TY - JOUR
T1 - Decay, shock, and renewal
T2 - Operational routines and process entropy in the pharmaceutical industry
AU - Anand, Gopesh
AU - Gray, John
AU - Siemsen, Enno
PY - 2012/12/1
Y1 - 2012/12/1
N2 - In this study, we examine decay in adherence to operational routines over time. Our empirical setting is the worldwide pharmaceutical industry, and we focus on operational routines used to maintain product quality. Based on an analysis of longitudinal data from U.S. Food and Drug Administration (FDA) inspections, we find that the tendency of operational routines to decay is widespread. Our results also illustrate that FDA inspections act as external renewals that halt decay in adherence to routines. In addition, manufacturing plants are found to vary significantly in their level of decay. Using data on mergers and acquisitions affecting these plants, we find that mergers appear to cause decay in adherence to routines. However, acquisitions appear to serve as renewals and halt such decay. Based on our overall findings, we present theoretical implications for research in organizational routines and practical insights for companies and regulatory authorities.
AB - In this study, we examine decay in adherence to operational routines over time. Our empirical setting is the worldwide pharmaceutical industry, and we focus on operational routines used to maintain product quality. Based on an analysis of longitudinal data from U.S. Food and Drug Administration (FDA) inspections, we find that the tendency of operational routines to decay is widespread. Our results also illustrate that FDA inspections act as external renewals that halt decay in adherence to routines. In addition, manufacturing plants are found to vary significantly in their level of decay. Using data on mergers and acquisitions affecting these plants, we find that mergers appear to cause decay in adherence to routines. However, acquisitions appear to serve as renewals and halt such decay. Based on our overall findings, we present theoretical implications for research in organizational routines and practical insights for companies and regulatory authorities.
KW - Acquisitions
KW - Mergers
KW - Operational routines
KW - Process entropy
KW - Quality control
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U2 - 10.1287/orsc.1110.0709
DO - 10.1287/orsc.1110.0709
M3 - Article
AN - SCOPUS:84872391645
SN - 1047-7039
VL - 23
SP - 1700
EP - 1716
JO - Organization Science
JF - Organization Science
IS - 6
ER -