Managing R&D – The eternal dilemma: A study of how control is exercised in R&D operations

Abstract: Managing R&D is not an easy task for organisations to handle as it is often associated with uncertainty and high risk-taking. The purpose of this thesis was therefore to gain a better understanding for how management control is performed in a company’s R&D unit. The study has, based on previous research, identified four types of control (output, behavioural, personnel and cultural control). The empirical study aimed to investigate whether and to what extent each form of control was used in R&D projects. These controls were also expected to be used differently depending on whether it was a research or a development project. The results of the empirical study showed that all four forms of control were found to be present in the case company, in which output and behavioural gained the strongest support followed by cultural and personnel control. In line with the expectations, output and behavioural controls were found to be more present in development than in research, however no clear differences could be found regarding personnel and cultural controls. The findings furthermore indicated that employees felt somewhat restricted by the formal controls and desired less strict control in order to enhance their creativity and innovativeness.