R&D departments must formulate strategy for their own survival within a corporation

Abstract

Summary form only given as follows. We have conducted a case study extending over 5 years of events affecting a small R&D unit in a multinational company. We were particularly concerned with strategy for the unit. We had supposed that the purpose of strategy would be to enable the parent company to counter competitors' actions, but to our surprise no competitor action over the period had any significant effect on the company, or prompted any changes of policy by the R&D unit. There were however serious threats to the continued survival of the R&D unit during the period, but these all came from the parent company. We found that the R&D unit had to have its own strategy, directed internally as well as externally, and seven principles for strategy for the unit emerged from the case. The threats mostly arose from several rounds of merger activity, which left merged groups with more R&D units than were needed. Within this context, however, we found that the company did not have an accurate perception of the capability and achievements of the unit studied, and the unit's first priority was in fact to foster its own image within the company. We also found that there were occasions when the company threw away technology in which it had invested over a long period, to the benefit of competitors. Another finding was that a technical breakthrough by an individual could foster the survival of the R&D unit, but that this had to be skilfully handled for the benefit to be realised.