Discuss about the Structure,Operations and Strategies of Pfizer Australian.
Pfizer an Australian Pharmaceutical company specializing in the development and manufacture of medicines for both people and animals. These medicines come in a biologic and small molecule portfolio in medicines, vaccines, and nutritional products. The company has been in the pharmaceutical business for over a decade thus gaining substantial market power within Australia. Due to competition and influx of many firms in the field, the company has developed strategies aimed at limiting competition which have led to several challenges like court cases due to lowering of cholesterol products and use of atorvastatin product to the community. The company has developed as an industry leader promising new products that have the potential to meets the needs of the market and emerging diseases today. The company delivers commitment to patients, customers and shareholders through improving business daily (Pfizer 2016).
Structures define the way a company arranges employees and jobs to enable the organization perform its functions so as to meets its goals. Larger organizations base their structures on formal structures that are based on establishing procedures on how responsibilities are assigned for various positions within the company. This means that the responsibilities of employees are defined by their responsibilities and the immediate person that they report to. Therefore company structure is based on positions and not individuals within the organization. These structures depend on various factors like work, size of the company or number of employees, revenue and the geographical dispersion of the facilities that a company has. These facilities define the range of businesses that a company engages in and define the level of diversification across the market (Grewal and Tansuhaj 2001, p. 11)
Since the company has grown and increased in both size and complexity, there are many business areas that the company has invested in. The company changed its operational structure to a commercial operating structure that is based on business units. This is due to the continued changes in the company that have increased bureaucracy within the company. The need to remove hierarchies and bureaucracy which affects decision-making led to the adoption of the strategic business units within the organization. These units give accountability and decision-making to executive officers who are responsible for the decisions they make. Thus the company operates nine diverse global businesses in the field of healthcare, this, therefore means that each business unit will have its manager with clear accountability for results from the initial development of the product line to access by patients through the end of the product life (Nilsson and Rapp 1999, p,69). The company operates nine biopharmaceutical businesses units that are managed by executive offices who report to four general managers who are in charge of a range of business units. These units are; Specialty Care and Vaccines Business unit, primary care unit, Oncology, established products, animal health, capsugel, consumer health, nutritional health, emerging markets. This type of structure has given the company the best way of managing all the business functions and areas that exist. The structure is the most preferred since it allows a company to be able to manage its business operations. This allows the units to be operated like separate companies being fully accountable for profits and losses (Allen, Becerik, Pollalis and Schwegler 2005, p. 309).
The company is led based on the principles of the classical school of management which describes a leadership style based on written rules and bureaucratic office holding based on trained individuals and proper skills that meets the defined job responsibilities of the task. This means that standards need to be set so as to be used in measuring actual performance of employees and a proper way of administration through hierarchical techniques. Modern companies are run based on either implementing a fully bureaucratic structure or one other form of leadership with a few bureaucratic ideas (Schmidt and Brauer 2006, p. 15).
The company has a proper division of labor where employees are divided into departments based on their specialization. This enables the company to balance between power and responsibilities within the company. The company has nine departments that are run based on specialization of the individual based on their expertise. Through specialization, a chain of command based on hierarchy is established where an employee reports to the immediate boss within the department. Strategic business units within the company however, have minimised the hierarchy by enabling departments to make their own decisions that are reported to the top management. Complete and consistent rules are applied based on the skills, experience and age of employees. Each department and unit has specific requirements for employees that can work in it. These formal rules determine all the activities that are run in the company (IBIS World 2015, p.13).
Employees are selected and promoted based on their qualifications; this ensures that only properly qualified individuals are allowed to occupy positions and offices. All employees are expected to draw a line between their own assets and organizational assets. This enables the employees to utilize available assets within the organization to meets the needs of the company. However, employee development is a key thing that enables the company to develop leaders who can take up leadership positions when the one s above have either retired or turned over. Standards for employee assessment are set and at the same time having procedures for corrective action in case of mistakes within the company (Northouse 2007, p. 12).
However, the leadership style delays decision-making within the company since final decisions have to be made by the top executives. Accountability and responsibility in decision-making has led to the need for unit heads to take responsibility in decision-making. Further, this leadership style does not give room for development of informal groups that are good developing group dynamics and improving team work. Since the company keeps on increasing its business activities and acquiring new markets, the need to adopt a less formalised structure will increase decision-making speed and improve efficiency within the company (Rowe 2007, p14).
Grant (2005, p.11) argues that companies take actions based on the resources to develop new products focussed on promotion. Pfizer’s product development strategy is aimed at continued considerable momentum of the company to develop new lines of business and acquire assets that can help the company enter into emerging markets. In 2016 the company has four major business strategies that need to be achieved; improving the performance of the innovation, maximizing value, earning greater respect from society and creating a culture of ownership.
The innovation business line is the most important strategy that the company uses to stay in the market and mange completion. According to Calisha (206, p. 10) businesses have keep on developing new products that meet the changing needs of the market? Markets are not static and thus will keep on changing due to different needs that keep on developing. Innovations are developed through investment in research and development to exploiting of new opportunities within the market. Pfizer allocates the largest share of its resources to research and development to enable development of new unique products that can give the company strategic advantage. For each new product that the company develops, a license and patent rights are created to retain the uniqueness of the product to the company (Bennett 2010, p.11).
The company has continuously maximised its value through taking advantage of the large business operations. The company can continue increasing its projects due to its enormous resources. Through continuous penetration into new markets and developing new products that are quickly absorbed into the market, the company can maximise its value by engaging in deep research and investing more resources in research and development. The company further invests in a focused sales force that can overcome competition within the industry. The sales forces are not based on competition and imitation y other companies but rather sales and professionals teams are recruited from the top professionals to develop a sales force that cannot be imitated by any other company. Further, the sales force is reconfigured every time through changing promotional responsibilities and territory alignments make it difficult for imitation (Mintzberg 1994, p21).
Respect from the society is earned and developed through continuous maintenance and improvement of the reputation of the company with customers, communities and shareholders. The management works hard to ensure the company thrives well in business to give the shareholders greater benefit on their investment. The company has several products in the market that are not easily substituted. This is through developing generic products based on the subsidiary name “Greenstone” (Matthew & Jonathan 2009, p.8).
Creating a culture of ownership within the workforce has seen the company with the best human resources within Australia. The human resource is based on education, experience and collaborative skills. This has enabled the company develop personal intellectual strengths and diverse thinking that has led to the innovative forces behind the company. Today the company is developing new organizational structure that is based on developing a new culture based on seizing opportunities. This will be a key driver of competition to enable the company change and survive in the changing pharmaceutical pressures within the industry.
Today management and leadership styles have changed with many organizations moving away from traditional and classical structures to modern structures that are hierarchical with reduced decision-making time. Therefore Pfizer needs to reduce the bureaucracy within the company and adopt a less hierarchical structure that will have lower level managers at the sub unit level. This enables quick decision-making and innovations that can propel the company to higher levels. Employees need freedom to make decisions based on the level of responsibilities that they have. Reduced s
Despite the dominance in the both the industry and market share, the pharmaceutical industry is undergoing many transformations that have led to the need for businesses to develop new strategies that will enable survival in the future. The strategies need to be aligned along expanding to new geographical areas, improving business operations and diversifying business activities to meets the needs of the growing number of patients. Pfizer can improve and expand its business market across other regions that have not been largely dominated by major players in the industry. Developed countries offer a greater market filed with aging populations, obesity, heart diseases cancer and diabetes. Therefore an investment in drugs that will meet the conditions of this population will give the company an increased market share and larger profits (Brews and Christopher 2004, p. 431).
Pfizer has to increase research and development investments to meets the increasing needs of the company. Increased size, patent issues and price pressures from the market pose a major threat to the company. However, partnerships and acquisitions can be the best solution that will enable the company meets its overwhelming size. This will enable streamlining of processes within the company to enable effective spending and changing the work habits in the company (Slater, S.F., and Olson, E.M. (2001, p.1059).
Further, the future business opportunities are unpredictable making many companies to identify major areas that they can specialize in. The need to grow the potential of the company can be achieved through acquiring smaller companies that are controlling segments within the market. This will offer competitive advantage that will enable the company to survive future competition.
Conclusion
The need to stay relevant in the market is the core business strategy of any firm, businesses challenges and market forces make companies to shrink or close down businesses due to increased losses. Therefore Pfizer can develop new products that are based on the emerging market trends. The health care industry offers greater opportunities due to disease like cancer and diabetes that cannot be controlled. This therefore offers health care industries the best opportunity to develop products that meets the needs of these increasing segments in the society. However, the company has also had negative effects and reactions from the larger public. Government regulations in Australia and international markets also keep changing, the company should therefore ensure that it meets the requirement and complies with patent issues that have been established within the market (Lawrence 2015, p.5). With increased research and development, partnerships and mergers, Pfizer has room for growth and sustainability that will enable the company to survive competition in the global market that is flooded with over five hundred firms within the sector.
References
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Bennett, Simeon, July 8, 2010. Pfizer: Civil Suits for Drug Counterfeiters. Business Week.
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Calisha Myers, 2016 October. Pfizer Announces Operating Structure and Select Senior Leadership Posts to Be Effective Immediately Upon Close of Wyeth Acquis. Latin America Conference, retrieved from
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IBIS World 2015, Pfizer Australia Holdings Pty Limited – Profile Company Report Australia. Retrieved from https://www.ibisworld.com.au/enterprisefull/default.aspx?entid=12915.
Lawrence Gregory, 2015 August. Pfizer Company Analysis: Market Share, Strengths, Risks. Business, Management . Pfizer Com. Retrieved from https://panmore.com/pfizer-company-analysis-overview.
Matthew Karnitschnig, & Jonathan D. Rockoff, 2009, January . Pfizer in Talks to Buy Wyeth. Wall Street Journal (Eastern Edition), p. A.1. Retrieved March 7, 2010, from Wall Street Journal.
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Nilsson, F., and Rapp, B.,1999. Implementing Business Unit Strategies: The Role of Management Control Systems. Scandinavian Journal of Management, 15, 65-88.
Northouse, G. ,2007. Leadership theory and practice. (3rd ed.) Thousand Oak, London, New Delhe, Sage Publications, Inc.
Pfizer 2016, Leadership and Structure. Retrieved from https://www.pfizer.com/about/leadership_and_structure/leadership_structure
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