Pharmaceutical Executive Digest Europe - January 14, 2009 - (Page 11) Brave the Jargon, Embrace Institutional Theory Your company is wrapped in a knot of constraints and pressures, and it’s naïve to try to manage without understanding this, says Dr Brian D. Smith. hen I was a young graduate trainee, I sometimes wondered how it felt to be one of those senior guys (they were almost always men then) whose word was law and who seemed to me to be all powerful. I imagined feelings of power and authority and looked forward to the day I’d get there. When I reached that level, those memories seemed innocent and naïve as my dominant feeling, and those of my senior peers, was that of frustration. Why, I wondered, was it so difficult to get anything done? When I moved into academia, I was surprised and, to be honest, a little irritated that there existed a whole body of research that spoke directly to these frustrations of senior managers. Surprised because I considered myself a pretty wellread executive and irritated because if I’d known this stuff earlier it would have helped me get things done. The problem W is, as with much management research, all the good stuff is wrapped up in jargon and published in journals that managers never get to read. …institutional theory doesn’t do quick and simple easily. It needs thought and careful application. A good example of this work is institutional theory, generally acknowledged to be the creation of Philip Selznick.1 In essence, this body of work describes organisations like big pharmaceutical companies as being confined by the values of their external environment. Dimaggio and Powell2 expanded on this, describing three sets of pressures: coercive (legal), normative (cultural) and mimetic (seeking to imitate). Their paper’s title, “The Iron Cage Revisited,” is a pretty good description of how many of my management colleagues felt. When I first read this work, coming from a pharmaceutical industry background, the scales fell from my eyes. Some of the pressures had obvious manifestations in our sector (e.g. coercive regulatory pressures) but others only became understandable when I put my experience in the context of institutional theory. The hassle I had received from medical affairs, for example, or from the sales team, were obvious examples of normative pressures stemming from the sub-cultures of their professions. And mimetic pressures were clearly seen in all the pressure to adopt ‘industry best practice’ that, whilst we justified it in rational terms, often seemed a senior management whim that we were forced to serve. This rationalisation of emotional whims is also discussed by the institutional theorists, who talk about ‘rationalised myths’ as a way firms maintain ‘social legitimacy’ in their business environment. I now use institutional theory in my work trying to understand how firms compete. I’ve discovered that the jargon and journals aren’t the only reason this valuable knowledge isn’t used much by practising executives. The other reason is that they usually prefer simple, quick answers and institutional theory doesn’t do quick and simple easily. It needs thought and careful application. Take, for example, the industry’s current problems with pricing and government pressure to reduce costs. To many of us in the industry, the picture of ‘big bad Pharma’ painted by activists and pressure groups seems unfair and to neglect the contribution the industry has made to the incredible health outcomes we now have. If we, as an industry, had used the ideas of institutional theory, we would have understood the cultural pressures we face 13 CALENDAR The next few weeks’ pharma events 2 NEWS Major award for European healthcare agency 4 BRUSSELS REPORT Setbacks for patient communication in Europe 5 FROM THE EDITOR New year, new format
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Digest Europe - January 14, 2009 Pharmaceutical Executive Digest Europe - January 14, 2009 Contents News Brussels Report From the Editor Executive Profile Q&A Strategy Fundamentals Calendar Pharmaceutical Executive Digest Europe - January 14, 2009 Pharmaceutical Executive Digest Europe - January 14, 2009 - Contents (Page 1) Pharmaceutical Executive Digest Europe - January 14, 2009 - News (Page 2) Pharmaceutical Executive Digest Europe - January 14, 2009 - News (Page 3) Pharmaceutical Executive Digest Europe - January 14, 2009 - Brussels Report (Page 4) Pharmaceutical Executive Digest Europe - January 14, 2009 - From the Editor (Page 5) Pharmaceutical Executive Digest Europe - January 14, 2009 - Executive Profile (Page 6) Pharmaceutical Executive Digest Europe - January 14, 2009 - Executive Profile (Page 7) Pharmaceutical Executive Digest Europe - January 14, 2009 - Executive Profile (Page 8) Pharmaceutical Executive Digest Europe - January 14, 2009 - Q&A (Page 9) Pharmaceutical Executive Digest Europe - January 14, 2009 - Q&A (Page 10) Pharmaceutical Executive Digest Europe - January 14, 2009 - Strategy Fundamentals (Page 11) Pharmaceutical Executive Digest Europe - January 14, 2009 - Strategy Fundamentals (Page 12) Pharmaceutical Executive Digest Europe - January 14, 2009 - Calendar (Page 13)
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