Outsourcing Risk Analysis And Control Tactics Of Research And Development

Enterprises which choose Research and Development (R&D) outsourcing are mostly motivated by cost saving, accessing to new technologies, risk sharing, shortening research and development cycles, quick response to market demand, and so on. However, every coin has two sides, no exception for R&D outsourcing. While R&D outsourcing brings the profits for enterprises, it also brings with it a relatively high risk, such as adverse selection caused by asymmetric information, vender's moral hazard, leaking the information of R&D, excessive hidden costs and legal disputes caused by imperfect contracts, developing new competitors. Therefore, it is undoubtedly of important practical significance and theoretical value to do research on reducing the cost of R&D outsourcing, identifying and assessing outsourcing's risks, designing effective strategy for risk control in order to ensure the successful implementation of R&D outsourcing.Based on the related literature review, this paper delimits the concept of risk of R&D outsourcing and builds up a framework of outsourcing risk analysis from the perspective of the theory of risk management. The conceptual model of the identifying factors of R&D outsourcing risks is constructed with the help of the models of R&D outsourcing and the objects of risk source. By introducing the risk rating, this paper makes a significant assessment to the R&D outsourcing risk. Secondly, for the risk that is caused by asymmetric information, this paper establishes a model of risk prevention of adverse selection and moral hazard in the situation of asymmetric information from the perspective of the principal-agent theory. The results show that the adverse selection of venders can be prevented from the signaling model and the information screening model, with the former model conveys the strength of R&D outsourcing and the latter one designing the rewarding contracts of the venders' ability. The risk of moral hazard can be reduced by the incentive and monitoring contract of rewarding which combines rewarding contracts with the agent's risk aversion, the share of output, and the signal monitoring. Finally, according to the operational models of R&D outsourcing, this paper proposes R&D risk-control tactics from four aspects: the decision making of outsourcing and the management of employee's relations, selection of outsourcing venders, the integrality and flexibility of contract, contract monitoring and outsourcing relations management. When the risk-controlling tactics are being carried out, the concept of dynamic monitoring in the process of outsourcing risk reduction is introduced to ensure that the tactics are actually put into effect.