BIOTECH is a predominantly a knowledge intensive firm. The objective of BIOTECH is to bring an innovation in antibody therapeutics. In BIOTECH 123 project, the innovation was a radical one in which new therapeutics was produced to tackle acute respiratory disease. Such innovation will lead to a ‘blockbuster' drug that will affect lives of many people who suffering from such disease. This means a careful way of carrying out the research and development process, with careful strategies and proper clinical trial, while choosing right partners, proper team and management was needed to assure a successful completion of the process. No doubt it's hard to manage innovation and knowledge especially radical innovation, (Junkunc, 2007) and BIOTECH was no exception in this case, the project went through with a lot of problems and hurdles.

Reasons for Problem for BIOTECH 123

The reasons for the problems were due to emphasis on the new product and process. There seems to be exploitation of knowledge. There is a high level of uncertainty in radical innovation. The route is always sporadic and discontinuous in radical innovation.

Another reason for BIOTECH 123 faced so many problems and hurdles was the need for SWOT analysis which would help the project team or the organization as whole to find their internal strengths and weakness and as well as their external threats and opportunities. In management the SWOT Analysis is used in the start of projects as it helps to guide through the whole management process. The problem BIOTECH 123 faced was the lack of knowledge and process management change.

The SWOT analysis is the most suitable mean for recognizing potential approaches and areas to improve the gaps in the role, where you can allow yourself to be creative and innovative. The SWOT Analysis is one of the best tools to help to improve the look of the organization, when going through any change in this case BIOTECH was going through the change of formal process management along with being innovative. Carrying out a SWOT analysis can be a ‘real eye opener'. Not only will it draw attention to what needs to be corrected, it will also illustrate you what you've been doing correct. () SWOT analysis not just act as a guide but it is a starting point of bringing people together in knowledge sharing process when discussing the strengths, weaknesses, opportunities and threats of a given project. This could have helped BIOTECH with a boost and setting a trend, as there seem to be lack of knowledge sharing among different teams and department within the BIOTECH leading to conflicts and miscommunication problems. The SWOT analysis diagram is illustrated below which will give an over view of the analysis tool.

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Problem faced by BIOTECH 123 in managing Innovation and Knowledge

Organizations are increasingly using project teams to accomplish specific tasks (Rubery et al., 2002) and to increase flexibility (Ayas and Zeniuk, 2001; Sauer et al., 2001 cited in Newell et al., 2006). However, a problem for project-based organizations is that the knowledge acquired during a project is not used in other projects or other contexts. As each new project is started, there is a tendency to ‘reinvent the wheel', rather than learn from the experiences of previous projects (Prusak, 1997 cited in Newell et al., 2006). From the case it is evident that BIOTECH didn't learn from their mistakes they were trying to avoid but didn't manage it properly. They decided to adopt a formal project management approach for developing a more proficient approach to design clinical trials in which they lacked significant experience.

After the success of first phase trial, everyone in BIOTECH seems to be very optimistic about BIOTECH 123 and they decided to attempt the second phase trial. But the trial incurred problems and could not gather enough patients for the trial so the trial was paralyzed and did not go ahead. This leaded to a lot of time wasting. BIOTECH had to be careful with the regulatory agency as it was a very sensitive issue because of past communications problems with the regulatory agency.

There was lack of knowledge sharing among the potential partners and project team as they failed to communicate exactly that how many patients were required to carry on the trial. Communication gap also prevailed between potential partners and project team regarding how big should be the sample size for the trial. The lack of experience on the behalf of BIOTECH is pretty evident in this case. Even the potential partners seemed to be having less knowledge regarding this issue and BIOTECH made a mere guess to stick with 48 patients. “Communication and coordination related to new ideas based on specialized knowledge is difficult” (Becker and Murphy, 1992 cited in Junkunc, 2007: 390).

The risk management analysis was not done by the BIOTECH; they wanted to do the second trial themselves to take lead while on the same time they were negotiating with their potential partners. It would have been a wise thing to get into partnership immediately after the success of phase 1 trial before moving on to phase 2 trial, as this would have made sure that risk/ loss is shared among the partners. BIOTECH was doing too many delays in striking the deal. They could have signed the deal before the phase II trial, but they were too busy studying cost related problems, instead of looking into the risk management strategies by identifying the problems. To be innovative and to acquire greater knowledge, it is important to take risk. This shows the dire need of knowledge among the BIOTECH staff. In the start there were no proper time lines or Gantt charts made to show duration of each phase and activity and how long the whole process will take. If BIOTECH had a proper GANTT charts with details elaborating that how long each activity will take and which activity can go side by side with the other could have helped BIOTECH in completing their trial and partnering in time. There was lack of direction by team leader and objectives of the team were not clearly communicated across teams and departments. Another communication problem faced between manufacturing department and clinical trial team was the selection of the hospital for the clinical trial; it was found quite late that the hospital chosen by manufacturing department was not licensed to carry out labelling. There seem to be discontent by clinical trial manager saying “that manager should have made them aware of this requirement much sooner.

The BIOTECH 123 was a ‘linear model of Innovation'. The innovation in the form of therapeutics was in the process stage. The linear model of innovation looks like as follows:

Basic research Applied research Development Production and Diffusion

The BIOTECH 123 was in the Development (commercialisation) stages as there were clinical trials going on to check viability of the innovation. Marketing was in process as to attract potential partners for the ongoing project 123.

There seems to be particles found in the product, which created tension among clinical trial team and other departments, as no one was able to find the reason behind the particle problems. There seems to be conflict of interest within the groups in the organisations. BIOTECH took the decision at last to inform their partner about the problem. They were delaying the communication to their partners due to lack of trust and that how they would react to the situation. In order to be innovative, trust is very important in organisations and within partners. On the other hand, the problem also seems to exist in the partnering process. Project team was involved in the negotiation of the deal, but knew nothing about the financial details regarding the deal. This meant lack of motivation and carelessness on behalf of the project team. No details of the plans were notified to potential partners instead BIOTECH was conducting a form of ‘due diligence'. Lack of decision power among the team leaders of BIOTECH seems to be evitable, along with the fact that no risk assessment took place provided that there was a dire need of SWOT analysis in order to decide which partner would be the best. The managers were playing guessing games rather than using management and leadership skills.

The above problem was because of the lack of knowledge, skills, expertise and direction of the BIOTECH employees. The vision of the BIOTECH was not clear. “Organizations must be infused with vision, similar to the way institutions are infused with value, in order to be effective in the hypercompetitive environment.” (DÕAveni, 1994 cited in Johannessen et al., 1999) People at work need a vision, a sense of purpose or meaning transcending the trivia of everyday efforts (Vleck & Davidson, 1992 cited in (Johannessen et al., 1999). As it can be seen from the figure below that vision helps the organization in creating knowledge and sharing, which leads to organization innovation and the knowledge is reinforced back into the vision in the form of the output and result. So it's a circular flow of information within an organization. The lack of vision within department leads to coordination problem and communication problems in short no knowledge sharing was taking place within the BIOTECH.

The above model can be related to the general model of knowledge. Knowledge flow consist of the set of procedures, actions and behavior through which data, information, and knowledge are transformed from one state to another. To simplify the analysis of knowledge flow in BIOTECH, the framework described by Newman and Conrad (1999) in their paper is based primarily on the General Knowledge Model. The model organizes knowledge flows into four primary activity areas: knowledge creation, retention, transfer and utilization. (Newman and Conrad, 1999) (See figure below).

The model gives a clear idea as to how knowledge is shared, used and kept within organisations. BIOTECH did innovate in the form of BIOTECH 123 but they didn't share and manage knowledge in order to manage the innovation. Due to the lack of knowledge transfer, there was no utilization of knowledge into the business processes among BIOTECH 123 project. This gives a clear idea that the problem lied in lack of knowledge sharing.

There is lack of awareness that knowledge transfer has occurred or is needed'Newell et al., (2006) in her study found that “many interviewees described how they sought out knowledge only when they saw they had a problem”. Same thing was done by BIOTECH; they went for help by external consultant when they had no other option left. BIOTECH realised the need of managing knowledge and innovation in organisation to make it a success story. A project matrix structure was introduced to improve co-ordination among teams and department by the consultant. The new matrix structure of the organisation helped improving communication problem and helped in better understanding of things happening in different department, which eventually lead to more knowledge sharing among the employees and departments of BIOTECH. There were formations of new teams in BIOTECH. Teamwork is essential in success of the organisation. Cross-functional team-working within organizations is often portrayed as the key to creativity and success for firms (Bolwijn & Kumpe, 1990 cited in Newell and Swan, ) There seem to be a lot of problem associated with team working but it is always overlooked by the benefit of networking. Individual efficiency decreases and this is referred to as free rider in the group, who leave the work for other members to do within a group. A more centralised decision making management structure was introduced, before too much responsibility was given to line managers, making them stress out rather than coming to a solution. A proper time line was introduced to take BIOTECH 123 to success. This involved meeting strict deadlines and clear and unified objectives of the project seem unavoidable among different teams and department of the organisations. In critic to this it can be said that, 'knowledge workers', and this kind of work, are expected to demand high levels of autonomy. This creates complex managerial dilemmas around how to balance autonomy with control and uncertainty and flexibility with efficiency. (Robertson and Swan, 2003) Meeting deadline did helped BIOTECH in knowledge management and innovation, but in long -run too much control and power over knowledge workers dealing with innovation would affect their performance as knowledge workers prefer more autonomy in work place and the culture should be created in such a way that help fostering of knowledge workers. The question as to whether BIOTECH employees can be referred to as knowledge worker is debatable.

Two major problems

The two major problem identified from the case study are the lack of trust among teams within the organisation as well as with the potential partners. The second problem that affected BIOTEH was of formal management approach a problem of project management.

Lack of Trust within BIOTECH and with their potential partners

Trust is a multi-dimensional concept. Jones and George (1998) look at trust as an interaction of values, attitudes and emotions or moods. (Newell and Swan, 2000) This statement shows how trust is so heavily dependent on the culture of the organization. 'Trust' cannot be controlled, but it can be encouraged by good knowledge culture and by ‘choices that leaders make'. (Mayle, 2006)

People don't trust a leader who doesn't trust them.(Mayle, 2006)

This exactly was the problem faced by BIOTECH; there was lack of trust among each other.

Multi-functional and inter-institutional networkings are increasingly pictured as new and effective forms of organization, especially when innovation is significant. Mechanisms that can interact are effective as they help to develop trust among a diverse range of teams/people. (Newell and Swann, 2000).There was no networking among BIOTECH teams and with their potential partners leading to lack of trust. It is quite possible that a single firm may not have all the expertise so it is important to fill in the gap of missing knowledge by networking that draws other firms. (Newell and Swann, 2000).This was the reason for BIOTECH to go into partnering. For innovation and development of products, networking with individuals is vital and as research suggests that innovation is becoming more like a networking process.

Conflict can rise in due to class of cultures among managers and workers. Trust in an organization is because of the culture of the organization, which lacked in BIOTECH. This problem can also be related to the project management problem as the issue of trust, power and conflict in an organization was because of the lack of corporate knowledge culture and bad management and poor decision making and planning. There was lack of trust on potential partners because BIOTECH thought they didn't seem to be serious. The communication problem persisted between BIOTECH and potential partners because of lack of trust; BIOTECH was too hesitant to share knowledge as they were unsure about the reaction of their potential partner.

Project Management

The field of project management is about providing the tools and systems that facilitate the project teamto forecast, look forward to and handle their work to meet these constraints. The field of portfolio management is about using tools and procedure to present organization with precise approximates of cost, scope and time for each in development and designed project so that they can make the correct decisions to optimize their objectives within overall constraints. Each day, managers and bosses make decisions based on estimates of the dynamics of the project management triangle. Since each decision can determine whether a project succeeds or fails, accurate estimates are critical. (DeMarco, 2008) This point is critical to the group leaders/ managers of the BIOTECH, who were taking their decision on mere guesses rather than proper estimates. BIOTECH main problem in project management was ‘not respecting the triangle'; they should have taken schedule, scope and budget together. But all they were focusing was on cost (budget), which leads to delays in the project and affected the quality of the project as a whole and more cost was incurred instead of saving.

A very formal / professional management approach was taken by BIOTECH in which they were inexperienced. They seemed to be reluctant as they were new to clinical trials. Due to the management problem, it is very evident, in the case, the problems of communication faced by BIOTECH, problem of conflict of interest of different team, overall a knowledge culture seem to be missing in the organization which helps in knowledge sharing eventually knowledge sharing was not in the organization and the problem of leadership and management style can be questioned here.

The knowledge culture is quite different from the industrial culture; a good knowledge culture is required for an effective knowledge management. In knowledge culture there is wide information distribution, which seems to be missing in BIOTECH. There are few management levels, shared responsibility and principles based measures. In BIOTECH there was no network culture and no networking outside the organisation as well. The key measure apparently was not effectiveness. (See figure below)

The linking concepts 'control', 'responsibility', 'contribution' can help enormously with the transition between the appropriate cultures. (Xiong et al., 2008)Depending on their culture, organizations approach knowledge management (KM) in very different ways. When groups do not communicate the problems persists which are resolved when they are brought together too rapidly. Communication should include value alignment as well as content sharing. Control, responsibility and contribution were missing in the BIOTECH 123 project teams.

Different communication engages in different roles in knowledge management and innovation. So, accordingly to different situation rational communication will contribute to more efficient knowledge management and communication in research team's management and major innovation. Also rational communication means will direct to better collaboration among members, better externalization of individual tacit knowledge and better transition from individual intellect resource to team intellect resource.(Xiong et al., 2008)

When information enters research organization, after the process of indulgent and integration by interaction between knowledge management and communication management, the integrated information is feed back to source. (Yang et al., 2007) The above model will provide more integration among the employees.

The model shows that knowledge management and communication management in research organization is to share knowledge, cooperate with each other and improve the relationship with avoiding and solving conflicts (both formally and informally) and saving on time and cost. Plus feedback process will help in better management of communication and knowledge (Yang et al., 2007)


General theories and model give us a better understanding of the case. All these problem existed in organisation due to poor project management, though a proper formal management approach was adopted by BIOTECH, but they had quite little knowledge and experience in regard to project management. Due to the poor management, there was no knowledge culture in the organisation, no proper communication system within teams and department and the decision making can be questioned. A lot of time was wasted due to above problem. And all the problems were bringing hindrance in sharing knowledge among BIOTECH which is necessary to stay competitive and efficient. The problem with project management can be related to the need of SWOT analysis, which is discussed earlier as reasons which lead to problems. Even the lack of trust among teams and with partners was due to poor management problem and culture which didn't foster knowledge sharing and until there is no knowledge sharing in the organisation; it will be hard for organisation to innovate. BIOTECH managed well the problem of particles after shaky phase. Well planning was required to avoid the uncertainty of radical innovation which BIOTECH didn't think of in the earlier stage. BIOTECH matrix structure was a good way to avoid communication problems within organisations. Managing knowledge was a huge issue in BIOTECH there seem to be lack of knowledge sharing among teams and with partners. A good job was done by external consultant to bring BIOTECH back on track. But all these problems have created serious doubts on the mind of potential partner.

Source: ChinaStones -

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