Biomedical Engineering Reference
In-Depth Information
Table 24.3
Propositions for a research agenda of an open systems study of pharmaceutical
marketing
Foundational elements
Market exchanges between value chain partners with disparate organizing logics are prone to
confl ict when fi duciary responsibility is central to one, but not both, of those logics
Organizational legitimacy is a key mediator for the infl uence of marketing strategy on long term
(a) sustainability, and (b) profi tability
Marketing strategies centered exclusively on a fi rm's own internal logics will (a) enhance value
chain confl ict and (b) lower organizational legitimacy
An organization is likely to be perceived as more legitimate, the more it is perceived by its value
chain partners and customers to (a) deliver something that adds value to exchange relation-
ships in the system (pragmatic legitimacy), (b) be a trustworthy partner that can be relied
upon to protect the best interests of its downstream customers and curb opportunism (moral
legitimacy), and (c) engage in activities that are meaningful and desirable for society
(cognitive legitimacy)
In the long term, marketing strategies centered exclusively on pragmatic legitimacy will
undermine (a) moral legitimacy, and (b) cognitive legitimacy
The higher the organization's legitimacy, the greater its effectiveness in (a) securing scarce
societal resources, (b) long term sustainability, and (c) overcoming market threats (e.g., due to
unfavorable information, shocks, crisis)
Greater the persistence of unresolved confl ict among value chain partners, lower the organiza-
tional legitimacy for one or both partners
Premises
Greater the marketing incentives to physicians with the objective of infl uencing their prescription
writing (a) higher the system confl ict and (b) lower the organizational legitimacy
Greater the effectiveness and effi ciency of marketing strategies rooted in consequential logic,
(a) higher the system confl ict and (b) lower the organizational legitimacy
Greater the focus of value chain partners on the stability of their own internal dominant logic,
greater the intensity of system confl ict
Key questions and mechanisms
The more a value chain is characterized by persistent system confl ict, the more likely are
retaliatory actions by value chain partner(s) to safeguard their own legitimacy
Managerial actions with a strong (weak) focus on consequential logic will result in increasing
(decreasing) unilateral actions by value chain partners to safeguard their legitimacy by (a)
erecting fi rewalls and (b) maintaining arms length relationships
Collaborative actions among value chain partners are likely to be more effective, the more they
are organized as open, bottom-up, self-organizing systems (rather than structured, top-down,
regulated systems)
Over time, value chains will have an increasing tendency toward mechanisms that provide
effi ciency gains and reduce complexity (progressive mechanization)
Greater the system's success in progressive mechanization, lower its capacity to effectively
resolve emergent system confl icts
24.5.1
Foundational Elements
Whereas an economic framework directs managerial attention to the objective of
maximizing ROI, the open systems framework directs managerial focus to organi-
zational and system legitimacy. We assert that legitimacy is a stronger predictor of
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