Utility and Perceived Acceptability of R&D Project Selection Models

The analytical utility and managerial acceptability of three expected value maximizing (EV) project selection model forms were assessed within five different development R&D performing organizations. Utility was assessed in terms of the capabilities of the models for prescribing higher value portfolios than those actually implemented by the R&D managers. Value was expressed in terms of profit, return on investment, expenditures on unsuccessful efforts and funds unexpended. Acceptability was measured in terms of the manager's willingness to adopt the models on the bases of their assessed utilities, their general performances and their perceived attributes. Although one of the EV model forms was found to have high utility with regard to all five organizations studied, it was acceptable in only two of these organizations. In general, high utility was not found to be either an inherent characteristic of these EV model forms or an important consideration for their adoption by the R&D managers. Overall, the models were largely irrelevant and managerially unacceptable with respect to the development projects and the selection/allocation processes studied here.