Strategic Performance Measurement of Research and Development: A Case Study

Cristiana Parisi, Paola Rossi

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

The paper used an in depth case study to investigate how firms can integrate the strategic performance measurement of R&D with the Balanced Scorecard. Moreover, the paper investigated the crucial role of controller in the decision making process of this integration.The literature review of R&D management evidenced the limits of Balanced Scorecard to manage and monitor the R&D activities. Therefore, the firms have to create a specific performance measurement system and to link it with the macroindicators of Balanced Scorecard. The controller has a central role in the selection of non-financial ratio as the R&D measures to introduce in the Balanced Scorecard.In choosing our case study, we have selected the pharmaceutical industry because of its relevant R&D investment. Within the sector we chose the Italian affiliate of a traditional industry leader, Eli Lilly Italia,that was characterized by the reorganization of R&D performance measurement systems and its consequent simplification.The Balanced Scorecard of Eli Lilly Italy were categorized into four perspectives: Financial Perspective, Customer Perspective, Competence Perspective and People Perspective. The competence perspective was linked to the R&D dashboard, composed by several key performance indicators: cycle time, cycle time AMR, publication, corporate productivity, capacity, rating audit quality. Furthermore, when the company has implemented the Balanced Scorecard, the controller has assumed a crucial role in choosing indexes and in the organizational learning process connected to the feedbackprocess. The study offers an example of integration of R&D performance management with Balanced Scorecard and it contributes to the literature review about the role of controller in a complex system control environment.
Original languageEnglish
JournalThe International Journal of Business & Management
Volume3
Issue number12
Pages (from-to)322-330
Publication statusPublished - 2015

Keywords

  • Balanced Scorecard
  • Controller
  • R&D Dashboard
  • Competences Perspective

Cite this

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title = "Strategic Performance Measurement of Research and Development: A Case Study",
abstract = "The paper used an in depth case study to investigate how firms can integrate the strategic performance measurement of R&D with the Balanced Scorecard. Moreover, the paper investigated the crucial role of controller in the decision making process of this integration.The literature review of R&D management evidenced the limits of Balanced Scorecard to manage and monitor the R&D activities. Therefore, the firms have to create a specific performance measurement system and to link it with the macroindicators of Balanced Scorecard. The controller has a central role in the selection of non-financial ratio as the R&D measures to introduce in the Balanced Scorecard.In choosing our case study, we have selected the pharmaceutical industry because of its relevant R&D investment. Within the sector we chose the Italian affiliate of a traditional industry leader, Eli Lilly Italia,that was characterized by the reorganization of R&D performance measurement systems and its consequent simplification.The Balanced Scorecard of Eli Lilly Italy were categorized into four perspectives: Financial Perspective, Customer Perspective, Competence Perspective and People Perspective. The competence perspective was linked to the R&D dashboard, composed by several key performance indicators: cycle time, cycle time AMR, publication, corporate productivity, capacity, rating audit quality. Furthermore, when the company has implemented the Balanced Scorecard, the controller has assumed a crucial role in choosing indexes and in the organizational learning process connected to the feedbackprocess. The study offers an example of integration of R&D performance management with Balanced Scorecard and it contributes to the literature review about the role of controller in a complex system control environment.",
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Strategic Performance Measurement of Research and Development : A Case Study. / Parisi, Cristiana; Rossi, Paola.

In: The International Journal of Business & Management, Vol. 3, No. 12, 2015, p. 322-330.

Research output: Contribution to journalJournal articleResearchpeer-review

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AB - The paper used an in depth case study to investigate how firms can integrate the strategic performance measurement of R&D with the Balanced Scorecard. Moreover, the paper investigated the crucial role of controller in the decision making process of this integration.The literature review of R&D management evidenced the limits of Balanced Scorecard to manage and monitor the R&D activities. Therefore, the firms have to create a specific performance measurement system and to link it with the macroindicators of Balanced Scorecard. The controller has a central role in the selection of non-financial ratio as the R&D measures to introduce in the Balanced Scorecard.In choosing our case study, we have selected the pharmaceutical industry because of its relevant R&D investment. Within the sector we chose the Italian affiliate of a traditional industry leader, Eli Lilly Italia,that was characterized by the reorganization of R&D performance measurement systems and its consequent simplification.The Balanced Scorecard of Eli Lilly Italy were categorized into four perspectives: Financial Perspective, Customer Perspective, Competence Perspective and People Perspective. The competence perspective was linked to the R&D dashboard, composed by several key performance indicators: cycle time, cycle time AMR, publication, corporate productivity, capacity, rating audit quality. Furthermore, when the company has implemented the Balanced Scorecard, the controller has assumed a crucial role in choosing indexes and in the organizational learning process connected to the feedbackprocess. The study offers an example of integration of R&D performance management with Balanced Scorecard and it contributes to the literature review about the role of controller in a complex system control environment.

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