The role of institutional incentives in the resource allocation processes of pharmaceutical and biotechnology companies

Although research shows that nonpecuniary incentives can help stimulate both innovative output and firm-level productivity in R&D-intensive settings, organizations have difficulty creating and implementing these kinds of incentives, partly because the underlying social processes involved in offering them have yet to be elucidated. In this dissertation, I develop a new theoretical concept, "institutional incentives." This concept emerged as I conducted a field-based study of resource allocation processes in complex organizational settings. I explain how managers in biopharmaceutical firms create and implement institutional incentives, embedding them in firm-level processes. In the course of my research, I collected interview data from nine biopharmaceutical firms and archival data from public and private sources. Based on my analysis of these data, I found that commercial research scientists think of their employment as an opportunity to fulfill the objectives embedded in their shared norms and values. Some firms in my sample make it clear to these values-oriented employees--through specific coordinated actions--that the firm is committed to operating in ways that enable employees to fulfill these objectives. Commercial research scientists are motivated to work harder and more creatively in these firms, and these firms are better able to attract and retain commercial research scientists. By acting in ways that enable employees to fulfill the objectives embedded in their norms and values, employers offer their scientists "institutional incentives." I present one approach to analyzing institutional incentives: connect a focal group's system of values and norms to coordinated organizational activities to understand if and how managers create and implement institutional incentives in their firms (or fail to do so). To this end, I explicate several norms and values uncovered in the field settings. I then elaborate three categories of practices by which managers create and implement institutional incentives in the field settings. Finally, I connect specific practices to the values and norms they activate, thereby showing how institutional incentives "work." I close by suggesting the implications of these findings for several conversations in the literature.