We Went Too Far, and We Learnt From It: Management Control in the development of the Boeing Dreamliner

Research and development (R&D) represents a series of high-value activities that play a critical role in the future competitiveness of an organisation ( Bardhan, 2006 ; Emmanuel, Harris and Komakech, 2010 ; Nixon, 1998 ; Rilla and Squicciarini, 2011 ). Owing to the increasingly sophisticated and complex nature of modern technologies and the rising cost of R&D, it has become for many organisations unaffordable ( Hagedoorn, Link and Vonortas, 2000 ). Recent advances in information and communication technologies have spurred many organisations in this situation to opt for an asset-light business model to leverage supplier’s knowledge and to reduce the risks associated with innovation by sharing the upfront investment ( Archibugi and Iammarino, 1999 ; Bardhan, 2006 ; Chesbrough, 2010 ; Gassman, Enkel and Chesbrough, 2010 ; Grimpe and Kaiser, 2010 ). In some cases, organisations choose to outsource R&D to locations outside of their host country under the assumption that this will help them reduce costs or address problems related to trying to attract a skilled workforce or technological assets ( Rilla and Squicciarini, 2011 ). At issue for the managers working in these firms is how they can facilitate the coordination of R&D and the manufacture of integrated components when they outsource these tasks to suppliers. This chapter focuses on this issue. It provides an empirical examination of the management control systems (MCSs) that were designed to coordinate the development and manufacture of the Boeing 787 Dreamliner.