Scand. J. Mgmt.

17 (2001) 409}420

Short-term R&D bias, competition on cost rather

than innovation, and time to market
Alan S. Dunk*, Alan Kilgore
School of Accounting, University of Western Sydney, Nepean, P.O. Box 10 Kingswood N.S.W. 2747, Australia
Received 1 June 1999; accepted 1 April 2000

Abstract
Mounting evidence indicates that capital markets often apply short-term pressure on "rms to
gain short-term results by focusing primarily on reported "nancial performance. As a result of
short termism, it has been argued that companies are likely to cut expenditure on R&D which
might otherwise improve longer-term performance. As there is a growing consensus that R&D
is critically important to both organizational and national performance, short termism may
have signi"cant detrimental organizational consequences. One implication arising from
a short-term R&D bias, and examined in this paper, is its e!ect on market time reduction.
Arguments are examined that suggest a dominant R&D strategy is to reduce product time to
market. Concerns have been expressed, however, that such a strategy is applicable in speci"c
circumstances only. A review of the literature suggests that analyst and shareholder bias against
high-risk, long-term research in favor of lower-risk, short-term product R&D in#uences
organizations to reduce the time it takes to get a product to market when the emphasis in the
marketplace is on cost competition rather than product innovation. The "ndings of the study
suggest that when the emphasis on competition on cost rather than innovation is low,
short-term R&D bias does not a!ect market time. In contrast, when the emphasis on competi-
tion on cost rather than innovation is high, the results indicate that short-term R&D bias
positively in#uences market time reduction. The study concludes with suggestions for further
research.  2001 Elsevier Science Ltd. All rights reserved.

Keywords: Short-term R&D bias; Competition on cost rather than innovation; Time to market

1. Introduction

Considerable evidence suggests that capital markets apply short-term pressure to

corporate managements (e.g. Carr, Tomkins & Bayliss, 1994; Demirag, 1995).

* Corresponding author. Tel.: #61-2-9685-9218; fax: #61-2-9685-9102.

E-mail addresses: a.dunk@uws.edu.au (A.S. Dunk), a.kilgore@uws.edu.au (A. Kilgore).

0956-5221/01/$ - see front matter  2001 Elsevier Science Ltd. All rights reserved.
PII: S 0 9 5 6 - 5 2 2 1 ( 0 0 ) 0 0 0 0 4 - X
410 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420

Research indicates that such pressure is frequently generated by shareholders who

place signi"cant emphasis on short-term "nancial performance (Ball, 1991; Demirag,
1996; Bushee, 1998). By placing substantial importance on earnings and dividends,
investment analysts also demonstrate a short-term focus in their investment apprai-
sals (Cash, Hughes & Singh, 1990; Coates, Davis & Stacey, 1995; Demirag, 1995).
Demirag and Tylecote (1992) found that more than 90% of UK "nance directors
considered that "nancial markets concentrate mainly on short-term earnings and
share price performance. Consequently, Ball (1991) argued that one implication of this
phenomenon is that companies are likely to focus on producing short-term results in
line with market expectations.
One particular concern arising from the impact of such short-term pressure is its
e!ect on R&D expenditure. As a result of short-termism, both Ball (1991) and
Dickerson, Gibson and Tsakalotos (1995) argued that companies are likely to cut
expenditure on R&D which might otherwise improve longer-term performance.
Demirag and Tylecote (1992) found that 36% of UK manufacturers believed such
pressure adversely impacted their R&D investment decisions. However, Ali (1994)
warned that if "rms do not devote su$cient funds to R&D, such underinvestment
may compromise their competitive position since R&D spending has been found to be
associated with subsequent sales growth. Preliminary empirical evidence supports this
perspective. For example, short-term performance pressures in the UK have been
found to have a negative impact on R&D spending, patent rates and market shares
(Demirag, 1995). Furthermore, Demirag (1996, 1998) argued that short-term "nancial
market pressure in the UK has led to R&D cutbacks, resulting in a decline in
manufacturing performance and reduced international competitiveness. Similar con-
cerns have been expressed that underinvestment in R&D by US "rms has also caused
them to lag behind foreign companies in terms of competitiveness and technological
development (Laverty, 1996; Bushee, 1998).
Despite such pressure, there is a growing consensus that R&D is critically impor-
tant to organizational performance (Harris & Mowery, 1990; Damanpour, 1991;
Iansiti & West, 1997). Ali (1994) reported that acceleration in the rate of technological
development, shorter product life cycles, and more intense competition has forced
"rms to rely increasingly on new products for sales and pro"tability. If this is the case,
then short termism may have signi"cant detrimental organizational consequences, as
evidence suggests that "rms can gain competitive advantage through R&D activities
(Quinn, 1992; Ali, 1994; Shields & Young, 1994; Noci & Verganti, 1999).
One implication arising from a short-term R&D bias, and examined in this paper, is
its e!ect on product time to market. Arguments have been raised in the literature that
suggest a dominant R&D strategy is to reduce product time to market (e.g. Shields
& Young, 1994). However, it has been proposed that such a strategy may only be
applicable in speci"c competitive circumstances (e.g. Lilien & Yoon, 1990; Ali, 1994).

 An alternative approach is to de"ne short termism in terms of the application of a discount rate in
excess of a "rm's opportunity cost of capital (e.g. Demirag, 1995). The congruency of the two perspectives is
not completely theoretically clear.
 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420 411

A review of the literature suggests that analyst and shareholder bias against high-risk
long-term research in favor of lower-risk, short-term product R&D in#uences organ-
izations to reduce the time it takes to get products to market when the emphasis in the
market place is on cost competition rather than product innovation.
The purpose of this study is to examine empirically the e!ect of short-term R&D
bias on the relative importance of reduction in time to market when the nature of
competition is taken into consideration. The structure of the paper is as follows.
Section 2 reviews the literature and develops the theory on which the hypothesis is
based. Section 3 describes the method and the subsequent section presents the results
of the empirical investigation. Section 5 discusses the conclusions and considers
potential limitations.

2. Literature review and theory development

Evidence suggests that short-term, low-risk, R&D projects are often preferred by an
organization's stakeholders to those of a longer-term, higher risk nature. For example,
Ball, Thomas and McGrath (1991) concluded, consistent with the literature, that
long-term R&D is disfavored because of a short-term R&D bias by shareholders and
other stock market participants. Moreover, Rothwell (1983) reported that a frequent
dependence on short-term "nancial criteria for evaluating R&D performance discour-
ages long-term R&D and risk taking. As a speci"c illustration, Hayes and Abernathy
(1980) found that short-term ROI-oriented control systems result in organizations
being hesitant to commit to innovative product development. Bushee (1998) argued
that a short-term capital market focus puts pressure on managers to constrain R&D
costs to maintain short-term earnings growth.
Anecdotal evidence suggests that "rms may operationally respond to stakeholder
short-term R&D bias by focusing on reducing product time to market. Some com-
panies have adopted time-based strategies that concentrate on reducing time to
market through the faster development of new products (Gold, 1987; Rothwell, 1992;
Nijssen, Arboun & Commandeur, 1995; Iansiti & West, 1997). From their visits to
R&D units, Shields and Young (1994) concluded that a primary innovation strategy is
to reduce time to market. The shortening of market lead time has been a common
feature of product development for the past decade (Cauley de la Sierra, 1995). For
example, in their study of 12 large technology-based "rms, Gupta and Wilemon (1990)
found that 88% of respondents reported they were accelerating product R&D.
A frequently held view is that competitiveness in world markets depends in part on the
ability of "rms to develop and market new products faster (Mans"eld, 1988; Gupta
& Wilemon, 1990).
These competitive implications arising from shortening product time to market are
consistent with responding to stakeholder short-term R&D bias. Recent studies show
that under conditions of high market growth, limited product life cycle, and high price
erosion, the introduction of a new product six months late will have a negative e!ect
on cumulative pro"t of 17}35% over a "ve year period (Nijssen et al., 1995). Nijssen et
al. (1995) argued that the timely introduction of a product under such conditions, even
412 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420

when 50% over budget, cuts pro"t potential by only approximately four percent.
A survey by Trent and Monczka (1998) of companies with respect to competitive
factors for competing successfully on a global basis revealed that time-related capabil-
ities are becoming crucial to order winning.

2.1. The impact of the nature of competition on the relation between short-term R&D bias
and time to market

The literature suggests that whether short-term R&D bias results in an emphasis on
market time reduction is dependent on the extent to which competition is based on
cost or product innovation. When competition is based on cost, organizations are
likely to respond to a short-term R&D bias by an emphasis on reducing time to
market. Porter (1980) argued that "rms can obtain competitive advantage by follow-
ing a low-cost strategy under which the primary focus is on achieving low-cost relative
to competitors. Such a strategy can be e!ected in R&D departments by delivering
technology at the lowest cost (Shank & Govindarajan, 1992; Ali, 1994). Shields and
Young (1994) reported that R&D departments are under increasing pressure to
reduce costs, consistent with this strategy. Ali (1994) argued that cost-based competi-
tion critically a!ects new product development strategies of "rms due to di!erences in
product cost speci"cations between them.
Yoon and Lilien (1985) warned that for products developed in the context of
cost-based competition, market share performance decreases with delayed market
entry. Brown and Karagozoglu (1989) and Nijssen et al. (1995) indicated that cost-
based competition typically results in "rms focusing on product R&D designed to
deliver a more immediate payo!. To meet short-term "nancial performance criteria
when competition is primarily cost-based, reducing product time to market is likely to
enhance sales and earnings as well as the recovery of past costs before competition
drives prices down (Rotman, 1994; Cauley de la Sierra, 1995; Lau, 1998). In such
circumstances, "rms are under pressure to capitalize on the competitive advantage of
such products quickly to recover R&D investments (Coombs & Gomez-Mejia, 1991).
Doing so facilitates the management of short-term stakeholder R&D bias (e.g. Ball
et al., 1991; Bushee, 1998). This suggests short-term R&D bias is likely to result in an
emphasis in reducing product time to market when competition is primarily cost-
based.
In contrast, when competition is based on product innovation, short-term R&D
bias is unlikely to result in an emphasis on market time reduction. In such an
environment, the primary focus is on creating innovative products that customers
perceive as unique, rather than focus mainly on costs (Porter, 1980; Jones & Butler,
1988). Firms can charge a price premium for their exclusive products, thereby
enhancing pro"tability (Gupta & Wilemon, 1990). Although product R&D can be
risky, the extent to which organizations can improve their performance is often

 Process innovation may also be implicated in reducing time to market. However, this issue is outside
the scope of the paper.
 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420 413

dependent on their ability to deliver innovative products (Damanpour, 1987; Calan-

tone, Vickery & DroK ge, 1995). Studies have shown that successful product innovation
is dependent on creating products that are superior to the others in the market
(Rothwell, 1983; Friar, 1995). Hayes and Abernathy (1980) and Ali (1994) concluded
that organizational performance requires a commitment to compete in the long run
by o!ering innovative products. Innovative products allow "rms to in#uence the
competitive environment (Damanpour, 1991). The long-term pro"tability of a "rm is
linked to its ability to provide innovations that keep up with changes in consumer
demand, technology, as well as competitive and environmental pressures (Mans"eld,
1982; Chandrashekaran, Mehta, Chandrashekaran & Grewal, 1999).
Attempts to reduce product time to market when competition is based on product
innovation may result in poor design, product malfunctioning, product liability suits,
product recalls, and higher overall costs (Gupta & Wilemon, 1990). Moreover, a later
entry may allow for better product design, which may reduce the risk of failure (Lilien
& Yoon, 1990). Interviews conducted by Shields and Young (1994) indicated that
attempts to minimize costs can reduce an R&D laboratory's ability to maintain the
quality of its innovation program over the long run. As such, market time reduction is
not an e!ective response strategy to short-term stakeholder R&D bias when competi-
tion is based on product innovation as both pro"t opportunities and development
issues guard against the utility of that approach. Hence, when competition is primarily
innovation-based, short-term R&D bias is unlikely to result in an emphasis on
reducing product time to market.
The literature review suggest that if competition is based on cost, then short-term
R&D bias is likely to result in an emphasis on reducing product time to market. In
contrast, if competition is based on innovation, short-term R&D bias is unlikely to
a!ect time to market. This hypothesis is stated in the form null as follows:

H : The relation between short-term R&D bias and the emphasis on reduction in

time to market is not dependent on the nature of competition (cost versus
innovation).

3. Method

3.1. Sample selection

A sample of corporate "nancial directors was drawn from public companies in

Australia listed in The Business Who's Who of Australia (Beck, 1996) to enable the issues
underlying the research to be investigated empirically. Only those organizations
reporting R&D expenditure in their published "nancial statements were considered.
Finance directors were focused on because of their typical responsibility for the
planning, management, and control of R&D investments in organizations. A total of
74 directors were contacted by telephone and were asked to contribute to the study.
They represented a wide cross-section of organizations involved in mining, chemicals,
building materials, pharmaceuticals, whitegoods and foodstu!s.
414 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420

An anonymous questionnaire accompanied by a cover letter was mailed to each

"nance director, together with a reply-paid self-addressed envelope for its return.
A telephone follow-up was conducted to enhance the response rate. This follow-up
also veri"ed that the targeted directors had responded to the questionnaire themsel-
ves. Responses were received from 56 directors, representing a response rate of 76%.

3.2. Variable measurement

To undertake this research, measures of the variables had to be constructed as the

literature does not contain relevant instruments designed for use in a cross-sectional
framework. The paucity of empirical research in R&D (Bommer & Jalajas, 1999)
necessarily hampers the availability of psychometrically tested measures.

3.2.1. Short-term R&D bias

In constructing an instrument to assess short-term R&D bias and to enhance its
construct validity, care was taken to ensure that it was consistent with the approach
taken by, for example, Demirag, Tylecote and Morris (1994) and Coates et al. (1995),
who viewed short-term bias with respect to R&D expenditures as the shortening of
the time horizon for making those investments at the expense of longer-term potential
bene"ts. As such, short-term R&D bias was measured by a single Likert-scaled item
anchored by (1) strongly disagree and (5) strongly agree in which respondents were
asked to indicate the degree to which analysts and shareholders often exhibit a strong
bias against high-risk long-term research in favor of lower-risk short-term product
development. Descriptive statistics for the measure are presented in Table 1.

3.2.2. Competition on cost rather than innovation

Competition on cost rather than innovation was assessed by two Likert-scaled
"ve-point items anchored by (1) very little and (5) very much in which respondents
were asked to indicate "rst, the extent to which the emphasis is on product cost rather
than product innovation in their "rms. Second, they were requested to specify relative
to their main competitors, the extent to which their "rms lean towards competition on
cost rather than competition on product innovation. As the two items were positively
correlated (r"0.501, p(0.001), scores on both items were summed to form the
overall score for the instrument. Table 1 provides descriptive statistics for the
measure.

3.2.3. Market time reduction

Market time reduction was measured by a Likert-scaled "ve-point item anchored
by (1) low importance and (5) high importance in which respondents were asked to

 The complete questionnaire can be obtained from either author.

 Although an assessment of the internal consistency of the instrument could not be made, its validity is
not dependent on the number of items it comprises.
 The legitimacy for summing the scores is based on there being a signi"cant correlation between the two
items (Brownell, 1985).
 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420 415

Table 1
Descriptive statistics of the variables in the study

Theoretical Actual

Variables n Mean SD Min Max Min Max

Short-term R&D bias 56 3.643 0.999 1 5 1 5

Competition on cost rather 56 5.786 1.997 2 10 2 10
than innovation
Market time reduction 56 3.768 1.321 1 5 1 5

Table 2
Correlation matrix of the variables in the study

Short-term R&D bias Competition on cost rather than

innovation

Competition on cost rather 0.125 (n.s.)

than innovation
Market time reduction 0.253 (p(0.05) !0.005 (n.s.)

indicate the degree of importance they attached to the reduction of the amount of time
taken to get a product to market. Descriptive statistics for the instrument are
presented in Table 1.
Table 2 presents the correlation matrix of the variables in the study. Whether the
positive correlation between short-term R&D bias and market time reduction
(r"0.253, p(0.05) is in#uenced by the level of competition on cost rather than
innovation is subject to hypothesis test. The proposition underlying this research is
that this bivariate relation will decompose depending on the level of competition on
cost rather than innovation. Additionally, the absence of an observed correlation
between short-term R&D bias and competition on cost rather than innovation
(r"0.125, p"n.s.) negates concern for multicollinearity a!ecting the results of the
study.

4. Results

The following model was used to test the hypothesis:

>"b #b X #b X #b X X #e, (1)
       
where > is the market time reduction, X the short-term R&D bias, and X the
 
competition on cost rather than innovation.
Whether short-term R&D bias and competition on cost rather than innovation
interact to a!ect market time reduction was tested by estimating the signi"cance of the
coe$cient of the interaction term, b , in Eq. (1). Table 3 presents the results of the

regression. As b is signi"cant (t"2.29, p"0.026), the null hypothesis was rejected.

416 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420

Table 3
Results of the hypothesis test

Variable Coe$cient Value SE t p

Constant b 6.305 1.760 3.58 0.001


Short-term R&D bias (S) b !0.667 0.472 !1.41 0.163

Competition on cost rather b !0.679 0.298 !2.28 0.027

than innovation (C)
S;C b 0.179 0.078 2.29 0.026

Adjusted R"10.2% n"56 F "3.08, p"0.035


Table 4
Decomposition of the interaction

Variable Coe$cient Value SE t p

Panel A: Low emphasis on competition on cost rather than innovation

Constant b 3.654 1.245 2.93 0.009

Short-term R&D bias b 0.042 0.347 0.12 0.905

R"0.1% n"20 F "0.01, p"0.905

Panel B: High emphasis on competition on cost rather than innovation
Constant b 1.835 0.762 2.41 0.022

Short-term R&D bias b 0.511 0.197 2.60 0.014

R"14.1% n"36 F "6.75, p"0.014


Despite the apparent signi"cance of b , Southwood (1978) demonstrated that lower-


order coe$cients in two-way interaction models cannot be interpreted unless ratio-
scaled data are used.
Although the results shown in Table 3 suggest that short-term R&D bias and
competition on cost rather than innovation interact to a!ect market time reduction,
they do not provide evidence of the nature of the relation. To facilitate an examination
of the nature of the interaction, competition on cost rather than innovation was
dichotomized at the mean. Two regression analyses were then conducted in which
market time reduction was regressed on short-term R&D bias "rst, for a low emphasis
on competition on cost rather than innovation and second, for a high emphasis on
competition on cost rather than innovation. The results of these regression analyses
are reported in Table 4. The "ndings presented in panel A suggest, that when the
emphasis on competition on cost rather than innovation is low, short-term R&D bias
does not a!ect market time reduction (t"0.12, p"0.905). In contrast, when the
emphasis on competition on cost rather than innovation is high, the results in panel
B suggest that short-term R&D bias positively in#uences market time reduction
(t"2.60, p"0.014).
Given the signi"cance of b in Table 3, the di!erence in the two slope coe$cients in

panels A and B of Table 4 provide support for the di!erential e!ect of competition on
 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420 417

cost rather than innovation on the relation between short-term R&D bias and market
time reduction. These "ndings are consistent with the theoretical expectations of the
study.

5. Conclusions

The results of this study suggest that there are systematic competitive rami"cations
for market time reduction arising from stakeholder short-term R&D bias. The
"ndings show that when the emphasis is on cost competition rather than product
innovation, short-term R&D bias positively a!ects market time reduction. When
competition is primarily based on product innovation, however, short-term R&D bias
does not result in an emphasis on time to market reduction. These "ndings suggest
that short-term stakeholder pressure has far-reaching implications for R&D manage-
ment in organizations particularly in terms of their in#uence on the extent to which
"rms attempt to reduce product times to market. Although Shields and Young (1994)
found that a dominant R&D strategy is to reduce time to market, the results of this
study indicate that when there is an emphasis on cost competition, the focus in on
market time reduction. As such, consistent with concerns expressed in the literature
(e.g. Lilien & Yoon, 1990; Ali, 1994), the time reduction strategy appears to be
applicable only in speci"c circumstances.
As these "ndings show that an emphasis on market time reduction in response to
short-term R&D bias arises only when competition is based on cost rather than
product innovation, companies focusing on reducing time to market without paying
attention to the nature of competition may need to reconsider their position. Hence,
consistent with Porter (1980), companies may develop competitive advantage by
reducing time to market in response to short-term R&D bias when competition is cost
driven. Product support and best customer service with short lead times and the
ability to bring new products from concept to customer in the shortest time in the
industry will begin to rival cost and quality as critical market attributes (Trent
& Monczka, 1998). In summary, the "ndings of the study provide a springboard for
further research into the related issues of "nancial markets and their e!ects on
corporate operations. Given the globalization of "nancial markets and the import-
ance of innovation to organizational performance, further work focusing on stake-
holder expectations of R&D is warranted.
These "ndings also have particular reference to both cost management strategies
and the use of short-term "nancial performance measures in the context of R&D.
Research and development budgetary pressures have also resulted in calls for renewed
e!orts to measure R&D productivity, as there is little clarity in how it can be
quanti"ed (Rotman, 1994). Taking a wider perspective, short-term accounting
measures of pro"tability that discourage long-term investment may need to be
complemented by performance indicators that measure long-term factors such as
market share, employment stability, and long-term pro"ts which, Demirag et al.
(1994) argued, are more likely to be in accordance with a "rm's strategic plans.
Otherwise, it may give rise to the likelihood that projects comprising R&D budgets
418 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420

will continue to be less risky, and are more likely to provide short-term bene"ts rather
than ones that may give rise to long-term outcomes.
A number of limitations potentially could have in#uenced the outcomes of this
study. First, no statement of causation can be made because the research is contem-
poraneous and cross-sectionally based. Second, further work needs to be conducted to
assess the reliability and validity of the instruments used. Despite their possible
psychometric limitations, the measures have facilitated the examination of a crucial
issue facing organizations as competition at both the domestic and international level
continues to grow.

Acknowledgements

Thanks are due to participants at the 1999 meeting of the European Accounting
Association and at a seminar at the University of Western Sydney, Nepean for their
comments on previous drafts of this paper. The helpful comments of the editor and the
two anonymous reviewers are also gratefully acknowledged.

References

Ali, A. (1994). Pioneering versus incremental innovation: review and research propositions. Journal of
Product Innovation Management, 11(1), 46}61.
Ball, J. (1991). Short-termism * myth or reality? National Westminster Bank Quarterly Review, August, 20}30.
Ball, R., Thomas, R.E., & McGrath, J. (1991). In#uence of R&D accounting conventions on internal
decision-making of companies. R&D Management, 21(4), 261}269.
Beck, P. (Ed.) (1996). ¹he business who1s who of Australia 30th Ed. Sydney: Riddell Publishing.
Bommer, M., & Jalajas, D. S. (1999). The threat of organizational downsizing on the innovative propensity
of R&D professionals. R&D Management, 29(1), 27}34.
Brown, W.B., & Karagozoglu, N. (1989). A systems model of technological innovation. IEE Transactions on
Engineering Management, 36(1), 11}16.
Brownell, P. (1985). Budgetary systems and the control of functionally di!erentiated organizational
activities. Journal of Accounting Research, 23(2), 502}512.
Bushee, B.J. (1998). The in#uence of institutional investors on myopic R&D investment behavior. The
Accounting Review, 73(3), 305}333.
Calantone, R. J., Vickery, S. K., & DroK ge, C. (1995). Business performance and strategic new product
development activities: an empirical investigation. Journal of Product Innovation Management, 12(3),
214}223.
Carr, C., Tomkins, C., & Bayliss, B. (1994). Strategic investment decisions. Aldershot: Avebury.
Cash, A.D., Hughes, A., & Singh, A. (1990). Take-overs, short-terminism and xnance * industry relations in
the U.K. economy. Unpublished discussion paper presented at the seminar on takeovers: a study of
short-terminism? The Institute of Public Policy Research, London.
Cauley de la Sierra, M. (1995). Managing global alliances: Key steps for successful collaboration. Wokin-
gham, UK: Addison-Wesley.
Chandrashekaran, M., Mehta, R., Chandrashekaran, R., & Grewal, R. (1999). Market motives, distinctive
capabilities, and domestic inertia: A hybrid model of innovation generation. Journal of Marketing
Research, 36(1), 95}112.
Coates, J., Davis, T., & Stacey, R. (1995). Performance measurement systems, incentive reward schemes and
short-termism in multinational companies: A note. Management Accounting Research, 6(2), 125}135.
 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420 419

Coombs Jr., G., Gomez-Mejia, L.R. (1991). Cross-functional pay strategies in high-technology "rms.
Compensation and Benexts Review, 23(5), 40}48.
Damanpour, F. (1987). The adoption of technological, administrative, and ancillary innovations: Impact of
organizational factors. Journal of Management, 13(4), 675}688.
Damanpour, F. (1991). Organizational innovation: A meta-analysis of e!ects of determinants and moder-
ators. Academy of Management Journal, 34(3), 555}590.
Demirag, I. S. (1995). Assessing short-term perceptions of group "nance directors of UK companies. British
Accounting Review, 27, 247}281.
Demirag, I. S. (1996). The impact of managers' short-term perceptions on technology management and
R&D in UK companies. Technology Analysis & Strategic Management, 8(1), 21}32.
Demirag, I. S. (1998). Boards of directors' short-term perceptions and evidence of managerial short-termism
in the UK. The European Journal of Finance, 4, 195}211.
Demirag, I., & Tylecote, A. (1992). The e!ects of organizational culture, structure and market expectations
on technical innovation: A hypothesis. British Journal of Management, 3, 7}20.
Demirag, I., Tylecote, A., & Morris, B. (1994). Accounting for "nancial and managerial causes of short-term
pressures in British corporations. Journal of Business Finance and Accounting, 21(8), 1195}1213.
Dickerson, A.P., Gibson, H.D., & Tsakalotos, E. (1995). Short-termism and underinvestment: the in#uence
of "nancial systems. The Manchester School, 63(4), 351}367.
Friar, J.H. (1995). Competitive advantage through product performance innovation in a competitive
market. Journal of Product Innovation Management, 12(1), 33}42.
Gold, B. (1987). Approaches to accelerating product and process development. Journal of Product Innova-
tion Management, 4(2), 81}88.
Gupta, A.K., & Wilemon, D.L. (1990). Accelerating the development of technology-based new products.
California Management Review, 32(2), 24}44.
Harris, R.G., & Mowery, D.C. (1990). Strategies for innovation: An overview. California Management
Review, 32(3), 7}16.
Hayes, R.H., & Abernathy, W.J. (1980). Managing our way to economic decline. Harvard Business Review,
58(4), 67}77.
Iansiti, M., & West, J. (1997). Technology integration: Turning great research into great products. Harvard
Business Review, 75(3), 67}79.
Jones, G.R., & Butler, J.E. (1988). Costs, revenue, and business-level strategy. Academy of Management
Review, 13(2), 202}213.
Lau, R.S.M. (1998). How does research and development intensity a!ect business performance? Business
Review, 57(1), 3}8.
Laverty, K.J. (1996). Economic short-termism: The debate, the unresolved issues, and the implications for
management practice and research. Academy of Management Review, 21(3), 825}860.
Lilien, G.L., & E. Yoon. (1990). The timing of competitive market entry: An exploratory study of new
industrial products. Management Science, 36(5), 568}585.
Mans"eld, E. (1982). How economists see R&D. Research Management, 25(1), 23}29.
Mans"eld, E. (1988). The speed and cost of industrial innovation in Japan and the United States: External
vs internal technology. Management Science, 34(10), 1157}1168.
Nijssen, E. J., Arboun, A. R. L., & Commandeur, H. R. (1995). Accelerating new product development:
A preliminary empirical test of a hierarchy of implementation. Journal of Product Innovation Manage-
ment, 12(2), 99}109.
Noci, G., & Verganti, R. (1999). Managing &green' product innovation in small "rms. R&D Management,
29(1), 3}15.
Porter, M. E. (1980). Competitive strategy. New York: The Free Press.
Quinn, J. B. (1992). Intelligent enterprise: A knowledge and service based paradigm for industry. New York:
The Free Press.
Rothwell, R. (1983). Innovation and "rm size: A case for dynamic complimentarity; or, is small really so
beautiful? Journal of General Management, 8(3), 5}25.
Rothwell, R. (1992). Successful industrial innovation: Critical factors for the 1990s. R&D Management, 22(3),
221}239.
420 A.S. Dunk, A. Kilgore / Scand. J. Mgmt. 17 (2001) 409}420

Rotman, D. (1994). R&D: Tight budgets shift priorities and strategies. Chemical Week April, 6, 38}43.
Shank, J.K., & Govindarajan, V. (1992). Strategic cost management and the value chain. Journal of Cost
Management, 6, 5}21.
Shields, M.D., & Young, S.M. (1994). Managing innovation costs: A study of cost conscious behavior by
R&D professionals. Journal of Management Accounting Research, 6, 175}196.
Southwood, K.E. (1978). Substantive theory and statistical interactions: Five models. American Journal of
Sociology, 83(5), 1154}1203.
Trent, R.J., & Monczka, R.M. (1998). Purchasing and supply management: Trends and changes throughout
the 1990s. International Journal of Purchasing and Materials, 34(4), 2}11.
Yoon, E., & Lilien, G.L. (1985). New industrial product performance: The impact of market characteristics
and strategy. Journal of Product Innovation Management, 2(3), 134}144.