The Effect of Innovation Strategies on Business Performance of Pharmaceutical Companies: The Moderating Role of Financial Management and Intellectual Capital
Abstract
Background: Management science is seeking ways to realize organizational goals, strategies,and expectations, which are the criteria for a company’s successful performance. One of themost important aspects of management in an organization is the evaluation and measurementof business performance. Measuring business performance is crucial and according to someexperts, “you cannot manage what you do not measure”. Having a systematic view ofbusiness performance in pharmaceutical companies is of great significance.Methods: According to the studies and interviews with pharmaceutical experts, we developeda conceptual model and examined the factors affecting pharmaceutical companies’ innovativestrategies. A descriptive method, specifically the Partial Least Squares Structural EquationModeling (PLS-SEM) was adopted. The statistical population of the study consisted ofpharmaceutical companies’ experts selected by cluster sampling. Also, according to the MorganTable, the number of statistical population and sample members were 70 and 59, respectively.Results: The obtained results indicated that the key processes and product innovativestrategies improved business performance. Financial management, as the moderatorvariable, affected the relationship between product and process innovation and businessperformance improvement. Intellectual capital, as the other moderator variable, affectedthe relationship between product and process innovation and business performanceimprovement.Conclusion: The findings of this study showed that factors, like financial management,product innovation strategy, process innovation strategy, and intellectual capitaldevelopment significantly affect business performance improvement. Generally, a reviewof previous literature showed that the present study confirms their results to some extentand by including some factors, which had not been considered before, it is a more novelcomprehensive research on this issue.
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[2] Hadi, M. Challenges, solutions, and innovation strategies in pharmaceutical firms’ supply chain. Nootash Magazine, Economic and Social Quarterly.2016. p 12. [2]. http://www.nootash.com/
[3] Doyle P, Bridgewater S, editors. Inovation in marketing. New York: Routledge; 1998. https://books.google.com/books?id=A4omTPG2xngC&dq
[4] Foroutan V. [Evaluating and ranking the factors affecting innovation capability in the pharmaceutical industry via the AHP method, case study: Tehran Darou Company (Persian)]. Paper presented at: International Conference of Management Elites. 1 June 2016; Tehran, Iran. https://civilica.com/doc/528984/
[5] Yam RCM, Guan JC, Pun KF, Tang EPY. An audit of technological innovation capabilities in chines firms: Some empirical findings in Beijing, China. Res Policy. 2004; 33(8):1123-40. [DOI:10.1016/j.re�-spol.2004.05.004]
[6] Chen J, Zhu Z, Yuan Xie H. Measuring intellectual capital: A new model and empirical study. J Intellect Cap. 2004; 5(1):195-212. [DOI:10.1108/14691930410513003]
[7] Malek Akhlagh M, Moradi M, Mehdizade M, Dorostkar Ahmadi N. Innovation Strategies, Performance Diversity and Development: An empirical analysis in Iran Construction and Housing Industry. IJMS. 2013 (6) 31-60. https://ijms.ut.ac.ir/article_32063_030238d18d440bd5bcaa33b689325b4c.pdf
[8] Bontis N. Managing organizational knowledge by diagnosing intellectual capital: Framing and advancing the state of the field. World Congress on intellectual capital readings. Amsterdom: Elsevier; 2001. [DOI:10.4018/978-1-878289-98-8.ch016]
[9] Tai HT, Mai NQ. Proactive personality, organizational context, employee creativity and innovative capability: Evidence from MNCs and domestic corporations. Int J Organ Anal. 2016; 24(3):370-89.
[DOI:10.1108/IJOA-04-2015-0857]
[10] Zizlavsky O. The balanced scorecard: Innovative performance measurement and management control system. J Technol Manag Innovation. 2014; 9(3):210-22. [DOI:10.4067/S0718-27242014000300016]
[11] Mata J, Woerter M. Risky innovation: The impact of internal and external R&D strategies upon the distribution of returns. Res Policy. 2013; 42(2):495-501. [DOI:10.1016/j.respol.2012.08.004]
[12] Kargar Shahamat B, Taghva MR, Tabatabaiean SH, Salehi Sadaghiani J. [Requirements of innovation network formation an analysis of the firms rule on Iran’s pharmaceutical sector (Persian)]. J Manag
Imp. 2017; 10(4):49-94. http://www.behboodmodiriat.ir/article_ 44442.html
[13] Sardo F, Serrasqueiro Z. A European empirical study of the relationship between firms’ intellectual capital, financial performance and market value. J Intellect Cap. 2017; 18(4):771-88. [DOI:10.1108/JIC-10-2016-0105]
[14] Vishnu S, Gupta VK. Intellectual capital and performance of pharmaceutical firms in India. J Intellect Cap. 2014; 15(1):83-99. [DOI:10.1108/JIC-04-2013-0049]
[15] Sveiby KE. The new organizational wealth: Managing & measuring knowledge-based assets. San Francisco, CA: Berrett-Koehler Publishers; 1997. https://books.google.com/books?id=xKNXlgaeCjAC&dq
[16] Delkhosh M, Mousavi H. Strategic financial management review of the financial success of an organization. Mediterr J Soc Sci. 2016; 7(2 S2):30-4. [DOI:10.5901/mjss.2016.v7n2s2p30]
[17] Barclay D, Thompson R, Higgins C. The Partial Least Squares (PLS) approach to causal modeling: Personal computer use as an illustration. Technol Stud. 1995; 2(2):285-309. https://www.researchgate. net/publication/242663837
[18] Fornell C, Larcker DF. Structural equation models with unobservable variables and measurement error: Algebra and statistics. J Mark Res. 1981; 18(3):382-8. [DOI:10.1177/002224378101800313]
[19] Mortazavi M, Rasoli Ghahrodi M, Rostami A. [The effects of organizational innovations and competitive cost leadership strategy performance though competitive advantages (Persian)]. J Dev Evol Manag. 2017; 1395(27):17-25. http://www.jdem.ir/article_526.html
[20] Seyedi SR, Jabini AR, Savaghebi Firoozabadi M, Saadmohammadi M. [Effect of service open innovation on the firms’ economic growth, case study: Food and medication industry (Persian)]. Paper presented at: International Management Conference. 22 November 2014; Tehran, Iran. https://civilica.com/doc/343775/
[21] Ghalaychi M, Zamani Mozdeh M, Karimi Govarashki MH. [Effect of coordination between innovation strategies and business on organization’s performance (Persian)]. Paper presented at: 2nd National Conference on Applied Research in Management and Accounting. 5 March 2015; Tehran, Iran. https://civilica.com/doc/382187/
[22] Chen CJ, Hsiao YC. The endogenous role of location choice in product innovations. J World Bus. 2013; 48(3):360-72. [DOI:10.1016/j.jwb.2012.07.020]
| Files | ||
| Issue | Vol 4 No 3/4 (2018) | |
| Section | Original Article(s) | |
| Keywords | ||
| Innovation Business performance Financial management Intellectual capital management | ||
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How to Cite
1.
Moradi M, Yektadoost A, Nikfar S. The Effect of Innovation Strategies on Business Performance of Pharmaceutical Companies: The Moderating Role of Financial Management and Intellectual Capital. JPPM. 2018;4(3/4):65-74.
