Sanofi is a popular Company in the Pharmaceutical industry, which is best known for its health care services and improving their performance by implementing effective change strategies all over the world in their organisations. Sanofi is a France based company and operating its business in more than 145 countries and its 79 manufacturing sites operated in 36 countries where more than 100,000 employees working at Sanofi which representing 145 nations. However, in 2013, the company had to take several decisions about bringing a change in the organisation because the product sale of Sanofi was declined at a very low level and that forced the company to replace its CEO in 2015. In 2015, Oliiver Brandicourt joined as a new CEO of Sanofi and replaced the former CEO Chris Viehbacher, who was fired by the company after having disputes with the board of members because of continuously bad performance in healthcare service by the company (Andrew, 2015). Oliiver mainly focused to change the image of Sanofi with the help of advanced R&D of the company and he decided to bring a major change in the organisation.
The company focused on making new strategies with its R&D and management in emerging markets as well as focused on non-prescription drug sectors. Sanofi merged with some small biotic company and in 2014 and paid $1 billion to Regeneron to conduct research on behalf as back in 2013. Sanofi lost his number of patented drugs and was about to enter in generic sales. Merger with other small companies builds pressure on the company as it is still fighting with the low sales problem in the market. In 2014, the company decided to restructure its organisation and bring a change by reducing the size of its employees. Sanofi was also found to be guilty when the French Competition Authority (FCA) found that company was doing disparagement practices and charged heavy fine which company had to pay as a whopping amount of fine.
The incidents discussed above and economic pressures and operational inefficiency, forced the company to bring changes in the organisation. The changes include reducing the workforce, minimizing the facilities provided in healthcare services, and selling the patents of the company in France. The CEO of the company and the top managers played an important role in bringing change in Sanofi. They involved all the employees and people of the organisation in management of change and provided a perfect framework for implementing change in the organisation.
Due to Globalisation and economic crisis, every organisation has to face such a climate created by its external factors. Change has become a crucial part of any organisation to survive in the competitive world. Without change, no organisation can survive because today is the time of diverse work culture where the transformation of culture, behaviour, learning, and attitudes occurs. If the organisation is not able to adjust in the massive diverse environment, the organisation will not be able to handle the different competitive and tough business situations.
The Sanofi was facing the same problems after 2008 when the global Pharmaceutical industry was in economic crisis. The economic crisis started from the Subprime crisis and ended with Eurozone crisis. This company adopted the continuous change process and decided to reduce the price of health care services. Further, it also reduced the operational cost to face the economic crisis. The change process of company has been discussed in part one of the present essay. In the second part, the various theories, and concepts are well explained that can apply to the Sanofi change of management process. The change adopted by the company was a good example of bringing a major cultural and operational change in the organisation without any resistance from employees (Leaver, and Montalban, 2010). The top executives of the organisation played a major role in implementing the change by spending more time with the staff and listening to their issues and problems. Further, they also provided training to managers to handle the situation, which created panic during the change process. Later in the report, the different models and theories that can be applied to the ‘Sanofi France’ have been discussed in detail. In the last part of this essay, a conclusion based on the entire essay is explained that is a short summary of the case.
Management of change is defined as the regular process of upgrading an organization in the form of guidelines, structure, and ability to handle the change because of external and internal business environment. Change is present in the organization at both process and strategic level (Langley, et. al., 2013). Therefore, the doubt should not be there related to the importance to the organization and of its capability rather it is about what needs are required in future and how change can be explored in the organization (Buchanan and Badham, 2012).
There are two types of change in the organisation; first is continuous change and the second is discontinuous change. Continuous change is that change in which there is a connection between pre and post-change and no sudden change is planned. Actually, continuous change is a need of internal environment of the organisation. While in discontinuous change is a sudden change in the organisation and there is no connection with previous or post change that has already taken place in the organisation (David, 2014). The discontinuous change always brings problem for the organisation and creates many problems to be adjusted with the change process. The organisational people have no idea about this type of change neither they anything planned for it in association with the external environment of the business. In the above case, management planned a discontinuous change and leaders played a democratic style of the leadership role in the organisation (Järventie-Thesleff, Moisander, and Villi, 2014).
The role of a change agent is also a crucial part of managing the change process in the organisation. The role of a change agent for any organisation is of great importance when internal members resist accepting the change. The external change agency also plays a crucial role in bringing change. The change agency overviews the need of change related to the particular situation and provides the suggestion related to the pattern to carry continuous change in the organisation or a need if a discontinuous change is required. In this case, the senior manager, team leaders, and top executives of the Board members played an important role to establish an understanding between the employees who opposed the change and change agent (generally top leaders of the organisation). Normally people having no idea of the new change, or they unable to adjust to the new changing environment, resist the change in the organisation (Lunenburg, 2010).
In the era of globalisation and due to continuous organisational change, the role of managerial skills has been increased in the modern day of the business environment in all over the world. Due to globalisation, innovation, and technological advancement, many issues related to the workforce as well as shifting towards social trends have emerged and change should be done according to the demand of time (Anderson and Anderson, 2010). As there is no restriction of the organization to carry out business beyond boundaries, this has motivated the domestic players to introduce their business on the international level and have encouraged international organizations to go for the domestic level. Therefore, for expanding the business in the market many organisations are actually competing for the same product or services. In recent time, the number of healthcare companies in the pharmaceutical industry is increasing day by day that cause’s tough competition for other existing players in the industry (Parry, Grant, and Sestovic, 2013). Corporate culture is a hard thing to get right and it takes time to grow and evolves. Change in corporate culture is the result of action and reaction. Actually, it is the enduring effect of every interaction in the organisation regarding bringing cultural change on the organisation.
Sanofi Company decided to compromise on facilities and reduced the operational cost of drug manufacturing by reduce the number of employees. It helped in reduction of operation cost by apply ‘Theory O’ which was changing the behaviour and culture of the whole organisation and ‘Theory E’ which was focusing on operational cost reduction (Flouris and Oswald, 2016). The company wanted to bring a cultural change in the organisation by reducing the size of its workforce. Culture is an important aspect of organisational change. It can be said that it is possible to lead organisational change using culture as a vehicle (Liu, Slim, and Scally, 2018). The culture of an organisation influences the change management process but a change in the culture does not necessarily affect the management of change. Every manager of the company is well aware of the importance and role of organisational culture in the company’s success. However, it is not always factored into change management processes. Changing culture is the most frightening process in any organisation because it is not easy to understand the different culture in the same place with different angles (ILO, 2018). The culture of an organisation is a soft concept where there is no real way of defining or assessing culture then it is a hard job to measure it. Normally, it is very hard to change the behaviour of an individual then how a Person can change the culture of the whole organisation. However, if a leader wants to build a high-performing organisation it is necessary to focus on bringing cultural change in the organisation.
As we all know the most of the changes in the organisation at random in nature which tends to be discontinuous and raises complex and critical situation in the organisation. Most of the employees oppose these random changes and it creates complex problems in the implementation phase of the change. As per a research study, it has been found that most of the changes (almost 70%) usually fail because change agent does not understand the situation, lack of preparation and planning in case of continuous change (Harris, 2018). The continuous change can only become routine when perceived change as normal and respond naturally to internal and external business environment otherwise it will move towards discontinuous change where the change happened in a sudden way and a routine is very difficult to manage (Karp, 2006).
A study was done over media organisation for bringing change in the organisation. Data was collected, analysed, interpreted, and structured. But it was found that organisation is not ready to think out of the box rather they just want to remain in their own world as there is no such world of external business environment and are standing still with their inertia (Dawson and Andriopoulos, 2014). Therefore, the need to pursue both continuous and discontinuous change is actually a challenging one. If the organisation wants to be succeeding then it has to avoid inertia and it should remain open for the innovation and creativity. Sanofi was focusing on bringing quality medicines and an effective treatment to its customer all over the world and the core part of this innovation step was Canada. The company wanted to meet the healthcare needs of Canadians and desperate to go for Intellectual Property Rights (IPR). Sanofi was constantly struggling with their brand value and image (Sanofi, 2018). The company feel that they could not target the drug market anymore and was consistently facing challenges from R&D, thereby they think about selling it. Bringing operational change and reducing the workforce was not an easy task for the company. These needs of the company required doing things in a unique and systematic way.
Another study was done on a change in New Zealand police department where it was found that the vision and support of the frontline officer were not considered in the change process, which leads to the failure of the change program. It simply says that if the change is to be brought in then the change agent must consider the total need of the situation and must communicate the needs of the change with all the members of the department along with the consideration of all positive sides of the change (Duncan, Mouly, & Nilakant, 2010). Change agent was not aware whether to use continuous change or discontinuous and instead of continuous change process had used discontinuous process by considering only one side of the situation for sake of bringing change, which resulted in the unexpected outcome.
The role of power in organisational change is becoming crucial and very impactful. Power is related to complexity and diversity, which is the important source in the area of organisational development and change (Ulrich, Brockbank, Johnson, and Younger, 2013). The three main viewpoints related to power change in strategies, the role of change agent and inspiration behaviour related to decision-making determines the success or failure of power change (Cummings, Bridgman, and Brown, 2016). Generally, employees resist the power change and impact is rigid of it on the organisation. The power change connected to three points. The first is the nature of the organisation, second is the analytical framework, and the third is the change agent. This concerned with two different leadership styles; transformational leadership style and transactional leadership style. The transformational leadership mainly deals with the change by considering the interest of co-worker and employees while the transactional approach of leadership in change management remain untouched with the co-worker system and mainly focus on the value systems of the co-worker and provide them with the necessary benefits from this.
After the economic crisis when Sanofi France technically was in a big trouble in the Pharmaceutical industry, the jobs of managers were highly specialized but the communication level between organisational departments was very poor. Sanofi was introducing major management changes in order to compromise with healthcare services provided by the other pharmaceutical company. The company then decided to focus on bringing change into the working systems and reduced its operational cost without restructuring, thus the company became more efficient and effective in satisfying the needs of customers and clients. The change in working systems needs a whole process of culture change and reduction in operational cost. Hence there are numbers of change process model applied on focusing on ‘Theory O’ which was changing the behaviour and culture of the whole organisation and ‘Theory E’ which was focusing on operational cost reduction. Because of the restricting of Sanofi, there was a reduction in the number of employees, the shutdown of some of their drug plants, and outsourcing some of the healthcare services (Lodorfos, and Boateng, 2012). The second most important change took place is operational changes at the group level when the top sells and operational managers of Sanofi feel that there was inefficiency in the system. Then the top management decided to compromise with some facilities provided to the customers and educate its employees to get prepared for the upcoming changes, which help them to compete with other drug manufacturer companies because all were facing the same economic crisis.
This was the great example of continuous change when organisation trained and makes aware its employees that results in the change were no surprise for the employees and they were ready to adopt the change. The management gives ample time for its employees to ready with possible changes in the organisation. In the above case, the continuous change was applied because the employees were already aware and ready for the change through mind states and it was very less impact on their health and wealth interests. It was not the sudden change rather it was the demand of economic crisis time. The change was successful because of employees, staff contribution, and their good effort (Weber, Reichert, and Rinderle-Ma, 2012). The management of change process in Sanofi was a successful implementation because it was not a power change rather it was bringing after lots of discussion with the staff member of the organisation. Generally, employees resist the power change and impact is rigid of it on the organisation. The power change connected to three points. The first is the nature of the organisation, second is the analytical framework, and the third is the change agent. This concerned with two different leadership styles; transformational leadership style and transactional leadership style.
Here the role of change agent was so crucial. The role of a change agent is also important in bringing change in the organisation. The ill preparedness and inappropriate planning of change agent results in the unexpected outcomes of change implementation. Old approaches and philosophies to change suggested that if the organisation does not adopt change then it cannot be effective (Grabs, et. al, 2016). It was also stated that if organisation want to be successful in future, people need practices to be operative and able to improve their performance with the help of continuous change (Yilmaz, and Kilicoglu, 2013). In Sanofi, the top leader of the company such as new Chief executive and the chairperson play the role as a change agent. The continuous interaction of top leaders with the staff members and the continued training softened the harsh impact of cultural and organisational change.
Conclusion
In the end, the above case can be concluded as the top management of the Sanofi directed the change by applying various change process model after the difficult economic crisis time when all world was suffering. The Sanofi still considered being the big international Pharmaceutical Company and awarded various times for their cultural change and change management. The impact of economic crisis forced the company for taking an inappropriate decision, which was taken by the top management and CEO of the Company, but mostly it reflects the difficult business environment and hard times that exists for the whole Pharmaceutical industry. Sanofi decided to go for the organisational restructuring and they focused on to reduce the operational cost. The major focus of Sanofi behind the change is to compete with other drug companies who operated the business at very low prices and survive in the crisis phase. This was the main approach of Sanofi to maintain the efficiency of the organisation by considering the profit perspective. The role of leaders was so important during the management of change process, as the CEO of the company always interacted with the staff, and ensures their presence in all operational processes includes managing healthcare service and production of medicines and drugs. Overall summarizing the case, we can say that the management of change of Sanofi was successful because of their strategic planning and adoption of the proper change process. The continuous model of the change process ensured that no staff opposed the change process. The decision of top management related to the reducing the price of its products and reducing the facilities helped them to survive in economic crisis and now it operates very well today. Despite the success, the reputation of the Sanofi declined because of compromising with the operational quality of the health care services and reducing its workforce to maintain the loss and regain its image again in the market.
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