R&D organizational reform to provide profitable products

Abstract

Providing profitable products for corporate business success is an important mission for the R&D organization. Although good organization design may not guarantee corporate business success, it can be a critical factor to determining a company's ability to extract value from its R&D spending. There is no one best organizational design. Each company has to build an appropriate organization based on its business environment. The main subject of this thesis is Nippon Telegraph and Telephone Corporation's (NTT) R&D organization. NTT faces a severely competitive business environment from all angles of changing technology and service trends, competition, reorganization and financial difficulties. A case study of Bell Labs is also included, because of its similar situation and problems. Two critical internal organizational factors for providing profitable product are identified; marketing, and judgment of the development topics. A recommendation is given to build marketing capability in NTT holding company's R&D. Also, the collaboration method between marketing and R&D, and a new marketing approach for middle term R&D by using the lead user method are proposed. Furthermore, integration holding company's short term R&D into the subsidiary business corporations' R&D is also proposed.