Abstract:
For over three decades, the concept of operational
focus has been applied to organizations under the guiding principle that
dedicating managerial attention on a subset of linked tasks will achieve
superior performance. The empirical evidence on focus' effect on performance,
however is mixed. We explore the effect of focus at the task level by studying
the performance of investigative sites in pharmaceutical clinical trials. Within
a given trial, multiple investigative sites recruit eligible volunteers, enroll
them into a common clinical protocol, and process them according to the same
quality specifications. Because these sites vary substantially in their
organizational structure, this setting allows us to test whether focus is
associated with increased operational performance, as measured by final patient
enrollment tallies within a specific protocol. After controlling for selection,
scale, and learning effects, we find that sites that focus on their clinical
trial business significantly outperform those who intermingle it with their
daily patient-care activities. Diversified firms that separate the clinical
trial and patient care segments through a "plant-within-a-plant"
strategy achieve performance that is statistically equivalent to that of a fully
focused, dedicated research center. We find that the benefits of focus accrue
similarly at the management and production levels of the organization.