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

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.     

When Predictions Fail: The Case of Unexpected Pathways Toward High School Dropout

This study examines childhood variables that tend to deflect life-course trajectories away from finishing high school. We examined unexpectedly graduating in the presence of three empirical risk factors (having a mother that did not finish high school, being from a single-parent family in early childhood, and having repeated a grade in primary school) and unexpectedly not graduating in the absence these same factors (low risk). The comparison groups comprised individuals who expectedly did not graduate (first case) and expectedly graduated (second case). We found that having experienced all three factors practically guaranteed not finishing high school, thus defining a crystal clear target group for policy. Without screening, intervention, and follow-up, individuals facing such cumulative risk are most unlikely to graduate. We also found a group of males and females that did not finish high school despite not having these three risk factors. These missed estimates become nontrivial once they are translated into a population-level statistic of lost human capital investments. Specific family and individual factors helped explain the unexpected life course toward not finishing high school, especially for low-risk males and females. Our results suggest policies that support childhood screening for attention-related difficulties and helping parents better understand supervision during adolescence .     

Foster care assessment: an exploratory study of the placement assessment process in Flanders and the Netherlands

Family foster care placement decision‐making has a weak scientific underpinning. The identification of clusters of foster children (groups of foster children with similar characteristics) can help improve decision quality. In this study, we investigated if foster children could indeed be clustered, which problems were identified at the time of placement and what might be the influence of placement history. Two clusters of foster children were found: (i) young children with coinciding parental child‐rearing incapacity and familial problems, and (ii) older children with child problems. At the time of placement, familial problems were more often identified in younger children with a placement history. These findings stress the importance of approaching foster care assessment as part of a dynamic decision‐making process. It is key to finding the most appropriate situation for the child. At the same time, it must be decided how the desired situation can be realized, wherein placement decisions are based on an appraisal of whether or not a foster placement is an appropriate solution. In conjunction with this, it needs to be decided how the parents can be supported towards reunification, or whether or not long‐term foster care is the best option for the child, and if so what conditions need to be met.     

Top Management Team Heterogeneity,Strategic Change and Operational Performance*

This study examines the role of top management team (TMT) heterogeneity in facilitating strategic change. Based on the upper echelons literature, we argue that heterogeneous management teams are better able to handle the simultaneous and conflicting demands of refocusing the organization strategically and keeping up operational performance. We expect this to be true only for teams that are heterogeneous with respect to factors directly related to job requirements, however. Data were collected from 92 full TMTs of hospitals in Spain that were confronted with institutional pressures that challenged their current strategies. In support of our hypotheses, the results show job‐related TMT heterogeneity moderates the relation between strategic change and operational performance. No moderating effect is found for non‐job‐related TMT heterogeneity.     

Testing Parameters in GMM Without Assuming that They Are Identified

We propose a generalized method of moments (GMM) Lagrange multiplier statistic, i.e., the K statistic, that uses a Jacobian estimator based on the continuous updating estimator that is asymptotically uncorrelated with the sample average of the moments. Its asymptotic χ² distribution therefore holds under a wider set of circumstances, like weak instruments, than the standard full rank case for the expected Jacobian under which the asymptotic χ² distributions of the traditional statistics are valid. The behavior of the K statistic can be spurious around inflection points and maxima of the objective function. This inadequacy is overcome by combining the K statistic with a statistic that tests the validity of the moment equations and by an extension of Moreira's (2003) conditional likelihood ratio statistic toward GMM. We conduct a power comparison to test for the risk aversion parameter in a stochastic discount factor model and construct its confidence set for observed consumption growth and asset return series.