H. Krishnan on R&D and Marketing Intensity Review

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In this paper, we are going to evaluate the article R&D Intensity, Marketing Intensity, and Organizational Performance, written by Hema A Krishnan and Raghu Tadepalli. In this work, the scholars analyze the interaction between R&D (Research and Development) and marketing. This study is interesting to the extent that it throws light on the factors, which contribute to the company’s overall performance and organization.

We should point out that the firms can be either market-led (focusing on constant innovation) or customer-led (those firms, which attach primary importance to the clients needs and R&D). The authors overarching argument is that companies can combine both these approaches and this will eventually pay more dividends (Krishnan &. Tadepalli, 2009). This study has been conducted to test this hypothesis. In the course of the investigation, the researchers have employed such techniques as regression and posthoc analysis. The data have been taken from a wide range of companies (Krishnan &. Tadepalli, 2009, p 235).

Now we need to describe the dependent and independent variables of this study. In this case, the dependent variable is organizational performance, which can be influenced by a set of factors. In this regard, it should be mentioned that the scholars measure performance according to such parameters as the level of sales and the return on assets (Krishnan &. Tadepalli, 2009, p 235). Subsequently, the independent variable is the intensity of R&D and marketing.

According to this article, those companies, which invest capital in both these spheres, are more likely to succeed. Naturally, this statement appears to be quite grounded; however, we can say that Hema A Krishnan and Raghu Tadepalli do not pay due attention to the external environment, and its impact on the organization. Other factors can have a strong effect on the productivity of the firm such as instance, situation in the market, the demand for certain products, political and economic crises, absence or presence of competitors. All of them can affect the performance and the level of sales. In part, this evidence indicates that the findings of the research may not be valid. Perhaps, it might have been prudent to take a separate company to show the effects of R&D marketing interaction on the growth.

As regards the sampling procedure, the authors have randomly selected 201 organizations which represent various industries such as computer data processing, food, farm equipment and so forth. The sampling was random because the researchers wanted to avoid bias. While conducting this study, they have collected information from major firms, which are placed in 1998 Fortune 1000 list. In the vast majority of cases, the data have been derived from annual reports and Compustat (Krishnan &. Tadepalli, 2009, p 235).

On the whole, it is quite possible for us to argue that the sampling procedure has been consistent with the requirements for economic studies. Still, we have to acknowledge that there are some unclear moments. For instance, the authors draw such examples as Procter& Gamble, General Electric Company, SG&A, etc (Krishnan &. Tadepalli, 2009, p 237). All of them have sufficient financial resources in order to address both R&D and marketing.

Furthermore, they are less susceptible to economic crisis or market fluctuations especially in comparison with smaller enterprises. We should bear it mind that there are less developed companies that cannot pursue both R&D and marketing and they mostly have to choose only one of them.. Nevertheless, the scholars seem to avoid this question, while substantiating their argument.

In addition to that, if we speak about the sampling procedure, the authors have decided to pick firms from various industries, and they maintain that the intensity of R&D-marketing is always conducive to productivity. They acknowledge that some deviations from this rule can exist but these exceptions do not disprove their assumption. Perhaps, the research, itself should have been more focused, for instance, Hema A Krishnan and Raghu Tadepalli might have analyzed one particular sphere or industry. Certainly, they have tried to take a broader look but this inevitably leads to overgeneralization. As a rule, the works dedicated to this issue are very specific..

Naturally, one cannot presume that their major hypothesis is altogether erroneous. In this article, Hema A Krishnan and Raghu Tadepalli have proven that under certain circumstances firms can be product-and client-driven at the same time. In other words, they can produce only small amounts of some goods and place them in the market in order to test the demand for the innovation and its subsequent popularity. Additionally, they can conduct active marketing campaigns, including advertisement, pricing policies, and delivery. Partially, the example of P&G shows that this approach is very efficient.

The researchers are firmly convinced that considerable investments in R&D and product innovation will boost profitability, irrespective of the industry, in which the organization operates. It seems that this rule is not always applicable, as in certain spheres, such as pharmacology, medical equipment the companies are more concerned with research and development (Krishnan &. Tadepalli, 2009, p 239). The thing is that they have to focus on R&D because their products can be marketed, advertised, and promoted only when they are approbated.

Unlike many researches, which have been carried out to examine this question, this study takes companies from diverse industries: engineering, information technology, steel manufacturing. According to the scholars, the peculiarities of the industry do not play crucial role. But as we have previously noted, industry also sets some standards or limitations, the example of pharmacology is the most telling.

To conclude, this article aims to prove the interactions of R&D and marketing can bring considerable improvements into the performance of the enterprise. The researchers analyze the data, taken from diverse firms in order to test their hypothesis that the combination of R&D and marketing is more effective. The limitations of this study are as follows: 1) the scholars do not take into account the external environment (the situation in the market, economic crisis, etc), which can also impact the profitability of the firm. Secondly, they mostly refer to large companies, which have the capacity to pursue both these policies.

Finally, this examination explores various industries, and the scholars argue that each sphere forces the organization to choose only one approach either R&D or marketing as it is in pharmacology. Nonetheless, the value of this research cannot be underestimated, because it provides sufficient evidence that a company can be both market-and customer driven, as Procter & Gamble. This study can be slightly modified; it is necessary to make it more specific. The scholars may examine one particular industry or even a separate enterprise. This will make the key findings more accurate and valid.

Bibliography

Krishnan. H. Tadepalli R. Daewoo Park (2009). R&D Intensity, Marketing Intensity, and Organizational Performance. Journal of Managerial Issues, (21), 2, pp 232-247.

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H. Krishnan on R&D and Marketing Intensity Review

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