R-AND-D PROJECT TERMINATION DECISIONS - PROCESSES, COMMUNICATION, ANDPERSONNEL CHANGES

The decision to terminate a project can demoralize project managers an d team members, and increase concerns about job security. For these re asons, managers tend to delay project termination decisions. However, delaying project termination diverts scarce R&D resources from higher potential projects. Ramaiya Balachandra, Klaus K. Brockhoff, and Alan W. Pearson describe the results of a study that explores the manner in which managers inform staff of the decision to terminate or continue a project. Survey respondents are the highest ranking R&D managers in 78 large German, British, and U.S. companies. Respondents were asked t o describe the procedures they use for monitoring R&D projects and dec iding whether to continue a project. Underlying this research is the b elief that move effective management of these processes can improve pr oject team effectiveness, employee relations, and morale. All survey r espondents use project monitoring procedures. Most use formal procedur es, often supplemented with informal procedures. Move than one person usually monitors projects. Project managers, their immediate superiors , and project staff typically have these responsibilities, but respond ents also indicate that marketing managers often monitor projects. Com pared to US. companies, European firms typically involve fewer people in project monitoring. U.S. firms involve more non-R&D personnel in th ese tasks. Most firms focus on monitoring such variables as time, tech nical success, and probability of technical success. Staff motivation is the least used monitoring variable. Cost control was mentioned move frequently by German respondents than by respondents from other count ries. Decisions regarding the fate of a project usually come from indi viduals not directly involved with the project. Termination decisions are typically communicated in writing; no respondents use staff meetin gs to relate such decisions. Following the decision to terminate a pro ject, management faces the difficult task of finding suitable jobs for project team members. Rather than assign an entire team to a new proj ect, management typically disbands a team and assigns its members to o ther teams. The inherently uneven progress of R&D projects complicates these scheduling problems, and thus compounds the career uncertainty caused by project termination decisions.