Susana Morales

extern

Deciding how to allocate a fixed departmental R&D budget to its subdivisions can be challenging, especially when it comes to a consideration of the efficiency in the cross-functional management of R&D resources. This paper addresses the issue of operationally allocating budgets in a matrix organization and presents a pragmatic and short-term applicable budgeting process. Therefore, several basic calculation models lead to various allocation scenarios that enable an evaluation process for determining the most reasonable alternative. These models can be differentiated due to existing cost accounting views (cost center, cost category, cost object). The case study conducted in this paper has been designed as action research and aims at leading to a real life budget allocation in one R&D department at Daimler AG. In the course of this study, a transparent and pragmatic budget allocation process has empirically been examined, which can be adopted and standardized for similar cases. In a first application, the presented models as well as their evaluation process were considered useful for practice and substantiated the actual decision making by the R&D top management.