Examining Innovation Management from a Fair Process Perspective

3 Performance Management of the Innovation Process (S. 94-95)

In the second chapter, the theoretical foundations for an integrative performance management system for the innovation process were presented. The third chapter is dedicated to motivating and discussing an integrative performance management framework that integrates a managerial perspective. Firstly, an overall framework will be presented and its basic functional and scorecard design defined. A selection process for performance perspectives, criteria and measures will also be described. Secondly, we will turn to the details of the overall framework and specify the various performance levels of the overall framework in more detail.

3.1 An Overall Framework

3.1.1 Basic Functional Structure

Various performance management systems for the innovation process or for its subprocesses have recently been developed.408 Most of them focus on specific subprocesses such as basic & applied research, concept development or the overall NPD process. An example of a performance management system for an R&D department was presented in Figure 9 in Section 2.2.2.2. In addition, only a few frameworks are aimed at integrating all important organisational performance levels important for an integrated view of innovation performance, such as the departmental level and the project level. The following description of the basic functional structures aims to integrate all specific sub-processes, organisational performance levels and other so-called contingency factors that are further explained below.

The main components of the basic functional structure and design that we will use are based on past research, and represent best practice. The managerial perspective will elaborate on the organisational justice research presented in the last section, and represents our major original contribution to the overall performance management framework. We will argue that this managerial perspective can take centre stage of an overall performance management framework, it than also becomes a central lever for performance improvement. In literature, analyses argue that various contingency factors must shape the structure of a performance management system. These contingency factors represent environmental, organisational and situational aspects which have to be considered for an effective elaboration of the basic functional structure of such a performance management system. The following contingency factors have been argued as key determinants of a performance management framework, its complexity and organisation. They summarise the main ideas of past research into how performance management systems for the innovation process have to be designed:

• Industry: specific industrial characteristics
• Strategic control model: centralised cost centre, decentralised cost centre or profit centres
• Organisational size: company size and the size of the R&D organisation
• Organisational level: corporate, departmental, or project level
• R&D specificity: basic & applied research or NPD
• Type of project: basic & applied research project, NPD project
• Process specificity: application of performance perspectives according to particular process steps

We will approach this by presenting a basic functional structure that can be seen as a construction kit. This enables the specific adaptation to the needs of particular companies of different ‘industries’, ‘strategic control models’, and ‘organisational sizes’. But this adaptability, of course, has its limits, which are the specific characteristics of different industries. That is why our model is mainly focused on the automotive, manufacturing & engineering and electronics industries, the so-called `piece-flow industries`. Industries with very different requirements and innovation processes like the chemical or pharmaceutical industries are excluded (`continuous flows industries`).