|Title||Ideas about profitability in R&D and the selective pressure from management accounting|
|Publication Type||04. Conference Papers|
|Year of Publication||2011|
|Conference Name||the 2nd international conference on information management and evaluation|
The selective pressure on the development of products and production technologies is not exerted directly by customer demand, but by its interpretation in a company. The decisions on technical development usually take place a long time before a product reaches the market on the basis of calculations about profitability in management accounting. The profitability can depend on various factors, including production facilities, supply networks, intellectual property, distribution channels and competition. The calculations that lead to decisions on an investment tend to be very complex. Nevertheless, they do not represent fully realistic market conditions, but only a simplification for the sake of reliable estimates. In a conventional simple evolutionary model of innovation, technical development does not express expert knowledge. In addition, it adapts as much to the shortcomings of the financial calculations as to the prognostic information they are based on. If the selective pressure form management accounting is high, technical development is likely to focus on the exploitation of the missing cost factors in the calculations and neglect the reality market demand. In practice, innovations in research and development are not propelled by arbitrary change. Expanding the conventional model, the expertise in research and development can be represented by introducing intentional improvement operators. These operators show a potential to avoid unwanted directions of adaptation, which gives reason to believe that common sense in research and development play an important role in avoiding detrimental effects of incomplete cost calculations.