First in Class vs Best in Class

The purpose of this single case study is to examine those changes in structural characteristics and organizational actions which affect the innovation ability of an organization under acquisition. This study’s context was pharmaceutical innovation. It was shaped by the organizational learning perspective, specifically the exploration and exploitation model of James March (1991). By basing the analysis on a pharmaceutical company, this report helps us to assess the applicability of the model to this industry. Furthermore, given the specific history of this company, i.e. two acquisitions, it also helps indicate the applicability of the model to the acquisition process and its value in predicting and explaining the effects of such processes on innovation ability. The study found that changes in strategic actions had the strongest influence on organizational innovation ability. With the change of strategy organizational characteristics such as task division, decision-making power and communication lines altered, resulting in the emergence of a vertically integrated and centralized structure, with many phases, especially in the discovery process, being outsourced.