Strategies and performance of Canadian biotechnology firms: an empirical investigation

Technovation, 16(5) (1996) 231-243 Copyright 0 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0 166.4972/96 $15.00 + 0.00

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Strategies and performance of Canadian biotechnology firms: an empirical investigation Jaana Woiceshyn* Faculty of Management, University of Calgary, Calgary, Alberta T2N lN4, Canada Diana Hartel Public Service Commission of Canada

Abstract A survey of Canadian biotechnology firms investigated the impact of their context on their strategies and per$ormance. This paper reports two kinds of exploratory findings: a descriptive profile of the companies and their strategies for coping with business and political contexts, and statistical comparisons between three performance groups. Three aspects of the firms ’ business context were highlighted: high cost of product development, scarcity of capital, and lack of qualtjied people, especially managers. Although the firms tried to alleviate the cost and capital problems by engaging in collaborative alliances, small size, private ownership and the human resource problem indicated barriers to commercial success. Firms also perceived government action or inaction in the political context as a major obstacle, which they tried to overcome through various influence tactics. When firms in three performance groups were compared, the main dtflerentiators between higher and lower per$ormers were development of complementary skills outside R&D, and efSective transfer of organizational learning. Implications for managers and further research are discussed. Copyright 0 1996 Elsevier Science Ltd

1. INTRODUCTION Biotechnology is one of the ‘new’ rapidly developing technologies (along with, for example, microelectronics) that have dramatically changed the landscape of competition in many industries. New firms, new products, and new, more efficient methods of production have emerged. Industry structures are changing through strategic alliances and new entries. Despite the similarities to other emerging technologies, biotechnology constitutes its own context that

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poses specific problems for firms competing in the field. Firms pursue certain strategies and achieve certain levels of performance, influenced by their context. Pettigrew (1985) and Pettigrew and Whipp (199 I), for example, have demonstrated the impact of firms’ political, economic and business contexts on their strategy. As a unique setting, the biotechnology industry provides an opportunity to observe the importance of context to firms’ strategy. Biotechnology has been around for a long time, as it simply involves “the use of living organisms, or substances obtained from living organisms, to make products of value to man” (Marx, 1989, p. 1). How-

Techah

Vd. 16 No. 5 231

1. Woiceshyn and D. Hartel

ever, two discoveries in the 1970s (i.e., recombinant DNA and hybridoma techniques) made a revolution that led to the emergence of a ‘new’ biotechnology (Sharp, 1985). Possibilities provided by these new techniques include, to name but a few, new or less expensive cures for human diseases through improved production of therapeutic proteins (e.g., insulin, interferon) (Senker and Faulkner, 1992), and genetic manipulation to introduce new characteristics in crops and animals (e.g., frost resistance, enhanced milk production) (Crafts-Lighty, 1986, p. 2). Unlike many other high-tech industries, the biotechnology field is characterized by a very costly, very long, and regulated product development process similar to that of the conventional pharmaceutical industry. For example, bringing a biological drug into the market can take ten years or longer and cost over 100 million dollars (Fildes, 1990). Several factors contribute to such a lengthy, costly process. In an emerging science-based field such as biotechnology, development of commercially viable products from initial scientific ideas usually developed at universities requires time (Chakrabarti and Weisenfeld, 1991; Pisano et al., 1988; Weisenfeld-Schenk, 1994). Another cause of delay in product development is the government. Regulations require lengthy testing of biotechnology products, which partially explain the ten-year-long development process. Government approval and licensing agencies also create bottlenecks as they often do not have the capacity to handle the increasing number of biotechnology applications. The public’s fears (e.g., about genetically altered food products), channelled through effective lobbying, have led to stricter regulations that further delay the development cycle of new products. The government can also affect biotechnology firms by controlling patents (Fildes, 1990). A final factor affecting the length and the cost of product development, and differentiating biotechnology firms from other high-tech companies, is the financial and human resource requirements. In a field with so much uncertainty about outcomes (due, for example, to the dependence on basic sciences and vagaries of the regulatory approval) persuading investors can be difficult, particularly when the payoff may be ten years or even further in the future. Finding qualified employees and managers in such a new field can also be a problem for biotechnology firms (Fildes, 1990; Weisenfeld-Schenk, 1994). While many biotechnology firms resemble major pharmaceutical firms in the length, cost and regulation of their product development cycle, they also share characteristics with entrepreneurial high-tech companies. Most biotechnology firms are relatively small and have very limited resources. This, combined with the long and costly product development process, makes the risks companies face enormous, as they rarely can spread them across many projects. The high

level of risk makes the firms’ choices regarding strategy critical, particularly on issues such as sources and cost of funding, choice of products and markets, and size and form of their organization (Going and Winter, 1990). Biotechnology is a special context that poses certain requirements for firms to be successful. In addition, location in Canada provides another dimension to the context of biotechnology firms. For example, the mere geographic location far away from major research centers and other biotechnology firms exacerbates the problem of finding qualified management and staff (ibid.). Raising funding, at least initially, is also doubly difficult for Canadian biotechnology firms, as the venture capital industry is not as developed as, for example, in the United States, and Canadian investors are generally considered more conservative and risk-averse (ibid.). This study was conducted to explore the financial, product-market and organizational strategies of Canadian biotechnology firms to better understand how they cope with their particular context and how it affects their performance. Also, the obstacles and problems posed by the biotechnology firms’ context were investigated to discover what are the most important barriers to success. Finally, potential predictors of the biotechnology firms’ performance were also explored.

2. STRATEGIES FOR SURVIVAL, GROWIR AND PERFORMANCE IN HIGH-TECH MARKHS Typically, success factors in high-technology industries, and in product development in particular, are classified into three broad categories: strategy, management characteristics, and the competitive environment (Brown and Eisenhardt, 1995; Capon et al., 1992; Sandberg and Hofer, 1987). One of the foremost strategy factors cited, particularly in biotechnology, is the formation of strategic alliances with other, previously established firms for the purposes of either R&D, manufacturing or marketing. Studies demonstrate that biotechnology firms, in particular, benefit from such alliances (Fildes, 1990; Burrill and Lee, 1990; Hamilton and Singh, 1991; Shan et al., 1994). Alliance partners provide funds and manufacturing or marketing expertise, or access to distribution channels. All these improve the likelihood of success of biotechnology products. There is also some evidence that collaboration, not only with large, established firms but with universities doing basic research in areas relevant to the firm’s activities, is beneficial to the firm’s growth and performance (Pisano et al., 1988; Gambardella, 1992; Woiceshyn, 1993). While other strategy factors, such as the products’ fit with market needs and firm competences, have also been explored (e.g., Brown and Eisenhardt, 1995),

Strategies and perfomance

very little attention has been given in the literature to financing strategy. Often the venture capitalists’ perspective is adopted, and the results of these studies indicate that funding is given to firms that can show performance milestones (Tyebjee and Bruno, 1984) and indicate competence in marketing, the management team, technology and finances (Roberts, 1991). Studies focusing on the high-tech firms themselves mostly indicate that availability of financing is critical for their survival and success (Blakely et al., 1987); however, few provide detailed analysis about sources and cost of funding. Yet, for biotechnology firms that need significant amounts of capital for long periods of time, these issues are critical.

Another factor that mediates high-tech firms’ financing strategy and needs is government policy and support. Again, relatively little is known about the role these play in the survival and performance of firms. Although some studies found government support beneficial (ibid.), some evidence indicates that government subsidies and support (other than contracts for goods and services) are actually harmful for the long-term success of firms, as it can stifle firms’ own initiatives and bring a false sense of security (Woiceshyn, 1993; Doutriaux, 1991). In the biotechnology field in Canada, the government’s role seems to be particularly critical, as venture capital is not as easily available and investors tend to be conservative (Going and Winter, 1990).

Management characteristics cited in the success and survival of high-tech firms include management skills (Brown and Eisenhardt, 1995), relevant experience (Roure and Maidique, 1988), and the completeness of the management team (ibid.). These characteristics seem particularly relevant to biotechnology firms, which often have scarce resources that need to be stretched for long periods of time before any payoff. In these kinds of circumstances, the management team’s ability can become the differentiating factor between success and failure (Dutton, 1995).

We have already drawn attention to the third success factor in high-tech markets, i.e., the competitive environment, by discussing the context of biotechnology firms. Previous research indicates that firms that target large or growing markets or markets with little competition with their new products will perform better than those firms which do not (Brown and Eisenhardt, 1995). The study reported in this paper, however, did not focus on the impact of competitive environment on performance but rather investigated what strategies firms adopted to cope with their particular context. Therefore only the financial, productmarket and organizational strategies are reported.

of Canadian bioteddogy

hs

3. MEIHODOLOGY 31. Sample ml data collection A sample of 166 Canadian biotechnology firms was drawn from the following sources: 1988 Canadian Biotechnology Source Book, Canadian Biotech ‘91, Genetic Engineering and Biotechnology Firms: Worldwide Directory 1989/90, and Canadian Biotechnology Directory 1990/91. The questionnaire described below was mailed to the presidents of these firms, and 44 questionnaires (27%) were returned. Seventeen of the firms (10%) informed us that they were either not doing biotechnology work or were ceasing to conduct business. Fourteen questionnaires (8%) could not be delivered. When the 44 respondent firms were compared to the population of 166, no significant non-response bias was detected. Information on company size and age was available for 135 of the 166 firms in the population. The medians for the population were 11 employees (size) and 8 years (company age), in comparison to 13 employees and 7 years for the firms in the sample. Information on the focus of activities was available for all 166 firms. Again, when this was compared to respondents, no significant differences were detected: 3 1% of the population focused on either human therapeutics or diagnostics, while 32% of the respondents did. Plant agriculture was the main focus of 26% of the population, whereas 18% of the respondents reported it as their main activity. A relatively small number of firms focused on animal health and animal agriculture: 7% of the population, and 9% of the respondents. 35% of the population and 40% of the respondents were classified in the ‘other’ category. To ensure that the sample included only biotechnology firms, the 44 returned questionnaires were screened according to three criteria. Only firms that were independent companies or independent subsidiaries, founded between 1971 and 1988, and focusing their activities on biotechnology, were included. One firm was excluded from analysis because it was started before 1971.’ Biotechnology focus was operationalized as the utilization of genetic engineering, enzymes, monoclonal antibodies and cell culture and fermentation as opposed to conventional techniques. Two firms were excluded based on this criterion. These exclusions left us with a final sample of 41 Canadian biotechnology firms. 3.2. The questionnaire The questionnaire was designed to collect two kinds of data: a descriptive company profile, includ’Two firms founded prior to 197 1 were retained since both based their activities on biotechnology. Since these two firms were outliers with regard to their age, their age was substituted by the highest value for age that was in the normal range - i.e., the age of the oldest firm in the sample, which was 240 months (20 years).

Tedtttovatkn Vd. 16No. 5 233

J. Woiceshyn and D. Hartel

ing items such as age, size, and initial capitalization; and exploratory data, such as strategies of the biotechnology firms. On the basis of a review of previous research on biotechnology firms and success of product development, several variables measuring strategies contributing to success were identified. Questionnaire items were drafted to represent these variables. Additional items were also derived from our field research on biotechnology firms. The items were written to represent issues considered to be of strategic importance to biotechnology firms, such as ownership and funding arrangements, alliances with other firms, collaboration with universities and research focus. We also assessed completeness of the management team, perceived skills and competences, organizational learning and obstacles encountered, in order to discover whether chosen strategies could be also carried out. The majority of items were statements which asked the respondent to describe his or her firm by circling a number on a ten-point scale, ranging from ‘not at all’ to ‘very much’. The item pool was then screened by a panel of three expert judges familiar with the innovation and technology literature. The judges rated the items on a three-point scale (“The question is well representarepresentative of the tive-representative-not construct”). In order for an item to be included in the pilot questionnaire, at least two judges had to rank it ‘representative of the construct’ or better. A total of 81 items from an initial item pool of 233 were retained after this stage. Suggestions for improvement were also solicited from the expert judges, and their suggestions were incorporated in the pilot questionnaire. The pilot questionnaires were completed by the presidents of eight biotechnology firms who had participated in earlier field studies. Correlation analyses were conducted and all composite items (i.e., several items measuring one construct) with item-to-total correlations of 0.6 or lower were dropped. Similarly, Cronbach’s alpha reliabilities were calculated and all composites with reliabilities less than 0.7 were excluded. Seventy-four items were retained following the pilot analysis.* The revised questionnaire was then evaluated by one president of a biotechnology firm who suggested minor wording changes to a few questions. Having gone through this validation process, the final questionnaire was then mailed out. Company presidents or general managers completed 62% of the returned surveys, while the remainder were completed either by vice presidents of Research and Development (19%) or other managers (19%), such as vice presidents of Finance. Having managers other than the president fill out the questionnaire did not seem to pose a problem as these

‘The present study reports results pertaining questionnaire items.

234

TechnovationVd.16No.5

to a subset of the 74

were small firms (the median number of employees was 13), and all members of the management team were therefore likely to have a grasp of overall operations. This was evident in our field interviews: several managers were interviewed, and they all showed good grasp of the total operations, regardless of their positions in their firms.

3.3. The dependent measure The dependent variable in the exploratory part of this study was the firms’ performance, operationalized as the progression in a firm’s sources of financing, or value-added progress. Most biotechnology firms start up with financing from research contracts, risk capital (such as a private placement), government grants, or with a combination of these. At this stage, very little value has been added since almost no revenue is being generated. At the next stage, the firm starts to generate revenue by licensing out technology or products. Then it might start selling research products (e.g., monoclonal antibodies) or set up ancillary businesses (e.g., contract manufacturing). In the next stage firms will have developed final products, but only for small markets. Thus, sales revenues will be modest. The apex of performance - or at least the final ascent is reached when a firm launches products which achieve significant sales. This kind of division between the value-added stages follows closely an industry expert’s decription of the process (Taunton-Rigby, 1988).

Performance was assessed by having respondents rank their sources of funding. Those firms that ranked significant product sales as their primary source of funding were labelled to have achieved ‘big sales’ (n = 15). Those firms that ranked either licensing out technology or products, selling research products, ancillary businesses or selling small market products as their primary source of revenue were labelled to have achieved ‘some sales’ (n = 16). Firms that ranked either research contracts, government grants or risk capital as their primary source of funding were labelled to have ‘no sales’ (n = 10).

Traditional performance measures such as profits could not have been used to capture value-added progress as only a few of these firms were profitable yet. Also, a direct comparison of sales figures between firms of different size and with different target markets would not have yielded any meaningful differentiation between firms that were more and less advanced in their value-added progress. Furthermore, our interviews of 22 managers in 10 firms indicated that the managers were very well aware of the steps in the value-added process, and differentiated clearly, for example, small market product sales from significant product sales.

Strategies and petfomance

4. RESULTS This paper reports two kinds of results, descriptive and exploratory. The descriptive results include a profile and strategies of the companies. The exploratory section reports results from analyses of variance between the three performance groups.

41. Description of Canadian biotechnology firms Most of the companies surveyed (32 firms or 78%) were founded between 1971 and 1986, while only nine (22%) were founded between 1987 and 1989. There were no responses from companies founded later than 1989. The mean age of companies was nine years and eight months. When measured by the number of employees, the majority of the firms (33 or 79%) were small, employing fewer than 50 people. Only two firms (5%) had more than 300 employees, and the median number of employees was only 13, and the mean 60. When measured by the amount of initial capitalization, the size of the firms was more varied, ranging from 1000 to 14 million Canadian dollars. The mean initial capitalization was Can$2.3 million. The focus of the companies’ activities varied widely, indicating a broad range of applications of biotechnology. Seven firms (17%) stated that their primary focus was human therapeutics, while five firms (12%) focused on human diagnostics. Plant agriculture was given as the primary focus by eight firms (20%), while four firms (9%) focused on animal health or animal agriculture. The largest group of the firms seventeen (42%) - indicated their primary focus to be ‘other’, including such varied areas as specialty chemicals, biomass conversion, pesticides, forestry, waste management, mineral leaching, food processing, enzymes, etc. The most common ‘other’ focus was plant work (such as plant micropropagation) that in the respondents’ judgement did not fit under the conventional definition of ‘plant agriculture’. Five firms (12%) indicated this as their primary focus. The second most common ‘other category’ was fermentation (four firms or lo%), and the third was enzymology (three firms or 7%). Descriptive statistics for the firms surveyed are presented in Table 1. The central importance of R&D to biotechnology firms is reflected in the number of products that they had under development (from basic research to product registration and launch). This number varied from 1 to 20, the mean being 4.5. The emergent nature of the industry is indicated by the number of products generating sales revenue: the mean was 5.9, the median only 1, and the range was from 0 to 120 (Table 1).

TABLE I. 1991)

Characteristics

of Canadian biotechnology fims

of Canadian

biotechnology

Characteristic

Number of firms (%)

Year founded: 1971-80 1981-86 1987-89

15 (37%) 17 (41%) 9 (22%)

Number of employees: fewer than 50 51-135 136-299 over 300

33 (79%) 3 (7%) 4 (9%) 2 (5%)

tinns (as of October

Mean 9 years 8 months (age)

60

Initial capital

Range: $1-14 million

Focus of activities: Human therapeutics Human diagnostics Plant agriculture Animal health/agriculture Other, such as: specialty chemicals, biomass conversion, pesticides, forestry, waste management, mmeral leaching, food processing

7 5 8 4 17

$2.3 million

(17%) (12%) (20%) (9%) (42%)

Number of products under development

Range: &20

4.5

Number of products generating sales revenue

Range: 0-I 20

5.9

4.2. Stntegies of Canadian biotechnology firms Strategies of the firms surveyed are described in three different categories: finance strategy, product market strategy, and organizational strategy. These are the areas posing the most important strategic issues for biotechnology firms from the perspective of managers (Going and Winter, 1990; Burrill and Lee, 1993). They also indicate how biotechnology firms are coping with their specific context. The respondents were asked about their companies’ strategies in the first year, at present, and what they expected in five years, in order to detect any trends. 4.2.1. Finance strategy Three aspects of finance strategy were investigated: the ownership status of the firms, their sources of revenue, and the extent of government support they received (Tables 2 and 4). All three are indicators of the firms’ ability to survive and finance the long development process before products are ready for commercialization. With regard to ownership status, the majority of the surveyed firms (26 or 63%) were private and wholly independent Canadian-owned firms. Even more firms had started in this group (33), and only half of them (13) were planning any changes in their status in the next five years. The next largest group (6 firms or 15%) were either divisions or subsidiaries of Canadian or foreign firms. The third larg-

TedmowtionVd.16 No.5 2%

TABLE 2.

Financing strategies of Canadian biotechnology

First year

NOW

Ownership status: Private and independent Canadian-owned company Independent division or subsidiary Private and independent foreign-owned company Publicly traded company

33 (83%) 3 (7%) 1 (2%) 2 (5%)

26 (63%) 6 (15%) 2 (5%) 5 (12%)

24 (58%) 8 (19%)

10 (24%) 16 (39%)

6 (17%) 8 (19%)

5 (12%)

15 (37%)

23 (56%)

est group consisted of publicly traded companies (5 firms), and the last group foreign-owned companies (2 firms). A number of firms were expecting to make changes in their ownership strategies, and most of them were aspiring to go public. This tendency for private ownership raises a concern about the firms’ ability to finance their activities, particularly when we know that there is a shortage of venture capital in Canada and that private investors tend to be conservative (Going and Winter, 1990). Table 2 summarizes ownership strategies of the firms. There was no statistically significant pattern observed between different ownership strategies and the value-added progress of companies, but ownership strategies were related to company type. Companies developing human therapeutics were more likely to be publicly traded, subsidiaries or foreign-owned, or at least planning to move into these groups, as opposed to being independent Canadian-owned firms that were not planning any changes. In contrast, firms involved in animal health and animal agriculture were more likely to be independent Canadian companies with no plans to change, as opposed to being publicly traded, subsidiaries or foreign-owned (Table 3). The second aspect of financing strategy for the biotechnology firms was their primary source of revenue, which also reflects their value-added progress (see Table 2). Firms whose primary source of funding is either research contracts, government grants or risk capital, or a combination of these, have not really Ownership strategy and company type

Canadian company, no change To go public/to become a subsidiary Public or foreign company or subsidiary Chi-squared: df=4:p<0.10

236

In 5 years

Aspect of strategy

Primary source of revenue: Research contracts/government grants/risk capital Licensing technology or products/selling research products/ ancillary businesses/small market sales Significant product sales

TABLE 3.

firms

value = 8.836

Te.dmomtionVd.16Wo.5

Human therapeutics

Plant agriculture

Animal agriculture

1 6 6

4 2 5

5 1 1

13 6 5 13

(37%) (15%) (12%) (37%)

added any value as they are not generating sales revenue yet. Ten firms (24%) belonged to this category, as opposed to 24 (58%) in their first year. Only six of these firms intended to remain in this category after five years. The second group (16 firms or 39%) had made modest value-added progress: they had moved from the first stage into the next by starting to generate some revenue either through licensing out their technology, selling research products such as monoclonal antibodies, or establishing ancillary businesses such as contract manufacturing. Some changes in the numbers of this group were projected, as eight firms intended to make further value-added progress, and the rest planned to remain in it during the next five years. The third group consisted of firms that were generating significant revenues through product sales. There were 15 companies (37%) in this group, although 23 firms (56%) intended to achieve significant sales within the next five years. The source of revenues does not seem as significant a concern as the private ownership of most of the firms and the attendant scarcity of funds, as three-quarters of the firms have made at least some value-added progress and the average age of the firms is over nine years. Table 2 summarizes the data on sources of revenue. Government support was also investigated in order to determine how much the firms relied on it as opposed to private funding, assuming that excessive dependence on government would be detrimental to their success (cf. Woiceshyn, 1993; Doutriaux, 1991). We also asked the firms about the extent of their relations with government as another indicator of their dependence, and those results are reported here as well. Only seven firms (17%) reported that they did not receive any government support in the form of grants or low-interest or no-interest loans. However, only three firms (7%) said they received ‘very much’ government support. On a scale ranging from 1 (‘not at all’) to 10 (‘very much’) the mean response was 5.43, with a standard deviation of 3.14, indicating fairly solid financial support from the government.

Strategies and performance of Canadian biotedmw

This can be a concern if the firms need the govemment support in the long term and cannot succeed on their own, particularly since the Canadian markets for biotechnology products are relatively small and competition against foreign firms becomes necessary (Going and Winter, 1990). Table 4 summarizes the data on government support. When asked whether they cultivated relations with the government by participating in various govemment committees, 22 of the firms (52%) indicated no participation, while one firm was involved in as many as ten committees. The average number of committees in which the firms participated was 1.48 (the standard deviation was 2.3 1). While the firms did not participate greatly in government committees, most of them indicated that their senior managers or other employees maintained relations with government officials. The mean response was 6.65 on a scale of 1 to 10, with a standard deviation of 2.49. Only one firm indicated that no relations with government officials were maintained, while six firms (14%) said they did this ‘very much’. The government has a significant control over the biotechnology firms through its regulatory agencies and the patent office. Therefore attempts to keep the government informed about the industry’s requirements by maintaining relations are probably beneficial for the biotech firms’ longterm performance (Table 4). 4.2.2. Product market strategy An aspect of the firms’ product market strategy that has been of great concern to managers was examined: the extent to which they engage in collaboration or alliances with other firms (Going and Winter, 1990) and universities (see Tables 5 and 6). Collaboration or alliances with others are particularly relevant to biotechnology firms in order to share the costs and risks of development as well as for pooling expertise (most small biotechnology firms do not have strong manufacturing and marketing skills, for example). Cost and risk sharing is especially important in Canada, where funding is more difficult to obtain than in the USA.

firms

with other firms, meaning that they were collaborating in research and development, marketing and manufacturing functions. Twenty-four firms (58%) expected to achieve full collaboration within the next five years. Twenty firms (49%) were engaged in partial collaboration, cooperating in R&D, marketing and/or manufacturing. However, only eleven firms (27%) intended to have partial cooperation within the next five years. Finally, nine firms (22%) were not engaged in any cooperation with other firms. Only four firms had no plans to do so within the next five years. The median number of collaborative partners was two for both the R&D and marketing functions, and one for manufacturing collaborations. Most collaboration with other firms was in R&D: 29 firms (67%) engaged in this kind of cooperation. Twenty-one firms (50%) collaborated in marketing, and fifteen (36%) in manufacturing. However, the majority of the firms (84%) intended to engage in marketing collaboration within five years, and almost two-thirds of them (64%) intended to have manufacturing collaboration. This extent of collaboration is potentially a good sign for the Canadian biotechnology firms’ ability to succeed as it enables sharing of resources and expertise and thus facilitates product development. Table 5 summarizes these data. Not only other firms but universities are important collaborators with biotechnology firms because the firms’ progress is often dependent on the basic discoveries made at universities. By working jointly with universities, firms can not only save money but can also leapfrog their competition by being the first to commercialize products based on ideas discovered in university laboratories. When asked to what extent they collaborated in basic research with universities, only five firms (11%) replied ‘not at all’, while eight firms (18%) indicated ‘very much’ collaboration. The mean response was 6.02 with a standard deviation of 3.30. When the same question was asked regarding TABLE 5.

Collaboration

with other firms Now

Within 5 years

Ten firms (24%) were engaged in full cooperation TABLE 4.

Government

support and relations No. of firms

%

Mean

SD

Extent of support: not at all very much

I 3

17.1% 7.3%

5.43

3.14

Relations with government: not at all very much

1 6

2.3% 14.0%

6.65

2.49

Participation in committees: 0 committees 10 committees

22 1

52.4% 2.4%

1.48

Extent of collaboration: full (R&D, marketing, manufacturing) partial (either R&D, marketing and/or manufacturing) none missing Collaboration partners: R&D Marketing Manufacturing Collaboration

2.31

by area:

R&D Marketing Manufacturing

10 20 9 2

(24%) (49%) (22%) (5%)

24 (58%) II (27%) 4 (10%) 2 (5%)

Median number of partners 2 2

I NOW 29 (67%) 21 (50%) 15 (36%)

Within 5 years n/a 36 (84%) 27 (64%)

TechnovtiVd.16 No.5 237

I. Woiceshyn and D. Ha&l

product development (as opposed to basic research), seven firms (16%) indicated no collaboration at all, while six (14%) said they were ‘very much’ engaged in collaboration with universities. Again, this level of collaboration is a positive indicator of the firms’ chances of succeeding. These data are summarized in Table 6.

This section describes the managerial organization and organizational competences of the biotechnology firms. First it describes the management teams, then it outlines the perceived skills and competences of the organizations. It has been argued that the success or failure of a biotechnology firm depends on the expertise or conduct of the management team (Woiceshyn, 1993; Dutton, 1995), and there is evidence indicating that the completeness of the management team and its relevant experience affect the success of high-tech start-ups (Roure and Maidique, 1988). Completeness of the management team is a critical issue as it determines how much and how rapidly work can be done. This is especially relevant to biotechnology firms as the ability to shorten the development cycle enables them to cut costs and reach the market before the competition. We defined a ‘complete’ management team as one where the essential business functions of finance, research, development, production and marketing were covered by an experienced manager. Seventeen (41%) of the firms had incomplete management teams. These incomplete teams had only one or two managers, a president and either a finance, R&D or marketing vice president. Interestingly, the oldest of the firms with incomplete management teams was 11 years old (the mean age of the firms with incomplete teams was 5.4 years, the median 5 years). Management team completeness was also related to the performance of the firms. More firms with complete management teams had achieved big sales than those with incomplete management teams, and more firms with incomplete teams had achieved only some sales or no sales than those with complete teams (Table 7). In the light of the number of firms with incomplete management teams, it is not surprising that 18 firms (46%) rated their skills as strong only in research or Collaboration

Extent of collaboration basic research: not at all very much

m

Extent of collaboration product development: not at all very much

m

238

TechmavtiVd.16No.5

with universities No. of firms

%

Mean

SD

5 8

I I.6 18.6

6.02

3.30

1

6

16.3 14.0

Management team completeness and firm performance

Incomplete management team Complete management team

‘Big sales’

‘Some sales’

‘No sales’

2

9

6

I1

7

4

Chi-squared: value = 6.35 df = 2; p < 0.05

4.2.3. Organizational strategy

TABLE 6.

TABLE 7.

5.61

3.28

research and development. No statistically significant relationship between management team completeness and perceived skills was found, however; therefore the data are reported for the sample as a whole. Eight of the firms (21%) considered their skills strong in some downstream activity such as development, manufacturing, marketing, but not in research. (Fifteen firms (38%) perceived themselves as strong in general management.) Six firms (15%) saw themselves as strong both in R&D and downstream activities (manufacturing, marketing), and only three firms (8%) perceived themselves as strong in all activities from research to manufacturing as well as in general management. There were also three firms that did not consider themselves strongly skilled in any area. When perceived skills were examined across the performance groups, it was observed that firms with ‘some sales’ and ‘no sales’ perceived themselves as strong only in research or R&D more often than the firms generating ‘big sales’. The firms with ‘big sales’, on the other hand, perceived themselves as strong in downstream activities such as manufacturing and marketing more often than the firms in the other two groups. (The numbers in the other categories of perceived skills were so small that differences regarding the three performance groups were not significant.) Of the fifteen firms that claimed strong general management skills, three (20%) had no sales, nine (60%) had some sales, and only three (20%) generated significant product sales. This perceived lack of skills can seriously jeopardize the firms’ ability to commercialize their products. See Table 8 for a summary of findings pertaining to perceived skills. 4.2.4. Perceived obstacles to product development This section describes the obstacles managers perceived as hindering product development in their firms, as well as the related issue of organizational learning. Both of these variables are related to the firms’ ability to cope with their context; i.e., the obstacles can lengthen the already long development process, whereas organizational learning can potentially accelerate it. On the flipside of a firm’s perceived skills are the obstacles perceived by respondents as most hindering development of marketable products (see Table 9). Most respondents considered factors related to funding as the biggest obstacle to product development.

Strategies and performance of Canadian biotechnology fims

TABLE 8.

Management team completeness

and perceived skills

Management team completeness: incomplete complete

Number of firms: I7 (41%) 24 (59%)

Perceived skills: strong in research/R&D only strong in development, manufacturing and/or marketing strong in R&D and manufacturing/marketing strong in everything from research to marketing not strong in any area

I8 (46%) 8 (21%) 6 (15%) 3 (8%) 3 (8%)

strong in general management

15 (38%)

Perceived skills by performance:” strong in researcWR&D only strong m development, manufactoring and/or marketing

‘Big sales’ I 5

‘No sales’ 5 2

‘Some sales’ 12 I

Chi-squared: value = Il.65 df = 2: ,’ < 0.005 “No analysts was conducted for the remaining skill categories due to the small number of firms reporting ‘strong’ perceived skills.

TABLE 9.

Perceived obstacles to successful product development

Funding-related obstacles: difficulty raising funding/insufficient high cost of operating

funding Total

Government-related obstacles: not sufficient assistance from government inconsistent or heavy regulations/long approval process Total Market/marketing-related obstacles: market perception and support, difficulties or intense competltion

Number of firms: 24 (60%) 4 (10%) 28 (70%)

6 (15%) 13 (32%) I8 (47%)

in marketing

I I (27%)

R&D-related obstacles: long R&D process, ability to focus, or achieving group learning

9 (22%)

Staff and management-related obstacles: lack of qualified staff lack of confidence and skills, risk management. or ability to develop corporate strategy

5 (12%) 4 (10%) Total

9 (22%)

Twenty-four firms (60%) considered raising funding the most difficult task hindering product development, and, relatedly, four firms (10%) maintained that high costs were their biggest road block. The second biggest obstacle in terms of the number of responses was perceived government action or inaction. Nineteen firms (47%) were not satisfied with the government. Six (15%) thought that government did not provide sufficient assistance, whereas 13 firms (32%) perceived government regulations to be inconsistent, too heavy, or the approval process too long. The third group of obstacles related to markets and

marketing. Eleven companies (27%) perceived this area as problematic. They complained about negative market perception and lack of market support, intense competition, and difficulty in marketing and understanding the market. Despite most firms’ perceived strength in R&D, issues related to it were the fourth largest category of obstacles. Nine firms (22%) considered the length of the R&D process, the ability to focus R&D or the ability to facilitate group learning as major hindrances along the way to successful product development. The last two obstacle groups were relatively smaller but seem worth mentioning in the light of the problems in forming a complete management team and acquiring necessary skills. Lack of qualified staff was perceived as the main obstacle by five firms (12%). Some of the respondents commented that being located in Canada, and particularly outside of the main metropolitan areas, magnified this problem. The last group of obstacles related to management, although only four respondents (10%) perceived this as a problem. They were particularly concerned about the ability to manage risk, lack of confidence or skills, and the ability to develop corporate strategy. Table 9 summarizes the data pertaining to perceived obstacles. Despite the perceived obstacles to successful product development, most respondents felt confident about their companies’ capacity to transfer learning inside their organization. In response to a question “To what extent do you believe that learning (e.g., discovery of more efficient methods) is effectively transferred within your organization (e.g., from one group to another)?“, 22 firms (55%) considered the transfer of learning very effective (rating from 8 to 10) on a ten-point scale. Sixteen companies (40%) considered it modest (rating from 4 to 7), and only one firm considered it poor (rating from I to 3). The relatively small size of most of the firms most likely explains this finding, and it is a positive indication of the firms’ ability to add value, as value-added progress necessarily entails learning. The most commonly reported ways of transferring learning were through formal or informal meetings, personnel overlap in project teams, and circulation of reports.

4.3. Explaining performance diierences Some exploratory comparative analyses were conducted between the three performance groups, ‘big sales’, ‘some sales’ and ‘no sales’, in order to detect factors that might contribute to the firms’ success. Differences in group means were tested by ANOVAs. The results of this analysis are presented in Table 10. When the ‘big sales’, ‘some sales’ and ‘no sales’ groups were compared, the groups differed significantly (p < 0.01) across only two variables: complementary skills and organizational learning (see Appendix for questionnaire items representing these variables).

khnomtionVd.16No.5 239

1.Woke@ andD. Ha&l

TABLE 10. Analysis of variance for complementary learning by performance groups

skills and organizational

Complementary skills: source of variance between groups error total

SS 70.70 214.27 284.97

DF 2 35

MS 35.35 6.12

F

P

5.77

0.007

Organizational learning: source of valiance between groups error Total

ss

DF 2 35

MS 18.33 3.22

F

P

36.36 112.70 149.36

5.69

0.007

The variable ‘complementary skills’ measured whether the firm had developed distinctive capabilities in areas other than R&D (e.g., human resource management, finance). The firms that had achieved either ‘big’ (M= 6.42, SD = 2.32) or ‘some’ (M = 7.13, SD = 2.36) product sales had developed distinctive complementary capabilities to a greater extent than those firms that had achieved no sales (M=3.80, SD=2.90; F(2,35) =5.77, p < 0.01; see Table 10). The three groups differed significantly in their capacity to transfer learning inside their firm (F(2,35) = 5.69, p < 0.01). Learning was more effectively transferred by the firms in the ‘some sales’ (M = 8.06, SD = 1.95) than in the ‘big sales’ group (M= 5.83, SD = 1.94). The ‘no sales’ group (M = 7.70, SD = 1.25) transferred learning somewhat more effectively than the ‘big sales’ group, although this difference was not statistically significant (Table 10).

5. DISCUSSION 51. hterpretatien

ofthe fidii

5.1. I. The descriptive findings

What do the data on strategies and performance of Canadian biotechnology firms imply in light of the existing literature? How well are the firms coping with their context? We will first consider the strategies adopted by the firms to cope with their business and political contexts. Then we will discuss the findings relating to performance differences across the firms and their implications for managers. Considering the business context of the biotechnology firms, three aspects of it are highlighted: cost of product development, availability of capital, and availability of human resources. As a science-based field, product development cycles are long and significant amounts of capital are required to commercialize biotechnology products. The estimated capital requirement for a biological

240 lednmvrticn Vd. 16No. 5

drug, for example, is $100 million at least (Fildes, 1990). The fact that most of the surveyed firms are small and privately held spells trouble for their ability to finance product development. This problem is exacerbated by the commonly occurring shortages of investment capital in the industry (WeisenfeldSchenk, 1994), especially in Canada (Going and Winter, 1990). Many firms’ plans for going public will be difficult to realize. Having reached significant product sales certainly helps the almost one-third of the companies we surveyed, but a great number of firms (15) have not been able to make value-added progress (i.e., to move from one revenue-generating stage to another) since their inception. This is particularly true in the animal agriculture area. These findings are corroborated by the managers’ own perceptions. A large majority of the respondents (70%) considered funding-related problems to be a major obstacle on the road to successful product development. Many firms have coped with the cost of development and shortages of investment capital by forming collaborative alliances with other firms and universities. Over two-thirds of the firms engage in collaboration in at least one area, whether R&D, marketing or manufacturing. This is consistent with the tendency of Canadian biotechnology firms to form more alliances than their US counterparts (Going and Winter, 1990). Collaborative alliances are formed not only because of the cost of development and commercialization of products, but also because it is difficult for one firm to gain expertise in many aspects of the multidisciplinary, science-based field of biotechnology. Forming alliances also helps the firms to cope with the complexity and uncertainty characteristic of the field (Fildes, 1990; Chakrabarti and Weisenfeld, 199 1; Weisenfeld-Schenk, 1994; Hamilton, 1993). The lack of qualified human resources is the third aspect of the business context of the biotechnology firms considered here. Due to the emergent nature of the biotechnology field, attracting experienced staff, including management, is often difficult (WeisenfeldSchenk, 1994). In some biotechnology sectors in Canada, as many as 50% of the firms are experiencing this problem (Going and Winter, 1990). This was an issue with which the surveyed firms were not coping particularly well, although only 22% of the respondents perceived the lack of qualified staff and management as a problem. Almost half of the firms (41%) had an incomplete management team in terms of functional expertise, and this was associated with slower value-added progress (ibid.; see also Roure and Maidique, 1988). The firms’ relatively poor ability to cope with the lack of qualified personnel was also reflected in their lack of skills. Almost half of the surveyed firms indicated that they were strong in research or R&D only, and yet the development of downstream capabilities such as manufacturing and marketing is one of the critical challenges for biotechnology companies (Fildes, 1990; Going and Winter, 1990).

Strategies and performance of Canadian biotechnology fitms

The political context of the biotechnology firms poses its own problems. The government of Canada plays a significant role in the biotechnology industry, both as a sponsor and as a regulator. The government is keen to support the industry through various grants, subsidies and tax credits, and has formed the National Biotechnology Advisory Committee and the Interdepartmental Committee on Biotechnology as well as the Biotechnology Unit at the Ministry of State for Science and Technology, intent on formulating industrial policy for biotechnology (Weldon and Shindler, 1988). Despite these efforts, almost half of the surveyed firms saw government as creating obstacles for them, some of them through lack of assistance. Government sponsorship can be a double-edged sword, however. Reliance on government funding might also be too comfortable a cushion, hindering the firms’ efforts to find sufficient private or public funding (Woiceshyn, 1993; Doutriaux, 1994). Yet many of the surveyed firms (83%j received some form of government support. Government is also a heavy regulator of biotechnology firms, thus lengthening the product development cycle. Almost half of the firms (48%) tried to influence the government and the regulations to their favor by participating in government committees, but still one-third of the firms saw heavy or inconsistent regulations as a major obstacle for them. Overall, the surveyed firms were dealing with their specific context somewhat effectively, although the cost of development, the availability of capital and human resources, and the government’s involvement pose hazards to them. In addition, almost one-third of the respondents observed market-related barriers to progress, such as competition, and about one-fifth considered issues related to R&D, such as ability to focus, as problematic. These had also been observed as challenges in some previous studies (Fildes, 1990; Weisenfeld-Schenk, 1994; Going and Winter, 1990). 5.1.2. The expioratov @dings Testing differences between the three performance groups yielded relatively few insights; this was at least partially due to the relatively small sample size and small number of firms in each group. The ‘some sales’ group perceived the transfer of learning to be more effective than did the ‘big sales’ group (as did the ‘no sales’ group), probably due to their smaller size. Indeed, the ‘some sales’ and ‘no sales’ firms were more likely to have fewer employees than the firms with ‘big sales’ (see Table 11). More significant, however, is that the firms generating ‘big’ product sales had developed distinctive capabilities to a greater extent than had firms with only some sales revenue. In other words, the ‘big sales’ firms had built capabilities outside of research and development, such as in finance, human resource management and distribution, which probably facili-

TABLE 1 I.

Company size and performance

Size (number of employees)

Small (5 20) Medium Q-50) Large (> 50) Chi-squared: df=4;p<0.10

‘Big sales’

‘Some sales’

‘No sales’

6 3 4

12 I 3

10 0 0

value = 8.63

tated their value-added progress. This finding agrees with the literature on the value-added chain which suggests that in addition to the primary functions such as manufacturing and marketing, value-added activities include supporting activities, such as finance, as well (Porter, 1985). 5.2. implications far managers and for further research As this is a single-industry study, generalizations are limited. Some implications can be drawn for managers of biotechnology firms, particularly in Canada. On the basis of our study, it seems that raising sufficient investment capital either through public offering or through a parent company remains one of the most critical challenges biotechnology firms are facing. At the same time, downstream capabilities such as manufacturing and marketing need to be developed in conjunction with full-blown management teams. In addition, developing complementary skills outside of research and development seem to be associated with achieving significant product sales. While these survey results have given us a glimpse of the challenges and obstacles biotechnology firms are facing, as well as some predictors of value-added progress, we do not have any evidence of causal direction or of what kind of dynamics are going on in the firms. In order to investigate these issues further and to gain a better grasp of the role of distinctive capabilities, organizational learning, and skills in biotechnology firms’ progress, we need to conduct longitudinal research as well as to go inside the firms and observe processes and interview managers and other employees.

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APPENDk VARIABLES DlAERENllAllNG FIRMS WITR ‘BIG SALES’, ‘SOME SALES’, AND ‘NO SALES Cemplementaty skillsII To what extent has your firm developed distinctive capabilities and skills in areas other than R&D (e.g., distribution, human resource management, finance)?

0rgiuwieMllearNing To what extent do you believe that learning (e.g., discovery of more efficient methods) is effectively transferred within your organization (e.g., from one group to another)?

Strategies and performance of Canadian biotechnology fitms

Jaana Woiceshyn earned her bachelor’s and master’s degrees in Busi-

Diana Hartel gained her BA (Special) in Psychology from the Univer-

ness Administration from the Helsinki School of Economics, and her PhD in Management Science and Applied Economics from the Wharton School at the University of Pennsylvania in 1988. She has taught strategic management and business ethics in Canada at the University of Calgary’s Faculty of Management since 1987. Her research focuses on the management of innovation and technological change. Dr Woiceshyn has conducted studies on adoption of new production technology and its impact on performance in the pre-press industry in Canada and in Finland, and on the value-added progress of Canadian biotechnology firms. She has presented her work at several international conferences and it has been published in various refereed journals.

sity of Alberta and her MSc and PhD degrees at the University of Calgary. At the doctoral level, Diana’s research focused on industrial and organizational psychology with a specialization in attitude measurement. Other areas of research interest have included social gerontology, organizational development, and managerial assessment and development. Dr Hartel is currently employed by the Government of Canada as an industrial psychologist for the Public Service Commission, which is the branch of government responsible for civil service staffing. Her work involves executive assessment, training of managers in the use of selection instruments, and design of specialized assessment tools. She also custom designs selection systems for private clients, undertakes consulting in study design and statistical analysis, and conducts workshops on the design of selection tools.

Te.dmovti Vol.16No. 5

243

Technovation, 16(5) ( 1996) 265-268 Copyright 0 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0166-4972/96 $15.00 + 0.00

ELSEVIER AD”AW3.D TFCHNOL
Translations of abstracts National systems of innovation, otganizational learning and industrial biotechnology Jacqueline Senker Technovution, 16 (5) (1996) 219-229

Systimes nationaux d’innovation, apprentissage organisationnel et biotedmologie industrielle

Risumi Ce papier discute des effets des systemes nationaux d’innovation sur l’apprentissage organisationnel des societes et comment ils influent sur la structure industrielle. L’analyse se focalise specifiquement sur la reponse industrielle de petites et grandes entreprises aux opportunites offertes par la biotechnologie, et jusqu’ou les politiques gouvemementales et d’autres facteurs ont forme differents modeles de developpement industriel qui ont CvoluC aux USA et au Royaume Uni. La disponibilite en capital risque, l’investissement dans la fondation scientifique et dans la culture nationale sont des facteurs importants qui expliquent les differences entre les modeles initiaux de commercialisation qui ont emerge dans les deux pays. 11 est evident qu’il y a eu de la part des organisations britanniques un apprentissage considerable, ce qui demontre que pendant que la biotechnologie murit, la structure industrielle dans les deux pays converge. Copyright 0 1996 Elsevier Science Ltd

Nationale Systeme fiir Innovation, organisatorisches Lemen und industklle Biotechnologie

Abriss In dieser Arbeit diskutieren wir die Auswirkungen von Innovation auf das organisatorische Lemen von Untemehmen, und wie dies die industrielle Struktur beeinflul3t. Die Analyse konzentriert sich besonders auf die Reaktion der Industrie, sowohl von grogen, etablierten Untemehmen als such von neuen kleinen Firmen, auf die Miiglichkeiten, die Biotechnologie

bietet, und wie weit staatliche Richtlinien und andere Faktoren die unterschiedlichen Muster industrieller Entwicklung, die sich in den USA und im UK entwickelt haben, geformt haben. Verftigbarkeit von Risikokapital, lnvestitionen in die Wissenschaftsbasis und die nationale Kultur haben sich als wichtige Faktoren herausgestellt, die die unterschiedlichen anfanglichen Muster der Kommerzialisierung, die in den beiden Landem entstanden, erkhiren. Beweise betrachtlichen Lemens in britischen Organisationen fiihren zu der SchluSfolgerung, dal3 sich die industrielle Struktur in beiden Landem im Verlauf der Reifung der Biotechnologie aneinander annahem wird. Copyright 0 1996 Elsevier Science Ltd

Los sistemas nacionales de innovaciin, de fomwiin organizativa y de biotecnologia industrial

Resumen En este articulo se contemplan 10s efectos de 10s sistemas nacionales de innovation en la formacidn organizativa de las empresas y coma afectan a la estructura industrial. El analisis se centra especificamente en la respuesta industrial tanto de las empresas establecidas coma de las nuevas empresas pequefias en vistas de las oportunidades brindadas por la biotecnologia y el efecto de la politica gubemamental y demas factores sobre 10s distintos patrones de desarrollo industrial experimentados en 10s estados unidos y en el reino unido. La disponibilidad de1 capital de riesgo y la inversion en la base cientifica y en la cultura national resultan ser algunos de 10s factores importantes que explican 10s distintos patrones iniciales de la comercializacion que surgio en ambos paises. Basado en 10s indicios de considerable formacion en las organizaciones britanicas se concluye que a medida que la biotecnologia madure, las estructuras industriales de 10s dos paises llegaran a coincidir. Copyright 0 1996 Elsevier Science Ltd

Strategies and performance of Canadian biotechnology firms: an empirical investigation

Tedmovalion VOI. 16 No. 6

265

Translations of abstracts

Jaana Woiceshyn and Diana Hartel Technovation,

16 (5) (1996) 231-243

StMgies et performances des firmes canadiennes de biotecbnologie - une enqu@te empirique

RQumi Un sondage chez des firmes de biotechnologie a permis d’enqueter sur l’impact de leur situation sur leurs strategies et leurs performances. Ce papier rend compte de deux types de decouvertes d’exploration: un profil descriptif des deux societes et de leurs strategies pour gerer des situations politiques et financ&es, et des comparaisons statistiques entre trois groupes de performances. Trois aspects de la situation financiere de la firme sont soulignes: 0 cotit de production ClevC, rarete des capitaux propres 0 un manque de personnel qualifie, 0 et en particulier le personnel d’encadrement Alors que les firmes essaient de reduire leurs problemes de capitaux et de cotits, en s’impliquant dans des cooperations interentreprises, la petite taille, le fait que les entreprises soient financees par capitaux prives, et les problemes de ressources humaines montrent la variete des bat-r&es qui ralentissent le succes commercial. Les firmes ont per$u l’action ou l’inaction du gouvernement comme &ant un obstacle majeur, qu’elles ont essay6 de surmonter par des tactiques diverses. Lorsque les firmes sont comparees dans trois groupes de performances, les differenciateurs principaux entre celles qui sont performantes et celles qui le sont moins, sont la mise au point de competences complementaires, qui se situent en dehors de la R&D, et des transfer& efficaces de l’apprentissage organisationnel. Les implications pour le personnel d’encadrement seront abordees ainsi que des recherches plus pousstes. Copyright 0 1996 Elsevier Science Ltd

Strategien und Leistung kanadischer Biotedmologiefirmen: eine empirische Untersudumg

Abriss Eine Umfrage unter kanadischen Biotechnologiefirmen untersuchte die Auswirkungen ihres Kontextes auf ihre Strategien und Leistung. In dieser Arbeit berichten wir tiber zwei Arten von Forschungsergebnissen: ein deskriptives Profil der Firmen und ihrer Strategien zur Bewaltigung des Geschafts- und politischen Kontextes und statistische Vergleiche zwischen drei Leistungsgruppen. Drei Aspekte des

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Geschaftskontextes der Firmen wurden hervorgehoben: hohe Kosten fur Produktentwicklung, Kapitalknappheit und Mange1 an qualifiziertem Personal besonders Managem. W%hrend die Firmen versuchten, die Kosten- und Kapitalprobleme durch Beteiligung an gemeinschaftlichen Allianzen zu verringem, deuten kleine GroSe, Privatbesitz und Personalressourcenprobleme auf Hindemisse fur kombetrachteten Erfolg. Die Firmen merziellen Regierungshandlungen oder Untatigkeit im politischen Kontext ebenfalls als wesentliches Hindemis, das sie durch verschiedene Beeinflussungstaktiken zu tiberwinden versuchten. Beim Vergleich der Firmen in den drei Leistungsgruppen waren die wesentlichen Unterscheidungsmerkmale zwischen hoheren und niedrigeren Erfolgsuntemehmem die Entwicklung von erganzenden Fahigkeiten aul3erhalb der Forschung und Entwicklung und effektiver Transfer von organisatorischem Lemen. Die Implikationen fur Manager und weitere, zuktinftige Forschung werden diskutiert. Copyright 0 1996 Elsevier Science Ltd

Las estrategias y el rendimiento en las empresas de biotecnwa canadiensas: una invesfigaciin empirica

Resumen Un sondeo llevado a cabo entre empresas canadiensas de biotecnologia examino el impact0 de1 propio context0 de la empresa en las estrategias y en el rendimiento. Se documentan dos tipos de resultados explorativos: un perfil descriptive de las empresas y de sus estrategias de funcionamiento en cuanto a 10s contextos comerciales y politicos y unas comparaciones estadisticas de tres grupos de rendimientos. Se destacaron tres aspectos de1 context0 comercial de una empresa: el alto costo de desarrollo de1 producto, la falta de capital y la falta de personal cualificado, especialmente en administration. A pesar de que las empresas trataron de aliviar 10s problemas de costo y de capital creando alianzas colaborativas, el tamafio pequefio, la privatization y el problema de 10s recursos humanos indican barreras al Cxito comercial. Las empresas tambien perciben la action o la falta de action de parte de1 gobiemo en el context0 politico coma un obstaculo importante, que intentaron superar por medio de varias tacticas de influencia. Comparando empresas de 10s tres grupos de rendimientos, 10s factores principales de diferenciacion de 10s grupos de rendimientos mas altos o mas bajos resultaron ser el desarrollo de capacidades complementarias fuera de I & D y la transferencia efectiva de 10s conocimientos organizativos. Se comentan las implicaciones para la direction de la empresas y para mas investigacion. Copyright 0 1996 Elsevier Science Ltd

Sweden’s

Technological

Profile.

What