Inertia and Incentives: Bridging Organizational Economics and Organizational Theory

Organizational theorists have long acknowledged the importance of the formal and informal incentives facing a firm%u2019s employees, stressing that the political economy of a firm plays a major role in shaping organizational life and firm behavior. Yet the detailed study of incentive systems has traditionally been left in the hands of (organizational) economists, with most organizational theorists focusing their attention on critical problems in culture, network structure, framing and so on -- in essence, the social context in which economics and incentive systems are embedded. We argue that this separation of domains is problematic. The economics literature, for example, is unable to explain why organizations should find it difficult to change incentive structures in the face of environmental change, while the organizational literature focuses heavily on the role of inertia as sources of organizational rigidity. Drawing on recent research on incentives in organizational economics and on cognition in organizational theory, we build a framework for the analysis of incentives that highlights the ways in which incentives and cognition -- while being analytically distinct concepts -- are phenomenologically deeply intertwined. We suggest that incentives and cognition coevolve so that organizational competencies or routines are as much about building knowledge of %u201Cwhat should be rewarded%u201D as they are about %u201Cwhat should be done.%u201D

Public-Private Interaction and the Productivity of Pharmaceutical Research

We examine the impact of publicly funded biomedical research on the in-house research of the for-profit pharmaceutical industry. Qualitative analysis of the history of the discovery and development of a sample of 21 significant drugs, and a program of interviews with senior managers and scientists reveals a complex and often bidirectional relationship between the public and private sectors of the industry, illustrating the difficulties inherent in estimating the rate of return to public support of basic research. This analysis also highlights the importance for private sector firms of maintaining close connections to the upstream' scientific community, which requires them to make significant investments in doing in-house basic research and adopting appropriate internal incentives and procedures. We measure the extent and nature of this connectedness' using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers. These measures are significantly correlated with firms' internal organization, as well as their research performance in drug discovery as measured by important patents per research dollar. The size of the estimated impact of connectedness' to private research productivity implies a substantial return to public investments in basic research.

Balancing Incentives: The Tension Between Basic and Applied Research

This paper presents empirical evidence that the intensity of research workers' incentives for the distinct tasks of basic and applied research are positively associated with each other. We relate this finding to the prediction of the theoretical literature that when effort is multi-dimensional, firms will balance' the provision of incentives; when incentives are strong along one dimension, firms will set high-powered incentives for effort along other dimensions which compete for the worker's effort and attention (Holmstrom and Milgrom, 1991). We test for this effect in the context of pharmaceutical research using detailed data on individual research programs financed by private firms. Consistent with the complementarity hypothesis, we find strong evidence that firms who provide strong promotion-based incentives for individuals to invest in fundamental or basic' research also provide more intense incentives for success in applied research through the capital budgeting process. The intensity of these bonus' incentives is weaker in firms who use a more centralized research budgeting process. We interpret this latter finding as providing support for theories which emphasize substitutability between contractible and non-contractible signals of effort (Baker, Gibbons, and Murphy, 1994).

Ivory Tower Versus Corporate Lab: An Empirical Study of Basic Research and Appropriability

We explore the use of patent citations to measure the "basicness" and appropriability of inventions. We propose that the basicness of research underlying an invention can be characterized by the nature of the previous patents cited by an invention; that the basicness of research outcomes relates to the subsequent patents that cite an invention; and that the fraction of citing patents that are assigned to the same organization as the original invention is a measure of appropriabiity. We test the validity of these presumptions by comparing the value of our measures for university and corporate patents, and find that many of the measures do conform to our a priori belief that university research and research outcomes are more basic and harder to appropriate than those of corporations. We also find some evidence that basicness of outcomes is correlated with basicness of research, and that appropriability is lower for basic outcomes.

The Diffusion of Science-Driven Drug Discovery: Organizational Change in Pharmaceutical Research

Recent work linking the adoption of key organizational practices to productivity raises an important question: if adoption increases productivity so dramatically, why does adoption across an industry take so long? This paper explores this question in the context of one particularly interesting practice, the adoption of science driven drug discovery by the modern pharmaceutical industry. Over the past two decades, the established pharmaceutical industry has slowly shifted towards a more science-oriented drug discovery: (a) adopters experienced substantially higher rates of R&D after the late 1970s and (b) the rate of adoption across the industry was extremely slow. Motivated by the apparent contradiction between large boosts in performance and slow rates of adoption, this paper characterizes the sources of differences in rates of adoption between 1980 and 1993. The principal finding is that adoption of a science-oriented research approach was a function of initial conditions, or subject to 'state dependence': some firms simply began the sample period at a much higher level of science orientation. Moreover, while these effects attenuated over time, our empirical results suggest that it took more than ten years before adoption was unrelated to initial conditions. In addition, consistent with theories developed in the context of technology adoption, we find that relative diffusion rates depend on the product market positioning of firms. More surprisingly, adoption rates are seperately driven by the composition of sales within the firm. This latter finding suggests the potential importance of differences among firms in terms of the internal structure of power and attention, an area which has received only a small amount of theoretical attention.

Parent-to-Parent Support for Parents of Children who are Deaf or Hard of Hearing: A Conceptual Framework

Background: Parent-to-parent support for parents with children who are deaf or hard of hearing (D/HH) is identified as an important component of early hearing detection and intervention (EHDI) programs for children with hearing loss. Purpose: The specific aim of this review was to identify the constructs and components of parent-to-parent support for parents of children who are D/HH. Research Design: An extensive scoping literature review identified 39 peer-reviewed articles published from 2000-2014. Studies were selected and reviewed based on standardized procedures. Results: Data was identified, extracted and organized into libraries of thematic and descriptive content. A conceptual framework of parent-to-parent support for parents of children who are D/HH was developed and presented in a comprehensive, bidirectional informational graphic. The constructs and components of the conceptual framework are 1) well-being: parent, family and child, 2) knowledge: advocacy, system navigation and education, 3) empowerment: confidence and competence. Conclusions: The findings from this scoping review led to the development of a structured conceptual framework of parent-to-parent support for parents of children who are D/HH. The conceptual framework provides an important opportunity to explore and clearly define the vital contribution of parents in EHDI programs

South Korea\u27s Transition from K-GAAP to IFRS

The purpose of this paper is to examine the relationship between South Korean culture and the transition from Korean Generally Accepted Accounting Principles to Korean International Financial Reporting Standards. It is suspected that the hierarchical structure of Korean society and culture has allowed Korea to make one of the fastest accounting standards transitions in recent years. This possible correlation is examined through the use of a survey of current accounting students in Daegu, South Korea

An Outpatient Physical Therapy Intervention Program

BACKGROUND AND PURPOSE: Two thirds of the United States population may experience neck pain at one point in their life. Two common categories of neck pain are whiplash associated disorders (WAD) and cervical radiculopathy. Conservative non-operative management of cervical radiculopathy is effective with the majority of patients. The purpose of this case report is to describe the outpatient physical therapy intervention for a patient with cervical radiculopathy. CASE DECSRIPTION: The patient is a 47- year-old right hand dominant female with a complicated history of neck pain referred to physical therapy for evaluation and treatment of cervical radiculopathy. Symptoms included bilateral cervical and upper thoracic pain, and upper extremity radicular symptoms. Decreased cervical and upper extremity range of motion (ROM), upper extremity and scapular muscle weakness, and significant tenderness with palpation were found. Eight visits over a six week course of therapy focused on nerve glides, soft tissue mobilization, joint mobilization and manipulation, therapeutic exercises, and a trial of cervical mechanical traction to reduce pain and increase function. OUTCOMES: The patient reported decreased overall pain, and improved cervical ROM and self management skills. Shoulder ROM, upper extremity and scapular strength did not improve. Tolerance to work and exercise activity did improve since the start of treatment. Neck Disability Index scores increased from 14/50 to 19/50, indicating greater functional difficulty. DISCUSSION: The interventions detailed throughout this report are supported by varying levels of research and may be related to changes in this patient’s impairments and function. Any lack of improvements or gains made by the patient could iii also be related to her motivationand activities she participated in outside of her therapy visits. Few studies are available to represent cases in which conservative treatment for cervical radiculopathy is unsuccessful and who potentially may require surgical referral. This case report helps to give current insight into one such possible rehabilitation experience