Business Unit Strategy and Changes in the Product R&D Budget

This study of changes in Product R&D intensity in business units supplements past studies by including two major classes of independent variables which have not been examined previously: the competitive strategy of the business and role of the business in the overall corporate portfolio. Multipl...

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Bibliographic Details
Published in:	Management science Vol. 29; no. 7; pp. 757 - 769
Main Authors:	Hambrick, Donald C, MacMillan, Ian C, Barbosa, Ricardo R
Format:	Journal Article
Language:	English
Published:	Linthicum INFORMS 01-07-1983 Institute for Operations Research and the Management Sciences
Series:	Management Science
Subjects:	Cash flow Competition Decision making economics Market shares Product development Product life cycle R&D Regression analysis Research & development Research & development expenditures research and development statistics: regression Studies Success
Online Access:	Get full text
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Summary:	This study of changes in Product R&D intensity in business units supplements past studies by including two major classes of independent variables which have not been examined previously: the competitive strategy of the business and role of the business in the overall corporate portfolio. Multiple regression analysis is used on a sample drawn from the PIMS data base. The results suggest that R&D decisions in growth businesses are responsive to competition, evolving strategies, and intra-firm resource flows. In mature businesses, a pattern of stability and R&D equilibrium is evident, even in the face of changes by competitors. Managerial implications are noted.
ISSN:	0025-1909 1526-5501
DOI:	10.1287/mnsc.29.7.757