Building Organizational and Scientific Platforms in the Pharmaceutical Industry: A Process Perspective on the Development of Dynamic Capabilities

Abstract

In this paper, we examine the process of dynamic capability development in a large pharmaceutical firm. Using interviews with multiple managers at different organizational levels, we developed two narratives of the process of developing two separate dynamic capabilities in the same firm. We focus on three areas that prior research has shown to be critical in the early stages of the process of implementing new strategic initiatives: the cognitive orientations of key personnel, managerial action undertaken within the firm, and the firm's internal and external contexts. We provide evidence that managers undertake specific initiatives based on their own particular cognitive orientations, and that senior managers play a major role in the development of capabilities by imprinting the organization with their specific cognitive orientation and then orchestrating the multilevel organizational routines necessary for actualization of a capability. These replicable actions by senior management during the early stages of capability development can lead to the development of a capability that is not initially in the cognitive frames of lower level employees. Finally, we will show that internal and external contingencies have a profound impact on the decision to develop a capability, and to discontinue its development. Our findings thus suggest that the process of developing new capabilities shares common elements with other strategic initiatives.

Innovation practices in emerging economies: Do university partnerships matter?

“…Firstly, one of the main criticisms of the dynamic capabilities concept is that these capabilities are difficult to measure empirically, and the same is true for underlying operational processes such as innovation practices. In this study, we controlled the ''strategic characteristics'' using proxies that could represent the capabilities that enterprises require to grow and survive, based on their objectives, resources and barriers (De Fuentes and Dutrénit 2012;Dutrénit et al 2010;Easterby-Smith et al 2009;Narayanan et al 2009;Scuotto et al 2016). In the ESIDET survey, measured with a Likert Scale (1-4), we identified some proxies that captured the relevance of certain objectives for enterprises' innovation practices (e.g., to reduce variable costs, reduce fixed costs, reduce damage to the environment, comply with standards and regulations, and reduce the use of inputs) as well as the identification of certain obstacles for enterprises' innovation practices (e.g., economic risks, high innovation costs, access to financial sources, internal rigidity, lack of qualified personnel, lack of technology updates, lack of market information, legislative obstacles, and lack of customer responsiveness).…”

Perceiving ‘capability’ within dynamic capabilities: The role of owner-manager self-efficacy

“…Within the body of micro-foundations literature to which we contribute, there are arguments that idiosyncratic individuals (Felin and Foss, 2005;Hodgson, 2012) and their cognition (Narayanan, Colwell and Douglas, 2009;Schlemmer and Webb, 2008) can be integral micro-foundations of dynamic capabilities. This infers that perceived self-efficacy, as an idiosyncratic element of cognition that can influence individual intentions and behaviours (Boyd and Vozikis, 1994;McGee et al, 2009), could potentially underpin an enterprise's dynamic capabilities to develop its resource base.…”

It Takes a Quarter of a Century to Build a Dynamic Capability: Supplier Relations Management at Renault (1975-1999)

“…Pablo et al (2007) describe three phases that consist in managers identifying latent dynamic capabilities, enabling a use of these dynamic capabilities and managing the innovations in accordance with the needs of the organization. Narayanan et al (2009) identify four phases that are activation (identifying a need for a new capability); articulation (defining the nature of the capability and the implementation principles); mobilization (developing new routines) and implementation (carrying out the projects). Some authors focused on the learning mechanisms.…”

“…The concepts of hybridization, combination and saturation therefore become a tool which comes to complete sequential approaches like that of Pablo et al (2007) or Narayanan et al (2009). But most importantly, they help us go beyond current explanations that identify generic hierarchical factors.…”

“…As outlined in section 1.1., the question of building dynamic capabilities has been the object of a wide range of works, in which we find two major approaches. On the one hand, there are the works which focus on the processes and describe the phases of the construction of a capability (Pablo et al, 2007;Narayanan et al, 2009). And on the other, some works identify variables (human, organizational, financial, technological, etc.…”