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International Journal of Business Trends and Technology- volume2Issue6- 2012

Critical Success Tools for Research and Development Cycle


at Indian SMEs-A Theoretical Framework
A Mehta
Mehta0108@gmail.com
Abstract

This paper provides a review of literature for the identification of the critical success tools
(CSTs) for the development of R & D cycle at Indian SMEs. It proposed a theoretical framework
in terms of R & D cycle for the instrument development and testing in future research. The
findings of the secondary data review along with the proposed theoretical framework will help
the stakeholders to know the various possible aspects of the R & D cycle at Indian SMEs .It will
also help to integrate the concept of R &D with the innovation and strategic management for
Indian SMEs. It will provide guidance to the various agencies to formulate the strategies and
policies to boost the innovation at Indian SMEs that will finally promote systematic
implementation of innovation strategies during the regular management process at Indian SMEs
along with the CSTs supported by environmental analysis.

Keywords: CST, Innovation, Indian SMEs, Technology, R &D, R & D cycle, Strategy

Introduction

In India the official source for industrial R&D statistics is the Department of Science and
Technology (DST). However, this source of information is known to hugely underestimate the
actual R&D investment as the primary survey is limited to just R&D units recognized by the
DSIR (Department of Scientific and Industrial Research) (Alagh, 1998)..SMEs are well-known
for their creativity and new product development capabilities. This applies in particular to SMEs
that have the ability to innovate effectively and develop new products more rapidly than larger
firms. Indeed, there is little doubt that SMEs are capable of effective innovation. However, many
SMEs still fail to see the opportunities and advantages that are open to them, such as the
flexibility of customizing products to the requirements of the consumer (ORegan et. al.,
2006)..Innovation, according to Rogers (2003), is an idea, practice, or object that is perceived as
new by an individual or other unit of adoption. This newness need not necessarily involve
new knowledge thereby effectively implying that the newness may also concern
advancement or modification of existing knowledge. Keeping in view this scope of innovation,
we may define innovation as invention and commercialization of new, or betterment of
existing, products, processes and/or services (Tiwari, 2007). The development of the neoclassical
growth theory supported by the introduction of new macroeconomic statistics and computing
capability in the 1950s marked the beginning of the rise of interest in innovation studies
(Fagerberg et al., 2005). However, the many who became interested in understanding the

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processes of technological progress or innovation gradually created this research area, because
they all felt the limitations of the conceptual framework of the neoclassical model in capturing
the sophisticated processes of learning and innovating or technological progress (Nelson and
Winter, 1982). When defining strategic environmental management, according to Hart (1995,
p.78), Shrivastavy (1996, p.175) and (Stead&Stead, 1995, p.197), it is important not to forget
sustainable development and the strategy concept called sustainable development strategy. The
staring point for an introduction of sustainable strategic management into a company is a
strategic vision based on sustainability. This strategic vision forms a decision making basis that
supports a new definition of the company's long-term prosperity, which combines profit making
and responsible environmental behaviour. According to Blohlvek, Koat and ule (2001,
p.56), management is a process because it is a system of successive activities and tasks that are
mutually interlinked. It is a systematic process because a manager is to introduce order to his
activities, and to perform his tasks in a manner that is accepted by the other members of the
organisation and in line with their expectations. It is a process oriented at accomplishing
objectives, which means that tasks and activities are derived from objectives set to the members
of the organisation. Devenport and Bibby (1999) state that SMEs increasingly need to develop
their innovation capabilities beyond that of technological innovation. This need comes from
increased agility in larger organizations, which enables them to erode traditional SME niche
markets. Furthermore, increased internationalization has encouraged some SMEs to operate in
more competitive global markets where continual improvement is prerequisite to innovation, as
distinct from solely technological development. Thus people, process and product dimensions
are included (Tidd et al., 2001). Porter and Stern (1999), stress that such innovation involves
much more than just science and technology. In most cases while discussing the issue of firm
size the empirical literature concentrated on identifying the linear or non-liner relationship
between firm size and R&D intensity among relatively large Indian firms (e.g. Lall, 1983;
Katrak, 1985; Siddharthan, 1988, 1992; Basant, 1997; Pradhan, 2002; Kumar and Aggarwal,
2005, Kathuria, 2008). There are, of course, a few exploratory and survey based studies on
innovation issues by Indian SMEs (Sikka, 1999; Kharbanda, 2001; Kacker, 2005; Sahu, 2008)
and one statistical study at the sectoral level (Bala Subrahmanya, 2006).

Literature Review

As the purchase of external technologies is an alternative way of strengthening firms


competitive capabilities, it can discourage in-house R&D of purchasing firms. However, prior
studies on Indian firms overwhelmingly uphold a positive relationship between in-house R&D
and external technology purchase (e.g. Lall, 1983; Katrak, 1985; Siddharthan, 1988; Deolalikar
and Evenson, 1989; Pradhan, 2002). Therefore, exporting SMEs are forced to undertake
considerable R&D effort to improve their competitiveness and to meet heightened competition.
Their R&D investments are also necessitate for absorbing knowledge spillovers from export
activities regarding evolving technological and market conditions overseas (Aw, Roberts and
Winston, 2005). Moreover, exporting SMEs have the advantage of a larger market to do R&D
activities than a local market-oriented SME. Braga and Wilmore (1991) for Brazil, Siddharthan
and Agarwal (1992) for India and Rasiah (2007) for a sample of auto parts firms from a number

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of East Asian and South-East Asian countries have indicated the possibility of favourable impact
of exports on firms R&D behaviour. Personal networks are important for an entrepreneur to
successfully start up a newfirm to potential customers, investors, authorities, and suppliers
(Birley 1996; Kowalkowski et al. 2005). Compared to the resource base of the business network,
the firms internal resources are often scarce; for this reason drawing on resources from network
relationships is important (Gummesson 2004; Hammarkvist et al. 1982; Johannisson 1998;
Ostgaard and Birley 1996). The firm itself is a new phenomenon when it is created and has
therefore no credibility in itself. This is why the personal network and the credibility of prior
actions within the network is an enabling factor that eases necessary transactions for the growth
of the company (Kowalkowski et al. 2005). Although there are a number of studies on continual
improvement in SMEs (Gunasekaran et. al., 1996; Bessant and Caffyn 1997; Bessant and
Francise 1999), there is a relative paucity of in depth studies of innovation implementation
(Humphreys, McAdam, Leckey, 2005) and strategies applied by SME entrepreneurs to attain
innovation advantage. In the ongoing globalization process of national markets, the role of
technological capabilities becomes critical for firms survival and growth. The disappearance of
inward FDI and import barriers that once protected national markets and the introduction of
product patent regime recently have vastly expanded the strategic role of technology in the
evolving competitive environment of national markets. While the large firms are well positioned
to face these globalizing competitive challenges with their better strategic asset bundle, the
resource-starved small and medium enterprises (SMEs) are expected to be at greater risks
(Etemad, 2004; Pradhan and Sahu, 2008).

Proposed CSTs for R & D at Indian SMEs

Societal Marketing- Corporate societal marketing is defined to encompass marketing


initiatives that have at least one non-economic objective related to social welfare and use the
resources of the company and/or one of its partners (Drumwright and Murphy 2001, p. 164).
According to Kraft Foods chief executive officer and president Robert Eckert, Consumers are
yearning to connect to people and things that will give meaning to their lives (Stark 1999, p. 8).
Muniz and OGuinn (2000) have defined brand communities as specialized, nongeographically
bound communities, based on a structured set of social relationships among users of a brand.
They note that, similar to other communities, a brand community is marked by (1) a shared
consciousness, (2) rituals and traditions, and (3) a sense of moral responsibility. A CSM program
with a well-chosen cause can serve as a rallying point for brand users and a means for them to
connect to or share experiences with other consumers or employees of the company itself. The
literatures on corporate social performance (CSP), responsibility (CSR1) and responsiveness
(CSR2) also argue that firms have societal responsibilities that may or may not reinforce the
profit objective (Wood and Jones, 1995). Societal marketing implies that organizations
(governments, businesses and nonprofits) need to determine the needs of target markets and to
deliver the desired satisfactions in a way that enhances the consumers and the societys well
being. Social marketing focuses on designing and implementing programs that increase the
acceptability of a social idea, cause, or practice in (a) target group(s) (Kotler, 1994).

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Green Marketing-In the past decade, interest in more sustainable use of earths resources has
increased and has spanned a wide range of industries and academic disciplines. Green topics
have been researched in marketing and engineering for decades under concepts such as
sustainable solutions, green products, green marketing, and green processes (Charter et al., 2002;
Ottman, 1997).Information provision about greenness is a key component of green marketing.
Clearly, firms should not advertise products environmental benefits unless such claims can be
credibly substantiated. Negative press reports on false or exaggerated claims often lead to
decreased sales (Polonsky, 1995). .Some scholars claim that green policies/products are
profitable: green policies can reduce costs; green firms can shape future regulations and reap
first-mover advantages (Porter and van der Linde, 1995; for a critique, see Rugman and Verbeke,
2000). However, this does not seem to be the norm within and across most industries. Many
believe that green policies are expensive, especially after the initial gains the low hanging
fruit in reducing end-of-the-pipe pollution have been harvested (Walley and Whitehead,
1994). An important strategic reason for green marketing is that it could help firms to pre-empt
command-and-control regulations that often hurt their profits (Fri, 1992), and enable them to
shape future regulations, thereby reaping first-mover advantages. the tasks of green marketers
who favor collective sacrifices as vehicles for achieving their objectives are complicated by the
politics of the nonmarket environment (Kollman and Prakash, 2001). Polonsky and Rosenberger
(2001) stated that green marketing is a holistic, integrated approach that continually re-
evaluates how firms can achieve corporate objectives and meet consumer needs while
minimizing long-term ecological harm. Peattie (2001) suggested that green marketing has
been used to describe marketing activities which attempt to reduce the negative social and
environmental impacts of existing products and production systems, and which promote less
damaging products and services. Charter (1992) defined green marketing as a holistic and
responsible management process that identifies, anticipates, satisfies and fulfils stakeholder
requirements, for a reasonable reward, that does not adversely affect human or natural
environmental wellbeing. Terms such as environmental marketing, ecological marketing,
greener marketing, sustainable marketing and marketing of green products have also been used
in the literature to describe similar activities (e.g. Coddington, 1993; Ottman and Herbert, 1993;
Polonsky, 1994).
Balances Score card-The balanced scorecard (which saw its initial development during the
years of 1987 - 1992) (Kaplan. and Norton,1992) links performance measures by looking at a
business's strategic vision from four different perspectives: financial, customer, innovation and
learning, and internal business processes. These four perspectives do not eliminate, but instead
support the goals of various management techniques (such as Strategic Planning, Total Quality
Management, and Core Competence) employed during the several decades surroundings the
balanced scorecard's appearance. Each of the four perspectives is considered by four
parameters(Kaplan. and Norton,1992) .Those parameters are:

Goals: What do we need to achieve to become successful


Measures: What parameters will we use to know if we are successful
Targets: What quantitative value will we use to determine success of the measure
Initiatives: What will we do to meet our goals

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Kaplan and Norton contend that, " to put the balanced scorecard to work, companies should
articulate goals for time, quality, and performance and service and then translate these goals into
specific measures."
Business Intelligence-Sometimes business intelligence refers to on-line decision making, that is,
instant response. Most of the time, it refers to shrinking the time frame so that the intelligence is
still useful to the decision maker when the decision time comes. In all cases, use of business
intelligence is viewed as being proactive. Essential components of proactive BI are [Langseth
and Vivatrat, 2003]:

real-time data warehousing,


data mining,
automated anomaly and exception detection,
proactive alerting with automatic recipient determination,
seamless follow-through workflow,
automatic learning and refinement,
geographic information systems
data visualization

BI assists in strategic and operational decision making. A Gartner survey ranked the strategic use
of BI in the following order [Willen, 2002]:

1. Corporate performance management


2. Optimizing customer relations, monitoring business activity, and traditional decision support
3. Packaged standalone BI applications for specific operations or strategies
4. Management reporting of business intelligence

Technology Transfer-Technology transfer is a crucial and dynamic factor in social and


economic development. Technology has been transferred intentionally or unintentionally.
Sometimes, a generator of technology has acquired a competitive advantage by undertaking the
dissemination of products, processes and maintenance systems (Bradbury, 1978). Technology
transfer is defined in the Work Regulations of the United Nations, as the transfer of systematic
knowledge for the manufacture of a product or provision of service (Yu, 1991). Mnaas (1990)
states that technology consists of four closely inter-linked elements: namely, technique,
knowledge, organisation and product. However, knowledge contributes the major part to
technology, which is the key to control over technology as a whole. It is important that the
understanding of explicit and tacit elements of knowledge will help identify the process of
knowledge transfer. With regarding to the appropriateness and effectiveness of technology
transfer, Samli (1985) models the pattern of technology transfer with consideration of six
dimensions: geography, culture, economy, business, people and government.
Technology marketing-Young firms are aware of the need to influence potential stakeholders
around them such as customers, venture capitalists, suppliers that their business is innovative and
is of commercial importance. Researchers have called this to bridge the credibility gap. Getting
one actor committed to the project will help establishing credibility to reach out to other actors
(Birley and Norburn 1985). Further research has proven that personal relationships are often the

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factor that enables the first transactions and the founders of the firm are using their prior
credibility in the new firm (Kowalkowski et al 2005). News media is a key trigger of responses
from competitors according to Mark Kennedy (Kennedy 2005). He argues that both efficiency
and legitimacy concerns lead firms to rely on media coverage of their competitors rather than on
competitors direct public statements and shows in his study that being referenced by rivals
follows coverage rather than releases, but coverage itself follows producers influence attempts.
Thus, the media is behind the market mirror, and its image of demand is refracted by properties
of the reportersource interface.It can be supported by mobile, internet, radio, TV etc.
According to industry data released by Japan s largest advertising agency Dentsu in late
February, mobile advertising expenditures in the Japanese market in 2007 increased by almost
60% compared to the previous year, reaching 62.1 billion (ca. USD 621 million). Mobile
marketing, interpreted most broadly, could describe any approach to communicating with
consumers while they're on the move: all manner of electronic devices (MP3 players, PDAs, etc.)
A study featured in the Yahoo! Summit Series (September 2005) reported that across China,
India, and the United States, 13- to 24-year-olds were least favorable toward advertising on their
personal electronic devices compared with other new or traditional media. The study highlighted
the variation in acceptance of mobile advertising across countries: in India, 30 percent of youth
were positive toward mobile phone advertising, versus 23 percent in China and 9 percent in the
United States.
Virtual Enterprise-The VE life cycle involves a number of phases, basically VE creation /
configuration, VE operation, VE evolution, and VE dissolution (Camarinha-Matos et al, 98, 99),
(Spinosa et al., 98). Other authors also include the activities of business opportunity
identification, and partners search and selection as separate phases (Bremer et al., 99). A virtual
organization is "a collection of business units in which people and work processes from the
business units interact intensively in order to perform work which benefits all" (Porter, 1990).
Although virtual organizations have become a relatively widespread business approach to
structuring business, the underlying concepts of linking competencies across business units or
organizations have existed for some time earlier, too. These business linkages enable
organizations to more tightly coordinate the transactions and activities across a value chain.
Virtual reality, virtual space, virtual organizations, virtual teams; virtual is todays
organizational buzzword (Johansson, 1995; Potocan, 2001). Virtual organizations enable
organizational and/or individual core competencies to be brought together when needed, and
disbanded when no longer required. These new firms mirror the fluidity of the global markets,
creating, and disbanding resources as dictated by the marketplace. Global location, technical,
workforce and market expertise advantages can be heightened through the use of the virtual
organizational structure (Davidow, Malone, 1993). The rationale for forming a virtual
organization varies for the different entities involved in each relationship (Speier, Harvey, and
Palmer, 1998; Harvey, Speier, and Novicevic, 2000; Harvey, Dabic, 2001). Virtual global
strategic organizations involve inter-organizational relationships that exist in a variety of forms.
These relationships can be based on existing relationships between firms and often reflect prior
competitive or cooperative interactions (Hill, Hitt, and Hoskisson, 1992; Allcorn, 1997). In
addition to these inter-organizational strategic relationships, firms must have an economic
incentive for participation. Strategic needs, desire for performance enhancements, or an attempt
to foster innovation can drive these incentives. Nike, e.g., was one of the first organizations that
took advantage of advanced communication and logistic technology to create a global network of
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organizations to produce athletic shoes instead of keeping all the work inside the organization
(Snow, Miles, and Coleman, 1992; Potocan, 1997; Harvey, Dabic, 2001) Five identifiable
models of virtual global strategic organizations begin to emerge from the existing literature (see:
Porter, 1990; Davidow, Malone, 1993; Rayport, Sviokla, 1995; Allcorn, 1997). These models
share common elements of coordination through the use of IT and communication technologies,
and the performance of work across time and space (Speier, Harvey, and Palmer, 1998; Harvey,
Speier, and Novicevic, 2000; Harvey, Dabic, 2001).

Supply chain management-Firms find that they can no longer compete effectively in isolation
of their suppliers or other entities in the supply chain (Sandeep, 1998).Accordingly, a
streamlined SCM is the network of facilities and distribution options to support an association of
vendors, suppliers, manufacturers, distributors, retailers, and other trading partners (Kwan,
1999)..SCM can form a loop that begins with the customer and ends with the customer (Yang
and Papazoglou, 2000).Supply-chain management (SCM) enables supply-chain partners to work
in close coordination through information sharing to facilitate supplier-customer interactions and
minimize transaction cost (Lawrence, 1999; Premkumar, 2000; Lee and Whang, 2000).
According to Ferguson (2000), the concept of SCM incorporates two important ideas: 1 SCM is
a collaborative effort that combines many parties or processes in the product cycle; and 2 it
shows that SCM can cover the entire product cycle, from the introduction of raw materials to the
point at which the consumer purchases the product. functional integration is required, which is
the process of integrating all business functions to work together, e.g. a firms logistics or
distribution functions must integrate with supply-management, manufacturing, and information
technology before the functional integration can be extended to other companies in the supply
chain (Ferguson, 2000).
Customer relationship management-Among some of the top trends identified during
conversations with technologists and marketers are the importance of firmwide initiatives,
including SharePoint intranets to improve information sharing, enterprise relationship
management (ERM) systems to better identify and grow key relationships and attorney-driven
Web communications including blogs and minisites for improved audience reach and
business development. Social media are on everyones mind. This is not surprising, considering
that sites like Twitter have around 23 million members, according to The Economist. Acquisition
of customers: this refers to the need of organisation to find new customers for their products.
This means they are required to develop strategies to attract potential customers to purchase the
product. The cost of attracting a new customer is estimated to be five times the cost of keeping a
current customer happy (Kotler, 1997). Retention of customers: organisations also need to
focus on existing customers in order to ensure that they continue purchasing and continue
supporting the product. Organisations can increase their profitability by between 20% and 125%
if they boost their customer retention rate by 5 percent (Peck, Payne, Christopher & Clark,
2004). Profitability: Customer profitability reflects the financial performance of customers with
respect to all the costs associated with a transaction (Gordon, 1998). Profitability in the case of
CRM is determined in the light of the lifetime value of the customer to the organisation, taking

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account the income and expenses associated with each customer and their respective transactions
over time (Gordon, 1998). CRM includes the use of technology in the building of databases and
the use thereof to develop and improve the relationship with the various markets, including the
final consumer. In order to exploit this technology, skills among staff are required. Organisations
within developing markets have customer information in databases, though many do not have the
advanced technology or skills to exploit the information that is stored (Brunjes & Roderick,
2002). The success of any strategy is determined by the success with which it is implemented.
This is also true in the case of CRM strategies. Implementing CRM require that the organisation
and the associated business processes be in place in order to facilitate its success (Brunjes &
Roderick, 2002). The risk in implementing any CRM strategy is that the organisation is not ready
to do so and relying on technology to implement the strategy (Brunjes & Roderick, 2002).
Total quality management-A baseline technical definition of what TQM is all about has been
given by the American Federal Office of Management Budget Circular (cited in Milakovich,
1990, p. 209), TQM is a total organizational approach for meeting customer needs and
expectations that involves all managers and employees in using quantitative methods to improve
continuously the organisations processes, products and services. According to the latter
definition TQM is not merely a technical system. In fact, TQM is associated with the
organisation itself, which is also a social system. Pike and Barnes (1996) argue that organizations
are not only technical systems, but also human systems. In addition, Oakland (1993) states that
TQM is an attempt to improve the whole organisations competitiveness, effectiveness, and
structure. For Dale (1999), TQM is the mutual co-operation of everyone in an organisation and
associated business processes to produce products and services, which meet and, hopefully,
exceed the needs and expectations of customers. TQM is both a philosophy and a set of
management guiding principles for managing an organisation. (p. 9).
Enterprise resource planning-Kumar and Van Hillegersberg (2000) define ERP systems as
configurable information systems packages that integrate information and information-based
processes within and across functional areas in an organization. In this sense, ERP systems are
designed to integrate business functions and allow data to be shared across many boundaries and
divisions within the company. Enterprise resources planning (ERP) systems assist enterprises in
automating and integrating corporate cross-functions such as inventory control, procurement,
distribution, finance, and project management. In recent years as many companies began to
search for ways to replace their existing applications running on mainframes that no longer meet
the growing corporate needs, ERP systems have become fixtures to provide a basis for business
process management integration across business functions (Mabert et al., 2000) Gattiker and
Goodhue (2000) group the literature of ERP benefits into four categories: (1) improve
information flow across sub-units, standardization and integration facilitates communication and
better coordination; (2) enabling centralization of administrative activities such as account
payable and payroll; (3) reduce IS maintenance costs and increase the ability to deploy new IS
functionality; (4) ERP may be instrumental in moving a firm away from inefficient business
processes and toward accepted best of practice processes. Several research studies have
identified various important benefits the ERP systems bring to organizations. OLeary (2000)
stated that an ERP system integrates the majority of the business processes and allows access to
the data in real time. Furthermore, ERP improves the performance level of a supply chain by
helping to reduce cycle times (Gardiner et al., 2002). There are also some intangible benefits that
an organization may enjoy by implementing an ERP system including, better customer
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satisfaction, improved vendor performance, increased flexibility, reduced quality costs, improved
resource utility, improved information accuracy and improved decision-making capability
(Siriginidi, 2000).
Strategic technology management-According to a recent definition, strategy is the readiness of
a enterprise for the future, Dedouchov (2001,s.1) "the strategy defines the company's long-term
objectives, the course of individual strategic operations and the allocation of corporate resources
necessary for the accomplishment of the set objectives in such a way that the strategy sets out
from the company's needs, takes into account changes in its resources and capabilities, and, at
the same time, adequately responds to changes in the company's external
environment".According to Koontz and Weihrich (1993, p.16), management is the process of
designing and maintaining an environment in which individuals work together in groups to
accomplish efficiently selected objectives. In his definition of strategic management, Bowman
(1995, p.9) sets out from the consequences of decisions on products, allocation and appointments
of top managers: he identifies important decisions with strategic objectives. The way these
important (strategic) decisions are made and implemented can be characterized as a process of
strategic management. Looking inside the firm of the buyer the adoption process of an
innovation is viewed as a five step process. (Rogers 1983)1) Knowledge is when the group
within the company which is the decision-making unit starts to understand what the innovation is
about and how that relates to their needs.2) Persuasion is when the decision-making unit
develops a positive or negative attitude towards this particular innovation. They try to evaluate if
the innovation could or could not be useful for their business.3) Decision is the third step and
here the unit may try the product or a smaller version of it. After the trial they decide.4)
Implementation is vital for the adaptation. If something goes wrong here and the start up firm is
not able to provide adequate information the buyer may cancel the transaction or just not use the
innovation.5) Confirmation is the last step where the buyer needs to get feedback on that they are
using the innovation correctly.
Business process management-Elzinga et al. (1995) propose that: Many companies are engaged
in assessing ways in which their productivity, product quality, and operations can be improved.
A relatively new area of such improvements is business process management (BPM). DeToro
and McCabe (1997) argue that BPM is re-emerging rather than a relatively new area but they
agree with Elzinga et al. (1995) and Corrigan (1996) that BPM incorporates the approaches
indicated above and that: There is renewed appreciation that no one performance improvement
path meets every need and a combination of these paths is required. process arena has been
focused on business process re-engineering (BPR) as described by Hammer (1990), Davenport
(1993), and Hammer and Champy (1993). Despite BPR being eagerly embraced by many
organisations it has failed to deliver the expected results, according to writers such as Harrington
(1998), Malhorta (1996), Mumford and Hendrick (1996), and Deakins and Makgill (1997).
Huffman (1997) makes the point: Organisations advocate a particular improvement strategy to
the extent that it becomes the strategy of choice, de-emphasising or excluding all others. This
need not, and must not, happen. A variety of approaches, techniques, and tools are available for
improving products, systems, processes and activities. Hammer and Champy (2001) defined
Business process re-engineering (BPR) as the fundamental rethinking and radical redesign of
business processes to achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service and speed. Somers and Nelson (2004) stated that
BPR plays a significant role in the early stages of implementation. Furthermore, it is important in
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the acceptance stage and tends to be less important when the technology becomes routine. Nah
(2003) noted that reengineering should continue with new ideas and updates to take full
advantage of the ERP system when the system is in use. Organizations should be willing to
change their businesses to fit the software in order to reduce the degree of customizations
(Murray and Coffin, 2001). Many organizations have made unnecessary, complex
customizations to ERP software because the people making the changes do not fully understand
the organizations business practices (Nah 2003). Coombs and Hull (1996) believe that the
emergent business process paradigmlacks coherence of theories and practices and it is
characterised by an approach to strategy which shifts the focus to the important intrinsic
properties of the firm, rather than its environment alone and by a variety of ways of
understanding and managing the horizontal flows within and between organisations and by an
emphasis on organisational change. Talwar (1993) defines a process as a sequence of pre-
defined activities executed to achieve a pre-specified type or range of outcomes and Ould
(1995) says there are two types of processes: (1) the sort that starts when necessary and finishes
some time in the future; (2) the sort that is constantly running. Armistead et al. (1997) raises the
unanswered questions of: What is business process management? Firstly, is it a series of tools
and techniques for improving the performance of business processes whether they be categorised
as operational, support or directions setting. Or is it a way of integrating the management of the
whole organisation? Secondly, if business process management is the latter, how can it be made
to work? Finally, is it a tool for organisational design which needs to be understood by only a
few within the organisation? In his attempt to explain BPM, Zairi (1997) says BPM is
concerned with the main aspects of business operations where there is high leverage and a big
proportion of added value. BPM has to be governed by the following rules: Major activities
have to be properly mapped and documented. BPM creates a focus on customers through
horizontal linkages between key activities. BPM relies on systems and documented procedures
to ensure discipline, consistency and repeatability of quality performance. BPM relies on
measurement activity to assess the performance of each individual process, set targets and
deliver output levels which can meet corporate objectives. BPM has to be based on a
continuous approach to optimisation through problem solving and reaping out extra benefits.
BPM has to be inspired by best practices to ensure that superior competitiveness is achieved.
BPM is an approach for culture change and does not result simply through having good systems
and the right structure in place.
Enterprise systems-The notion that a company can and ought to have an expert (or a group of
experts) create for it a single, completely integrated supersysteman MISto help it govern
every aspect of its activity is absurd. (Dearden, 1972, p. 101). Whether because the capacity of
computers and programming languages was too small or organizations were content to manage
themselves along narrow functional lines, the 1970s vision of a single integrated information
system for the enterprise remained a mirage for the majority of computer-using organizations.
Instead, organizations created islands of automation (McKenney & McFarlan, 1982).
Integration. Enterprise systems promise seamless integration of all the information flowing
through a companyfinancial and accounting information, human resource information, supply
chain information, and customer information (Davenport, 1998, p. 121). Best practices
represent a powerful reason to adopt enterprise systems without modifying them because few
organizations claim to have redesigned all their business processes for cross-functional
efficiency and effectivenesswhich was the stated purpose of business process reengineering
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(Hammer, 1990). best practices embedded in enterprise systems, most adopting organizations
must commit themselves to some degree of business process reengineering (Connolly, 1999).
Finally, some organizations adopt a best-of-breed strategy in which they try to integrate
several enterprise packages from different vendors, each designed to be the best fit in its class
with the needs of the adopting organizations. Examples of companies that have adopted the best-
of-breed approach are American Standard Companies (Bashein et al., 1997) and Starbucks
(Aragon, 1997). Given the richness of enterprise systems in terms of functionality and potential
benefits to adopting organizations, it should not be surprising that companies are adopting these
systems for many different reasons20 (Ross, 1999). In large companies, it is not unheard of to
find, say, 42 different general ledger packages or 22 separate purchasing applications in use at
the time of adopting an enterprise system. Boeing, for example, had 14 bill-of-material systems
and 30 shop-floor control systems before the company adopted ERP (Schneider, 1999). One
reason for nonadoption, partial adoption, or discontinuance is lack of featurefunction fit
between the companys needs and the packages available in the marketplace. There are very
few companies that dont have specialized processes dictated by their industry, according to one
consultant (Slater, 1999). More commonly, the organization may choose to adopt only certain
parts of an enterprise system or may modify the system to improve feature-function fit. Consider
examples of the implementation of SAP R/3 from Visio (a software company) (Koch, 1997).
Companies that continually change their organizational structures and business models and
particularly those that are not run in a very top-down manner may find enterprise systems
unsuitable as a corporate solution (Bancroft, Seip, & Sprengel, 1997). the nonadoption of
enterprise systems is the availability of alternatives for increasing the level of systems
integration. Data warehousing, a bundle of technologies that integrates data from multiple source
systems for query and analysis, provides what some describe as the poor mans ERP. The
usefulness of data warehousing as an integration strategy is limited by the quality of the source
systems. Another alternative to enterprise systems involves rearchitecting in-house systems
around a layer of middleware that isolates application systems from stores of master data.
When Dell abandoned SAP R/3 as its integration strategy, the company designed a flexible
middleware architecture to allow the company to add or subtract applications quickly and
selected software from a variety of vendors . . . to handle finance and manufacturing functions
(Slater, 1999). Enterprise systems represent an important contemporary phenomenon in the
organizational use of information technology. According to M. Lynne Markus and Cornelis
Tanis The most distinct differences between an enterprise system and other transaction-oriented
systems are that the enterprise system is a package versus a system custom developed in-house
(implying long-term dependence on a vendor) and that embedded in the enterprise system are
normative business practices (requiring many adopting organizations to undertake some form of
process reengineering).
Information management-Having decided to provide comprehensible information, firms face
yet another challenge: consumers must perceive information as being credible. As a reference,
many view industry as the least reliable source of information on environmental issues (Ottman,
1992; Stisser, 1994). Knowledge transfer is about connection not collection, and that connection
ultimately depends on choice made by individuals (Dougherty, 1999). Maitland (1999) argues
that the crucial factor in determining a company's competitive advantage is its ability to convert
tacit knowledge into explicit knowledge through organisational learning. Polanyi (1967)
considered human knowledge by starting from the fact that we know more than we can tell.
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Knowledge is increasingly being recognised as a vital organisational resource that gives market
leverage and competitive advantage (Leonard-Barton, 1995).
Environmental entrepreneurship-Sustainability, which is often used in unison with greenness,
includes issues such as population pressure and increased consumption, globalization, global
warming and climate change, ozone depletion, acid rain, genetic engineering and loss of habitats
and species diversity (Charter et al., 2002). According to the United Nations Brundtland
Report, sustainable development meet[s] the needs of the present without compromising the
ability of future generations to meet their needs (United Nations, 1987). The three main
dimensions of sustainability are environmental (planet), economic (profit) and social (people),
also known as the triple bottom line (UNEP, 2007). Charter et al. (2002) combined the
concept of sustainability with marketing to define sustainable marketing as a broader
management concept which focuses on achieving the triple bottom line through creating,
producing and delivering sustainable solutions with higher net sustainable value whilst
continuously satisfying customers and other stakeholders. Chen et al. (2008) discussed the
aspects of sustainability in relation to information systems (IS) in detail and proposed a model
through which IS automation can be leveraged to achieve eco-efficiency. They also proposed
that ISs be used to build environmental awareness in organizations and the community to
transform organizations and industries so they achieve eco-effectiveness.However, if consumers
do not care much about who is greener, but they do penalize firms that violate environmental
laws or emit high levels of toxins, greenness is a hygiene variable 33% of adults claimed to
have avoided buying products, at least occasionally, from companies with poor environmental
records (Ottman, 1996). Menon and Menon (1997, p. 54) suggest that firms could adopt
enviroprenuerial marketing strategies: the processes for formulating and implementing
entrepreneurial and environmentally beneficial marketing activities with the goal of creating
revenue by providing exchanges that satisfy firms economic and social objectives.

Proposed theoretical framework

Proposed theoretical framework for CSTs for R & D at Indian SMEs (Part I)

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Proposed theoretical framework for CSTs for R & D at Indian SMEs (Part II)

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Proposed theoretical framework for CSTs for R & D at Indian SMEs Part III

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Proposed R & D cycle for Indian


SMEs

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Conclusion

Bessant and Francise (1998) suggest that effective innovation must involve all areas of an SME
with the potential to impact every discipline and process. Innovation can be transformational,
radical or incremental depending on the effect and nature of the change. Afuah (1998) suggest
that innovations do not have to be breakthroughs or paradigm shifts, though organizations should
strive for the larger innovation.Domestic R&D expenditure in India and China increased
substantially in recent years as both countries are undertaking concerted efforts to build cutting-
edge scientific capabilities, see e.g. OECD (2006). According to Bansal and Roth (2000), there
are three primary reasons for a firm go green: competitiveness, legitimation and ecological
responsibility. Improved competitiveness includes energy and waste management and process
intensification. Legitimation refers not only to complying with legislation but also to additional
actions that target long-term sustainability, avoid fines and penalties and lessen risks. Ecological
responsibility is a motivation that stems from the concern that a firm has for its social
obligations and values (Bansal and Roth, 2000). As Peattie and Crane (2005) argued, the free
market will never be able to turn every firm toward greener products, so legislation forces them
to undertake more sustainable business practices. However, regulations should still leave room
for innovations and create maximum opportunity for innovation by letting industries discover
how to solve their own problems (Porter and van der Linde, 1995). new regulations and
standards can be an advantage in business and in marketing. In addition to legislation, there are
competitors, customers, trade associations and other pressure groups that demand that firms
come up with more green solutions (Kassaye, 2001). According to Fuller (1999), sustainable
products possess positive ecological attributes that are nothing more than enhanced waste
management factors (ecoattributes) that have purposely been designed-in (embedded) through
decisions concerning how products are made/manufactured, what they are made of, how they
function, how long they last, how they are distributed, how they are used, and how they are
disposed of at the end of useful service life. According to Fuller and Ottman (2004), there are
three key design scenarios for sustainable products: short-term eco-redesigns that involve low-
functional changes of existing products, eco-innovations that provide complete new
functionalities and ways to use the product for customers, and sustainable technology
innovations that utilize emerging and sometimes even radical technology to provide new
customer benefits and changes in how products are used. Naturally, the last category is the
riskiest for small and even large firms. Bhat (1993) divided the sustainable considerations of the
design phase into two parts, source reduction and waste management strategies, along with their
respective subtasks, which are the most important ways to affect a products overall
sustainability during the design phase. Charter et al. (2002) provided a list of questions that a
developer of sustainable product should consider while designing a green product. With regard to
the firm size (FSIZE), previous empirical studies have found a decisive role for it in firms R&D
performance. Following the Schumpeterian assertion that large-scale enterprises are the key to
innovation driven capitalist development, firm size is postulated to have independent advantages
in conducting R&D. In addition to larger resource base and greater risk taking capabilities, larger
the firm generally implies the higher incentive to do R&D because the effect of cost reduction

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(effected via R&D) applies to a larger output and so is more profitable for them (Cohen and
Klepper, 1996; Fishman and Rob, 1999). However, a number of empirical studies in India as
reviewed by Kathuria (2008) and elsewhere as reviewed by Cohen and Klepper (1996) suggested
that the influence of firm size on R&D performance is subject to a critical level of firm size.

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