Suppose Sparkman Corporation, a large pharmaceutical company, is concerned about the ability of its research and development department to develop profitable new prescription drugs. Approval for a new drug must go through a pre-clinical stage, three clinical trial stages, and then an approval process with Health Canada. It takes 6 to 15 years to meet all these requirements. Because the life of a patent is 20 years, and patents are applied for before the start of the pre-clinical stage, the company can then market the drug for about 5 to 14 years before the patent expires.35 once a patent expires, competitors can produce generic versions of the drug. Employees currently participate in profit-sharing plans, but the company wants to give additional bonuses to improve performance. Sparkman management decided to implement the balanced scorecard approach.
REQUIRED
a. Explain why monitoring and rewarding nonfinancial performance might be particularly important for Sparkman.
b. List one objective for Sparkman's learning and growth perspective.
c. List two performance measures for the objective you chose in Part B.