniques have been applied by the companies for forming suitable strategic decisions through research and development. On the contrary, the SMEs have faced a lot of challenges in funding their research and developmental projects due to limited financial and human capital. However, SMEs are trying to come up with new methods for coping up with these challenges and forming a research and development team.
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