Closing the Marketing Strategy-Tactics Gap: An Institutional Theory Analysis of Pharmaceutical Value Chain - Innovation and Marketing in the Pharmaceutical Industry - page 713

assessments, and how to repair legitimacy breeches. For instance, Suchman ( 1995 )
notes that legitimacy response is a strategic issue and mending legitimacy breeches
may require managers to decouple or disassociate from offending activities, insti-
tute credible monitoring controls, restructure market arrangements, or engage in
aggressive damage control. Whether such managerial action mends or exacerbates
legitimacy breeches within the value chain is an important line for theorizing and
empirical work. The proposed open systems framework offers several lines of
inquiry for exploring the preceding issues as noted in Table 24.3 .

24.5.2 Premises

The economic and open systems frameworks differ in their underlying premises.
Specifi cally, in contrast to economic framework's premise of autonomous manage-
rial action (March 1996 ), the proposed open systems framework is premised on the
notion of action-system interdependence. Rooted in the notion of a “rational man,”
the economic framework holds that individual managers largely hold agency for
action, and their collective actions are the key to understanding how institutional
systems are structured and shaped over time, and how these system dynamics, in
turn, infl uence organizational outcomes. Indeed, the economic framework does not
assert that institutional systems are swayed by any single manager. Rather, it posits
that managers in an industry often share common schemas of their institutional
environments and, as common patterns of managerial action emerge, their collec-
tive actions are powerful forces in infl uencing organizational, value chain, and insti-
tutional outcomes (George et al. 2006 ).
By contrast, the open systems framework adopts a constrained role for manage-
rial agency while emphasizing the role of action-system interdependence.
Sidestepping both the agency vs. structure debate and paradox of embedded agency
(Heugens and Lander 2009 ), an open systems perspective recognizes that managers
hold agency in shaping institutional structures and processes; however, it does not
accord agency the status of taken for granted as per the economic framework.
Rather, an open system framework views managerial actions to be just as empow-
ered as they are constrained by the institutional structures and processes that embed
their actions. This open systems view of managerial action, empowered and con-
strained, is referred to as action-system interdependence. Dating back to action
theory (Parsons 1956 ), action-system interdependence implies that individuals con-
struct actions from repertoires available in the institutional system; yet, actions are
interpreted or are effective in catalyzing change depends on processes of sense-
making and response by other actors in the system.
The pharmaceutical value chain is a prototypical instance of such interdepen-
dence. Fiduciary responsibility requires subordinating self-interest in the service of
external constituencies (e.g., pubic, society), enlarging the scope of the system and
exposing it to external scrutiny. Considerable evidence exists to suggest that market
actors in such systems are often blind sighted by implications of action-system