Obstacles in R&D management of Japanese companies

Why is it difficult to discontinue R&D topics?

Abstract

This study focuses on the challenges of R&D management in Japanese companies, specifically examining why it is difficult to discontinue research topics. The efficiency of R&D in Japanese firms has declined, and the conventional Stage-Gate method faces issues. Case studies of Fujifilm and Kewpie reveal that while Kewpie has introduced the Boost-Gate method to support research topics, many topics continue without thorough business feasibility evaluations, highlighting problems in the initial selection process within R&D. Findings indicate that discontinuing research topics within R&D is difficult due to middle management's reluctance to take on additional burdens, top executives' directives, and researchers' concerns about performance evaluation. Moreover, information asymmetry between R&D and business divisions results in inefficient topics persisting until business intervention. This phenomenon can be explained by prospect theory, which suggests that individuals in uncertain environments tend to avoid risks. In conclusion, Japanese firms need to enhance the internal evaluation of research topics, which could lead to improved productivity in R&D.