Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

4-2026

Abstract

The biopharmaceutical industry, characterized by stringent global regulatory oversight, faces a pivotal theoretical tension regarding the nexus between regulatory compliance and corporate performance. The traditional perspectives often frame compliance as an “operational burden”, while the emerging viewpoints posit it as a “strategic asset”. Grounded in an integrated framework of the Resource-Based View (RBV) and Dynamic Capability (DC), this study investigates the moderating role of digital transformation in the relationship between Good Manufacturing Practice (GMP) compliance and corporate performance.

Employing a mixed-method design, this paper conducted two complementary studies. Study 1 adopted a grounded theory based on interviews with nine industry experts. It reveals a dual mechanism through which digital transformation moderates the relationship between compliance supervision and firm performance, that is, an efficiency mechanism that mitigates compliance costs via de-manualization and process automation, and a trust mechanism that enhances external stakeholder confidence through data transparency and visualization. Study 2 adopted a quasi-experimental design by comparing 390 production batch records from two manufacturing sites, the traditional Factory S and the digitalized Factory H, within the sample enterprise.

The empirical results indicate that 1) the relationship between GMP compliance and firm performance is context-dependent; 2) the digital transformation plays a positive moderating role in this relationship, such that higher levels of digitalization strengthen the performance-enhancing effects of compliance; and 3) compared to the traditional manufacturing site, the digital site demonstrated statistically significant improvements (p< 0.001), including a 53.9% reduction in QA audit duration, a 42.1% reduction in batch release cycle time, an 82.4% decrease in human errors, a 69.6% reduction in deviations, and an 86.2% shortening of deviation investigation closure times.

This paper supplements to the literature in two key aspects. It synthesizes RBV and DC frameworks to clarify how digital transformation, as a high-level dynamic capability, reconfigures the value realization of compliance resources. It also address the paradox of “cost center vs. strategic asset” through demonstrating the contextual nature of compliance value. In practice, the findings suggest that pharmaceutical enterprises should integrate digital transformation into their core compliance strategies, leveraging digital tools to shift from reactive adherence to proactive prevention, thereby achieving the dual objectives of cost efficiency and value creation.

Keywords

Compliance Supervision, Firm Performance, Digital Transformation, Resource-Based View, Dynamic Capability, Pharmaceutical Manufacturing

Degree Awarded

SMU-SJTU Doctor of Business Administration

Discipline

Operations and Supply Chain Management | Strategic Management Policy

Supervisor(s)

LIM, Yun Fong

First Page

1

Last Page

129

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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