A Decision Process Model of R&D Resource Allocation in Hierarchical Organizations

A mathematical model is presented which incorporates many descriptive characteristics of decentralized R&D resource allocation processes. In general it is a member of the class of models referred to as decision process models. In specific it is representative of an R&D resource allocation process involving a number of subunits at three hierarchical levels. An important feature is the model's ability to represent a number of different interlevel information and organizational coordination mechanisms relating subordinate to ordinate and ordinate to superordinate. A series of 0--1 goal programs with preemptive priority factors provide models for each of the subunits. The subunit models are linked through very general information flows. R&D project or portfolio characteristics are passed upward; while R&D goals and/or budgets and associated levels are passed downward. The eventual purpose of this research is to construct a simulator capability suitable for experimentation concerning coordination in a decentralized resource allocation process involving R&D projects. Such a capability would be an important tool for analyzing existing or proposed decision processes and would be useful for policy analysis at the level of both the firm and the federal government. An illustrative experiment is discussed.