A new strategic approach for R&D project portfolio selection using efficiency-uncertainty maps
Benchmarking: An International Journal
ISSN: 1463-5771
Article publication date: 2 January 2023
Issue publication date: 1 December 2023
Abstract
Purpose
New business practices and the globalization of markets force firms to take innovation as the fundamental pillar of their competitive strategy. Research and Development (R&D) plays a vital role in innovation. As technology advances and product life cycles become shorter, firms rely on R&D as a strategy to invigorate innovation. R&D project portfolio selection is a complex and challenging task. Despite the management's efforts to implement the best project portfolio selection practices, many projects continue to fail or miss their target. The problem is that selecting R&D projects requires a deep understanding of strategic vision and technical capabilities. However, many decision-makers lack technological insight or strategic vision. This article aims to provide a method to capitalize on the expertise of R&D professionals to assist managers in making informed and effective decisions. It also provides a framework for aligning the portfolio of R&D projects with the organizational vision and mission.
Design/methodology/approach
This article proposes a new strategic approach for R&D project portfolio selection using efficiency-uncertainty maps.
Findings
The proposed strategy plane helps decision-makers align R&D project portfolios with their strategies to combine a strategic view and numerical analysis in this research. The proposed strategy plane consists of four areas: Exploitation Zone, Challenge Zone, Desperation Zone and Discretion Zone. Mapping the project into this strategic plane would help decision-makers align their project portfolio according to the corporate perspectives.
Originality/value
The new approach combines the efficiency and uncertainty dimensions in portfolio selection into an integrated framework that: (i) provides a complete representation of the stochastic decision-making processes, (ii) models the endogenous uncertainty inherent in the project selection process and (iii) proposes a computationally practical and visually unique solution procedure for classifying desirable and undesirable R&D projects.
Keywords
Acknowledgements
The authors would like to thank the editor and the anonymous reviewers for their insightful comments and suggestions.
Citation
Namazi, M., Tavana, M., Mohammadi, E. and Bonyadi Naeini, A. (2023), "A new strategic approach for R&D project portfolio selection using efficiency-uncertainty maps", Benchmarking: An International Journal, Vol. 30 No. 10, pp. 4193-4220. https://doi.org/10.1108/BIJ-02-2022-0129
Publisher
:Emerald Publishing Limited
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