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Technological Innovation in the Pharmaceutical Industry: The Use of Organizational Control in Managing Research and Development

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  • Laura B. Cardinal

    () (Kenan-Flagler School of Business, McColl Building, CB #3490, The University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599-3490)

Abstract

The literature on the management of R&D professionals strongly advocates managing R&D projects on a project-by-project basis. This literature suggests that projects should be managed differently depending upon project characteristics such as risk, ambiguity, and nonroutineness. While the primary emphasis of the R&D professional literature has been on project teams, the purpose of this study is to examine the impact of organization-wide controls on innovativeness at the firm level.In a sample of 57 pharmaceutical firms, this study investigates the influence of organizational controls on the research and development activities of R&D professionals. This study is one of a handful of studies that simultaneously explores the use of input, behavior, and output controls. Two categories of innovation are considered as dependent variables: incremental innovations in the form of drug enhancements and radical innovations in the form of new drugs. Contrary to existing theory and hypotheses developed in this study, the results show that input, behavior, and output control enhanced radical innovation, and input and output controls enhanced incremental innovation.These results challenge several important features of existing models of R&D management and diverge from common beliefs about R&D management at the project level. While it is commonly accepted that incremental and radical innovation should be managed differently, the results of this study suggest otherwise. In this instance, the management of R&D activities may be considered more similar than previously thought.

Suggested Citation

  • Laura B. Cardinal, 2001. "Technological Innovation in the Pharmaceutical Industry: The Use of Organizational Control in Managing Research and Development," Organization Science, INFORMS, vol. 12(1), pages 19-36, February.
  • Handle: RePEc:inm:ororsc:v:12:y:2001:i:1:p:19-36
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    File URL: http://dx.doi.org/10.1287/orsc.12.1.19.10119
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    Citations

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    Cited by:

    1. Sébastien Brion & Caroline Mothe, 2016. "Organizational context and innovation ambidexterity: Is creativity the missing link?," Post-Print hal-01500124, HAL.
    2. repec:eee:rensus:v:82:y:2018:i:p3:p:2869-2879 is not listed on IDEAS
    3. Alfonso Gambardella & Claudio Panico & Giovanni Valentini, 2015. "Strategic incentives to human capital," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 37-52, January.
    4. repec:bla:stratm:v:38:y:2017:i:7:p:1455-1477 is not listed on IDEAS
    5. repec:bla:stratm:v:38:y:2017:i:8:p:1741-1752 is not listed on IDEAS
    6. Avimanyu Datta, 2016. "Antecedents To Radical Innovations: A Longitudinal Look At Firms In The Information Technology Industry By Aggregation Of Patents," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-31, October.
    7. Santiago-Rodriguez, Fernando & Dutrenit, Gabriela, 2010. "Determinants of PRO-industry interactions in pharmaceutical R&D: the case of Mexico," MERIT Working Papers 053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. repec:wsi:ijimxx:v:21:y:2017:i:03:n:s1363919617500220 is not listed on IDEAS
    9. repec:spr:opmare:v:10:y:2017:i:3:d:10.1007_s12063-017-0128-1 is not listed on IDEAS
    10. Fossett, Sarah J. & Wunnava, Phanindra V., 2017. "Active Ingredients: Exploring the Key Factors Affecting the Rising Cost of Developing New Drugs," IZA Discussion Papers 10817, Institute for the Study of Labor (IZA).
    11. Carolin Decker & Christina Günther, 2017. "The impact of family ownership on innovation: evidence from the German machine tool industry," Small Business Economics, Springer, vol. 48(1), pages 199-212, January.
    12. Fumihiko Isada & Yuriko Isada, 2015. "A Network Analysis Of Open Innovation In Drug Discovery," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 9(1), pages 94-110.
    13. Sebastian Goebel & Barbara E. Weißenberger, 2017. "Effects of management control mechanisms: towards a more comprehensive analysis," Journal of Business Economics, Springer, vol. 87(2), pages 185-219, February.
    14. Kayhan Tajeddini, 2016. "Financial Orientation, Product Innovation and Firm Performance — An Empirical Study in the Japanese SMEs," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 13(03), pages 1-30, June.
    15. repec:spr:manint:v:55:y:2015:i:1:d:10.1007_s11575-014-0230-7 is not listed on IDEAS
    16. Beverly B. Tyler & Turanay Caner, 2016. "New product introductions below aspirations, slack and R&D alliances: A behavioral perspective," Strategic Management Journal, Wiley Blackwell, vol. 37(5), pages 896-910, May.
    17. repec:spr:scient:v:102:y:2015:i:1:d:10.1007_s11192-014-1437-x is not listed on IDEAS
    18. Marlous Agterberg & Bart van den Hooff & Marleen Huysman & Maura Soekijad, 2010. "Keeping the Wheels Turning: The Dynamics of Managing Networks of Practice," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 85-108, January.
    19. Andrea Fried, 2017. "Terminological distinctions of ‘control’: a review of the implications for management control research in the context of innovation," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(1), pages 5-40, February.
    20. repec:gam:jsusta:v:10:y:2018:i:4:p:1094-:d:139775 is not listed on IDEAS
    21. Zeki Simsek & Justin J. P. Jansen & Alessandro Minichilli & Alejandro Escriba-Esteve, 2015. "Strategic Leadership and Leaders in Entrepreneurial Contexts: A Nexus for Innovation and Impact Missed?," Journal of Management Studies, Wiley Blackwell, vol. 52(4), pages 463-478, June.
    22. Markus Kreutzer & Jorge Walter & Laura B. Cardinal, 2015. "Organizational control as antidote to politics in the pursuit of strategic initiatives," Strategic Management Journal, Wiley Blackwell, vol. 36(9), pages 1317-1337, September.
    23. repec:eee:ijrema:v:25:y:2008:i:4:p:261-272 is not listed on IDEAS
    24. repec:eee:tefoso:v:123:y:2017:i:c:p:210-215 is not listed on IDEAS

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