Skip to main content

Toward a Flexible Breathing Organization: R&D Outsourcing at Bayer

  • Chapter
  • First Online:
The Offshoring Challenge

Abstract

Although R&D is at the core of knowledge-intensive industries like Pharma, outsourcing parts of its activities hold considerable efficiency and effectiveness potentials. That means managers must understand, which R&D activities can be outsourced and which need to stay in-house in order to ensure competitiveness. Nevertheless, systematic approaches for understanding the finer details of the decision-making process on R&D outsourcing are lacking. To address this gap, we present a framework developed in the context of a multinational company, Bayer. The combination of literature studies and the study of the decision process in the pharmaceutical division at Bayer HealthCare allows us to unfold an outsourcing process model—the filter approach—that includes appropriate decision phases and proper tools. The underlying logic of the model is that outsourcing decisions are rather a learning process with different stages than a rational one-off decision.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Adams C, Branter V (2009) Spending on new drug development. Health Econ 19(2):130–141

    Article  Google Scholar 

  • CMR International (2009) Pharmaceutical R&D factbook. CMR International, New York

    Google Scholar 

  • Contractor F, Kumar V, Kundu S, Torben P (2010) Reconceptualizing the firm in a world of outsourcing and offshoring: the organizational and geographical relocation of high-value company functions. J Purch Supply Manag 47(8):1417–1433

    Google Scholar 

  • DataMonitor (2011) Pharmaceutical key trends 2010. Datamonitor, London

    Google Scholar 

  • David E, Tramontin T, Zemmel R (2009) Pharmaceutical R&D: the road to positive returns. Nat Rev Drug Discov 8:609–610

    Article  Google Scholar 

  • Evaluate Pharma (2009) World preview 2014. EvaluatePharma, London

    Google Scholar 

  • Farrell D (2005) Offshoring: value creation through economic change. J Manage Stud 42(3):675–683

    Article  Google Scholar 

  • Gupta A, Seshasai S, Mukherji S, Ganguly A (2007) Offshoring: the transition from economic drivers toward strategic global partnership and 24 hour knowledge factors. J Electron Commerce Organizations 5(2):1–23

    Article  Google Scholar 

  • Howells J, Gagliardi D, Mali K (2008) The growth and management of R&D outsourcing: evidence from UK pharmaceuticals. R&D Manage 38(2):205–219

    Article  Google Scholar 

  • Jahns C, Hartmann E, Bals L (2006) Offshoring: dimensions and diffusion of a new business concept. J Purch Supply Manag 12(4):218–231

    Article  Google Scholar 

  • Javalgi R, Dixit A, Scherer R (2009) Outsourcing to emerging markets: theoretical perspectives and policy implications. J Int Manag 15:156–168

    Article  Google Scholar 

  • Masia N (2006) The cost of developing a new drug. In: Bureau of international information programs focus on intellectual property rights. U.S. Department of state publication, Washington

    Google Scholar 

  • McIvor R (2005) The outsourcing process. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Mol MJ (2005) Does being R&D intensive still discourage outsourcing? Evidence from Dutch manufacturing. Res Pol 34(4):571–582

    Article  Google Scholar 

  • Morgan Stanley Research Europe (2010) Pharmaceuticals: exit research and create value. Morgan Stanley, New York

    Google Scholar 

  • Piachaud B (2004) Outsourcing R&D in the pharmaceutical industry. Palgrave Macmillan, Basingstoke

    Book  Google Scholar 

  • Platts K, Probert D, Canez L (2002) Make versus buy decisions: a process incorporating multi-attribute decision-making. Int J Product Econ 77(3):247–257

    Article  Google Scholar 

  • Probert D (1996) The practical development of a make-or-buy strategy: the issue of process positioning. Integ Manuf Syst 7(2):44–51

    Article  Google Scholar 

  • Sen AK (2009) Outsourcing of research and development activities: evidence from U.S. BioPharmaceutical Firms. GJBR 3/1:73–82

    Google Scholar 

  • Tate W, Ellram L, Bals L, Hartmann E (2009) Offshore outsourcing of services: an evolutionary perspective. Int J Product Econ 120(2):512–524

    Article  Google Scholar 

  • Teece DJ, Pisano GP, Shuen A (1997) Dynamic capabilities and strategic management. Strateg Manage J 18:509–533

    Article  Google Scholar 

  • Ulset S (1996) R&D outsourcing and contractual governance: an empirical study of commercial R&D projects. J Econ Behav Organ 30(1):63–82

    Article  Google Scholar 

  • Van de Water H, Van Peet H (2006) A decision support model based on the analytic hierarchy process for the make or buy decision in manufacturing. J Purch Supply Manag 12(5):258–271

    Article  Google Scholar 

  • Weiss D, Naik P, Weiss R (2009) The ‘big pharma’ dilemma: develop new drugs or promote existing ones? Nat Rev Drug Discov 8:533–534

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Lydia Bals .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2013 Springer-Verlag London

About this chapter

Cite this chapter

Bals, L., Kneis, K.C., Lemke, C., Pedersen, T. (2013). Toward a Flexible Breathing Organization: R&D Outsourcing at Bayer . In: Pedersen, T., Bals, L., Ørberg Jensen, P., Larsen, M. (eds) The Offshoring Challenge. Springer, London. https://doi.org/10.1007/978-1-4471-4908-8_12

Download citation

  • DOI: https://doi.org/10.1007/978-1-4471-4908-8_12

  • Published:

  • Publisher Name: Springer, London

  • Print ISBN: 978-1-4471-4907-1

  • Online ISBN: 978-1-4471-4908-8

  • eBook Packages: EngineeringEngineering (R0)

Publish with us

Policies and ethics