Transition in R&D management control system: Case study of a biotechnology research institute in China

摘要

China's transition from a command economy to a market economy calls for a transformation from a centralized to a decentralized model in research and development (R&D) management control system. Virtually all scientific research was funded and monitored by the state under the centralized economy, thus creating an incentive structure for individuals and institutes to get state research grants to carry out scientific research without being able to commercially exploit its final results. This study investigates a biotechnology research institute's commercialization effort in response to economic reform. The findings show that market demand is not sufficient in bridging the gap between technological potential and commercial exploitation. Management control system based on clearly defined property rights is of critical importance to successful R&D commercialization, and market-based financing is key to an effective control system.