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failed and recommending that it be dropped. Termination without producing a product under these conditions permits timely reallocation of the resources to more promising projects and is a good thing. |
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Finally, the reward must have value to the recipient, and there are wide individual differences in the perception of value. The 3M management discovered this when it allowed its teams to determine their own reward, with management approval [25]. Instead of a monetary reward, one team decided to send some of the key contributors to the official product launch ceremonies in the targeted market country. Another team asked for a dinner party for the team, as well as for 50 other contributors whose efforts they valued in the success of the project. There is a significant advantage in permitting the recipients to chose their own reward. One should be sensitive to these individual preferences and deliver an award that the recipient values. |
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Inconsistency and frequent shifts in the level of financial support for individual projects is another significant source of inefficiency. Big swings in the R & D budget lead to uncertainty among the staff, discontinuity of the projects, and ultimately inefficient product development. Efficient R & D for one new product requires a sustained financial and management commitment for seven years or more. It is not uncommon for many internal and external competitive factors to change during this time, and the temptation to cut back support for a project is great. Research and development is not a profit-producing function of the company, and it is an easy target for budget cuts. If funding is allowed to fluctuate, the project cannot be optimally supported, and delays in development are inevitable. Worker morale and productivity also wax and wain when projects appear to be in favor one day and out of favor the next. Both of these situations increase the total project development cost. It requires a long term vision and an ongoing commitment by management to make adjustments that are financially responsible but also sustain high worker productivity and rapid development. |
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Another factor affecting efficiency is the lack of coordination and continuity in product development from the test tube to the pharmacy shelf. Organizational structures often dictate separate divisions for discovery research, development, production, and marketing. Within each of these divisions there is usually good harmonization of goals and priorities. However, there is often discontinuity between divisions. A lack of common objectives and coordination across the organization can lead to costly development delays [13,14]. For example, the company may develop a scientifically attractive product for which there are no manufacturing facilities to produce it or for which the marketing |
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