Sharon Yvette Boyce, American InterContinental University, sheriibee1@prodigy.net

Abstract

Sustaining a competitive advantage is imperative for firms that are in dynamic industries, which require effective strategic implementation to manage such changing situations.  Many firms have found that implementation is very difficult to execute.  The major components of strategic implementation will be examined and analyzed.  The contention and rationale by scholars that the implementation process is so difficult to attain will be assessed.  Finally, there will be recommendations as to how a pharmaceutical company can use intellectual capital to build organizational capability as a competitive advantage to enhance its implementation strategy over the long-term.

Introduction

The ability to implement strategies is one of the most valuable managerial skills, which requires a keen knowledge of the critical aspects to affect change.  To sustain a competitive advantage, organizations must acquire and utilize techniques to optimize their core competencies, to strengthen their organizational capability, managers at all levels must be involved in the process of strategic implementation.  Strategic implementation entails transforming an organization’s strategic plan into action, and ultimately, into results, preferably high-performance results.  The global market in general, and the knowledge-based economy in particular, is required to increase its capacity to compete on the basis of its intellectual competencies, which must be strategically aligned with the of objectives the organization.  The dynamics of the economy dictate that businesses will have to find creative means by which to gravitate with the changes.  The pharmaceutical firm is no exception.  For organizations such as this, operating in the realm of developing medical therapeutic agents, the key to success clearly lies in the ability to use intellectual capital as a major competency better than other pharmaceuticals.  As organizations are required to change relative to heightened competition, improved information systems processes, advanced technology, and overall increased organizational learning, managers must have a broad perspective of the organization’s capabilities, so that implementing new strategies is managed effectively.

This investigation will be important for strategic management techniques, as it will: Analyze the major components of strategic implementation, assess and evaluate the implementation process, discuss and analyze the role of leader for implementing strategies, evaluate organizational capability and intellectual capital, and synthesize and integrate models to establish a framework for application in pharmaceutical firms.

The Importance of Strategic Implementation

Creating strategy is driven by a business’ vision, mission, and goals, along with its key competencies, and the competitive industry with which it has to contend.   Analyzing and formulating the appropriate strategy based on the objectives of the organization is the foundation for developing and transforming a plan, and refining it for the purpose of putting it into action.  Strategic implementation is very difficult skill to master, which makes adjusting to environmental change so challenging for organizations.  Due to the urgency of adapting to the changing market, strategic implementation is crucial to getting the initiatives launched and processes in place for organizations’ sustaining position.  Implementing the strategy is also important because of the intense effort that strategic analysis and formulation undergo, for making strategic plans a reality.  Most organizations concentrate a great deal on striving to outperform their competition, and are negligent with respect to enhancing their internal assets (i.e., intellectual capital), which is why strategic implementation is a very important aspect for managerial practices.  With such volatility in the business environment, trying to make adjustments associated with these changes, suggests the need for implementation of innovative strategies to leverage organizational capabilities.

Challenges of Strategic Implementation

The mindset of an organization should be focused on determining approaches as to attain objectives, by assessing increased external pressures of competitiveness within the respective industries, and by further establishing astute means to exploit intellectual resources and other organizational capabilities for sustained growth. For organizations that require knowledge as its primary asset, it is essential to continually focus on advanced techniques and innovative means by which to adapt to and to progress in an evolving environment.  Specifically, pharmaceutical companies command decision-making and creativity competencies for effective research, analyses, and development of therapeutics to combat physical and mental ailments.  For such organizations to remain stagnant and resist adjusting structure, capabilities, techniques, and other organizational resources, suggests a potential to fall short of strategic implementation to advance beyond the discovery aspect.  Schein (1993) maintains that because of this natural tendency to resist change and prefer the status quo, organizations have developed a number of immune systems that leaders must overcome if they hope to implement a new strategy successfully.  As the need to consistently monitor performance against defined organizational goals, and to sustain a competitive advantage, knowledge-based firms encounter challenges for effectively leading key resources to maximize relevant competencies aligned with organizational change. It is crucial that these types of organizations create structures conducive to decision-making from multiple perspectives, and specifically for pharmaceutical companies, researchers should have keen skills in integrating analyses and results of studies with strategic plans of the organization.

There are several elements involved in transforming a strategic plan of organizational change into action that result in desired outcomes. Obviously, with more attention as to autonomously working to discover mechanisms for augmenting health and wellness, research scientists within the pharmaceutical industry may not realize the significance of organizational strategy in accomplishing particular outcomes, and consequently neglect to provide contribution to of implementation. Based on a work developed by Robertson, Roberts, and Porras (1993), the dynamics that are an intricate part of a planned organizational change are:  (a) Social factors, (b) organizing arrangements, (c) physical setting, (d) technology, and (e) individual behavior, all of which influence the organizational performance and individual development.  This model suggests that any change to one element will have consequential outcomes that affect other components, which have their own consequences, implying that the rippling effect continues.  Managers also tend to have a proclivity to implement change to the entire organization by altering only one or two areas.  It is crucial that organizations carefully assess each of the elements that are part of implementing change, particularly by applying a comprehensive representation that comprises the key facets necessary for long-term success.  The components of strategic implementation will provide the critical factors that will provide guidance in executing the process.

Strategic Implementation Components

Within strategic management, the implementation process is the most challenging aspect of activating established plans, and entails several interconnected elements that provide insight as to making any necessary modifications toward a successful endeavor.  Strategic analysis and strategic formulation are imperative for initiating and developing the strategies for consideration of a firm’s strategic objective and exploration of opportunities. Influences as to the external environment, along with attributes as to internal skills/abilities and growth potential, are important for transforming such activities into a plan, a strategic intent.  As such, the pharmaceutical firm must rely on its innate core competencies to research and develop unique compounds, while working to assess environmental factors affecting structural design, and integrating constituencies that contribute to the R&D process.  These key actions are based on the organizations’ strategic goals and planning techniques to implement processes that accommodate current industry perspectives in ultimately commercializing these therapeutic agents. Therefore, the organizational foundation of applying relevant discovery research expertise and analyses formulated into a plan proceed to the strategic implementation of adjusting and refining the plan based on a particular strategic decision. 

Along with creating a strategy that is market-driven, implementing strategy must be driven by the activities evolving around the employees and the business processes, to be successful.  Most of the key components for the implementation process are ostensibly represented with respect to successful implementation; however, with so many areas to conquer, the leadership system has to be a key substance for applying this framework, in particular within the pharmaceutical realm.  The implication would be to create some process for such a challenge, such as to augment long-term organizational progress. One important organizational asset would include building internal capabilities to comprise intangible characteristics of conducting scientific research, performing strategic decision-making, employing empowerment, and improving leadership, to provide continual enhancement to the discovery research and development process.

Organizational Change/Implementation Strategy Models

The 7-S Model, developed by consultants at McKinsey & Company, demonstrates that change is complex due to organizational resistant systems, difficult paradoxes, and the many interconnected variables involved, and that to be effective a change effort must address many of these issues simultaneously—Strategy, Structure, Systems, Style, Staff, Shared Values, and Skills (Waterman, 1982). The 7-S Model demonstrates that key interdependencies exist among the seven components, which are imperative for the success of an organization’s strategic implementation and success.  The model clearly suggests the need for appropriate alignment and congruence, based on the managerial style of the organization, the organization’s skills, the structure of the organization, and the culture.  The 7-S Model does not explicitly capture the effect that external changes might have on the organization.  Although it is imperative to improve internal capabilities, it will also be crucial for the pharmaceutical organization to build strategic goals and implementation with appropriate adaptation for competing in this knowledge-based industry, such that learning and innovation are increased, and comprise within their structure.

The drivers of organizational change—Globalization, Technology, Focus on the Value Chain, Transformation, Change, Removal of Boundaries, Intellectual Capital, Leadership, Challenge of customer value of strategic implementation—proposed by Ulrich and Kerr (1995) are important for adapting to the dynamics in a global market, as they provide the properties necessary for changing the mindset of people and improving their internal capabilities.  The model emphasizes a process for removing boundaries so that the focus is on the enhancement of competencies.  These characteristics of improving the strategies for organizational change are some necessary components to drive strategic implementation.  Unlike the 7-S Model, which does not include a more global perspective and emphasis on intellectual capital, Ulrich and Kerr’s model captures key factors that would have an effect on the process of implementing strategies that are essential for the pharmaceutical firm, whose primary objectives require research scientists to incorporate knowledge of relevant facets for long-term perspectives that influence development of therapies encompassing strategies for competing at a comprehensive level.

Organizational Capability

Increasingly competition is forcing organizations to be creative in their strategic efforts as businesses are learning to improve the way customers/clients are served, whether they are within the organization or external to it.  The Twenty-first century organization is continually augmenting operations and enhancing its activities. Products and services that were previously unique in nature are not being imitated, strategic alliances are increasing, technological processes are improving astronomically, and companies are investing more in their intangible assets.  Consequently, to remain competitive in this millennium, organizations will have to sustain organizational capabilities to enhance the implementation strategy.  Having superior core competencies and organizational capabilities are key factors for proficient strategy execution.

Galbraith (1987) presents keen perspective to explain that an organizational capability is created when people, structure, rewards, and processes are created and combined to support task performance, and that the company must put into place organizational structures, management process, rewards, and incentives, and the human resource practices that support the task performance. The Galbraith (1994) Star Model of organizational capability does address essential requirements for defining and creating a supportive system for task performance.  However, the model is not structured in a way that is easily interpretable.  Although it is necessary and important that an organizational capability consists of the relevant attributes, the model may be improved by explicitly demonstrating that organizational outcomes are influenced by task performance, as well as by other factors. Otherwise, it may be interpreted that key organizational capabilities are inter-connected without expected results.  For example, within the pharmaceutical organization, there should be clear and effective illustration as to the interdependencies and interrelationships of discovery research and development functions, such that each is directly supporting strategic goals, and is contributing performance outcomes with respect to the overall organization or the relevant disease study franchises.

Intellectual Capital

As organizations are increasingly viewing knowledge as their most valuable and strategic asset, it is crucial to effectively manage their intellectual resources and capabilities.  Organizations are learning to align and integrate technology and organizational initiatives for managing and supporting knowledge processes.  Although building such knowledge management systems is congruent to exploiting knowledge, there is should be concrete evidence that their organizational capabilities are appropriately managed and utilized.  There needs to be systematic alignment between the organization’s strategy and knowledge management.

By having superior intellectual resources, an organization must understand how to exploit and develop their traditional resources better than competitors.  The implication of this perspective is that the value of the intellectual capital exists with the knowledge of the individuals, but can be institutionalized, as part of the organization’s systems and structures.  Pharmaceutical organizations must be compelled to concentrate their efforts toward developing more creative skills for research science professionals, as well as enhanced managerial competencies to effectively demonstrate components attributable to attaining strategic goals for developing health therapies.

Developing Professional Intellect

To have the most effective professionals, in particular in a knowledge-based organization, a key initiative would be to identify and attract individuals who possess astute qualities in relevant areas of medical and/or scientific research.  Although it is crucial to identify and recruit experts in the field, it is also very important to decrease dependency on these highly experienced, skilled, and knowledgeable people in order that knowledge can be created and shared throughout the organization.  As part of its investment decision-making, an organization should allow its management to use strategic techniques to procure new and capable employees from the research scientist market, in an effort to acquire and enhance key competencies in its potential as a learning organization.  Goh (1998) characterizes a learning organization as one where employees are empowered to act based on the relevant knowledge and skills they have acquired and information about the priorities of the organization. Based on this conceptualization, the pharmaceutical firm focusing on research and development of unique and efficacious therapeutic substances are afforded opportunities and essential capabilities to strategically position itself with increased competitive advantage, to adjust accordingly with the dynamic complexities of the pharmaceutical industry.

Quinn, Anderson, and Finkelstein (1996) have provided some key aspects for developing and leveraging the professional intellect, for enhancing an organization’s intellectual capital.  The authors stress the importance of managing information systems for capturing and leveraging all these organizational capabilities to the greatest extent.  Such systems allow the intellectual professional to transfer knowledge to other parts of the organization, which can improve performance. Acquiring such capabilities will strengthen the implementation strategy for knowledge-based companies, such as pharmaceutical firms. 

Building Core Competencies and Competitive Capabilities

Building core competencies and organizational capabilities that competitors cannot replicate is an effective way to execute strategy better than they are capable.  This is why one of managers’ most important roles is to build organizational capabilities as a competitive advantage.  Leaders are required to have increased resources, superior talent, enhanced capabilities, and perceptive knowledge to continually facilitate processes toward attaining the ultimate objectives discovering and commercializing safe and effective therapeutics.  The core competencies of an organization must relate to any of its strategic relevant characteristics.  These multi-skilled activities require managers and leaders who have an appreciation for the significance of strategically implementing core competencies and organizational capabilities that create value, and specifically for pharmaceutical company by developing and exploiting resources, and by subsequently producing innovative healthcare drug therapies, to sustain long-term organizational success.

Developing and Strengthening Core Competencies

Some major companies were reported by Quinn (1992) to have developed core competencies, strategically aligned with their organizations:  Honda’s core competence is its depth of expertise in gasoline engine technology and small engine design; Intel is in the design of complex chips for personal computers; Procter & Gamble’s core competencies reside in its superb marketing-distribution skills and its R&D capabilities in five technologies—fats, oils, skin chemistry, surfactants, and emulsifiers; Sony’s core competencies are its expertise in electronic technology and in its ability to translate that expertise into innovative products.  Comparable to these efforts to attain organizational capabilities for the implementation of organizational strategy, the pharmaceutical firm must firstly, ensure its scientists possess keen expertise and experience within the relevant research concentrations for which it builds its goals, and further, organize and coordinate research programs with key resources to meet these objectives, with increased ability to expeditiously and effectively adjust to the dynamics of Twenty-first Century innovative thinking and execution to produce medical therapeutics.

It is critical to continually improve the intellectual capital of an organization and to base strategic implementation on this area due to potential replication of industry rivals and the potential to always react to changes in the environment.  Although Quinn points out that leaders cannot be expected to realize the overall building of core competencies, there is need to have included an information systems medium or knowledge dissemination mechanism for enhancement of the intellectual capital across functions.  As more knowledge is transferred and institutionalized, the organizational capability is more likely to be increased as a competitive advantage.  With respect to this perspective, there are key implications for pharmaceutical company, as it has to continually provide support to senior management, who generally possess strengths as scientists to discover methods to combat diseases, and minimal skills to build and strengthen the intellectual capital to achieve competitive advantage through exceptional strategy execution.

Role of Leaders in Building Organizational Capability

With respect to building organizational capability aligned appropriately with the organizational strategy, sound managerial practices, processes, and commitment are imperative for successful strategic implementation, to sustain a competitive advantage.  Organizations in the knowledge economy are required to improve their intellectual capital by building structures and a leadership system that help create, acquire and transfer knowledge throughout the organization, while empowering all employees to be decision-makers in the strategic implementation process.  A leader must be motivated by a genuine desire to lead, inspired by a vision of where the organization is heading, able to unite people in the effort to realize the vision, totally committed to his or task, and action-oriented.  Due to this constant world of change in the business economy, leaders face a lot of challenges, but the implication is that these leaders must adapt to the changes and effectively communicate it to the organization.

Within the pharmaceutical organization, the leadership system is generally composed of senior management (who make major decisions for research programs), various franchises of major disease areas (which contain heads of these specializations), projects groups and project leaders, and smaller teams, with concentrations in a particular area of research.  Leaders are primarily selected based on previous expertise in a particular area and are usually informally appointed by those who follow them. They may not be the best in that area of expertise, but they may be the ones who clearly understand the goals of the organization and are capable of persuading other researchers to commit their competencies to accomplish these goals.

It is important to note that work by Sapienza (1995) confirms that the most common mistake made in R&D organizations is promoting an individual to a management position on the basis of scientific or technical performance, without accounting for the fit (or lack of fit) between the human aspects of the job and the individual work-related requirements.  This suggests that such organizations need to ascertain the nature of a scientist to have an affiliation (i.e., organizational commitment) or possess intrinsic desire to attain capability to ensure successful strategic focus as to organizational goals, which transcend her/his need to achieve technical progress in the research and development process.

Project leaders are key drivers in the process of discovery research.  They encourage teams to use interdependent efforts in moving the project to the developmental stage.  At the same time, they empower team members to be creative and autonomous.  It is crucial for knowledge-based organizations, for example in the pharmaceutical realm, to assure that a leadership system is in place that contains specialization in an area of disease or scientific studies.  This leadership system should motivate other researchers to become leaders in their respective specialized area of study.

Techniques for Intellectual Capital

In twenty-first markets, organizations clearly require a creative, motivated workforce which is intellectually professional and which contributes to the strategy of increasing value in aggressively changing environmental conditions.  Since most professionals have such specialized knowledge and produce high-quality intellectual output, they will tend to control their work domain and not necessarily support organizational goals.  This is an issue within the pharmaceutical firm. Most scientists are innovative and self-directed.  They may desire to independently make discoveries without regard to meeting overall organizational objectives.  It is imperative, therefore, for these firms to develop best practices for managing intellect in order to build and sustain a competitive advantage over the long-term.

Strategic implementation is required to creatively align the organization’s strategy with its other internal support systems, in order to transform analyzed and formulated strategies into action.  The pharmaceutical company, which is a business that competes in the knowledge economy for discovering and commercializing therapeutic agents, must continually develop strategies to protect its intellectual capital and improve performance.  In order to sustain a competitive advantage, such organizations operate on the basis of their intangible assets (i.e., scientific knowledge, therapeutic expertise, and technological competencies), and require unique implementation strategies as more firms are learning to develop drugs more expeditiously.

Model for Strategic Implementation and Intellectual Capital

Based on the perspectives and models presented with regard to strategic implementation, an integrated framework will predict an optimal application for the pharmaceutical organization.  As already determined, an organization’s intellectual capital is one of the major factors affecting organizational change, and if properly nurtured and leveraged, will strengthen organizational capability.  Essentially, the pharmaceutical organization has core competencies of knowledge and experience in the various disease specializations for the purpose of researching and developing drugs in a preventive or protective mode.  These competencies require continual improvements for strengthening of the organizational capability, by encouraging innovation and knowledge transfer throughout the Research and Development (R&D) functional units. 

Within the pharmaceutical industry, a knowledge-based entity faces continual turbulence even in its inherent state of existence, where core competencies of innovative thinking for progression through the scientific research and development process is paramount, and requires a systematic approach to making intelligent options for long-term success.  With respect to strategic implementation as to required organizational changes as a result of advancement within the industry, research scientists must be skilled in the decision-making process, as well as possess competencies in leading other resources toward accomplishing criteria that meet the objectives of the organization. This suggests that the pharmaceutical company must build organizational capability by allowing training in new areas or research, technical seminars both internally and externally, and leadership development programs, which will enhance knowledge and learning across the R&D functions.

Managing intellectual capital in the pharmaceutical company for effective implementation of strategy is another key initiative for leveraging organizational capability.  With all the difficulties inherent in implementing a planned strategy in the pharmaceutical firm, senior management has to creatively manage the human resources, along with the other intangible assets, and coordinate the collaborative efforts, to achieve a long-term competitive advantage.  It is essential that the managers and project leaders continually concentrate on internal knowledge and create relevant knowledge systems to capture and synthesize the many scientific disciplines for successful leveraging of organizational capabilities.  Quinn (1992) found that to achieve dominance on lean financial resources, companies like Cray, in large computers, Lotus, in software, and Honda, in small engines, leveraged the expertise of their talent pool by frequently re-forming high-intensity teams and reusing key people on special projects.  Similarly, pharmaceutical companies require continual enhancement as to knowledge of inhibitory agents, biological pathways, chemical interactions, and technological processes within the respective specializations, to effectively integrate the astute approaches in developing compounds to eradicate diseases and other ailments.

Following the development and strengthening of the core competencies and organizational capability, an organization must create a culture that encourages intellectual capital for implementing strategy.  The pharmaceutical organization must have managers and project leaders who, while effectively managing the intellectual capital of the R&D process, will be instrumental in influencing behaviors that are consistent with the firm’s goals of producing unique medical therapies, and in providing reward systems aligned with those behaviors.  It is incumbent as to individuals involved in such knowledge-based work processes maintain understanding as keenly proposed by Klein (1998), who found that the achievement of the firm’s knowledge strategy and the success of its operating-level intellectual-capital initiatives, must be enabled by fostering a culture that values and rewards the creation and sharing of intellectual capital.  As these contributors to the goal of researching, discovering, and developing efficacious therapeutic products align personal aspirations in applying scientific creativity with these organizational strategies, implementing any adjustment to internal systems with respect to evolving external complexities becomes more attainable.  The culmination of diverse acuity toward decision-making that involves individuals from various perspectives provides increased utilization of complementary knowledge and leadership capabilities to resolve complex problems of research and to contribute to strategic thinking and implementation of organizational goals to develop novel medical drug products.

Synthesis and Integration for Successful Strategy Implementation in a Pharmaceutical

Strategic management emphasizes the strong need for the companies to formulate mechanisms by which the structure of the organization is dictated by the strategic design.  Leadership is a major component of the formulation and implementation processes, such that the appropriate mission, values and milestones are effectively defined and communicated throughout the echelon.  The inclusion of a strong leadership system to guide the organization in setting directions and assuring that the appropriate communication of goals is permeated throughout the organization, would improve the perspective of discovery research scientists.  The potential benefits of such self-leadership include increased employee commitment, as well as innovation stemming from heightened motivation and unleashed employee capabilities (Manz & Sims, 1991).  These factors are critical for life sciences or pharmaceutical organizations to be successful, where such knowledge-based businesses require continual development of products in their pipeline.

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