Importance of Research and Development to an Organization

Importance of Research and Development to an Organization

I am familiar with the Coca-Cola Company. Research and development enable management to analyze the projects they intend to invest in properly (Sekaran, 2016). Clear assessments and evaluation enable proper budgeting which ensures reduced costs regarding production, marketing, and distribution. It gives management a better understanding of the markets they deal with. They are also able to identify their competitors and the strategies they use in their operations (Barney, 2015). It enables management to put an allowance in the budget for accommodating changes likely to occur in the future. Therefore the budget will be flexible and more convenient.

The Level of Assignment of Finances in Coca Cola Company for Research and Development

The level is sufficient in that research and development does not take much of the firm finances. The company can strategize and know which department to allocate funds so that there will be no overspending and extravagance in any activities undertaken. The organization allocates 9% to research and development to give room for competitive differentiation and efficiency improvement (Hays, 2013). The marketing level of the company is therefore brilliant and competitive (Allen, 2014).

Variability with other Organizations

The percentage is variable as some industries do not have many competitors to worry about or the competitors in the market may already be established, and all they have to do is monitor and emulate their strategies (Barney, 2015).

Handling of Expenses and Departments Involved

Expenses in the Coca-Cola Company are handled sufficiently. They have analysts who ensure accuracy, timeliness, review, approval, posting, and payment of expenses in the company. Therefore, all the records are complete and well kept. The finance and accounts department handles all revenue and expenses so that the budgetary goals can be achieved (Barney, 2015). They monitor and review the expenses to evaluate performance and minimize costs.

Human Resource and Management of Expenses

The human resource initiates training programs for the employees on organizational resource management for production maximization which in turn leads to the achievement of budgetary and organizational goals (Cummings, 2014)


Allen, F. (2014). Secret formula: how brilliant marketing and relentless salesmanship made Coca-Cola the best-known product in the world. HarperCollins.

Barney, J. B. (2015). Looking inside for competitive advantage. The Academy of Management Executive, 9(4), 49-61.

Cummings, T. G., & Worley, C. G. (2014). Organization development and change. Cengage learning.

Hays, C. L. (2013). The real thing: Truth and power at the Coca-Cola Company. Random House Trade Paperbacks.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.

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