Exploring the gap between strategy formulation and strategy execution

: a focus on organizational structure and its impact on the effective implementation of strategy in companies operating models : the case of pharmaceutical companies

Abstract

A key question for today’s pharmaceutical companies is how to translate corporate strategy into their operating models to meet the demands of the ever faster-changing industry. Change at that pace can create a disconnect between company’s corporate strategy and its operating model. Despite the importance of the topic, literature on strategy implementation is limited and lackstheory. Thus, our research aims to identify how organizational structure impacts or facilitates strategy implementation in pharmaceutical companies operating models. Therefore, we conducted qualitative research of exploratory nature. We carried out a comprehensive literature review and interviewed 26 high-ranking managers of global pharmaceutical companies andstrategy consultancies. It is proposed that organizational structure has decisive impact andconstitutes the main bottleneck for effective strategy implementation. During our research,corporate strategy emerged as the lead driver in the choice of organizational structure forpharmaceutical companies. Our results suggest that organizational structure is of the utmostimportance when implementing corporate strategy and designing operating models. Thus,managers need to consider organizational structure already in the strategy formulation processand adapt existing structure if necessary. On this basis, managers should leverage design principles as a crucial first step in translating corporate strategy into operating models.

Date of Award	15 Oct 2020
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Philippe Zarlowski (Supervisor)