General Perspective: R&D - Essay Example

General Perspective: R&D Businesses engaged in the 'transfer process must be careful in application of Western benchmarking criteria relating to performance, therefore the soft budget constraints imposed on local firms and their resultant excessive gearing through lending facilitated by local authorities looks a recipe for disaster when Western financial liquidity ratios are applied'. The characteristics pertaining to the entrepreneurial environment are molded by the processes of management at the local level. In this regard, the local government has experienced different issues i.e. 'fixing rates of taxation and finance but with substantial freedom' (Allan, 2003). The acquisition and R&D based activities of the supplier with the reseller is regarded as vertical R&D based activities. In the case of vertical R&D based activities, both the parties are involved in buyer-seller relationship. The acquisition of the Medico Container Services by Merck is regarded as vertical R&D based activities. The regulatory authorities have appreciated exercises of vertical R&D based activities. It is expected that consumers are also able to benefit from the vertical R&D based activities, because such activities i.e. the integration of the supply chain, increase the efficiencies, the prices stabilize and quality of the services also improve. The R&D based activities of the Time Warner Inc. and Turner Corp., which is entirely different entertainment networks, has improved the services of the entertainment giants greatly. The regulatory authorities expressed their concerns that Time Warner after R&D based activities will be reluctant to offer and sell its video programs to other competitors of the cable TV companies, and Turner Corp. will have extra benefit through such bargains of R&D based activities, and Turner Corp. will be offered programming right at discriminatory rates, therefore both the companies will establish their monopolies against other competitors including Direct Broadcast Satellite and new wireless cable technologies. The regulatory authority also feared that the R&D based activities will affect competition in the production of video programming; the R&D based activities will allow Time-Turner to refuse the services of transmission by competitors. The regulatory authority therefore approved the R&D based activities as it was likely to improve the services, through ' Direct Broadcast Satellite and new wireless cable technologies' (Yang, 2005). Microsoft: Research & Development The Research and Development Credit has supported different technological innovations, which has assisted the technology companies in the 'creation and perseverance of high quality of life' for the customers. The performance of research and development are responsible for the positive economic benefits. The revenue has been increased considerably, and the employment opportunities have further expanded, at parallel there has been increase in the purchase of the capital goods, and rate of returns. The implementation of the research and development has resulted in good number of opportunities for the increase in dividends and such practices has contributed towards strengthening of the American tax base. The focus of the American government has been over ensuring that the economic growth is sustainable, and the threat to the global security is minimal, for that purpose the practice and the implementation of the research and development is expected to influence and ensure appropriate surveillance of the goods imported and exported to the United States, such practice will correspondingly influence and improve the labor and capital requirements. The businesses in American are based on small scale businesses, which accounts for more than ninety percent of the American businesses. These small businesses contribute massively towards the gross national product of the country. The stability and the status of these small scale companies can be ensured provided that such companies are provided with an opportunity to perform in the open market, against the largest competitors in an independent manner. The survival of the small and highly technological businesses is essential for the fabrication of the new products for potent and specialized markets. This is achievable provided that the companies undertake research and development. However, the access to research and development is not within the domain of every business, rather it require finances and capital. It has been observed that 'firm's Research and Development efforts and its success in developing new products are closely related in high-technology industries' (Troy, 2001), the R&D has played significant and crucial role for the enhancement and up-gradation of the new product development process. The development and the progress of the new product development process is practiced through internal and external approach, in former the 'firm have in-house R&D capabilities, as well as the ability to generate ideas for new products, to analyze their potential profitability, and to market them, the capital expenditures and the associated fixed costs for such an undertaking are often beyond the means of even well-established and profitable small businesses', however in latter, the development involves procurement of the external services from specialized private laboratories or firms, 'which specialize in the development and testing of products for their clients' (Troy, 2001). The external mode of R&D has slight edge over the in-house R&D scheme, because 'the fixed costs and capital expenditures associated with external new product development are substantially lower than maintenance of in-house facilities and staff' (Troy, 2001). In recent past Microsoft experienced full-blown R&D cooperation and understanding, for last decade, every year has experienced greater level of R&D based activities. Although the market has experienced the negative fallout of the R&D activities, the companies and professionals have suffered tremendous economical blow than expected, however the current corporate sector has completely ignored such facts and has planned further R&D based activities in the years to come, the conglomerate deals of the 1960s and 1970s which was responsible for the emergence of the non-profitable companies including ITT Corp. and Litton Industries 'have been thoroughly discredited, and most of these behemoths have been broken up' (Tirole, 2005). In October 1989, the bankers fail to raise the funds for the 'ill-conceived buyout' of UAL Corp., the deal later collapsed and was responsible for causing severe blow to the stock market. The successful experience of the R&D based activities started when Microsoft. planned R&D based technological activities, in 2001 both the corporate agreed to join in a $2.3 billion stock swap, the R&D based activities were responsible for the establishment of the largest technological hub in America, after the R&D based activities the corporate was able to produce $650 million in annual expense savings by the end of 2002. Once the R&D based activities exercises turned profitable, it was regarded that, 'this was to be the era of strategic deals, friendly, intelligent, and relatively debt-free transactions done mostly as stock swaps, which were supposed to enrich share holders by producing synergies in which two plus two equals five or more through wisdom and intellect, which solicited R&D ' (Montgomery, 2003). Semantic connectivity has been incorporated by the search engines 'to build their own thesaurus and dictionary to help them to determine how certain terms & topics are related' (Studer, 2003). The semantic connectivity is adopted through the scanning of 'their massive databases of content on the web' (Menzel, 2003). It has been researched by the professionals that the use of the semantic connectivity measurement tools does not necessarily optimize the search operations, but however helps in the measurement of the keyboard phrases to be targeted, and measures the keyword phrases to be included on the page related to particular topic (Chee, 2005). The semantic connectivity also helps in the measurement of the relationships of text on other high rankings sites or pages. Technology: Discussion The semantic connectivity measurement help in the search of the pages which provide the relevant themed links, although the source for this material is highly technical, SEO specialists need only know the principles to take away valuable information' (Studer, 2003). The Information Retrieval has several technical terms which are difficult to comprehend, 'these can be broken down and understood even by an SEO novice' (Pollock, 2004). In the software technology, 'the encoding of the meanings individually from the data and the contents files' (Pollock, 2004), and similarly the encoding of the meanings from the application code is achievable through semantic technology. The semantic technology has enabled the people and the machines to understand, comprehend, share and reason at the time of execution. The evolution of the semantic technology has been responsible for the implementation, variation and addition of the 'new relationships or interconnecting programs in a different way can be just as simple as changing the external model that these programs share' (Studer, 2003). It is essential to explain the meanings and relationships, and 'hard wired into data formats and the application program code at design time' (Menzel, 2003), therefore at the instance of making changes, there is need to amend the previously un-exchanged information i.e. 'two programs need to interoperate in a new way, the humans must get involved' (Michael, 2003). It is essential that the parties under off-line condition should explain and communicate among themselves the knowledge of the incorporated changes, and the extent of the changes, 'and then recode the data structures and program logic to accommodate it' (Pollock, 2004), in later stages the application of these changes have to be incorporated into the database and the application, it is fundamental to regard 'semantic technologies as meaning-centered' (Michael, 2003) with inherited features and modules for the 'auto recognition of topics and concepts, the extraction of the information and the interpretation of the meaning, categorization' (Michael, 2003). The semantic technology is capable to answer any given question, and the scope of the search is itself wide, therefore the technology is capable of searching for 'topics, concepts, associations that span a vast number of sources' (Pollock, 2002). Furthermore, the semantic technology has provided 'an abstraction layer above existing modules of the Information Technology that enables bridging and interconnection of data, content, and processes' (Michael, 2003), and the technology has proven to be an additional dimension which has provided 'far more intelligent, capable, relevant, and responsive interaction than with information technologies alone' (Menzel, 2003). The semantic technology has been responsible for the evolution of the World Wide Web, through this medium the web literature can be read in the format acceptable by the software agents, beside the natural language. The semantic technology has provisions for the exchange of information, and its integration (Chee, 2005). Technology: Holy Grail It is commonly acknowledged that, 'the holy grail is the achievement of fully automatic semantic interoperability among independently developed and heterogeneous agents' (Michael, 2003). The problem associated with the semantic connectivity has been responsible for the cryptography, and is intractable. The technology experts have incorporated many assumptions, 'then relax them one by one as technology progresses' (Menzel, 2003). The assumptions include, 'that all parties use a single language for representing ontology; that all members in a given exchange community use a single shared ontology, or a single shared upper ontology, with distinct domain ontology, or a shared interlingua ontology to map individual ontology to and from; that semantic mapping among ontology will be human-assisted, rather than fully automated; that mapping will be done between lightweight ontology, with a limited role for automated reasoning; that there is adequate infrastructure support for community repositories of both ontology and inter-ontology mappings'. The community related to the semantic connectivity has invested efforts which have focused upon the viability of the certain assumptions, for this purpose, the vendors of the ontology tool have supported the Web Ontology Language, which has been approved by the W3C as the 'standard ontology language for the web' (Michael, 2003). The assumptions also include aspects relevant to 'the theoretical extremes for semantic integration' (Bernstein, 2003). The creation of maps is considered to be 'a labor-intensive and error prone activity, even for humans' (Pollock, 2002), therefore many of the software related to the current mapping tools are semi-automated, the semi-automated nature of the tools have helped the users to communicate in an interactive manner. The cases where the accuracy is of fundamental importance, such an approach is expected to provide good results. The application of the linguistic and learning techniques assist in the mapping operation in automated manner. The use of the fully automated features has reflected series of error, 'the ontology that these techniques are used on tends to be less formal'(Pollock, 2002). The semantic connectivity requires the user to select the mapping tool which provides adequate accuracy and cost-effective automation, with reduced expenses towards the labor. The semantic connectivity comprises of the 'philosophy, a set of design principles, collaborative working groups, and a variety of enabling technologies' (Michael, 2003), there are remaining prospective future possibilities which have to be materialized and implemented. The major element associated with the semantic technology is the 'balance between using semantically lightweight representations versus semantically rich representations with formal axiomatizations' (Bernstein, 2003). The Tim Berners shared his opinion regarding the evolution and the implementation of the semantic technology as, 'I have a dream for the Web in which computers become capable of analyzing all the data on the Web including the content, links, and transactions between people and computers. A Semantic Web, which should make this possible, has yet to emerge, but when it does, the day-to-day mechanisms of trade, bureaucracy and our daily lives will be handled by machines talking to machines. The intelligent agents people have touted for ages will finally materialize' (Pollock, 2002). Such situation can happen in real if the humans are successful in the efficient usage of the internet connection and application software, and are successful in the interference of these two factors so that there is coherence between the respective outcomes in the form of the semantic technology. The semantic connectivity has the potential to offer benefit to the semantic publishing, the web feature of the semantic technology has the potential to 'revolutionize scientific publishing, such as real-time publishing and sharing of experimental data on the Internet' (Michael, 2003), and such an opportunity is under discussion by the W3C HCLS group's Scientific Publishing Task Force. It has been researched that the 'many semantic mapping, integration and/or interoperability projects take place more or less in a vacuum' (Michael, 2003), therefore if the communities seek the adoption of the semantic connectivity to emerge of gigantic scale, it requires the establishment of certain infrastructure which offer an opportunity for the easy registration usage and access of different items i.e. ontology, mappings between ontology, mapping languages, and translation engines. The vision of the semantic connectivity can be determined through the elaboration of the issue requests i.e. 'given this message, encoded using ontology A, please return a translated message encoded using ontology B, and please use this particular mapping and that particular translation engine' (Menzel, 2003). The infrastructure required for the practical development of such concept has yet to be evolved and revised, however some limited progress has been materialized in this regard. Dramatic Shift from Equity Based Partnerships The Research and Development has been success story for the technological companies, 'R&D Credit supports technological innovations through which the creation and the perseverance of the qualitative standards of living has been possible. It has been realized that 'many positive economic benefits are driven and motivated by performance of research and development, including increased revenue streams to U.S. companies' (Troy, 2001), which is further responsible for the enhancement of the company's ability to 'recruit employees, purchase capital goods, pay dividends to shareholders and contribute to a strong country tax base' (Troy, 2001). It is further evident that the loans which appear in the balance sheet are 'tantamount to local authority equity' (Troy, 2001), provided that the behavior of the authorities is precise and clear. In situations where close association exists between the authorities and the enterprises, such coordination provide the parties with relatively better understanding over western banker to decide over the issues pertaining to the future of the companies 'based on assessments of intangible assets' (Troy, 2001). It has been observed that the enterprises are assessed on western standards, ignoring the fundamentals of practices and behaviors. The diversification of the stock portfolio is responsible for the reduction in the risk, as it minimizes the potential loss from any single stock. The observation is applicable in cases of R&D based activities and acquisition, if the 'companies treated the businesses they acquire as investors treat stocks' (Montgomery, 1994), the failure to do so will lead towards the increase in the threshold of risk factor, in some of the cases the diversification of the business is considered to be risky activity. It is because the companies diversify on marginal basis, it is impossible for any of the corporate to diversify broadly and offer the sought-for security (Gibb, 2000). In contrast with the mutual funds, 'Mutual funds trade hundreds of stocks in many unrelated industries, with very little of the total portfolio in any single stock. By contrast, when a company expands into a new area, its portfolio consists of two stocks, typically 90 percent in the core operation and 10 percent in the new businesses' (Tirole, 2005). The diversification in majority of the cases is responsible for lower return and maximal risk factor. Researchers have observed that there is possibility of higher failure rates and lower returns for unrelated acquisitions than for related acquisitions. When the company acquires businesses in their own industry, it is observed that lowest failure rates and highest returns phenomenon occur. The reason why the diversification into unrelated business is considered to be risky is that the corporate is unfamiliar about the industry itself, and therefore the corporate is likely to overlook critical risk factors during due diligence. The corporate is expected to pay more towards the acquisition of strange industry, and will experience trouble to monitor the performance of the new acquisition. It is therefore important that the company conduct the process of due diligence in comprehensive and thorough manner, and the entire proceedings should be flawless. Often the company has appointed non-technical and irrelevant people to monitor the task force, and different departments after the R&D based activities, such appointments will affect the performance and growth of the business, and therefore the shareholder's investment is expected to be at stake. Diversification is popular and common practice in the American market. The responsibility of the manager is to increase the wealth of the professionals, and therefore if the diversification efforts are consistent it is expected that the professionals will be able to benefit (David, 2002). References 1. Montgomery, C. A. Corporate Diversification. Journal of Economic Perspectives. 2004. pp. 165 2. Tirole, J. The Theory of Corporate Finance. Princeton University Press. 2005 3. Yang, L. What Has Motivated Diversification: Evidence from Corporate Governance 2005. 4. Uner Kirdar and Leonard Silk. People: From Impoverishment to Empowerment. Oxford University Press. 1995. 5. Inge Kaul, Isabelle Gruenberg, and Marc A. Stern, Global Public Goods: International Cooperation in the 21st Century. Oxford University Press. 1999. 6. Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America. Cambridge University Press. 1991. 7. Robert O. Keohane. Governance in a Partially Globalized World: Presidential Address, American Political Science Association 2000. American Political Science Review 95, No. 1. 2001. 8. Michael Uschold, Michael Gruninger. Ontologies and Semantics for Seamless Connectivity. Institute for Systems Research Publication. 2003. 9. Pollock, J. Integration's Dirty Little Secret: It's a Matter of Semantics Whitepaper, The Interoperability Company. Prentice Hall Publication. February 2002. 10. Pollock, J. Adaptive Information: Improving Business through Semantic Interoperability, Grid Computing, and Enterprise Integration. John Wiley & Sons. 2004. 11. S. Staab, R. Studer. Handbook on Ontologies. Springer Publication. 2003. 12. Melnik, S., Rahm, E., Bernstein, P. Developing Metadata-Intensive Applications. Journal of Web Semantics Volume 1, Issue 1. 2003. 13. Gruninger, M. and Menzel. Process Specification Language: Principles and Applications. AI Magazine. 2003. pp. 24-74. 14. Louis Rosenfeld, Peter Morville. Information Architecture for the World Wide Web. O'Reilly Publication. 2002. Read More