Research On R&D Projects Risk Management For Multinational Corporations In China

Along with the deepening of global economic integration, maximum utilization of the global resources has become an important approach to obtain the competitive advantages for the multinational corporations. More and more multinational corporations transfer their production and manufacturing and R&D into China with Chinese excellent investment environment and related-low labor costs advantages. This also greatly improves Chinese manufacturing standards, and the situation of Chinese manufacturers becomes more important in the overall economic structure. Although China has become the hot area for the multinational corporations' R&D investment, studies on the risk management for multinational corporations' R&D in China have not been aroused sufficient attention.Under such a background, the study on transnational corporations' R&D risk management in China plays a very important role for multinational corporations' business development. Considering the environment and characteristics of R&D in China, this thesis analyses the risk factors involved in the requirement, cost, quality and schedule, and discusses the risk identification, assessment and control methods. Four research questions are mainly addressed in this thesis:(1) What are the risks of R&D that multinational corporations suffer in China?(2) How to identify and measure the multinational corporations' R&D risks in China?(3) How to manage and control the risks appeared in the process of multinational corporations' R&D activities?In this thesis, the phase review process of R&D for the multinational corporations based on the phase review (PR) of PACE, the R&D risks are analyzed and controlled from the aspect of the R&D review phases. Then the RFRM (Risk Filtering, Ranking, and Management) model for R&D is proposed, by which the major and special risk factors (scenarios) in the multinational corporations' R&D process in China can be identified and evaluated. Following the proposed R&D risk management framework, the R&D risks in all the phases can be integrated. Thereafter, the risks are normalized as the cost index to measure the risks for each PR and whole R&D, which can provide the guideline for the reducing or mitigating risks in R&D processes, and regulate R&D risks from the four dimensions: requirement, quality, cost and schedule. Finally, the proposed risk management and controlling models are applied in ASB (Alcatel Shanghai Bell) R&D project management, how to implement the risk identification and the risk controlling is discussed detailedly according to practical R&D projects in the enterprises. The significance and managerial meaning of this thesis are, by studying and controlling of the R&D risks of multinational corporations in China, the decision criteria to decision-makers are provided, the risks in R&D activities are forecasted and controlled, and the technology transfer success rates of multinational corporations in China are improved. Finally, the objectives of enterprise operation are achieved: on time delivery with low cost and high quality to the market.Contributions of this thesis are briefly summarized as follows:(1) The risk decision-making mechanism based on the phase review process for R&D of the multinational corporations in China is proposed. By the proposed process, R&D risks are analyzed on the PR level of R&D project. This approach provides the decision criteria for decision-makers to forecast the risks in R&D process, and mitigate the risks in each stage according to the different conditions, to assure products on time delivery.(2) The RFRM model of R&D risk management for the multinational corporations in China is developed. By the RFRM model, the risk factors can be filtered and sorted, and can also be evaluated. The proposed model can provide many helps to decision-makers of multinational corporations to recognize the risks in different R&D phases and take actions to migrate the risks.(3) The R&D risks controlling model and the risk incentive optimization model for the multinational corporations in China are developed. In the R&D risks controlling model, the requirement, cost, schedule and quality of R&D activities of the multinational corporations in China are involved, the effects of risk factors are normalized as the cost index to measure the risks, and the whole performance of R&D project achieves optimization. The proposed risk incentive optimization models can resolve the risks that are induced by culture conflict in the globalization process of the multinational corporations.(4) The proposed risk identification, assessment and control methods are applied to ASB (Alcatel Shanghai Bell) R&D managerial practice. The validity of the proposed R&D risk controlling models is demonstrated through the practical application of the methodology.