Integrating R&D and marketing: a comparison of practices in theJapanese and American chemical industries

The authors analyze survey information collected from R&D and marketing managers working for American and Japanese chemical manufacturers. They report three key differences in the R&D marketing relationships between Japanese and American firms. Those differences involve the procedures for allocating the tasks between the functional areas, the activities assigned to each area as a result, and the potential for conflict between the two functions. Specifically, the authors find evidence that R&D departments in Japanese firms have a larger role in new product development than do marketing departments. American firms are not characterized by the same asymmetry in their relationship. Finally, the American firms studied did exhibit a greater potential for conflict between functions     

A comparison of R&D project termination factors in fourindustrial nations

With firms establishing R&D facilities abroad, it is important for R&D managers to understand how decisions are made and the factors that affect them in different countries. The decision to terminate an ongoing R&D project is made based on a number of factors. Some of these are objective and based on actual data, while others are mostly qualitative and subjective. Previous studies have identified a number of factors found to be important in the context of firms in the United States. Some recent studies have identified such factors in Germany and in the United Kingdom. This study examines the factors in the Japanese context in addition to the three countries. It further compares these factors from the four countries and provides some explanations for the similarities and the differences between the factors. Based on the results of this comparative study it suggests the implications for R&D management     

Corporate R&D strategy portfolio in Japanese and Australiantechnology-based firms: an empirical study

This paper presents an empirical study on the strategic structure of corporate R&D in Japanese and Australian technology-based companies. The perceived importance and distribution of basic research, precompetitive strategic research and applied research within a corporate R&D portfolio are examined through a comparative analysis of survey data. The results suggest that Japanese firms tend to place great emphasis on basic and precompetitive strategic research, although applied research still retains its importance. They recognize that basic research is critical to achieve long-term competitive advantages in the marketplace. Australian firms also realize the importance of basic research and the use of portfolio approach in R&D management. However, research work in Australian firms tends to focus on applied research with only a limited involvement in medium- and long-term research. Finally, it is concluded that Japanese firms utilize a portfolio approach to corporate R&D management more systematically than do their Australian counterparts     

Scientific output of small and medium size firms in high techindustries

The author focuses on the scientific output of small and medium-sized firms in high-tech industries in the US. The indicators for technological output have been defined differently by different researchers. Economists have used patents as the measure of research and development (R&D) output, partly because they are easier to delineate than other indicators. Behavioral researchers interested in the R&D management process have relied on publications as a surrogate measure for R&D output, while research in science policy and innovation has focused on products and processes as indicators of innovation and technical output. The author focuses on all three measures as indicators of R&D output and investigates the interrelationship among them as well as the correlates for this output. Except for the chemical industry. R&D expenditure is closely related to size as measured by annual sales, rather than the net income. It is observed that a growing firm is more likely to spend proportionately more money in R&D. The three output measures-patents, papers, and new products-are correlated, but the pattern of the relationship is different in different industries. It is noted that a firm's grown is linked with new products in only some industries. Patents do not seem to have any effect on sales growth. The growth in R&D is not a factor leading to a higher level of scientific productivity. The important factor is the average level of R&D spending. The policy implication for this observation is to maintain a steady funding level of R&D, avoiding sudden changes in R&D budget     

External-internal linkages and overseas autonomy-control tension:the management dilemma of the Japanese R&D in Europe

By examining how external/internal linkages held by overseas R&D labs affect autonomy-control tension within multinational corporations (MNCs), managerial dilemmas pertinent to international R&D management are discussed, especially in the context of internationalization of Japanese R&D in Europe. R&D is liable to be affected by high autonomy-control tension due to countervailing institutional forces at the functional level (research/corporate) and the geographical level (host country/home country). The external linkages an overseas R&D lab develops tend to increase the expected degree of local autonomy vis-a-vis the parent. The external linkages tend to increase the need for internal control on the part of the parent, especially when such sensitive issues as intellectual property rights and research initiatives are involved. Managers use internal linkages as a condition based on which local autonomy can be granted. Similarly, a high degree of internal linkages tends to decrease the difficulty of internal control and would even allow for some potential increase in local autonomy. An alternative multinational linkage strategy becomes necessary for the Japanese MNCs in the era of global R&D management in which the conventional social/cultural control mechanism may break down. This paper attempts to provide a basic framework which enables the association of such differences in linkage patterns with autonomy-control tension in a systematic way so that some new insight would be obtained regarding this classic yet unresolved tension     

Message and source factors, market uncertainty, and extrafunctionalinformation processing: hypotheses and empirical evidence

This article examines how the perceived quality of extrafunctional information improves the innovation management process and contributes to success with innovations. Data collected from 420 Japanese managers and 270 US managers are used to test hypotheses about the antecedents of satisfaction with extra-functional information and the impacts on new product performance. The results demonstrate that the level of marketing and R&D managers' satisfaction with extrafunctional information is an important predictor of new product success and financial performance. The results also show that marketing and R&D managers differ significantly in their preferences and criteria for evaluating extrafunctional information. The empirical evidence suggests that the factors that increase R&D's satisfaction with market information are not necessarily the same as those that increase marketing's satisfaction with R&D satisfaction. Each functional area should recognize which message factors are most related to high satisfaction with received information, and emphasize these when sending such information. The authors also discovered the moderating effects of market and technical uncertainty that should provide guidance for marketing and R&D managers on how to allocate their efforts in information transfer based on the external environment. The empirical findings also revealed some cross-cultural differences, as well as a few similarities, between US and Japanese respondents     

Innovation strategy and the R&D-marketing interface in Japanesefirms: a contingency perspective

This study proposes a contingency model suggesting that a firm's strategic position will affect cross-functional involvement and information sharing between R&D and marketing departments in five major new product development stages, as well as the quality of R&D-marketing relations and organizational structure. To test the model, the authors surveyed 274 R&D managers and 264 marketing managers in 315 Japanese high-technology firms. The results indicate that, contrary to anecdotal suppositions of Japanese firm homogeneity, Japanese firms differ among themselves and among the strategic types in several important ways. The results also suggest that the level of R&D-marketing integration should be contingent on new product development strategy, making uniform promotion of cross-functional team integration questionable. Despite the differences in innovation strategy pursued by aggressive new product developers versus nonaggressive new product developers, all three strategic types rank the stages of innovation in a similar manner     

Recent progress in modeling R&D project-selection processes

The authors review the progress that has been made in the development of quantitative models of R&D project-selection processes. Future research needs in the area are assessed. R&D project-selection has traditionally been modeled in the management science literature as a constrained optimization problem. The deficiencies of this approach have been described, and the need for new approaches has been recognized. In particular, the optimization approach ignores the organizational context in which decisions are made. A new stream of research in R&D project-selection models emerged in the 1970s in response to this need. The philosophy underlying the new approach differs significantly from traditional optimization models. The new approach seeks insight rather than outcomes and focuses on the decision process     

Some factors correlated with fluctuations in research anddevelopment spending

The author investigated the reasons why R&D spending by organizations other than the federal government appears to vary about a seemingly steady value as a percentage of the GNP. He found several highly correlated factors. Three of these factors correlated positively with nonfederal R&D spending over limited periods of time in the last three decades: the space program in the 1960s; the high rate of change in energy prices in the 1970s; and the availability of the R&D tax credit in the 1980s. A fourth correlated factor was found between a leading real interest rate and nonfederal R&D spending. After removing these effects, only a small underlying increase was found annually in nonfederal R&D spending when expressed as a percentage of the GNP     

An Analysis of Global R&D Activities of Japanese MNCs in the US From the Knowledge-Based View

We examined 79 Japanese MNCs' R&D subsidiaries in the US from the knowledge-based view. We found: 1) subsidiaries' R&D strategies encouraged some types of knowledge flows, but discouraged other types; 2) autonomous R&D subsidiaries promoted knowledge flows from local environments to the subsidiary; 3) process-oriented incentives promoted technical knowledge flows between a subsidiary and its headquarters; 4) knowledge flows and R&D strategies contributed to a subsidiary's knowledge accumulation; 5) organizational factors such as autonomy and process-oriented incentives contributed more to a subsidiary's overall performance than the subsidiary's R&D strategies did.     

Task Conflict, Integrative Potential, and Conflict Management Strategies in Joint Ventures

Existing studies of conflict management in joint ventures (JVs) assume that the characteristics of the tasks that generate conflict have no impact on either the conflict-performance relationship or on the effectiveness of conflict management techniques. In this paper, we challenge this assumption by examining JV conflict over R&D and marketing tasks. Because JVs decisions are made by two or more partners, often with very different goals and agendas, the potential for conflict is high. In some cases, this conflict can have a positive impact on performance. We hypothesize that this possibility is more likely in the context of R&D task conflict, because: 1) marketing task conflict is relatively more likely to involve distributive (win-lose) issues and 2) when win-win (integrative) potential exists, disputants are relatively less likely to perceive this potential in marketing task conflicts (i.e., the disputants in a marketing task conflict are more likely to approach their conflict from a fixed-pie perspective). Our analysis of data collected from 196 JVs clearly supports this hypothesis. We also find that the relative effectiveness of different conflict management strategies varies depending on whether they are applied to R&D or marketing task conflict. Our results demonstrate the importance of aligning conflict management strategies with the integrative potential of R&D and marketing tasks.     

Federal funding and R&D output in US industrial laboratories

The factors associated with inter-R&D laboratory differences in output from the R&D processes are investigated with emphasis on the influence of federal R&D on the composition of this output. An attempt is made to describe the various categories of innovative output characterizing industrial R&D and to investigate factors affecting the distribution of these activities among industrial R&D laboratories. It is shown that federal R&D allocations significantly redirect a laboratory's output, skewing it toward activities with public-good characteristics     

Foreign R&D in the United States

A new study reveals a marked rise in US activity of R&D by foreign companies. How large is direct foreign investment in R&D in the USA? What exactly do these facilities research and develop? Why have non-US companies set up new operations or expanded existing facilities for R&D in the USA? How do these firms decide where to locate? To address these and related questions, the operations of over 50 European, Japanese, and South Korean R&D facilities were studied. All belong to the the electronics, biotechnology or automotive industries. The results of this study are analysed     

Classification of R&D organizational structures in relation tostrategies

Formal structures of R&D organizations are classified into a number of types in connection with overall corporate organizations and according to corporate strategies. The data encompass 110 Japanese large firms in all of the manufacturing sectors including most R&D-intensive firms. Concepts underlying the types are interpreted in view of corporate innovation strategies including organizational design strategies. The classification and the concepts are expected to provide a common language for discussion in organizational design process. Statistical analyses show that these types are not determined by sectors, firm size, product fields, or other conventional managerial parameters. This finding is interpreted to indicate that R&D organizational structures reflect characteristic strategies of firms, including organizational design strategies which are not reduced to conventional materialistic factors of management     

Information infrastructure development: International comparison between the United States and Japan

The Clinton-Gore Administration won the presidential election by propagating “change” and “competitiveness”. The new administration is now paying serious attention to the development of the National Information Infrastructure (NII), often referred to as the “Information Highway”, which is a key component of its technology policy for regaining American manufacturing competitiveness. This article first compares the history of the NII with that of the Japanese Information Infrastructure (JII). Then, this study describes the political, economic and technical issues related to the implementation of NII and JII that need to be overcome by the United States and Japan, respectively. This study incorporates a Japanese perspective in the development of the Information Highway in the framework of a government/business relationship. This international comparison among four players (American business, American government, Japanese business, and Japanese government) serves as a conceptual basis for understanding the Information Highway plans of the two major industrial nations.     

Information exchange and governance structures in US and JapaneseR&D consortia: institutional and organizational influences

We examine institutional and organizational influences upon information exchange and governance structures within R&D consortia in the United States and Japan. We hypothesized that national differences in institutional environments would lead to less active governance and information-exchange activities within Japanese R&D consortia relative to their US counterparts. At the consortium level, we expected that internal consortium diversity would increase information exchange and governance requirements, and that structures stabilizing relations between consortium members would reduce information exchange and governance requirements. We tested these hypotheses on 39 US and 54 Japanese multifirm R&D consortia, involving, respectively, 1801 US member organizations and 1647 Japanese member organizations. Controlling for organizational age, size, and strategic focus, we found that internal diversity and interorganizational relations are both associated with information-exchange and governance mechanisms. Our model has much greater explanatory power for the United States than for Japan     

Determinants of Corporate R&D Investment: An Empirical Study Comparing Korea's IT Industry with Its Non‐IT Industry

In our study, we extracted the market, finance, and government factors determining R&D investment of individual firms in the IT industry in Korea. We collected the financial data of 515 individual firms belonging to IT and non‐IT industries between 1980 and 1999 from the Korea Investors Service's database and investigated the empirical relationship between the factors using an ordinary regression model, a fixed effects model, and a random effects model. The main findings of our study are as follows: i) The Herfindahl Index variable representing the degree of market concentration is statistically insignificant in explaining R&D expenditures in the IT manufacturing industry. ii) Assets, which is used as a proxy variable for firm size, have a positive and statistically significant coefficient. These two results suggest that the Schumpeterian Hypothesis may be only partially applied to the IT manufacturing industry in Korea. iii) The dividend variable has a negative value and is statistically significant, indicating that a tendency of high dividends can restrict the internal cash flow for R&D investment. iv) The sales variable representing growth potential shows a positive coefficient. v) The subsidy as a proxy variable for governmental R&D promotion policies is positively correlated with R&D expenditure. This suggests that government policy has played a significant role in promoting R&D activities of IT firms in Korea since 1980. vi) Using a dummy variable, we verified that firms reduced their R&D investments to secure sufficient liquidity under the restructuring pressure during Korea's 1998 and 1999 economic crisis.     

Suggestion rates and sociotechnical systems in Japanese versusAmerican factories: beyond quality circles

Available information for two samples of factory organizations on the US and Japan are compared. Japanese factories are found to differ systematically from those in America in terms of several characteristics. These include marketing outputs, input of materials, machine automation, methods of production, human resource development, motivating incentives, and willingness to work. Moreover, available data suggest that the Japanese plants are outperforming those in the American sample. It is proposed that one reason is the higher rate of suggestions by employees in Japan. Causes and consequences of suggestion rates in the two nations are studied     

A managerial approach to research and developmentcost-effectiveness evaluation

An overall research and development (R&D) cost-effectiveness evaluation system that is currently in operation is described and discussed. Evaluation is done on several cross sections of R&D management. For use with several usage objectives of cost effectiveness, some variations of the figure of merit (FOM) are shown. The FOM indicates R&D danger symptoms, especially on promising future trunk-line products. The authors conclude that cost-effectiveness evaluation can be used strategically by taking into consideration the phase of research, the product's life cycle, and future growth factors. Some prospects and analysis for future R&D are reviewed and discussed     

Origin of Mobile Cellular Network Technologies and Markets in Germany and China

The inventive foundation of mobile cellular technologies was laid about 100 years ago. Wireless voice service was commercialised in the 1940s by AT&T. In Germany, public and non-cellular wireless service was established by Deutsche Bundespost in the late 1950s and the first analogue cellular network called C-Netz emerged in the mid-1980s. In China, the first mobile cellular networks called TACS-A and TACS-B were installed by Ministry of Post and Telecommunication in the late 1980s. While describing the events in Germany and China, this paper concentrates on discussing the related technologies and their impacts in the marketplace. A comparison summarises some important findings. Japan and Europe's Nordic countries were the first nations to commercialise the 1st generation analogous cellular technologies. There existed A- and B-Network in Germany and China, but the network nature of them is quite different. The market development in Germany and China was similar. The enlarged network capacity accommodated gradually more subscribers and prices related to the cellular services fell continuously. However, China's fee system was more complicated and has adopted the RPP regime, while Germany has been using the CPP billing. The article concludes that implications such as the relationship between science and technology, time lag between scientific discovery and technological applications and technology spillover from military to civilian area are the economic lessons learnt from the story of cellular origin.