Strategic Management of Resource Allocation to Applied Research – Towards a Holistic Approach

Doctoral thesis, 2000

This thesis is concerned with the strategic management of applied research in companies, i.e. the operations close to the ‘R’ in a company’s R&D (Research and Development) operations. The practical point of departure was two large technology-based Swedish companies in the communications industry, Ericsson and Telia, and their conceived need to critically assess their management practice in the applied research area. The theoretical point of departure is the fragmented work done in the area so far. If we turn to theory, we see several strands of literature dealing with the problem of how to strategically manage applied research. However, closer inspection reveals that the process which strategically shapes the resource allocation to applied research is conceptualised in different ways. Five different factors – or determinants – are seen to shape the process. No holistic approach is available; i.e. an approach that considers all five determinants, and no previous research has focused on when the different approaches are effective and why. If management relies on partial approaches, i.e. only a few determinants, to strategically manage the process, it runs the risk of relying on determinants whose influences are overruled by other and more influential ones. Hence, management cannot be certain of whether it actually is intervening in the process, unless it employs a holistic approach. The purpose of this thesis is to develop and propose a holistic conceptual framework of the process and its determinants and to derive a set of challenges for managers. In response to this purpose, two models are developed to create a better understanding among practitioners of how the process and its determinants operate. The first model shows how the determinants interact and together shape the process and the second shows under which conditions the determinants are influential. These models are put into the practitioners’ context and a set of managerial issues is derived from them. The empirical data originate from two longitudinal and in-depth case studies of the process that shapes the resource allocation to applied research. The areas studied are speech technology at Telia and optics technology at Ericsson.