Coping with downsizing and outsourcing: the virtual corporate research lab

Abstract

Summary form only given. Many corporate research labs (CRLs) have been pressured to downsize, outsource or go out of business vs. divisionalized R&D. The paper discusses some causal factors and some actions that can be taken by surviving CRLs to reestablish their credibility and relevance to the changing corporate scene, including evolving into virtual CRLs. It is based on several decades of research and consulting practice in several dozen industrial firms on the general topics of organization, strategy, and project portfolios of R&D. A significant trend, first clearly evident in the early 1980s, involved the downsizing, reorganizing, and repositioning of the CRL, which most large industrial firms have had for many decades. In the mid and late 1990s, this trend has accelerated and has led to closing down many CRLs and outsourcing their former roles to other companies. Some of the positions and styles of operation that might help a virtual or a scaled-down CRL to survive and thrive are suggested. Some of the policies and practices suggested are readily implemented. Others are more difficult and will take a reasonable length of time to implement as well as some changes in attitudes and perceptions by CRL members, their supporters and customers.