External Innovation Implementation Determinants and Performance Measurement: A Case Study from the Pharmaceutical Industry

Abstract

With an increasing amount of externally sourced innovations, a major success factor for innovation-dependent indus- tries such as the pharmaceutical industry is to successfully implement innovations from outside. Existing frameworks emphasize creating a strong climate for implementation by developing the learning capabilities of the organization, but there is still much to be learned about the process of implementing innovations that have been in-sourced by companies. As a research setting that is particularly innovation-driven and not well-studied yet, this study examines the key deter- minants for innovation implementation based on a case study in the pharmaceutical industry. The results of 25 expert interviews and a survey with 67 respondents led to the resulting framework and a corresponding performance meas- urement system. The results reveal the importance of supporting systems and show differences in perception of early and late Research & Development functions.

Share and Cite:

M. Coates and L. Bals, "External Innovation Implementation Determinants and Performance Measurement: A Case Study from the Pharmaceutical Industry," Technology and Investment, Vol. 4 No. 2, 2013, pp. 131-143. doi: 10.4236/ti.2013.42016.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] E. F. Schmid and D. A. Smith, “Pharmaceutical R & D in the Spotlight: Why is There Still Unmet Medical Need?” Drug Discovery Today, Vol. 12, No. 23, 2007, pp. 998-1006. doi:10.1016/j.drudis.2007.08.013
[2] M. Dickson and J. P. Gagnon, “Key Factors in the Rising Cost of New Drug Discovery and Development,” Nature Reviews Drug Discovery, Vol. 3, No. 5, 2004, pp. 417-429. doi:10.1038/nrd1382
[3] M. D. Rawlins, “Cutting the Cost of Drug Development,” Nature Reviews Drug Discovery, Vol. 3, No. 4, 2004, pp. 360-364. doi:10.1038/nrd1347
[4] T. Aronsson, M. A. Bergman and N. Rudholm, “The Impact of Generic Drug Competition on Brand Name Market Shares—Evidence from Micro Data,” Review of Industrial Organization, Vol. 19, No. 4, 2001, pp. 423-433. doi:10.1023/A:1012504310953
[5] J. Lexchin, “The Effect of Generic Competition on the Price of Brand-Name Drugs,” Health Policy, Vol. 68, No. 1, 2004, pp. 47-54. doi:10.1016/j.healthpol.2003.07.007
[6] PhRMA, “Profile Pharmaceutical Industry, Report,” 2010. http://www.phrma.org/sites/phrma.org/files/attachments/Profile_2010_FINAL.pdf
[7] National Science Foundation, 2009. http://www.nsf.gov/statistics/ nsf00301/expendit.htm
[8] “Pharmaceutical Research and Manufacturers of Ameri ca,” PhRMA Annual Survey, 1997.
[9] F. J. Cohen, “Macro Trends in Pharmaceutical Innovation,” Nature Reviews Drug Discovery, Vol. 4, No. 1, 2005, pp. 78-84. doi:10.1038/nrd1610
[10] O. Gassmann, G. Reepmeyer and M. Von Zedtwitz, “Leading Pharmaceutical Innovation: Trends and Drivers for Growth in the Pharmaceutical Industry,” 2nd Edition, Springer, Berlin, 2008.
[11] B. Cassiman and R. Veugelers, “In Search of Complementarity in Innovation Strategy: Internal R & D and External Knowledge Acquisition,” Management Science, Vol. 52, No. 1, 2006, pp. 68-82. doi:10.1287/mnsc.1050.0470
[12] L. B. Cardinal, “Technological Innovation in the Pharmaceutical Industry: The Use of Organizational Control in Managing Research and Development,” Organizational Science, Vol. 12, No. 1, 2001, pp. 19-36. doi:10.1287/orsc.12.1.19.10119
[13] J. P. Liebeskind, A. L. Oliver, L. Zucker and M. Brewer, “Social Networks, Learning, and Flexibility: Sourcing Scientific Knowledge in New Biotechnology Firms,” Organization Science, Vol. 7, No. 4, 1996, pp. 428-443. doi:10.1287/orsc.7.4.428
[14] R. Veugelers and B. Cassiman, “Make and Buy in Innovation Strategies: Evidence from Belgian Manufacturing Firms,” Research Policy, Vol. 28, No. 1, 1999, pp. 63-80. doi:10.1016/S0048-7333(98)00106-1
[15] J. C. Linder, S. Jarvenpaa and T. H. Davenport, “Toward an Innovation Sourcing Strategy,” MIT Sloan Management Review, Vol. 44, No. 4, 2003, pp. 43-49.
[16] L. Huston and N. Sakkab, “Connect and Develop—Inside Procter & Gamble’s New Model for Innovation,” Harvard Business Review, Vol. 84, No. 3, 2006, pp. 58-66.
[17] PWC PriceWaterhouseCoopers Report, “Pharma 2020 Vision 2009,” 2009. http://www.pwc.com/gx/en/pharma-life-sciences/index.jhtml
[18] K. J. Klein and J. S. Sorra, “The Challenge of Innovation Implementation,” Academy of Management Review, Vol. 21, No. 4, 1996, pp. 1055-1080.
[19] P. J. Holahan, Z. H. Aronson, M. P, Jurkat and F. D. Schoorman, “Implementing Computer Technology: A Multiorganizational Test of Klein and Sorra’s Model,” Journal of Engineering and Technology Management, Vol. 21, No. 1, 2004, pp. 31-50. doi:10.1016/j.jengtecman.2003.12.003
[20] K. J. Klein and A. P. Knight, “Innovation Implementation —Overcoming the Challenge,” Current Directions in Psychological Science, Vol. 14, No. 5, 2005, pp. 243-246. doi:10.1111/j.0963-7214.2005.00373.x
[21] J. W. Hedge and E. D. Pulakos, “Grappling with Implementation: Some Preliminary Thoughts and Relevant Research,” In: J. W. Hedge and E. D. Pulakos, Eds., Implementing Organizational Interventions—Steps, Processes, and Best Practices, John Wiley & Sons, London, 2002, pp. 1-11.
[22] W. R. Nord and S. Tucker, “Implementing Routine and Radical Innovations,” Lexington Books, Lexington, 1987.
[23] J. Robertson, T. Sorbello and K. Unsworth, “Innovation Implementation: The Role of Technology Diffusion Agencies,” Journal of Technology Management and Innovation, Vol. 3, No. 3, 2008, pp. 1-10.
[24] D. Linying, D. J. Neufeld and C. Higgins, “Testing Klein and Sorra’s Innovation Implementation Model: An Emprical Examination,” Journal of Engineering & Technology Management, Vol. 25, No. 4, 2008, pp. 237-255. doi:10.1016/j.jengtecman.2008.10.006
[25] K. J. Klein, A. B. Conn and J. S. Sorra, “Implementing Computerized Technology: An Organizational Analysis,” Journal of Applied Psychology, Vol. 86, No. 5, 2001, pp. 3-16. doi:10.1037/0021-9010.86.1.3
[26] R. T. Frambach and N. Schillewaert, “Organizational Innovation Adoption: A Multi-Level Framework of Determinants and Opportunities for Future Research,” Journal of Business Research, Vol. 55, No. 2, 2002, pp. 163-176. doi:10.1016/S0148-2963(00)00152-1
[27] P. Murray and D. Blackman, “Managing Innovation through Social Architecture, Learning and Competencies: A New Conceptual Approach,” Knowledge and Process Management, Vol. 12, No. 3, 2006, No. 132-143.
[28] J. L. Cummings and B. S. Teng, “Transferring R & D Knowledge: The Key Factors Affecting Knowledge Transfer Success,” Journal of Engineering and Technology Management, Vol. 20, No. 1-2, 2003, pp. 39-68. doi:10.1016/S0923-4748(03)00004-3
[29] V. Van de Vrande, W. Vanhaverbeke and G. Duysters, “External Technology Sourcing: The Effect of Uncertainty on Governance Mode Choice,” Journal of Business Venturing, Vol. 24, No. 1, 2009, pp. 62-80. doi:10.1016/j.jbusvent.2007.10.001
[30] U. Lichtenthaler and E. Lichtenthaler, “Capability-Based Framework for Open Innovation: Complementing Absorptive Capacity,” Journal of Management Studies, Vol. 46, No. 8, 2009, pp. 1315-1338. doi:10.1111/j.1467-6486.2009.00854.x
[31] R. B. Cooper and R. W. Zmud, “Information Technology Implementation Research: A Technological Diffusion Approach,” Management Science, Vol. 36, No. 2, 1990, pp. 123-139. doi:10.1287/mnsc.36.2.123
[32] D. P. Ely, “Conditions that Facilitate the Implementation of Educational Technology Innovations,” Journal on Research on Computing in Education, Vol. 23, No. 2, 1990, pp. 298-305.
[33] E. M. Rogers, “Diffusion of Innovations,” 4th Edition, Free Press, New York, 1995.
[34] P. L. Rogers, “Barriers to Adopting Emerging Technologies in Education,” Journal of Computing Research, Vol. 22, No. 4, 2000, pp. 455-472. doi:10.2190/4UJE-B6VW-A30N-MCE5
[35] E. Waarts, Y. M. Everdingen and J. Hillegersberg, “The Dynamics of Factors Affecting the Adoption of Innovation,” Journal of Product Innovation Management, Vol. 19, No. 6, 2001, pp. 412-423. doi:10.1016/S0737-6782(02)00175-3
[36] D. C. Ensminger, D. W. Surry, B. E. Porter and D. Wright, “Factors Contributing to the Successful Implementation of Technology Innovations,” Educational Technology and Society, Vol. 7, No. 3, 2004, pp. 61-72.
[37] F. D. Davis, “Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology,” MIS Quarterly, Vol. 13, No. 3, 1989, pp. 319-340. doi:10.2307/249008
[38] V. Venkatesh, M. G. Morris, G. B. Davis and F. D. Davis, “User Acceptance of Information Technology: Toward a Unified View,” MIS Quarterly, Vol. 27, No. 3, 2003, pp. 425-478.
[39] E. Van Raaij and J. Schepers, “The Acceptance and Use of a Virtual Learning Environment in China,” Computers & Education, Vol. 50, No. 3, 2008, pp. 838-852. doi:10.1016/j.compedu.2006.09.001
[40] G. N. Stock and M. V. Tatikonda, “The Joint Influence of Technology Uncertainty and Interorganizational Interaction on External Technology Integration Success,” Journal of Operations Management, Vol. 26, No. 1, 2008, pp. 65-80. doi:10.1016/j.jom.2007.04.003
[41] G. N. Stock and M. V. Tatikonda, “External Technology Integration in Product and Process Development,” International Journal of Operations and Production Management, Vol. 24, No. 7, 2004, pp. 642-665. doi:10.1108/01443570410541975
[42] G. N. Stock and M. V. Tatikonda, “A Typology of Project-Level Technology Transfer Processes,” Journal of Operations Management, Vol. 18, No. 6, 2000, pp. 719-737. doi:10.1016/S0272-6963(00)00045-0
[43] R. F. Zammuto and E. J. O’Connor, “Gaining Advanced Manufacturing Technologies’ Benefits: The Roles of Or ganization Design and Culture,” The Academy of Management Review, Vol. 17, No. 4, 1992, pp. 701-728.
[44] R. K. Yin, “Case Study Research: Design and Methods,” Sage Publications, Inc., Thousand Oaks, 2003.
[45] I. Nonaka and H. Takeuchi, “The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation,” Oxford University Press, New York, 1995.
[46] D. Silverman, “Doing Qualitative Research,” 2nd Edition, Sage Publications, Thousand Oaks, 2004.
[47] M. Miles and A. Huberman, “Qualitative Data Analysis,” Sage Publications, Thousand Oaks, 1994.
[48] D. Silverman, “Interpreting Qualitative Data: Methods for Analysing Talk, Text, and Interaction,” Sage Publications, London, 1993.
[49] D. G. Marquis, “The Anatomy of Successful Innovations,” Innovation, Vol. 1, 1969, pp. 28-37.
[50] R. Katz and T. J. Allen, “Investigating the Not Invented Here (NIH) Syndrome: A Look at the Performance, Ten ure and Communication Patterns of 50 R&D Project Groups,” R&D Management, Vol. 12, No. 1, 1982, pp. 7 20. doi:10.1111/j.1467-9310.1982.tb00478.x
[51] H. A. Simon, “Bounded Rationality and Organisational Learning,” Organisational Science, Vol. 2, No. 1, 1991, pp. 125-134. doi:10.1287/orsc.2.1.125
[52] J. M. Wondolleck and S. Yaffee, “Making Collaboration Work: Lessons from Innovation in Natural Resource Management,” Island Press, Washington DC, 2000.
[53] W. W. Powell, K. W. Koput and L. Smith-Doerr, “Inter organizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology,” Administrative Science Quarterly, Vol. 41, No. 1, 1996, pp. 116-145. doi:10.2307/2393988
[54] D. Littler, F. Leverick and M. Bruce, “Factors Affecting the Process of Collaborative Product Development: A Study of UK Manufacturers of Information and Communications Technology Products,” Journal of Product Innovation Management, Vol. 12, No. 1, 1995, pp. 16-32. doi:10.1016/0737-6782(94)00025-B
[55] K. H. Lai, E. Ngai and T. Cheng, “An Empirical Study of Supply Chain Performance in Transport Logistics,” International Journal of Production Economics, Vol. 87, No. 3, 2004, pp. 312-331.
[56] J. Ukko, J. Tenhunen and H. Rantanen, “Performance Measurement Impacts on Management and Leadership: Perspectives of Management and Employees,” International Journal of Production Economics, Vol. 110, No. 1-2, 2007, pp. 39-51. doi:10.1016/j.ijpe.2007.02.008
[57] A. Neely, J. Mills, K. Platts, M. Gregory and H. Richards, “Performance Measurement Design: Should Process Based Approaches Be Adopted?” International Journal of Production Economics, Vol. 46-47, 1996, pp. 423-431. doi:10.1016/S0925-5273(96)00080-1
[58] M. Smith and D. Smith, “Implementing Strategically Aligned Performance Measurement in Small Firms,” International Journal of Production Economics, Vol. 106, No. 2, 2007, pp. 393-408. doi:10.1016/j.ijpe.2006.07.011
[59] J. Schmitz and K. Platts, “Supplier Performance Measurement: Indications from a Study in the Automotive Industry,” International Journal of Production Economics, Vol. 89, No. 2, 2004, pp. 231-243. doi:10.1016/S0925-5273(02)00469-3
[60] R. S. Kaplan and D. P. Norton, “The Balanced Scorecard Measures That Drive Performance,” Harvard Business Review, Vol. 70, No. 1, 1992, pp. 71-79.
[61] J. Sandstr?m and J. Toivanen, “The Problem of Managing Product Development Engineers: Can the Balanced Score card Be an Answer?” International Journal of Production Economics, Vol. 78, No. 1, 2002, No. 79-90.
[62] R. Kaplan and D. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review, Vol. 74, No. 1, 1996, pp. 75-85.
[63] S. Schmidberger, L. Bals, E. Hartmann and C. Jahns, “Development of a Performance Measurement System for the Benchmarking of Ground Handling Services at European Hub Airports,” International Journal of Production Economics, Vol. 117, No. 1, 2009, No. 104-116.

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.