Managing R&D with Investor and Owner Expectations: The Role of Firm Size in Manufacturing Firms in Sweden

Sammanfattning

This thesis explores how manufacturing firms in Sweden manage the tension between the long-term nature of R&D investments and short-term performance expectations from investors and owners, with particular attention to how firm size shapes managers’ perceptions of the R&D-performance relationship and how the time-lagged nature of R&D is communicated. Guided by the Resource-Based View and signaling theory, the study adopts a qualitative multiple-case design. It adopts an abductive approach and a reflexive thematic analysis of semi-structured interviews with 11 participants from 9 manufacturing firms in Sweden, including both small-and medium-sized enterprises and large enterprises. The findings show that firm size influences how R&D is perceived and managed across different organizational conditions, but it alone does not fully explain the relationship between R&D investments and firm performance.Large enterprises benefit from greater resource availability and risk-bearing capacity but face structural inertia. In contrast, small and medium-sized enterprises benefit from agility and faster decision-making but remain vulnerable due to financial constraints and dependence on key individuals. The study also shows that firms communicate the time lag in R&D through signals such as design wins, patent portfolios, and vitality metrics, thereby translating technical uncertainty into understandable business logic for owners, investors, and other decision-makers. These findings contribute to understanding how manufacturing firms balance long-term innovation with short-term performance pressures and highlight the importance of internal and external communication in sustaining support for R&D over time.