| This study was designed to answer the following guestion: What is the relationship between industry R&D requirements--determined by the level of industry R&D intensity (environment), firm size (using sales) as a structural aspect (organization structure), firm's R&D expenditure (functional strategy), and performance? The specific interest was to look for the three-way interaction between firm size, R&D strategy, and industry R&D intensity; and to assess the impact of this interaction on performance.;The performance of organizations was measured by the total yearly sales, total assets, operational profit, and return on assets for 1975, 1977, and 1979. R&D strategy was measured by the average R&D expenditures in 1973 and 1974; size was measured by the average sales during the same years. The industry's R&D intensity was measured by the average ratios of total R&D expenditures to the total sales of each industry in 1973 and 1974.;The findings indicated that performance was determined by the interaction between size, R&D strategy, and industry R&D intensity. In high R&D industries, small organizations with no R&D expenditure seemed to outperform those with R&D expenditure; and for large organizations, an expenditure higher than the industry average tended to improve performance.;In low R&D industries, an increase in R&D expenditure seemed to improve performance of small organizations up to a point, at which an increase in R&D expenditure would have a negative effect on performance. For large organizations, an R&D expenditure higher than the industry average again would improve performance.;This study presented findings which support the call for more empirical studies which use a contingency approach by considering environment, strategy, organization structure, and performance simultaneously. Moreover, this study has raised questions for further research, such as: Can marketing be an important substitute strategy for R&D in high R&D industry, especially for small organizations? What specific R&D strategy would be appropriate for small or large organizations in both high and low R&D industries?... |
