The Organization and Performance Evaluation of R&D Projects in a Dynamic Environment

17 Pages Posted: 17 Jan 2006 Last revised: 1 Mar 2015

See all articles by Bruno Cassiman

Bruno Cassiman

IESE Business School; KU Leuven - Faculty of Business and Economics (FEB)

Chiara Di Guardo

Universita di Cagliari

Giovanni Valentini

Bocconi University - Department of Management and Technology

Abstract

Faster technological development, shorter product life-cycles, and more intense global competition have transformed the current competitive environment for most firms. This new competitive landscape forces organizations to actively acquire knowledge, as a firm's competitive advantage is now more dependent on continuous knowledge development and enhancement. Therefore, knowledge has become a central theme in strategic management. Against this background, we argue that the knowledge characteristics of R&D projects are fundamental variables to explain governance decisions. Drawing upon the case of STMicroelectronics, we provide evidence that partnering or contracting with universities for innovation is common practice for developing new - original - knowledge, as opposed to applying existing knowledge, for solving a problem. However, the firm is more reluctant to partner, especially with another firm, when this knowledge directly enhances its competitiveness. Moreover, we find that R&D project performance is a bi-dimensional construct. One dimension picks up project efficacy and immediate benefits, while the other includes learning and long-term benefits. Though spanning firm boundaries for innovation does not seem to have appreciable effects on perceived project efficiency, it nonetheless brings about intertemporal benefits related to learning and capabilities development. In a dynamic environment, building knowledge may be more important than protecting it. Thus, an open innovation process may be an exceptionally effective way to build and develop the firm's technological future.

Keywords: innovation strategy, R&D project organization, R&D project performance, open innovation

Suggested Citation

Cassiman, Bruno and Di Guardo, Chiara and Valentini, Giovanni, The Organization and Performance Evaluation of R&D Projects in a Dynamic Environment. IESE Business School Working Paper No. 605. Available at SSRN: https://ssrn.com/abstract=875570 or http://dx.doi.org/10.2139/ssrn.875570

Bruno Cassiman (Contact Author)

IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain
+34 93 602 4426 (Phone)
+34 93 253 4343 (Fax)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Chiara Di Guardo

Universita di Cagliari ( email )

Cagliari, 09124
Italy

Giovanni Valentini

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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