New research from York University’s Schulich School of Business shows that firms operating in the pharmaceutical industry are most often better off investing in intellectual capital than in lobbying.

The findings are contained in the paper “The interdependent influence of lobbying and intellectual capital on new drug development,” which was recently published in the journal Research Policy. The paper was co-authored by Moren Lévesque, a professor of operations management and information systems at Schulich and the CPA Ontario Chair in International Entrepreneurship.

The results of the study have important practical implications for pharmaceutical companies, which are among the top lobbying spenders in the U.S. “From a managerial perspective, our results suggest that lobbying might not always be the most effective way for pharmaceutical firms to enhance their new drug development performance,” says Lévesque. “A shift in focus from lobbying to intellectual capital development may therefore enable firms to reap longer term benefits, both in terms of new drug development and reputation.”

Lévesque says the research also has clear implications for policymakers, who should focus on nurturing intellectual capital development in the pharmaceutical industry to achieve economic growth, as well as focusing on increased transparency with regard to lobbying and the political decision-making process.   

“With declining R&D [research and development] productivity being of increased concern to the industry, understanding how to allocate scarce and precious resources is vital,” says Lévesque. “Our research findings might prompt decision-makers in pharmaceutical firms to carefully review their portfolio of activities and redirect resources from lobbying to R&D.”

New research from York University’s Schulich School of Business shows that when it comes to sales, service and marketing communications, it’s not just what you say that matters – but when you say it.

The findings are contained in the recently published article “When Language Matters” in the Journal of Consumer Research, co-written by Schulich marketing Professor Grant Packard and collaborators from the Cheung Kong Graduate School of Business in China and the Wharton School of the University of Pennsylvania.

The researchers carried out a multi-method investigation, including analysis of thousands of moments across hundreds of service conversations at two sales firms, plus four separate experiments, to document the moment-to-moment dynamics between language and important marketing outcomes like customer satisfaction and purchases.

The researchers demonstrate their approach to identifying when language matters by looking at “warm” and “competent” language – which can be as subtle as the difference between a salesperson asking, “How are you today?” (warm) versus, “How may I assist you?”(competent). Conventional wisdom in marketing is that a warm approach leads customers to think employees are less competent, so competence should be prioritized throughout the customer interaction.

This new research shakes up this conventional wisdom. Customers were more satisfied – and spent more money – when employees used both warm and competent language but at separate, specific times. Specifically, customers were more satisfied when agents used warmer language at the beginning and end of conversations. Warmer language, it was found, can be costly during the middle of the conversation, when customers expect to “get down to business.” Competent language works the opposite way: it can be costly at the start and end but enhances customer satisfaction and purchases when emphasized in the conversation’s middle.

“Our research helps update beliefs about the ‘warmth-competence paradox,’ provides a method for determining when certain kinds of language matters and highlights ways to improve the customer experience,” explains Packard.

Managers and researchers who want to put these findings into practise using their own data can try out the free, automated language analysis tool developed by the research team, at WhenLanguageMatters.net.

“Our findings can help improve customer service, aid employee assessment and development, and fine-tune artificial intelligence chatbots’ effectiveness,” Packard says. “They can also more broadly be used to shed light on word-of-mouth, sales interactions and marketing communications.”