Jomo Kenyatta University Assignment
Jomo Kenyatta University Assignment
HEIT 2405
ASSIGNMENT
GROUP MEMBERS
In a business world marked by rapid technological developments that are causing disruption in
various industries and markets, the need to be at the forefront of the changes remains an
imperative for many businesses. One of these ways of staying ahead in the ‘hyper-competition’
Research and development (R&D) includes activities that companies undertake to innovate and
introduce new products and services. It is often the first stage in the development process. The
goal is typically to take new products and services to market and add to the company's bottom
line.
Through research and development eight imperatives have been developed to support
innovation.
They include;
changing these alone will have limited effect. It is also vital to focus at an early stage on
processes (how will R&D work differently in practice?) And (how will decisions be made, who
will have authority and which functions will be involved?). Designing effective processes that
involves all business units and other functions beyond R&D, such as Marketing and
Manufacturing, is essential.
leader, so business strategy is the starting point for reorganization. A key early task is to agree, as
explicitly as possible, what the business strategy means for R&D – for example, by setting
quantified targets for growth from incremental versus radical innovation, or for manufacturing
efficiencies. Qualitative objectives and requirements may also be set for what the R&D function
should deliver to the business. These can then be translated into criteria to help assess
restructuring options.
One of the most common R&D reorganization problems is lack of clarity about R&D’s role as
part of the broader innovation effort. In some companies the corporate R&D leader is the de
facto innovation leader – while in other companies there may be a separate corporate innovation
team or chief technology officer, or innovation may be led by marketing or another business
function. Also, R&D often includes technical support and/or quality functions that have different
dynamics and processes. It is therefore vital to be very clear about what R&D should and should
not do, its role within innovation, and its strategic and operational interfaces with other parts of
the business. These interfaces need to be designed and agreed with the full involvement of the
R&D reorganization cannot be accomplished by the R&D function alone. R&D is part of a cross-
functional innovation engine, and it has many strategic and operational interfaces with business
units, regions, and other functions. It is essential therefore to establish a steering team of
influential individuals to represent these other parts of the business as well as R&D. This has
stakeholder buy-in and better strategic alignment. Moreover, the cross-functional senior team can
help to identify any pockets of resistance to change within R&D’s internal customers and build
R&D reorganization often involves difficult decisions around major investments, closures,
relocations and so on, and there may be some strong vested interests. It is therefore essential to
take the heat out of the redesign by using a transparent and systematic process that identifies
plausible options and evaluates how each option performs against an agreed set of criteria that is
based on some credible scenarios. These criteria can be derived directly from strategic objectives
and operational requirements. Weightings can be agreed and options scored in real time by the
steering team or other stakeholder group, as shown below. This takes the argument away from
preconceived notions and prejudices and ensures a rational basis for decision-making.
Although successful R&D reorganization requires a holistic approach across structure, process
and governance, for review and evaluation purposes the options for redesign need to be broken
down into design “building blocks” – otherwise the complexity becomes unmanageable.
Breaking options down into building blocks also enables direct comparisons to be made with
good practices used in other companies – something that can be important to support the
business case for change. Once the building-block options have been evaluated, they can be built
back up to form a small number of overall solutions for final evaluation. This is often an iterative
process, and attention should be given throughout to maximizing business value contribution.
series of pressure tests with real-life situations. How would current programs and projects run
with the new processes, how would they flow through the new organization, and how effective
would new governance and decision-making approaches be? How would conflicts be resolved
and decisions escalated? These pressure tests can be conducted as desk exercises, and can
provide invaluable input for fine-tuning of the design and identification of issues to be managed
during implementation.
Major reorganizations are often sources of great anxiety and unrest for those affected, and R&D
is no exception. Indeed, scientists and engineers can be especially sensitive, as their motivations
are often closely connected with advancing their fields of work, rather than financial gain or
power. Prioritizing between different lines of research can be highly emotive, and any R&D
reorganization needs to manage these issues carefully. This means that, for example, ensuring
absolute confidentiality within the core team about emerging options is important, until those
options are final and can be properly communicated. Newly developed organizations also require
realignment of personal incentives with new ways of working for example, recognition for cross-
functional innovation efforts, new bonus mechanisms to reflect changing roles, and new career
In conclusion
R&D rcan deliver immense value to any large company for which innovation is important – and
in today’s era, in which creativity is essential for growth and even survival, this means virtually
every company.
However, R&D can also be costly, time-consuming and risky. If done badly, it can destroy a
huge amount of value and in-house capability that is essential for future competitiveness. By
taking a careful, systematic approach that considers structure, process and governance, and by
paying attention to the eight imperatives outlined above, leaders can greatly increase the
A budget is the projected cost of running a particular research and developmemt project while
funding is the process of allocating appropriate funds to ensure smooth running of the project.
In order to ensure smooth budgeting and funding of research and development, an organisation
needs to:
1. Keep track of costs so that they can know how to charge for innovation so that the investments
generate profit
2. Take into consideration how much a customer is willing to pay for development of a product
3. Perform a risk assessment with all stakeholders to weigh in on what will work and is worth the
4. Assign a project manager to manage the project, keep the team on track, monitor progress and
1. Revenue growth - consider whether the company's sales are increasing or decreasing from one
2. Operating costs - ensure the expenses are related in the operation of the research and
development project.
3. Capital requirement - ensure the organisation has enough funds to achieve the research and
development project.
4. Administrative support - The research and development department needs help in executing
day to day running of the organisation in order to ensire smooth running of the research and
development
5. Budgets improve resources allocation, because all requests are clarified and justified.
Disadvantages
1. Budgeting and funding demotivates employees if they don't participate in coming up with the
budget.