Critical Success Tools for Research and Development Cycle at Indian SMEs-A Theoretical Framework

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This paper provides a review of literature for the identification of the critical success tools (CSTs) for the development of R & D cycle at Indian SMEs. It proposed a theoretical framework in terms of R & D cycle for the instrument development and testing in future research. The findings of the secondary data review along with the proposed theoretical framework will help the stakeholders to know the various possible aspects of the R & D cycle at Indian SMEs .It will also help to integrate the concept of R &D with the innovation and strategic management for Indian SMEs. It will provide guidance to the various agencies to formulate the strategies and policies to boost the innovation at Indian SMEs that will finally promote systematic implementation of innovation strategies during the regular management process at Indian SMEs along with the CSTs supported by environmental analysis.
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   International Journal of Business Trends and Technology- volume2Issue6- 2012 ISSN: 2249-0183 http://www.internationaljournalssrg.org   Page 86 Critical Success Tools for Research and Development Cycle at Indian SMEs-A Theoretical Framework A Mehta Mehta0108@gmail.com Abstract   This paper provides a review of literature for the identification of the critical success tools (CSTs) for the development of R & D cycle at Indian SMEs. It proposed a theoretical framework in terms of R & D cycle for the instrument development and testing in future research. The findings of the secondary data review along with the proposed theoretical framework will help the stakeholders to know the various possible aspects of the R & D cycle at Indian SMEs .It will also help to integrate the concept of R &D with the innovation and strategic management for Indian SMEs. It will provide guidance to the various agencies to formulate the strategies and  policies to boost the innovation at Indian SMEs that will finally promote systematic implementation of innovation strategies during the regular management process at Indian SMEs along with the CSTs supported by environmental analysis. Keywords: CST, Innovation, Indian SMEs, Technology, R &D, R & D cycle, Strategy Introduction In India the official source for industrial R&D statistics is the Department of Science and Technology (DST). However, this source of information is known to hugely underestimate the actual R&D investment as the primary survey is limited to just R&D units recognized by the DSIR (Department of Scientific and Industrial Research) (Alagh, 1998)..SMEs are well-known for their creativity and new product development capabilities. This applies in particular to SMEs that have the ability to innovate effectively and develop new products more rapidly than larger firms. Indeed, there is little doubt that SMEs are capable of effective innovation. However, many SMEs still fail to see the opportunities and advantages that are open to them, such as the flexibility of customizing products to the requirements of the consumer (O’Regan et. al., 2006)..Innovation, according to Rogers (2003), is “an idea, practice, or object that is perceived as new by an individual or other unit of adoption”. This “newness” need not necessarily involve “new” knowledge thereby effectively implying that the “newness” may also concern advancement or modification of existing knowledge. Keeping in view this scope of innovation, we may define “innovation” as invention and commercialization of new, or betterment of existing, products, processes and/or services (Tiwari, 2007). The development of the neoclassical growth theory supported by the introduction of new macroeconomic statistics and computing capability in the 1950s marked the beginning of the rise of interest in innovation studies (Fagerberg et al., 2005). However, the many who became interested in understanding the   International Journal of Business Trends and Technology- volume2Issue6- 2012 ISSN: 2249-0183 http://www.internationaljournalssrg.org   Page 87  processes of technological progress or innovation gradually created this research area, because they all felt the limitations of the conceptual framework of the neoclassical model in capturing the sophisticated processes of learning and innovating or technological progress (Nelson and Winter, 1982). When defining strategic environmental management, according to Hart (1995,  p.78), Shrivastavy (1996, p.175) and (Stead&Stead, 1995, p.197), it is important not to forget sustainable development and the strategy concept called sustainable development strategy. The staring point for an introduction of sustainable strategic management into a company is a strategic vision based on sustainability. This strategic vision forms a decision making basis that supports a new definition of the company's long-term prosperity, which combines profit making and responsible environmental behaviour. According to Bělohlávek, Košťat and Šuleř (2001,  p.56), management is a process because it is a system of successive activities and tasks that are mutually interlinked. It is a systematic process because a manager is to introduce order to his activities, and to perform his tasks in a manner that is accepted by the other members of the organisation and in line with their expectations. It is a process oriented at accomplishing objectives, which means that tasks and activities are derived from objectives set to the members of the organisation. Devenport and Bibby (1999) state that SMEs increasingly need to develop their innovation capabilities beyond that of technological innovation. This need comes from increased agility in larger organizations, which enables them to erode traditional SME niche markets. Furthermore, increased internationalization has encouraged some SMEs to operate in more competitive global markets where continual improvement is prerequisite to innovation, as distinct from solely technological development. Thus people, process and product dimensions are included (Tidd et al., 2001). Porter and Stern (1999), stress that such innovation involves much more than just science and technology. In most cases while discussing the issue of firm size the empirical literature concentrated on identifying the linear or non-liner relationship  between firm size and R&D intensity among relatively large Indian firms (e.g. Lall, 1983; Katrak, 1985; Siddharthan, 1988, 1992; Basant, 1997; Pradhan, 2002; Kumar and Aggarwal, 2005, Kathuria, 2008). There are, of course, a few exploratory and survey based studies on innovation issues by Indian SMEs (Sikka, 1999; Kharbanda, 2001; Kacker, 2005; Sahu, 2008) and one statistical study at the sectoral level (Bala Subrahmanya, 2006).  Literature Review As the purchase of external technologies is an alternative way of strengthening firms’ competitive capabilities, it can discourage in-house R&D of purchasing firms. However, prior studies on Indian firms overwhelmingly uphold a positive relationship between in-house R&D and external technology purchase (e.g. Lall, 1983; Katrak, 1985; Siddharthan, 1988; Deolalikar and Evenson, 1989; Pradhan, 2002). Therefore, exporting SMEs are forced to undertake considerable R&D effort to improve their competitiveness and to meet heightened competition. Their R&D investments are also necessitate for absorbing knowledge spillovers from export activities regarding evolving technological and market conditions overseas (Aw, Roberts and Winston, 2005). Moreover, exporting SMEs have the advantage of a larger market to do R&D activities than a local market-oriented SME. Braga and Wilmore (1991) for Brazil, Siddharthan and Agarwal (1992) for India and Rasiah (2007) for a sample of auto parts firms from a number   International Journal of Business Trends and Technology- volume2Issue6- 2012 ISSN: 2249-0183 http://www.internationaljournalssrg.org   Page 88 of East Asian and South-East Asian countries have indicated the possibility of favourable impact of exports on firms’ R&D behaviour. Personal networks are important for an entrepreneur to successfully start up a newfirm to potential customers, investors, authorities, and suppliers (Birley 1996; Kowalkowski et al. 2005). Compared to the resource base of the business network, the firm’s internal resources are often scarce; for this reason drawing on resources from network relationships is important (Gummesson 2004; Hammarkvist et al. 1982; Johannisson 1998; Ostgaard and Birley 1996). The firm itself is a new phenomenon when it is created and has therefore no credibility in itself. This is why the personal network and the credibility of prior actions within the network is an enabling factor that eases necessary transactions for the growth of the company (Kowalkowski et al. 2005). Although there are a number of studies on continual improvement in SMEs (Gunasekaran et. al., 1996; Bessant and Caffyn 1997; Bessant and Francise 1999), there is a relative paucity of in depth studies of innovation implementation (Humphreys, McAdam, Leckey, 2005) and strategies applied by SME entrepreneurs to attain innovation advantage. In the ongoing globalization process of national markets, the role of technological capabilities becomes critical for firms’ survival and growth. The disappearance of inward FDI and import barriers that once protected national markets and the introduction of  product patent regime recently have vastly expanded the strategic role of technology in the evolving competitive environment of national markets. While the large firms are well positioned to face these globalizing competitive challenges with their better strategic asset bundle, the resource-starved small and medium enterprises (SMEs) are expected to be at greater risks (Etemad, 2004; Pradhan and Sahu, 2008). Proposed CSTs for R & D at Indian SMEs Societal Marketing-  Corporate societal marketing is defined to “encompass marketing initiatives that have at least one non-economic objective related to social welfare and use the resources of the company and/or one of its partners” (Drumwright and Murphy 2001, p. 164). According to Kraft Foods chief executive officer and president Robert Eckert, “Consumers are yearning to connect to people and things that will give meaning to their lives” (Stark 1999, p. 8). Muniz and O’Guinn (2000) have defined “brand communities” as specialized, nongeographically  bound communities, based on a structured set of social relationships among users of a brand. They note that, similar to other communities, a brand community is marked by (1) a shared consciousness, (2) rituals and traditions, and (3) a sense of moral responsibility. A CSM program with a well-chosen cause can serve as a rallying point for brand users and a means for them to connect to or share experiences with other consumers or employees of the company itself. The literatures on corporate social performance (CSP), responsibility (CSR1) and responsiveness (CSR2) also argue that firms have societal responsibilities that may or may not reinforce the  profit objective (Wood and Jones, 1995). Societal marketing implies that organizations (governments, businesses and nonprofits) need to determine the needs of target markets and to deliver the desired satisfactions in a way that enhances the consumer’s and the society’s well  being. Social marketing focuses on designing and implementing programs that increase the acceptability of a social idea, cause, or practice in (a) target group(s) (Kotler, 1994).     International Journal of Business Trends and Technology- volume2Issue6- 2012 ISSN: 2249-0183 http://www.internationaljournalssrg.org   Page 89 Green Marketing- In the past decade, interest in more sustainable use of earth’s resources has increased and has spanned a wide range of industries and academic disciplines. Green topics have been researched in marketing and engineering for decades under concepts such as sustainable solutions, green products, green marketing, and green processes (Charter et al., 2002; Ottman, 1997).Information provision about greenness is a key component of green marketing. Clearly, firms should not advertise products’ environmental benefits unless such claims can be credibly substantiated. Negative press reports on false or exaggerated claims often lead to decreased sales (Polonsky, 1995). .Some scholars claim that green policies/products are  profitable: green policies can reduce costs; green firms can shape future regulations and reap first-mover advantages (Porter and van der Linde, 1995; for a critique, see Rugman and Verbeke, 2000). However, this does not seem to be the norm within and across most industries. Many  believe that green policies are expensive, especially after the initial gains – the ‘low hanging fruit’ – in reducing end-of-the-pipe pollution have been harvested (Walley and Whitehead, 1994). An important strategic reason for green marketing is that it could help firms to pre-empt command-and-control regulations that often hurt their profits (Fri, 1992), and enable them to shape future regulations, thereby reaping first-mover advantages. the tasks of green marketers who favor collective sacrifices as vehicles for achieving their objectives are complicated by the  politics of the nonmarket environment (Kollman and Prakash, 2001). Polonsky and Rosenberger (2001) stated that ‘‘green marketing is a holistic, integrated approach that continually re-evaluates how firms can achieve corporate objectives and meet consumer needs while minimizing long-term ecological harm’’. Peattie (2001) suggested that ‘‘green marketing has  been used to describe marketing activities which attempt to reduce the negative social and environmental impacts of existing products and production systems, and which promote less damaging products and services’’. Charter (1992) defined green marketing as ‘‘a holistic and responsible management process that identifies, anticipates, satisfies and fulfils stakeholder requirements, for a reasonable reward, that does not adversely affect human or natural environmental wellbeing’’. Terms such as environmental marketing, ecological marketing, greener marketing, sustainable marketing and marketing of green products have also been used in the literature to describe similar activities (e.g. Coddington, 1993; Ottman and Herbert, 1993; Polonsky, 1994). Balances Score card- The balanced scorecard (which saw its initial development during the years of 1987 - 1992) (Kaplan. and Norton,1992) links performance measures by looking at a  business's strategic vision from four different perspectives: financial, customer, innovation and learning, and internal business processes. These four perspectives do not eliminate, but instead support the goals of various management techniques (such as Strategic Planning, Total Quality Management, and Core Competence) employed during the several decades surroundings the  balanced scorecard's appearance. Each of the four perspectives is considered by four  parameters(Kaplan. and Norton,1992) .Those parameters are: ã Goals: What do we need to achieve to become successful ã Measures: What parameters will we use to know if we are successful ã Targets: What quantitative value will we use to determine success of the measure ã Initiatives: What will we do to meet our goals
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