The development and application of a process model for R&D project management in a high tech firm: A field study

• Author: Devesh Verma,Anant Mishra,Kingshuk K. Sinha
• Published date: 01 July 2011
• Date: 01 July 2011
• DOI: http://doi.org/10.1016/j.jom.2010.11.010

Journal of Operations Management 29 (2011) 462–476

Contents lists available at ScienceDirect

Journal of Operations Management

journal homepage: www.elsevier.com/locate/jom

The development and application of a process model for R&D project

management in a high tech firm: A field study

Devesh Vermaa,1, Anant Mishra b,2, Kingshuk K. Sinhac,∗

aDaiichi Sankyo, Inc., Two Hilton Court, Parsippany, NJ 07054, United States

bInformation Systems and Operations Management Department, School of Management, George Mason University, Fairfax, VA 22030, United States

cOperations and Management Science Department, Carlson School of Management, University of Minnesota, Minneapolis, MN 55455, United States

article info

Article history:

Available online 26 November 2010

Keywords:

Project management

Process model

Portfolio management

Product development

High tech firm

Field study

abstract

In R&D organizations of high tech firms, multiple R&D projects are executed concurrently and timeliness

of project completion – i.e., developing the right products at the right times – is a matter of serious

concern. Given that the priority of R&D projects and the interdependencies between the projects in a

high tech firm change dynamically, high tech R&D project management is a complex and challenging

endeavor. To improve the understanding and management of high tech R&D projects, this paper reports

the findings of a field study where we, first, develop and empirically estimate a model that relates project

priority over time with the generative mechanisms of market pull and technical challenge associated

with R&D projects. Next, we develop and demonstrate the application of a process model within which

the time-varying project priority model is embedded. The process model makes it possible to allocate

fixed resources among competing projects with time-varying interdependencies, thereby improving the

timeliness of project completion. This research was conducted in collaboration with a major U.S. high

tech firm. The corporate R&D center of the firm served as the research setting for the field study. We

present an application of the process model to delineate the evolution of the R&D organization with

the merger of its (technology driven) parent firm with another (market driven) high tech manufacturing

firm. The application of the process model generates theoretical insights that are used to develop testable

propositions. Implications of the study findings and directions for future research are discussed.

© 2010 Elsevier B.V. All rights reserved.

1. Introduction

“A substantial body of research [on project portfolio

management]... has been focused on the question of which

innovation projects to pursue.... The optimization paradigm

so prominent...has been brought to bear on product planning

problems over the decades. Surveys have shown that these

models have found very little use in practice and only two of

the articles published are empirical.... If 50 years of research

in an area has generated very little managerial impact, perhaps

it is time for new approaches (emphasis added)” (Shane and

Ulrich, 2004, p. 136).

Hightech firms compete in a dynamically changing market place

where, to survive and thrive, firms need to introduce a contin-

uous stream of successful new products. A conventional way of

addressing this need would be to reduce the development time of

∗Corresponding author. Tel.: +1 612 624 7058.

E-mail addresses: deverma@dsi.com (D. Verma),

anantmishra@gmail.com (A. Mishra), ksinha@umn.edu (K.K. Sinha).

1Tel.: +1 973 944 2169.

2Tel.: +1 763 218 6783.

products (Adler et al., 1995). But simply reducing product devel-

opment time as an efficiency exercise alone – rather than basing

it on strategic considerations – would lead to the development

of products without customers (Stalk and Webber, 1993; Gerwin

and Barrowman, 2002). Therefore, without belittling the impor-

tance of reducing product development time, the focus of this study

is on timeliness – i.e., developing the right products at the right

times.

The challenge of introducing new products in a timely manner

is often complicated by the propensity of high tech firms to reduce

market risks by concurrently executing multiple R&D projects that

share human and capital resources (Adler et al., 1995; Krishnan and

Ulrich, 2001; Nobeoka and Cusumano, 1997; Girotra et al., 2007).

As a result, pooled interdependencies arise between such projects

(Thompson, 1967; Verma and Sinha, 2002). Each project renders

a discrete contribution to the entire pool of concurrent projects;

each project is, in turn, supported by this entire pool, making every

project interdependent (Loch and Kavadias, 2002). Therefore, if a

product is developed when the market is not ready for it, it is

conceivable that the resources committed toward development of

the product could have been better utilized for other concurrent

projects that had greater market potential (Meredith and Mantel,

2003).

0272-6963/$ – see front matter © 2010 Elsevier B.V. All rights reserved.

doi:10.1016/j.jom.2010.11.010