Innovation does not have a standardmodel, it can have effects on products, technology and can also impact majorstructural changes in institutions.
At the heart of the innovation process isresearch and development (R&D), which is a fundamental asset in the processof creating and acquiring new technologies aimed at refashioning andrevolutionizing our lifestyle as well as our organizational modes. Facing thegrowing competition, some firms have to devote more funds to R&D activitiesto pioneer and innovate because they want to survive. Those firms are called“R&D intensive” for the huge amount of investment spending in research andbecause of their success we will take a look at their organizational structureand also give a typical example or form that these firms can take.
So, what arethe main steps of innovation in these “R&D intensive” companies and howdoes the implementation of innovation in these companies occur?The scope of this paper is to examine the innovation implementation inR&D intensive company and specially in pharma company. We will start withthe literature review of R&D structures as well as an example of company andthe main stages of the innovation process in this type of company. Then we willpresent the literature review of the implementation of innovation followed bythe presentation of our methodology. Finally, we will present the case study onthe Novartis pharmaceutical company, followed by a discussion and finally aconclusion. II- Literature review R&D intensive companies arecharacterized by the way they invest much more in R&D than other firms,with very high investment costs for each project (DiMasi, Grabowski, andHansen, 2014).
They require specialized knowledge (DiMasi, et al, 1991 andNanda and Kerr, 2015). And their investments generally have low successprobabilities (DiMasi et al, 1991 and 2013), but high payoffs conditional onsuccess (Grabowski, Vernon, and DiMasi 2002, 2004), and Nanda and Kerr, 2015) II-1 Structure of R&D company The organization of R&D activities has agreat influence on the ability of the company to execute its business andtechnological strategies. Studies have shown that the structure of R&Dcompanies include strategies to create value or the use of technology, but allthis also depends on the internal dynamics of the company as well as itsexternal environment (Tirpak, Miller, Schwartz, Kashdan, 2006). The structure includes among other things thestructural organization, the allocation of resources, the culture as well asthe R&D strategy and in fact the choice of a structure tends to reinforcethe objective pursued by a company.Existing structures are usuallydescribed as centralized, decentralized or hybrid (Tirpak, Miller, Schwartz, Kashdan, 2006). Thus, a company using acentralized approach will have a centralized structure that encourages risktaking and is oriented towards the long term, and a company that uses adecentralized structure will favour a decentralized approach that focuses onthe short-term market and focuses on project and business monitoring and thehybrid structure is a mix of the other two approaches reflecting theirstrengths and weaknesses.The structure is also influenced by theinnovation game which can reflects a preference for a radical innovation aswell as an open innovation with a challenge in terms of dispersion orintegration particularly the internalisation of R&D (Zedtwitz, M.
, &Gassmann, O., 2002) with some criteria like the location of the R&Dheadquarters, proximity to the market, access to scientific and engineeringknowledge and the competition monitoring. In relation to the dynamics ofexternal and internal affairs, the characteristic of R&D structures evolvesaccording to the innovation game and can be illustrated as follows (Tirpak, Miller, Schwartz, Kashdan, 2006): the globalizationwhich leads to transnational R&D while adapting to the local market, thediversification that leads the company to hybrid structures with multiplebusiness, the cycles of centralization and decentralization (decentralizationto grow market and centralization allows scientists to create networks), outsourcingfor cost efficiency and for efficiency and enables the company to focus on itsskills, and finally the technological information that allows the bridge betweentime and space through sharing of information.At all companies with the same R& D structures will practically have the same innovation game:biotechnology with technology races-game will just prefer a centralised approachand pharmaceutical company whith a science-based safe journey-game will prefera centralized approach with R&D alliances.The common feature of pharmaceuticalcompanies is the continuous innovation. These companies are globalized, highlydiversified with huge investment in R&D, and essentially defined byinnovation in the creation of new knowledge bases, the invention of new drugsand the improvement of existing drugs (Petrova, 2014). The innovation processthe main business of pharmaceuticalcompanies is the process of R&D of new drugs that is divided into fourstages: research, development, manufacturing and marketing (Raja & Sambandan,2015):research activities involve theidentification and validation of new goals, he is here to understand thedisease and identify the target molecule that could become a drugdevelopment activities includepre-clinical experimentation of the new drug to demonstrate its effectivenessand safety. there are three phases: in phase 1 the first clinical trials aredone on a small number of volunteers (ten to one hundred people).
In Phase 2,more patients (twenty to two hundred) are being tested and in Phase 3 clinicaltrials are being conducted on a larger number of patients (up to one thousand)to examine the efficacy and safety of the drug in the long-termRegulatory, manufacturing andmarketing activities: the drug that has passed all the clinical tests must beapproved by the regulatory agency to be manufactured and sold on the market. Thepatent and the marketing right guarantee twenty years of license to the companyallowing it to gain exclusivity of marketing rights, maximize revenue andfacilitate the amortization of costs related to R&D expenditures. II-2 Innovation implementationModern organizations have a constantneed to adapt to the changing environment and according to David Johnson (2001)the success of the implementation of innovation positively depends on threefactors: the framing that refers to policies and company’s strategy, the innovationenvironment that refers to the internal tactics of the environment(interdependence of the system components) and the innovation attribute thatrefers to the characteristics of innovation. On the other hand, Dewett, Whittier, & Williams,(2007) propose an innovation implementation framework influenced bythree factors: the organizational factor, the innovation factor and the humanfactor, which depend mainly on the manager’s willingness to innovate. Themanagement of innovation is carried out at three levels (strategic, tacticaland operational): the strategic level is focused on the setting of the mainobjectives of the company, the tactical level refers to the development of newproducts and services as well as the planning of the manufacturing process, atthe operational level it is a question of controlling the efficiency of themanufacturing process (Bartochowska & Szumigaj, 2015).
Igartua & Albors (2011)proposes a framework for implementing the innovation management process definedin eight blocks: the strategy, the process-project-portfolio block, the market,the network, the organization and measurement of innovation and its management. An implementation framework of technological innovationaddressing six different factors has been proposed by Klein & Knight(2005): the implementation policy to teach the use of employee innovation, theteam climate or climate organization so that employees see innovation as apriority and not a distraction to the realization of their work, theavailability of financial resources because implementation is an expensiveprocess, managerial support, learning orientation and long-term managerialpatience.Dwayne Simpson (2009) proposes aconceptual framework based on three main points: -The Training that refers to thelevel of importance of the need, its accessibility including the location ofthe costs and the planning, and the benefits in terms of accreditation.
-The Adoption: at this stageinnovation should be seen as having the quality and utility needed to respondto real circumstances, it must be adaptable, compatible with the strategiesused and fit the value system or the culture of the program treatment. -The Implementation: in this phase,leadership must be able to see innovation as effective, feasible in the contextof the program and sustainable in terms of staff skills and economicrequirements. III- MethodologyThe goal of our research paper is toshow the implementation of innovation in R&D intensive company.
Our initialapproach consisted on basis of the literature review to show that thesecompanies generally adopt the same type of structure depending on the innovationgame and the strategy aimed. A typical example of these companies is that ofthe pharmaceutical companies which, as we have explained above, areintrinsically linked to science with a high level of internalization of R&Dfavoured by cross-border mergers and acquisitions (Held, 2009), thus leading to creation of strategicalliances taking into account the centralized structure adopted. In thefollowing we will present a case study on the pharmaceutical company Novartiswhich counts among the best in the world. We will show how through herfoundation she is involved in the implementation of digital health innovationin Ghana. Our data is collected from publications and annual reports as well asinformation obtained from the official website of Novartis and the NovartisFoundation. Our results will be only descriptive and qualitative given thedifficulty of finding the necessary information about our research subject.
Tostudy the implementation process we will use the framework proposed by DwayneSimpson (2009) based mainly on training, adoption and implementation as we havepresented it. Then we will discuss the results of our case study, followed by aconclusion of our subject. IV- Case study and FindingsHistoryNovartis is a pharmaceutical andbiotechnology group founded in Switzerland on December 20, 1996 following themerger of a chemical company (Sandez) and a pharmaceutical companies (Ciba-Geigy),it was the biggest merger in the history of the industry. The company hascontinued to grow by acquiring companies such as: Hexal (2005), ProtezPharmaceutical (2008), Corthera (2009), Alcon (2010), Genoptix (2011), EncoreVision Inc. (2016) and Advanced Accelerator Applications (2017). The company’sactivities are segmented into Innovative Medicines (Oncology andPharmaceuticals), Alcon (for eyes care devices), Sandoz (for generics andbiosimilars) and the innovative engine Novartis Institute for Research (NIFR).The company aims to discover newproducts for healthcare and offer medical solutions to meet the changing needsof patients around the world by using a science based innovation approach.
Novartisis represented in more than 150 countries with more than 200 projects in itsclinical pipeline. Case studyThe Novartis Foundation is aphilanthropic organization committed to promoting models of health care topeople in low- and middle-income countries around the world. She works withmore than 35 partners around the world and has initiated in August 2010 theTelemedicine Program in Ghana.Implementation processThe Trainings activities: thetelemedicine project was inspired by a protocol developed by the Medgate SwissCenter for Telemedicine, an integrated ambulatory care provider.
During thisphase nurses, midwives and community health workers were trained in the use ofmobile technologies. In 2010 Medgate organizes workshops in Basel, Switzerlandfor stakeholders (including doctors and departmental representatives) tointroduce the concept of telemedicine and protocol systems for projectimplementation. In 2011 Medgade is organizing a four-day workshop in Ghana fornurses, midwives and community health workers and doctors; this workshopincluded training in formalized telecommunication by means of mobile phones andcomputer based support systems to provide a direct connection between communityhealth workers and practitioners with physicians working in the district hospitalin the region. The aim is to be able to have structured conversations betweenthe counterparts and the doctors to obtain precise answers to importantquestions in order to establish precise diagnoses to avoid, if possible, thepatient being transferred to the hospital while he or she could have beentreated on the spot.The Adoption: Villages and remotecommunities have limited access to health care, so patients have to travel longdistances (more than 40 km) (with roads that are not always practical) toreceive medical care.
This results in a high death rate and pregnant women areparticularly at increased risk. Medgate’s Telemedicine Program has been adaptedto local needs and requirements and is using Information and CommunicationTechnologies (ICT) resources to connect community health workers and medicalexperts through teleconsultation centers that operate 24 hours a day. Doctors,nurses and midwives coach and counsel community workers on how to treat theirpatients, helping them to better manage emergency cases that can be treated andresolved locally, avoiding thus unnecessary referralsThe Implementation: Antennas havebeen installed throughout the community with the participation of localtelecommunications companies (Airtel and Ericsson) as well as the GhanaMinistry of Telecommunications. These facilities have increased mobile networkcoverage and the necessary equipment including mobile phones have been madeavailable to facilitate communication exchanges. A hotline for emergencies wascreated, small closed groups of users for group communication were alsocreated, and all calls were free and supported by telecommunication companies(Airtel).
The installation of all these devices has been allowed by the grantsfor sustainable development allocated by the Novartis Foundation.