Research Paper: Concise Analysis of The Research and Development R&D Department

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[. . .] Achieving outstanding R&D performance, however, requires an effective R&D strategy. R&D processes must be informed by the organization's overall strategic plan (Matheson & Matheson, 1998). Formulating the R&D strategy also requires consideration of decision making processes (centralized or decentralized), organizational resources and capabilities, winning factors, location of R&D facilities, as well as technologies to be utilized within the facilities. Other important factors relate to the extent of separation between research and development activities and the degree of reliance on external resources (Pisano, 2012). These factors must be carefully weighted to come up with an effective R&D strategy.

At the author's organization, a pharmaceutical firm with operations worldwide, the R&D department is one of the most critical departments. The organization particularly recognizes R&D as one of its pillars of growth. Driven by the desire to better humanity, the organization seeks to constantly deliver innovative products. The organization strives to undertake R&D initiatives that attend to unmet medical needs in diverse disciplines ranging from viral diseases to neurology, cardiology, oncology, anesthetics, and rare diseases. Important principles that guide the R&D department include scientific evidence, operational efficiency, and return on investment.

At the beginning, particularly during the first six years of operation, the organization's R&D strategy largely embodied centralization. Essentially, the power to make important decisions remained with the management. The management believed R&D was too critical a function to be left entirely to the R&D team. With a centralized structure, the management believed decision making would be faster. Keen on retaining control, the management was also reluctant to take advantage of external resources in spite of several attempts by the R&D team calling upon the management to exploit both internal and external expertise. Furthermore, despite having different product categories, all R&D activities were housed under one roof.

With time, however, and as the organization expanded, a centralized R&D structure proved quite detrimental to the organization, with bureaucracies and operational inefficiencies often hampering the R&D process. To cultivate a climate of innovation and creativity, it became imperative for the organization to adopt a much more decentralized structure. Though the management is involved in the process, important R&D decisions are now left to the function. A decentralized R&D structure is characterized by more autonomy and less control by the top management (Jain, Triandis & Weick, 2010). This is because innovation and creativity requires collaborative decision making.

Restructuring the R&D function was a move met with immense resistance within the organization, but it was inevitable -- it was the most appropriate decision for the organization. Indeed, since the decentralization of the R&D function, the organization has achieved greater innovation performance -- improved operational efficiency, increased R&D projects, faster time to market, and so on. The organization has also been more open to external resources. Relying on external expertise and partners has significantly improved the R&D process. Further, with a decentralized structure, the R&D function is now organized on the basis of product categories, with each product having its own independent R&D team.

Overall, R&D is important for organizational success. It accelerates growth, creates value and competitive advantage, and accelerates organizational performance. Without an effective R&D strategy, therefore, an organization may not survive in the long-term.


Jain, R., Triandis, H., & Weick, C. (2010). Managing research, development, and innovation: managing the unmanageable. 3rd ed. Hoboken: John Wiley & Sons.

Matheson, D., & Matheson, J. (1998). The smart organization: creating value through strategic R&D. Boston: Harvard Business Press.

Pisano, G. (2012). Creating an R&D strategy. Working Paper 12-095. Harvard Business School.

Shiu, M., Jiang, J., & Tu, M. (2013). Quality strategy for research and development. Hoboken: John Wiley & Sons. [END OF PREVIEW]

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