Servant Firms in Drug Discovery: a Neglected Project Based Organizational Form

36 Pages Posted: 23 Mar 2012

See all articles by Michael M. Hopkins

Michael M. Hopkins

University of Sussex

Paul Nightingale

University of Sussex - Science and Technology Policy Research Unit (SPRU)

Charles Baden‐Fuller

City University, London - Cass Business School; University of Pennsylvania - The Wharton School

Date Written: March 22, 2012

Abstract

This paper seeks to clarify the theory of project based organisations by highlighting a previously overlooked organizational form - temporary project based firms that are valued for their capabilities rather than their products. Such firms exhibit different characteristics from firms in existing typologies that focus on firms producing products, or subsystems of products, for a profit. ‘Servant firms’ by contrast create value by developing project capabilities, externally for their acquirers, and capture value as a capital gain for their investors at acquisition. The paper positions the firms in a new theoretical typology that is supported by a detailed study of five UK drug discovery firms that serve as examples of our typology in action. We also use our analysis to solve some empirical puzzles, such as why the biotech sector has attracted so much investment despite the dire profitability of so many of its firms.

Keywords: Project Based Organising, Biotechnology

JEL Classification: M10

Suggested Citation

Hopkins, Michael M. and Nightingale, Paul and Baden-Fuller, Charles, Servant Firms in Drug Discovery: a Neglected Project Based Organizational Form (March 22, 2012). Available at SSRN: https://ssrn.com/abstract=2027537 or http://dx.doi.org/10.2139/ssrn.2027537

Michael M. Hopkins

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Paul Nightingale

University of Sussex - Science and Technology Policy Research Unit (SPRU) ( email )

Mantell Building
Falmer
Brighton BN1 9RF, East Sussex
United Kingdom

Charles Baden-Fuller (Contact Author)

City University, London - Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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