Decay, Shock, and Renewal: Operational Routines and Process Entropy in the Pharmaceutical Industry

Gopesh Anand (), John Gray () and Enno Siemsen ()
Additional contact information
Gopesh Anand: College of Business, University of Illinois at Urbana–Champaign, Champaign, Illinois 61820
John Gray: Fisher College of Business, Ohio State University, Columbus, Ohio 43210
Enno Siemsen: Carlson School of Management, University of Minnesota, Minneapolis, Minnesota 55455

Organization Science, 2012, vol. 23, issue 6, 1700-1716

Abstract: In this study, we examine decay in adherence to operational routines over time. Our empirical setting is the worldwide pharmaceutical industry, and we focus on operational routines used to maintain product quality. Based on an analysis of longitudinal data from U.S. Food and Drug Administration (FDA) inspections, we find that the tendency of operational routines to decay is widespread. Our results also illustrate that FDA inspections act as external renewals that halt decay in adherence to routines. In addition, manufacturing plants are found to vary significantly in their level of decay. Using data on mergers and acquisitions affecting these plants, we find that mergers appear to cause decay in adherence to routines. However, acquisitions appear to serve as renewals and halt such decay. Based on our overall findings, we present theoretical implications for research in organizational routines and practical insights for companies and regulatory authorities.

Keywords: operational routines; process entropy; mergers; acquisitions; quality control (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://dx.doi.org/10.1287/orsc.1110.0709 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:23:y:2012:i:6:p:1700-1716

Access Statistics for this article

More articles in Organization Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().