In this dissertation, I present a grounded exploration of some processes and mechanisms through which internal ambiguity helps groups adapt to—and thus cope with—external ambiguity and an unpredictably changing environment.

Innovation is not always enough. In the beginning of the 2000s established pharmaceutical firms had developed several drugs, yet these new products were far too few. Patents of many blockbuster drugs were to soon expire and substantial profit would then be lost. A potential solution emerged: implementing new biomarker technologies in drug development. Biomarkers are required for knowledge creation about the drug effect on underlying causes of a disease. The problem is this: although academia, industry, and policy makers have deemed biomarkers as necessary for successful drug development, pharmaceutical firms have not used them in actual drug development projects.  Since the 1990s, established pharmaceutical firms have invested financially and restructured organizationally in order to implement biomarkers. Still, cases show that more than 50% of project termination in Clinical Phase 2 (the bottle neck of drug development) can be attributed to the lack of implementing biomarkers.   Challenges of established firms transforming in the face of technology change is a commonly studied phenomenon within innovation management literature. Several explanations have attempted to determine why established firms fail in following technology change. However, most of this literature has been based upon an empirical context where technology change is conceptualized as an innovation of the dominant product design in the industry. Consequently, the challenge is to develop or adapt a discontinuous product innovation. Conversely, implementing biomarkers is a case of technology change that impacts R&amp;D. Since drugs lose their value when the patent protection expires, the established pharmaceutical firms need to continuously develop new block buster drugs – not just one product. More research is needed to fill this gap in the literature in order to develop an understanding of the established firm challenge in implementing biomarkers. This thesis builds upon a longitudinal case study of AstraZeneca. Using multiple data sources, the findings show that the dominant architecture of the drug development process during the 2000s impeded the implementation of biomarkers. AstraZeneca required an “architectural process innovation” in order to complete this implementation. The company’s process-based management structures distorted it from recognizing the need for process change. This thesis has three contributions: First, it describes the process change and the firm’s managerial challenges associated with biomarker implementation; Second, it contributes to the literature on the established firm challenge by developing an understanding of the phenomenon of architectural process innovation; Third, it develops a process-based framework for studying technology change that affects R&amp;D. / <p>QC 20151106</p>

This dissertation consists of three essays in applied microeconomics. These essays investigate different aspects of the impact of technology on labor market outcomes and firm strategy. The first essay, co-authored with Ronald L. Oaxaca, is in the area of labor economics and it investigates the relation between non-neutral technological change and the gender gap in wages. This essay is the first to address the issue of the recent narrowing of the gender wage gap in the context of technological change by using a novel approach to separately estimate the effects of technological change and discrimination on the gender wage gap. Using a constant elasticity of substitution production function and Current Population Survey data on employment and wages by industry and occupation, the results show that changes in non-neutral technological change explain between 5% and 9% of the narrowing of the wage gap between 1979 and 2001. The latter two essays span topics across applied industrial organization, firm strategy and labor economics. The second component of my dissertation investigates the relation between technological knowledge diffusion through the labor mobility of scientists and the organization of R&amp;D activities by innovative firms. Using a labor mobility measure from the Current Population Survey March Supplements as a measure for inter-firm technology spillovers and a panel of R&amp;D alliance data for 18 U.S. industries between 1989 and 1999, a Poisson estimation shows that firms facing a 10% increase in the labor mobility of scientists have a 5% increase in the annual number of R&amp;D collaborations. The third essay is an empirical analysis of the impact of knowledge dissemination generated by the labor mobility of scientists and engineers on a measure of the pace of innovation. Using an unbalanced panel of firms containing patent data matched with firm data across eight innovative industries, from 1989 to 1998, along with a measure of the labor mobility of scientists and engineers, this essay provides evidence that firms in industries exposed to levels of labor mobility of scientists and engineers that differ by 1%, have an expected time lag between sequential generations of technologies that differs by 0.56 years.

Investments in financial and human capital are cornerstones in R&amp;D organizations longing for profitable business in an increasingly competitive environment. However, another aspect to consider for R&amp;D managers to succeed in terms of increased innovation is clan control, which is a widely described subject in management literature, not least by Ouchi. In this study, relationships between financial/human capital, clan control and innovation were examined in a setting of R&amp;D organizations within the Stockholm-Uppsala region. Positive relationships were found between education and patents issued; and stability orientation and projects completed. A negative relationship was found between innovation orientation and patents issued. In the end a brief discussion concludes the results and directions for further research are proposed.

According to the Globalizations Council the most important task Sweden has is to assess the opportunities and challenges presented by the global economy to a small, open country like Sweden. There has been dual competition, some has been able to sell the resource services of human and physical knowledge capital, and others offering to sell unskilled labor at wages way below Swedish standards. This thesis will examine the changes in market position in the manufacturing sector, and how comparative advantage and the role of technology have impacted the changes. The empirical analysis is based on the relative international competitiveness index to examine how market position in different sectors has changed during the time-period 1985-2003. In the regression measures for human and physical capital has been included as well as R&amp;D expenditure for both Sweden and the OECD countries. The results show that the changes in market position for most products are relatively small. What can be concluded is that it is not the sector as a whole that experience improving market positions instead it is certain products such as pharmaceutical, sulphate and electronic components among others. Sweden ranks very high in terms of resources dedicated to production of new technology and there are proofs on both side of the "Swedish Paradox"; which states that high technology exports are low given the high R&amp;D investment. The result also indicates that Sweden has a labor-intensive disadvantage, i.e. indications that the market position for industries with high total capital-intensity has increased.

This research develops a real options perspective framework for firms‘ valuation of strategic investments. I propose that a real options perspective can provide an effective means of re-examining and revising firms‘ strategic investment decisions in general, and of making individual, investment-level abandonment decisions in particular. The principal purposes of this research are to explore whether firms make abandonment decisions in accordance with real options theory, and the relative strength of the traditional economic theory, the behavioral theory of the firm and real options theory in explaining firms‘ abandonment decisions. I develop a set of hypotheses in the context of firms‘ R&D investment strategies in the world chemical industry. Using U.S. patent renewal data, I empirically test the hypotheses. The results from the empirical analyses suggest that, 1) firms‘ actual innovation abandonment decisions are consistent with the predictions made from real options theory; and 2) a real options perspective provides better explanation of firms‘ abandonment decisions than traditional economic theory and the behavioral theory of the firm. Therefore, taking such a perspective allows us to better predict abandonment than the other models. In investigating whether insights from real options theory enlighten firm‘s abandonment decisions, this research contributes to the strategic decision making literature, real options research, RBV and dynamic capability research and innovation literature.

The role of information is central to the study of corporate finance. In the real world where one party usually has more and better information, information asymmetry forms the basis of analysis in many key aspects of modern economics including contract theory and principle-agent problems. Although technology facilitates information flow, information continues to play an important role because we live in an environment in which there is more information and information that is more complex. Moreover, we are experiencing a fundamental shift towards a knowledge-based economy in which ideas and concepts, both in the form of information, gain importance. This thesis examines the role of information as we make this transition in two separate settings: First in a “real impact” setting where knowledge generated at leading research universities spills over into firms nearby, and second, in a "traditional market" setting where analysts help disseminate information. In the post-industrial economy of the 21st century, innovation is the engine of economic growth. As a result, we increasingly value human capital and knowledge. Chapter 2 looks at the location of firms relative to knowledge centers and its impact on stock volatility. I argue that knowledge spillovers foster firm R&D and find supporting evidence. My evidence is consistent with the classic models on the impact of human capital on economic growth (Nelson and Phelps, 1966). Chapter 3 examines the impact of knowledge and innovation on firms’ cash management policies. Bates, Kahle, and Stulz (2009) find that the average cash-to-assets ratio for firms more than doubles in the past decades and attribute it to changing firm characteristics. I identify innovation as a driving force behind these changes, resulting in firms holding more cash as a precaution. In Chapter 4, I study the investment value of information from analysts, or more specifically, analyst target prices. Due to potential conflicts of interest problems, the value that analysts provide to investors remains controversial. Moreover, since the information age is characterized by information overload, it is harder for investors to identify relevant information. I find that institutions trade in the same direction as the consensus target price movement. / Thesis (Ph.D, Management) -- Queen's University, 2012-03-07 14:20:20.178

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The value and scope of telecom services have increased substantially in the decade from the mid 1990s. The telecom companies have offered not only telephone services but also data exchanges for example streaming services. Therefore, they now offer telecom services as packaging into which layered services are integrated. The number of actors involved in the market has increased due to the expansion of business areas, while rapidly changing technological trends have altered R&D methods. The thesis shows that the adoption of the marketing concept and the development of complex inter-firm technology based relationships underpin the creation and management of new telecom services. The relationships have originated from an exchange of technological knowledge and specialized skills. This research uses the NTT-centred collaboration system in Japan, which features relational exchanges and high mutual dependence. This case shows that inter-firm relationships greatly contributed in the development of technological resources in two ways; collecting advantageous technologies from others and mediating in the introduction of new technologies. In addition, developments in technology resulted in an expanded domain of applicability. Consequently, not only the market structure was changed but also the relationship between marketing and R&D changed. With increasing integration of the market, the number of related firms increased as firms concentrated on specific technologies, with additional firms having superior competitive advantages in each layered business area. The case in the thesis also shows mechanisms of changing inter-firm relationships under dynamic business circumstances; indirect exchanges occurred when inter-firm relationships changed. Inter-firm relationships are changed, keeping existing but adding new relationships. The study also indicates a new direction to study service marketing. As the new trend of service development in ICT industry develops so the integration abilities and the management of inter-firm relationships in supply-sides become more focused. The thesis points to the importance of these upstream activities (coordinating inter-firm relationships in a service-oriented approach) and advocates the presence of a facilitator who can bridge both upstream and downstream activities. The results should contribute to both marketing and technology management in academia as well as business practices in R&D management.