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Universal Journal of Education and General Studies (ISSN: 2277-0984) Vol. 3(2) pp. 024-029, October, 2014
Available online http://www.universalresearchjournals.org/ujegs
Copyright © 2014 Transnational Research Journals
Full Length Research Paper
Strategic Management: Executing and Crafting
Research and Development Strategy in Organizations
1
Syeda Ataat Zahra and 2 Dr. Fareeha Zafar
1
University of Derby, UK, Working at Government College Lahore.
M-Phil (Business Administration), Kinnaird College For Women, Lahore, Pakistan
2
Accepted 31 March 2013
The main aim of this paper is to give an idea of how the organizations actually do strategic planning in
Research and Development, by keeping in view the proper alignment of resources. In this paper
various process of strategic management is being discussed for R and D. the paper highlights the R
and D portfolio, technology road mapping to help integrate; monitor and shape R and D strategy in
support of corporate strategy. The different point of opinions is discussed under the literature review.
The different types of research are also being discussed. Also the impact of research and development
strategy in the organizations is being highlighted with the steps of the planning.
Keywords: research concepts, phases of research and development strategy, portfolio investigation, R and D
milestones, process of R and D
INTRODUCTION
The research and development and innovation are one of
the way in which organizations gain competitive edge
over the competitors. According to Tidd, the creative
organizations always try to differentiate their products
and services, in terms of growth, profitability, market
share and capitalization. To enable consistent innovation
and to compete well in the market an R and D strategy
should be performed that would be focus on all the
innovation activities. Sometimes newly obtained R and D
strategies fail in the initiation stage, and products can’t
become successful. However, innovation can be the
successful factor for the organizations if they are properly
executed, and it requires proper management skills,
expertise and knowledge. Research and Development
can increase efficiency in business to radical to
fundamental
breakthroughs
that
creates
new
opportunities. Corporations and organizations actually
engage themselves in proper research and development
activities to make sure that their products are not
obsolete. Then, R and D strategy is formulated to achieve
the goals and objectives of the organizations.[
http://www.exforsys.com/career-center/strategicplanning/role-of-research-and-development.html]
*Corresponding author Email: [email protected]
or [email protected]
The R and D strategy has to be perfectly aligned with the
overall business strategy of the organizations to
maximize the long term return on the R and D
investments. For this alignment R and D project portfolio
is constructed which indicates what type of products
would be available in the market for the introduction. And
these projects have to evaluate individually and
continuously. The long term vision of the organizations
can be integrated with the R and D strategy and
corporate strategy.
The role of R and D strategy can be expanded to
increase the role for the corporations. The following
factors make the increase importance of R and D and
they are:
•
Pace for change: the rate of change in
technology and markets. Increase in pace of change on
core technologies.
•
Competitive pressure: R and D should be the
contributor in competitive market
•
Overhead reduction mandate: the budget of R
and D has to manage as in investment. The management
has make sure that the research that is being targeted to
those
areas
that
has
high
payoffs.[
n.dhttp://www.stanford.edu/group/biodesign/cgibin/ebiodesign/index.php/development-strategy/r-and-dstrategy]
By proper execution and crafting the research and
Zahra and Zafar
development strategy organizations can be very well
established their goodwill. It can further deploy their
products and services and can gain the competitive
advantage.
LITERATURE REVIEW
Research and development is very important for all the
organizations to sustain the growth by achieving
continuous improvements in the products and services.
Typically the organizations that are in their initial stage or
in the maturity stage need R and D strategy to ensure the
flexibility for the survival. Today Research and
Development is used by each and every organization like
small, medium size organizations to compete in a very
competitive
environment.
[http://www.exforsys.com/career-center/strategicplanning/role-of-research-and-development.html]
To compete in an environment business organization
need to employ Offensive and defensive R and D
strategies. There are various methods that are used by
the organizations the goal is and mission can be the
same but methods may be different. The Rand D is the
main driving force to attract the customers by meeting all
the requirements of customers, by modifying the products
with the emerging needs of the end users. The main goal
is to identify the main customers, and how would
organization go there. The various questions that one
should ask would be who are our ultimate customers?
What would be the target market? What type of
marketing channels would be needed? These questions
will allow all business organizations to do the research
and development in the right direction and at the right
time.
[Ref:
n.dhttp://www.stanford.edu/group/biodesign/cgibin/ebiodesign/index.php/development-strategy/r-and-dstrategy]
According to Spencer, The Research and Development
should be aligned with the goals of the corporations in
order to maximize the long term gain of R and D
investment. The management of Research and
Development should be categorized as strategic
competitive weapon that joins future R and D output with
the desired future strategy. These kinds of strategies
should be carried out carefully, as the number of
mistakes can occur with the implementation of the new
technologies. The main aim of the corporations would be
to use the best technology rather than the technology that
suits them, and they must be sure that this would be
accepted by the market. There are various tools and
techniques that can be combined in a new innovative
ways to help R and D strategy to be monitored and
integrated more effectively to ensure corporate strategy.[
http://www.exforsys.com/career-center/strategicplanning/role-of-research-and-development.html]
According to Tidd, the innovation and Research and
025
Development can be best way for the organizations to
gain competitive advantage. To enable consistent
innovation activities directed towards desired future
competitive position of the corporation, R and D strategy
should be chosen to best achieve the innovative
activities. And, this innovation can strengthen
competitiveness of the corporation in well defined way.[
n.dhttp://www.stanford.edu/group/biodesign/cgibin/ebiodesign/index.php/development-strategy/r-and-dstrategy]
RESEARCH CONCEPTS
Basic research
Basic research is used to explore the basic fundamental
of behavior. Ii does not have practical implications. It is
important
for
the
scientific
method
[Alan
S.alangutterman.typepad.com/files/odm_03.05.2012.pdf].
Applied research
Activities of an original nature to acquire new knowledge,
directed primarily at
Practical objectives or applications. The main motivation
is to apply knowledge in practical problems. [Alan
S.alangutterman.typepad.com/files/odm_03.05.2012.pdf]
DEVELOPMENT WORK
Systematic work that applies existing knowledge with the
aim of producing new materials and products and
introducing new processes, methods, systems or
services, Or improving those that exist. The key to
development is sustainability every development project
has
its
own
objectives.[
www.vegvesen.no/_attachment/61627/binary/14395]
Integrating Research and Development strategy
The business organizations that actually try to manage
products and technologies with the strong R and D
research are basically diversifying the new product into
the market,
The R and D management objective is to optimize the
budget to achieve the particular goals of the organization.
The main objective of the management technology is to
use best fit of the corporate strategy and the best return
on the portfolio as well. It’s the duty of the management
to assure that whether this new technology is suitable for
the entire functions of the organization or not. Basically
the technology management is not only responsible and
026. Univers. J. Edu. Gen. Stud.
Figure 1. Elements of forecasting in R & D
accountable of what is happening in the organization’s R
and D department but also held responsible for the unit of
R and D outside within this domain. Some organization
are actually striving to become the market leaders by
focusing on R and D to achieve the competitive
advantage. In short, to manage strategically is first and
foremost to integrate R and D to technology and
corporate strategy.[ thalexandria.tue.nl/repository/free
articles/334433.pdf ]
CORPORATE STRATEGY
It is the strategy that is being formulated for the entire
corporation’s strategy’s corporations has to make
different tradeoffs between performances, price that is
aimed at different segments. It is being observed that
organizations actually adopt different approaches for
managing their way to the future like
•
Diversified portfolios of projects and technologies
•
Dual strategies
•
Mergers, acquisitions and alliances
R and D strategy planning focuses on the organizations
opportunities to best fit in the market and create change
by the identifying the new paradigm shifts. The overall
strategy of the company determines the organizations
goals and how to achieve those goals and theses goals
depends entirely on the R and D strategy. The goals of
the R and D must be precisely formed in order to remain
competitive in the market and to succeed in the market
place.[www.deloitte.com/.../us_lshc_Executing%20and%
20sustaining%20RD%...]
Phases of research and development in the strategic
planning
General investigation
This phase is more oriented towards the future, and will
forecast the technological forecast etc. the main
forecasting is
•
The investigation of the future needs that would
be the needs analysis
•
An investigation of the future means (means
analysis)
•
Environmental
analysis[www.deloitte.com/.../us_lshc_Executing%20and
%20sustaining%20RD%...]
The above figure 1, shows that the strategic planning is
the representative setting for the planning process. The
technological forecast is the shows the clear picture of
what opportunities the firm will have in the future
perspective. The all the environmental analysis is being
studied to get an idea about the global idea of what is
happening around and to know the future outcomes for
the firm. The next one is the needs and technological is a
fundamental step of the know how and the relevant
expenditures required. In order to forecast the normative
approach or the explorative approach is used. Like,
Nestle properly analyze the environmental and future
sustainability of actions in technologies, brands,
operations and in R and D. one of the four pillars of
nestle is innovation and it is accelerating the performance
to
achieve
excellence
in
the
marketplace.[
http://www.strategos.com/?target=blogsandsubtarget=33]
Project evaluation
The research and development planning process
diagram is shown below:
The figure shows the research planning process that
starts with the technical and the economical. The first is
the technical evaluation and then the selection and
evaluation of the technological parameters this process is
taken by all the technical people around. Secondly, the
choosing of these parameters to describe the
technological trend and the consequences of this trend
will be the improved one. Third, the identification of the
technical bottlenecks by comparing the values desired
with the actual technological parameters. If we see
economically then we will have an idea that cost benefit
analysis and the economic analysis will be specifically
used by the organizations. These technical and the
Zahra and Zafar
027
Figure 2 . The Research planning process
Figure 3. Formulation of R&D strategy
economical approach are the interrelated items that both
affects one other. They should have to be considered
well in order to forecast future decision in the R and D
department. [http://www.nestle.com/aboutus/strategy]
The results of the economic and the technological will
be the inputs of the allocation models. In the planning
process of the research and development.
Research and Development process
R and D activities must remain closely linked to
prototyping and clinical efforts and should not be
developed in isolation. The steps below have been
excerpted to assist innovators in getting started in
developing a well-integrated, effective R and D strategy.
Determine Strategic R and D Milestones
First of all it is necessary for all the organizations to
identify the R%D milestones that are necessary to
achieve the organizations goals and objectives as well as
the mission and vision of the organization. The
milestones will give an idea of the outcomes that will
ultimately help the organizations to retire the important
risks. Such milestones might include proof-of-concept,
first prototype that performs effectively. Consider different
sets of critical milestones, alternative ways of sequencing
them, and the strategic implications of changing the
sequence
and
order
of
the
milestones.[
https://ujdigispace.uj.ac.za/bitstream/handle/10210/2161/
Chapter6.pdf?sequence=9]
7.2 Identify and Prioritize Key Technical Challenges
Then the next step is that the organizations who want
to identify and prioritize various milestones, define the
significant
technical
and
manufacturing
design
challenges. After carefully analyzing them, then it should
prioritize based on the importance and the level of
Uncertainty... Seek to resolve those challenges with the
greatest risk as early in the engineering process as
possible, working within whatever constraints may exist
within the company.
Example: Glaxo Smithkline
changed its research
operations in the year 2002, by adopting the new
strategy. The strategy was developed to promote
innovation, more accountability and the making the
research process improved by installing centre for
028. Univers. J. Edu. Gen. Stud.
excellence in Drug Discovery. The result of that
implementation was quite significant it GSK’s pipeline
was tend to be doubled compare to the previous years.[
https://ujdigispace.uj.ac.za/bitstream/handle/10210/2161/
Chapter6.pdf?sequence=9]
Develop an Initial R and D Plan
Organization need to develop an initial R and D plan to
succeed in the future Map out the high-level requirements
and processes of the quality system from “end to end.
Then, depending on the stage of the company and its
product(s), determine which processes and procedures
need to be developed further at any particular point in
time. Design control is usually one of the first elements to
be developed at the tactical level. and then
production/process controls. These elements should be
built out as they are needed, based on the company’s R
and
D
progress[https://ujdigispace.uj.ac.za/bitstream/handle/102
10/2161/Chapter6.pdf?sequence=9]
We can be of the opinion that the management should
understand the scope of the overall plan by implementing
the new strategy. The R and D planning cycle is much
more important, and that planning process will help the
management to define specific activities and resources
that is necessary for implementing and sustaining the R
and D strategy.
Research and Development Portfolio Analysis
The organizations will typically plot the different types of
R and D initiatives that are undertaken by them. It is done
by evaluating the type of risk involved in the projects. The
main purpose of that portfolio analysis is to focus on the
R and D projects and to evaluate whether the
organization has maintained the proper balance between
risk and the resources. The projects should be evaluated
based on the considerations that are taken to the other
projects. It can be done by evaluating products from
either development projects and from those products that
is currently available in the market.[ Iepubl.ltu.se/14021773/2004/095/LTU-CUPP-04095-SE.pdf ]
Some organizations view that instead of examine the
portfolios of the business, executives should view as the
portfolios of the core competencies. The R and D
portfolio can be created to help managing the risk that is
associated with the new products and services. The R
and D portfolio can be assessed by the decision and risk
analysis that bring key attributes of the technical and
commercial uncertainty and R and D productivity. This
decision and risk analysis tool helps the overall
management to decide R and D portfolio analysis.[
www.sony.net/SonyInfo/IR/info/faq/qfhh7c000000ep8satt/R_D.pdf]
Measuring Productivity and Performance
Here the management concern is to identify and applying
the appropriate measure of the productivity like return on
the investment (ROI) for the funds of the R and D
activities. It can be increased by hiring more staff. When
the organization grows and R and D opportunities
expands the management must apply the traditional
financial analysis while determining the R and D agenda
and by evaluation the current and past R and D activities.
The R and D activity can be very helpful in solving any
problems and evaluating the financial return on the
investment. The process of R and D can be evaluated by
using different criteria like the efficiency compare the
amount of resources used for the development against
the amount budgeted at the beginning period of time.
Similarly the effectiveness compares the actual output of
the development activity against the output that was
predicted before the commencement. The R and D will
rely on measures of internal behavior like adherence to
project schedule, delivery of progress reports and funds.[
https://ujdigispace.uj.ac.za/bitstream/handle/10210/2161/
Chapter6.pdf?sequence=9]
Formulation of R and D strategy
The R and D strategy consists of three phases
Shaping strategy: organizations actually shape the
strategy by looking at the tradeoffs like, product matrix,
degree of involvement, technology scope and sources of
innovation. Then the strategic decision is made whether
to stay at the existing technology or to innovate the new
one and then accordingly shape the R and D strategy. A
strategic decision should be made at the corporate level
to
help
shaping
R
and
D
strategy.[
http://psych.csufresno.edu/psy144/Content/Design/Types
/appliedvsbasic.html]
Integrating R and D strategy: the R and D strategy
should be integrated with the corporate level to create
competitive advantage. The main goal here is to create
and obtain the core capabilities and unique resources
that are aligned with the need of the corporations. These
core capabilities will strengthen and shape the
technological strengths of the corporation in the future.[
http://psychcentral.com/blog/archives/2011/05/12/underst
anding-research-methodology-5-applied-and-basicresearch/]
Monitoring R and D Strategy: when the strategy is
properly shaped and integrated it is necessary to make
sure that the alignment is maintained and carried out in
refined way. It implies the necessity to monitor the actual
outcome in regards to the intended outcome. The
strategy can be monitored with respect to the intended
future corporate strategy, by organizing R and D activities
for the corporations. The different funding approaches
Zahra and Zafar
029
can be used to monitor the R and D activities. The
funding department that are actually carried out the
strategy and making the actual investment will monitor
the
return
on
the
investment.[
http://hz.nl/en/business%20network/Pages/Applied%20re
search.aspx]
to achieve the R and D strategy in all aspects of the
business. The R and D strategy has to perfectly align with
the resources of the organizations for survival.
Impact of R and D strategy
Role of research and development in strategic planning
http://www.exforsys.com/career-center/strategicplanning/role-of-research-and-development.html
The
process
of
innovating
technologies,[http://www.stanford.edu/group/biodesign/cgibin/ebiodesign/index.php/development-strategy/r-and-dstrategy-menu
Strategic planning for Research and Development (2012). Alan
S.alangutterman.typepad.com/files/odm_03.05.2012.pdf
www.vegvesen.no/_attachment/61627/binary/14395
Strategic planning for research and development Bomelmans.
thalexandria.tue.nl/repository/free articles/334433.pdf
Executing and sustaining R and D strategy by Deloitte
www.deloitte.com/.../us_lshc_Executing%20and%20sustainin
g%20RD%...
Aligning
R
and
D
with
the
company
strategyhttp://www.strategos.com/?target=blogsandsubtarget
=33
Strategy Nestle roadmap to good food to good life
http://www.nestle.com/aboutus/strategy
https://ujdigispace.uj.ac.za/bitstream/handle/10210/2161/Chapt
er6.pdf?sequence=9
Research
and
development
strategic
plan
www.sony.net/SonyInfo/IR/info/faq/qfhh7c000000ep8satt/R_D.pdf
How can R and D strategy be shaped, integrated, and
monitored to support corporate strategy, Larsson, A,
Iepubl.ltu.se/1402-1773/2004/095/LTU-CUPP-04095-SE.pdf
Research
methods,
d
http://psych.csufresno.edu/psy144/Content/Design/Types/app
liedvsbasic.html
Understanding
research
methodology,
hale,
J
http://psychcentral.com/blog/archives/2011/05/12/understandi
ng-research-methodology-5-applied-and-basic-research/
What
is
applied
Research
?
http://hz.nl/en/business%20network/Pages/Applied%20resear
ch.aspx
What
is
development
work?
http://developmentnow.org/development-work-explained/
The organizations are developing the strategy to achieve
the desired outcomes. R and D strategy affects all levels
of the organizations to ensure whether the objective is
clearly defined or not. The robust planning and
communication within all the departments and the impact
can help to build and sustain the support required for
successful implementation. The main success of the R
and D strategy lies on the fact that it has to be properly
executed keeping in view the business attributes.
Defining the R and D mission in a very right direction
would help to lead the functions properly. The mission
that would be given to the R and D management is to
identify the areas of opportunity that could shape the
future corporate strategy. The R%D has two roles:
First: to support the existing business
Second:
to
act
as
an
agent
for
the
change[http://developmentnow.org/development-workexplained/]
CONCLUSION
The R and D strategy in organization shall be properly
executed and monitored in well defined way to achieve
the success and competitive advantage in market place.
By getting the execution right, proper articulation, building
support for the strategic vision, by assembling the right
team to achieve the strategy, right investment in
infrastructure and good communication will help the
organizations to be successfully positioned in a global
environment. We can come to the conclusion that there is
a no a single toll or technique that can handle the whole
process simultaneously to support corporate strategy. But
the tool of technology road mapping can be best utilized
REFERENCES