Innovation in the pharmaceutical industry: study of select parameters

Purpose - Innovation is the key to sustained competitive edge, especially for organizations functioning in a fast changing environment. The purpose of this paper is to understand select factors affecting innovation in Indian pharmaceutical organizations. Design/methodology/approach - The empirical analysis first tries to find relationships between the variables on a one‐to‐one basis, by conducting a step‐wise regression analysis. Thereafter, the analysis is taken a step further to find out the effect of interaction between the variables. Findings - The findings are interesting in the sense that while the one‐on‐one analysis did not yield significant results, the interaction analysis yielded significant results. Practical implications - An organizations' performance should be looked at as a function of the interaction effect of many variables and not as straight linear equations. This would give a more realistic understanding of the entire domain of organizational functioning. Originality/value - This paper presents a study done in an Indian environment to understand the functioning in original as compared to adapting the frameworks developed elsewhere. This assumes relevance specifically in the post WTO era wherein the impetus of survival of the pharmaceutical industry is innovation.