Operational complexity of foreign innovation projects and the inter-organisational alliance in the biopharmaceutical industry in China

ABSTRACT

Contrary to the perceived assumption that operational complexity of innovation projects predicts operations inside the organisation, we propose the opposite argument that operational complexity of foreign innovation projects increases the inter-organisational alliance formation. The evidence from the clinical trials innovation projects in the biopharmaceutical sector supports the operational complexity-alliance (OCA) proposition in China at three levels: institutional (legal and cultural), technological (purpose and methodology) and dispositional (organisation type and its experience). Institutional complexity shows that the legal difference between the home and host country positively predicts the inter-organisational alliance. Similarly, in national cultural differences, power distance, uncertainty and long-term orientation support the OCA proposition. Technological complexity reveals that explorative purpose and complex methodologies support the OCA proposition. The organisation’s disposition reveals that the industrial firm predicts the inter-organisational alliance more than the non-industrial organisation does. Concerning the organisation’s experience, it negatively predicts the inter-organisational alliance. Therefore, it appears that organisational discretion from the operational complexities leads to the structural change to reduce the cost of operations through externalisation rather than internalisation.

KEYWORDS:

• Operational complexity
• multiple logics
• biopharmaceuticals in China
• clinical trial projects
• inter-organisational alliance

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Tariq H. Malik has a Ph.D. in Management and Innovation from the University of London. He researches in international business, institutions and entrepreneurship/innovation in interdisciplinary approaches to the duality of discovery-presented questions. He is the founder of International Centre for Organisation & Innovation Studies (ICOIS) and is a professor of Management & Innovation.

Jiang Yun is a Professor of strategic management at School of Business Administration. He received his Ph.D. in management from the same university. Currently he is the director of disciplines management. He has received multiple grants from the National Science Foundation of China. His research focus is on the strategic process and innovation.

ORCID

Tariq H. Malik http://orcid.org/0000-0001-6906-3622

Notes

1 https://geert-hofstede.com/countries.html

Additional information

Funding

This work was supported by National Natural Science Foundation of China [grant number #71272054].