Strategic Management in R D Intensive Multinational Companies


In the current hypercompetitive business environment, the rate of business failure has risen and firms in the R&D industry are no exception. This rampant business failure has attracted the attention of many researchers so as to establish the cause. Strategic management has been said to be a core determiner of business success or business failure (Nguyen 2017). Companies with well-thought business strategies have been seen to win more market shares as compared to businesses that are traditionally managed. From the strategic management perspective, this paper seeks to explain why some R&D intensive multinational companies succeed in achieving superior performance while their competitors have failed to do so.

R&D intensive multinational companies plan for the needs of many and different consumers and these needs are rapidly changing in nature. In addition, R&D intensive multinational companies serve thousands of markets and in numerous and different environments. These requirements often challenge R&D intensive multinational companies and in turn the companies have developed unique but sophisticated planning techniques (Hesterly and Barney 2010). However, it is not the prowess in developing panning techniques that drives performance for these companies but the degree to which the firm is able to implement strategic planning techniques in the decision-making process (David and David 2013). As such, R&D intensive multinational companies that fail to link strategic planning techniques to decision making achieve inferior performance while those that skilfully link strategic planning to decision making achieve superior performance.


R&D intensive multinational companies that have a planning framework are more likely to achieve superior performance compared to those without a planning framework. According to Best (2007), a planning framework is principal to superior performance in that it overcomes organizational boundaries and enables strategic decision making about resources and customer groups. Most multinational R&D intensive companies use the strategic business units (SBU) concept to offer a planning framework, which impedes performance (Rothaermel 2013). The SBU concept of strategic management only offers two levels at which strategic decisions should be made but in the current business environment, it is futile to plan for tomorrow’s business given the evolving nature of consumer needs. From this perspective, only those R&D intensive multinational companies that plan at more than two levels (product/marketing level, business-unit level, shared resource level, shared concern level, and corporate level) will achieve superior performance (Foss and Knudsen 2013).

R&D intensive multinational companies with a planning process that stimulates entrepreneurial thinking will achieve superior performance while those without will fail. Monday et al. (2015) state that forecast-based and externally oriented planning are embraced by many multinational companies but unfortunately these approaches to planning lack creativity, which leads to business failure in the current business environment. On the other hand, the well-managed multinational companies have a clear planning process: thoroughly study the business, develop a detailed strategy, perform routine monitoring against the strategic goals, and replan as necessary (Szwejczewski et al. 2016). This planning process ensures that the business does not perform as indicated in the corporate blueprint but rather responds to the dynamic needs of the markets, which promotes performance. Among the measures such companies adopt to stimulate and challenge creative thinking include stressing on competitiveness, focusing on a theme, negotiating objectives, and demanding strategic insights among others (White et al. 2016). The responses then inform the reinvigoration of the planning process for optimal performance.

R&D intensive multinational companies with a corporate value system that reinforces commitment to the company’s strategy will achieve superior performance while those without a corporate value system will fail. When the top and middle managers within a company share a value system, planning is automatically followed by action (Thompson et al. 2015). Strategically managed companies have leadership styles and organizational climates that promote the implementation of decisions. The most successful companies are known to have value for teamwork, commitment to making things happen, open communication, and a shared belief in the future of the company (Goetsch and Davis 2014). Teamwork catalyses performance in that it leads to task-oriented organizational flexibility. Strategically managed companies make sure the entire staff understand the corporate goals and are committed to attaining them. When there is confidentiality about the company’s strategy, the juniors lack entrepreneurial drive, which hinders performance. Further, strategically managed companies have ambitious goals that once attained give the company a sustainable advantage. On the other hand, poorly managed companies focus on marginal improvements such as making a few more market shares, which do not project the future of the organization. Such an approach to management hinders performance since the entire staff is not committed to attaining the same goal: the top management understands the future projections while the subordinates understand the marginal goals.

R&D intensive multinational companies that expedite beyond the basic financial planning will succeed in achieving superior performance while those that settle for basic financial planning will fail. According to Strelnik et al. (2015), an annual budgeting process reduces the planning system to a financial problem, which is a risk factor for business failure. This is so because these companies spend much time and effort developing forecast costs, revenues, and capital needs in order to identify the limits of the expense budget every year. Although these businesses have potent business strategies, they fail to formalize them as they tend to believe that a business strategy exists to inform financial projections. On the other hand, strategically managed companies spend much time and effort seeking to know their products and consumer needs as well as what their competitors will do next to out-perform them. They therefore acquire deeper knowledge of the cost structure to ensure their strategies will promote performance beyond that of their competitors. Planning beyond the finances helps a business perform beyond the traditional limits, which is the case for the successful R&D companies.

R&D intensive multinational companies with externally oriented plans will succeed in achieving superior performance while those with internally oriented plans will fail. Externally oriented planning is creative and very dynamic (Hubbard et al. 2014). The managers in this type of planning must be proactive in looking for opportunities to develop more attract products. To attain this, they have to develop new business capabilities and redefine the market to perfectly suit the company’s strengths. Defining and satisfying the needs of the market is a challenge for many multinational companies: the management has to look at the product the company offers the market as well as those offered by competitors from a consumer’s point of view. This will help discover improvements that need to be made in order for the products to be more desirable. This is a lengthy process and it needs to be performed routinely and only the R&D intensive multinational companies that remain committed to the process will succeed in achieving superior performance.

Therefore, strategic management is the backbone to superior performance in the R&D intensive industry. Multinational companies that succeed in this industry have a planning framework, a planning process, a corporate value system, expedite beyond basic financial planning, and develop externally oriented strategies. These have proved to be the components of superior performance thus those R&D intensive multinational companies without the art of strategic management will fail.

Order Now


Best, R., de Valence, G. and Langston, C., 2007. Strategic management. In Workplace Strategies and Facilities Management (pp. 91-102). Routledge.

David, F.R. and David, F.R., 2013. Strategic management: Concepts and cases: A competitive advantage approach. Pearson.

Foss, N.J. and Knudsen, C., 2013. Towards a competence theory of the firm. Routledge.

Goetsch, D.L. and Davis, S., 2014. Quality management for organizational excellence: Introduction to total quality.

Hesterly, W. and Barney, J., 2010. Strategic management and competitive advantage. Upper Saddle River, NJ.

Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.

Rothaermel, F.T., 2013. Strategic management: concepts. New York, NY: McGraw-Hill Irwin.

Strelnik, E.U., Usanova, D.S. and Khairullin, I.G., 2015. Key performance indicators in corporate finance. Asian Social Science, 11(11), p.369.

Szwejczewski, M., Sweeney, M.T. and Cousens, A., 2016. The strategic management of manufacturing networks. Journal of Manufacturing Technology Management, 27(1), pp.124-149.

Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts and readings. McGraw-Hill Education.

Nguyen, Q.T., 2017. Multinationality and performance literature: A critical review and future research agenda. Management International Review, 57(3), pp.311-347.

White, G.O., Guldiken, O., Hemphill, T.A., He, W. and Khoobdeh, M.S., 2016. Trends in international strategic management research from 2000 to 2013: text mining and bibliometric analyses. Management International Review, 56(1), pp.35-65.

Discover additional insights on Strategic Decision-Making in Venture Capital Funding by navigating to our other resources hub.

Google Review

What Makes Us Unique

  • 24/7 Customer Support
  • 100% Customer Satisfaction
  • No Privacy Violation
  • Quick Services
  • Subject Experts

Research Proposal Samples

It is observed that students take pressure to complete their assignments, so in that case, they seek help from Assignment Help, who provides the best and highest-quality Dissertation Help along with the Thesis Help. All the Assignment Help Samples available are accessible to the students quickly and at a minimal cost. You can place your order and experience amazing services.

DISCLAIMER : The assignment help samples available on website are for review and are representative of the exceptional work provided by our assignment writers. These samples are intended to highlight and demonstrate the high level of proficiency and expertise exhibited by our assignment writers in crafting quality assignments. Feel free to use our assignment samples as a guiding resource to enhance your learning.

Live Chat with Humans
Dissertation Help Writing Service