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School of Business | Department of Accounting | Accounting | 2014
Thesis number: 13613
Pharmaceutical NPD investment process: Use of accounting information - Case Pharma
Author: Wäck, Anna
Title: Pharmaceutical NPD investment process: Use of accounting information - Case Pharma
Year: 2014  Language: eng
Department: Department of Accounting
Academic subject: Accounting
Index terms: laskentatoimi; accounting; informaatio; information; tieto; knowledge; investoinnit; investment; päätöksenteko; decision making; tuotekehitys; product development; lääketeollisuus; pharmaceutical industry; terveystalous; health economics
Pages: 78
Key terms: formal accounting information; informal accounting information; new product development investment; investment decision-making; proprietary drug research

The objective of this research is to explore the theory-based suggestions of Hall (2010) regarding the motives for managerial use of accounting information in an empirical setting. Furthermore, the study seeks to fill the prevalent gap in the academic literature by providing insight in the way in which accounting information is used in the NPD investment processes.


The method used in the research is an in-depth case study. The case company is a European pharmaceutical company. The data consists of nine in-depth semi-structured interviews conducted in 2013 in different organizational functions. In addition, the source material includes a pre-study including five interviews structured around the same themes within the company as well as other public and internal material.


The findings indicate that in the early stages of the investment process use of accounting information is only marginal but it increases as the investment process moves forward. The primary benefits of accounting information vis-à-vis other information derive from its role as a facilitator of discussion. Thereby it permits managers to move forward with the investment process even while surrounded by high levels of complexity and uncertainty. However, the findings contrast Hall's propositions as the diversity of operational factors and managerial backgrounds as well as the extent of cross functional communication are not directly proportional to the degree of use of accounting information.
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