Exploration, Exploitation and Ambidexterity in the R&D of Pharmaceutical Companies

University essay from Lunds universitet/Företagsekonomiska institutionen

Abstract: Purpose: The purpose of this thesis is to find out what pharmaceutical companies are doing in exploitation and exploration to improve R&D productivity. This research will also investigate the implications of management and control theories in combining exploration and exploitation in the context of pharmaceutical R&D. Methodology: Multiple case study interviews. Theoretical perspectives: Management Control System (MCS) Lean Principles, Open innovation, exploration vs exploitation and ambidexterity Empirical foundation: The empirical foundation is based on the information gathered from interviews. By concluding and analyzing the feedback, we are enabled to combine the empirical results with management theories to (i) study what different organizations that are involved in pharmaceutical R&D are doing to increase productivity, (ii) investigate the interviewees’ attitudes towards ambidextrous approach and (iii) discuss the possibility, the advantage and practical implication of combining exploration and exploitation. Conclusion: In the case studies we found that big pharmaceutical companies are more ambidextrous while small and medium size organizations lean more to exploration. Also, all organizations in this research acknowledged the importance of being ambidextrous but also argued that only relatively larger organizations can afford the cost of paying dual attention. All interviewees agreed the potential benefit of combining exploitation and exploration and some examples were given. Furthermore, we contribute to the existing research by combining case studies and theories of LOC and MCS, as well as arguing that by utilizing different levers of control rationally, the tensions that result from applying different opposing strategies can be better balanced out in an R&D Pharma environment.

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