Assessing the effects of R&D and IP-design Integration as Organizational Capabilities for Generating Valuable Patents
CBS, Innovation and Organizational Economics
Last modified: January 4, 2010
Karin Beukel, Research Center of Biotech Business, Copenhagen Business School (INO), enrolment; Nov/Dec. 2009, Expected final date: Nov/Dec. 2012, e-mail: email@example.com
State of the art, Research gab & Theory
Since the introduction of the RBV (Penrose, 1959; Rumelt, 1974), literature on linking organizational form with innovation outcomes has been extensive (Andriopoulos & Lewis, 2009; Eisenhardt & Schoonhoven, 1990; Katila & Ahuja, 2002; Puranam, Singh, & Zollo, 2006). Especially how the key to successful commercialization is dependent on coordination across various organizational units has attracted attention (Brown & Eisenhardt, 1995; Zahra & Nielsen, 2002). In the same line of literature, focus on how combining different capabilities and resources in creating firm value (Teece, 1997) and appropriating firm value (Moran & Ghoshal, 1999; Reitzig & Puranam, 2009; Rivette & Kline, 2000) has been immense. While features of how scientific capabilities affect firm performance has been widely confirmed in literature (Hausman, Hall, & Griliches, 1984; Pakes & Griliches, 1980), both organization capabilities and organizational form of IP generation and appropriation and its effects on firms performance has been neglected. It may be due to difficulties in obtaining extensive firm data on how IP organizations are formed and integrated with R&D. For instance, despite significant theoretical, empirical and anecdotal evidence of IP organizational form and capabilities having influence on firm performance (Granstrand, 1999a; Lynskey, 2006; Patrick, 1997; Reitzig & Puranam, 2009; Somaya, Williamson, & Zhang, 2007), research on individual chosen organizational forms impact on firm performance is extremely limited at best.
From empirical literature we know that that there is a great difference to how firms choose to organize IP teams involvement in R&D, presented in case studies about IP organization; Toshiba, Sony and Hitachi (Granstrand, 1999b), Eastman Chemical Company (Gwinnell, 1997), Dow Chemical (Petrash, 1997), Avery Dennison (Germeraad, 1997), Neste (Laento, 1997), Xerox (Daniele, 1997a; Daniele, 1997b) different approaches to the IP organizations involvement in R&D is confirmed. In light of these cases and interviews with key IP professionals in Denmark, a range of fixed IP organizational strategies has been confirmed. It is these very different strategic approaches and their effect on firm performance that is the core of this study.
With focus on the highly IP experienced Biotech industry in Denmark, an original dataset identifying 66 firmís intensity and form of IP involvement in R&D work is gathered via patent data, public CV databases and survey. Data showing fixed IP organizational strategies for each firm from start-up until today (or until firm termination of firm) in the time period from 1989 to 2009, combined with firm performance measures, patent data (family size and forward citations), and firm IP personnel data (experience, education and characteristics) lays the foundation of the quantitative tests performed. Furthermore, to elaborate on the content and form of each of the fixed IP organizational strategies, case studies and in-depth interviews with key practitioners are conducted.
In this study, I provide arguments and evidence that the structure of the IP organization affects firm patent performance. Four cases of organizational IP structure in R&D are considered: If there is no IP interaction in R&D, If the firm has limited and very passive IP engagement in R&D, if the firm applies a systematical IP engagement at stage gates meetings, and if the firm employs IP persons which actively contribute to the R&D project group on daily basis. Initial findings from interviews conducted with key practitioners emphasize that structure and form of IP involvement in R&D has impact on the firms patent value, several interviewees mention that having IP person participating in daily R&D work influences the choices made during an innovation process. Initial quantitative tests confirm that intense active IP engagement in daily work in R&D has positive effect on firm patenting performance.
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