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Change is a powerful force, an engine that drives more segments of our country's economic system. Most significantly, the forces of change allow us as declarers with new designs to build, and older constructions to change or rehabilitate. Change is genuinely the lifeblood of our business. The forces of change, however, are also more insidious and permeate as they affect our businesses, our jobs, and ultimately our daily lives. While we could easily realize change as progress in the physical world of construction, we often fail to recognize other concurrent forces of change in our industry, our businesses, our crews, and even our personal lives. Failure to recognize and adapt for this force of change can only lead in a downward spiral to lower efficiency, productivity, profitability, and personal ineffectuality. The intent of this section is to present a few ideas about managing this continuous process of change.
This change management report is aimed to show the focus of the company Pfizerto cope up with the changing and unstable environment and also to make a recommendation in order to fill the gap between their practical and the theory. In order to achieve the aim of this report the change situation that has been selected is the cultural change and post merger of the R&D department of the company in 2005.
t has been described in the literature that on the process of an firm is knowing a change, how the firm finds, picks out and forms its figures are the most significant faces for its future. As complexity possibility stresses and the importance of continuous acquisition activities (Rosenhead, 2001), the ability to change means a more silent, prepositional construct that belongs to explicit skills are after all simply snapshots of what an firm currently has. Needless to say, this ability has related to an firms sustainability. As deGeus argued, the 27 long lived companies had a commonalty which comprised a complete transformation in their business portfolio (Hopkins, 1998). Thus the importance of change and change management in today's turbulent business environment has intensified.
Our Mission: We will achieve and sustain our place as the world's premier research-based health care company. Our continuing success as a business will benefit patients and our customers, our shareholders, our families, and the communities in which we operate around the world.
Pfizer Inc. is one of the leading research-based healthcare companies in the world. Following its June 2000 takeover of Warner-Lambert Company, Pfizer was organized into four groups: Pfizer Pharmaceuticals Group, Warner-Lambert Consumer Group, Pfizer Animal Health Group, and Pfizer Global Research and Development. Among the prescription drugs marketed by Pfizer Pharmaceuticals with annual revenues exceeding $1 billion are Norvasc, for the treatment of hypertension and angina; Lipitor, a cholesterol reducer; Zoloft, an antidepressant; Zithromax, an oral antibiotic; Diflucan, an antifungal product; and Viagra, the famous treatment for erectile dysfunction. Warner-Lambert Consumer markets a number of leading consumer brands, including such over-the-counter healthcare mainstays as Benadryl, Sudafed, Listerine, Visine, Rolaids, and Ben Gay; in the confectionery area, Trident, Dentyne, Certs, and Halls; Schick and Wilkinson Sword shaving products; and Tetra fish food. Pfizer Animal Health is a world leader in medicines for pets and livestock. On the development side, Pfizer Global R & D spends $4.5 billion a year shepherding candidates through the product pipeline, which at any one time can include more than 130 possible new products. R & D efforts also are aided by the 250 alliances that Pfizer has formed with academia and industry.
The amalgamation of 2005 can be seen as the proper use of 'sigmoid curve' (Handy, 1994), as the company began a new curve ahead the first one declined. Both the bequest companies had the time, resources and energy to get the second curve through its first staggering before the first curve falls. But it was the experience and management capabilities of both the firm that lead them through with a flourishing change management program.
During the action of change management the company stressed upon creativeness and founding, it accomplished that without these the company amazed risk from the highly competitor pharmaceutic industry with an increase in generic manufacturers. Thus with a lot of patent expiries due soon and with empty pipelines, the begin of fresh curve was an issue.
Believing these external stimulants the CEO of the company tried to reconcile the concepts of being big and think small by dividing the R&D department into seven " centers of excellence for drug breakthrough " (hereafter CEDD) (Financial Times: April 2, 2001). This change was based on the achievement of biotechnology firms, where independent small squads were working. The alternate can be categorized as planned transformation.
The change position of the R&D section during the post-integration period at PFIZER can be assured as transformational as it fills the 5 key indicators of transforming change given by Ashburner et al. (1996: p. 6). The announced alter influenced the culture holding at the department, changed the interaction of operations and R&D department, formed new leaders within each CEDDs, changed roles of individuals and teams. Moreover, therein change the management role was proactive therefore PFIZER being the center of R&D can be seen as in the planned transformational stage, during the post consolidation period of the merger. The outside environment in which the company was controlling at the time of the amalgamation can be examined in detail by using the PESTEL analysis.
The pharmaceutical industry must always get on the move, always on the edge and always first in creating conceptions and products that help extend the life of mankind. The industry faces a need for accelerated investment, in order to deploy the new technologies, for pressing geo-political, economical, environmental and social reasons.
Political: Perceivers will see a continuing advancement in the catastrophic steps which have forced the industry into a socio-politico-economic turning point. Whether these are came to to flat demand or to the industry's innovation of an ever-wider range of products that many customers look to care little about, there is a trouble. The firm is as well associated close to the policies of authorities, the earnings of banks..The industry's advance to dealing with political institutions has not all of the time been splendid.
In the prospect of Pfizer Inc., it has coped with political factors instead brightly. It bears on to provide very adequate benefits and pays for its 115,000 employees. Pfizer continues to supply to the needs of their employees and their families. They cater benefits and fitting pays and extra time.
Also, Pfizer continues to acknowledge its duty to the government. As of 2004, Pfizer paid 2,665 (million) as tax.
Economic: For much of the acquired globe, and more and more for the developing world, the pharmaceutical industry is a mainstay industry, a flag of efficient progress. Without the existence of the pharmaceutic industry, it would be quite impossible to assist the existence of other sectors. One must commend that the expression covered by the pharmaceutic manufacture is something not to comprise entertained. It includes the eudaemonia of all, thus, no other sector would carry on to exist if this sector is carried off from the totally of the economic world.. While entirely and more sound like a very glooming assessment of such a vast economic phenomenon, the industry is not in the end despondent. A different future is conceivable for the industry, a highly desirable one.
Social: The world's pharmaceutical industry impacts the society entirely. It hires millions of people directly, tens of millions indirectly. Its products have transformed society, bringing undreamed-of levels of alterative and continuous replacement of wellbeing, changing the people life styles and work. The social respect of the advanced sense of health and curative that this industry plays the appraise of the people being able to spend a healthier lifestyle. For most of its existence the pharmaceutical industry has been a model of social discipline and it is not just that the pharmaceutical sphere offers a mainstay of something else.
In the context of Pfizer, the world is in continuous need of quality medicines and health care products. Though the world checks varied consultations, it's impossible that none would like to live longer or healthier.
Technological: The pharmaceutical manufacture works on a scale so amazing and has an act upon so huge that it is much difficult to see. The level and diversity of technologies that it must deploy are rising, which brings down both new investment fund burdens and new doubts and risks. Roughly a million new products are made around the world every week - they are easily the most analyzable products of their kind to be factory-made in such bulks. The industry uses manufacturing technology that is the cutting edge of science. Just still, the likely for acquiring coordination skills, intellectual capacities and excited sensitivities through electronic technologies remain far from fully exploited.
THE CHANGE PROCESS:
PFIZER uses European Base for Quality Direction (Excellence Model) to measure its execution (Simmons, 2003). The example has been used by the companies to approximate their performance in different prospects of change management. This framework provides a benchmark against the finest practice not only in the industry but also across dissimilar industries. Therefore for the function of this report the model can be used to show how the at issue change has affected the components of the model and moreover, applying it as the basis of this change management audit report. The affect of change on the firm and in specific on the R&D section is considered to be competitor advantage for Pfizer and can be comprised on EFQM by applying pointers in the following way:
This show us that the change process must an effect on leadership, people, resources and action, which will also affect on the results of clients and therefore key carrying out indicators. Leadership style applied in each CEDD and the overall leading style during this change has been under pressure so that it is adjusted with raising creativity (Financial Times, 2005). The leading styles needed to be changed from despotic and task oriented towards democratic and people oriented. It can be concluded from the press article about the change that scientists believed that the department was having a 'power' culture (Handy, 1999) before the changes towards CEDDs. But as the department was carved up into a grid like structure with dissimilar teams interacting inside each other the resulting culture was a 'task' culture (Handy, 1999)
It was very low to motivation the people due to many changes happening in a very short duration of time. Employees 1st saw the merger of Galxo and Wellcome in 1995 and after that Pfizer in 2005. Scientists working at the R&D development reported that these mergers were confining forces in their work as they had budgeting brings out during the pre-merger, due diligence and base-merger periods. Their motivation levels became very low after the declaration for the change into CEDDs (Financial Times, 2003). They caused an impression that they were being treated like sales department by raising competition within themselves (Financial Times, Oct 24, 2002). This come by the motivation of the employees can be seen as what is known as 'Denial Stage' in the Kubler-Ross Transition model. This model along with the emotional states of the undergoing staff is exemplified as follows:
Therefore, according to coding curve, PFIZER needed an approach that allows a smooth changeover from denial to acceptance in a short time period. The all processes at PFIZER also needed to be altered to supply for this new CEDDs based R&D department as there could be conceivable knowledge management issues amongst the centers and also they had to agitate as their budgeting demands. These issues in the enablers' part of the EFQM would lead to the PFIZER's unsatisfied employees and clients that in the long term will project in weak pipeline which is one of the key performance indicator for PFIZER.
Change And Organizational Development Theory:
In order to harness the advances by this change, PFIZER needed to use the organizational developmental theories to manage the smooth transitional period. The change from one R&D department to seven independent squad pointed CEDDs, can be represented in the following plot:
This structural change agreeing by Handy (1993) can only be possible if it is abided by a cultural change i.e. a shift of the culture from role to task culture. Thus the company was faced up with yet another trouble of changing the culture of the department in order to make the CEDDs work properly. The nature of this task required slow transformation (Gibb, 1998), as corporate culture is complex and intangible.
The model shows the quantification of external preference i.e. market and preference of internal aspects that lets in leadership, culture and strategy. According to Chorn (2004) the fit between the internal and external environment is the keystone towards a affirmed competitive advantage and thus sums the values for all the stakeholders of the company. The alignment shows how change in strategy has affected the culture towards the orientation course by market, strategy and leadership style.
The Process of Cultural Change:
Challenge was to educate the people and have eventuality plans for this cultural change at PFIZER's R&D department. But what precisely does management work on to change a department's culture? Should management be centered on strategy, building teams, authorising people, introduce tools and processes or restructure? (Atkinson, 2005) The possibilities are infinite in an organization; the difficult part is deciding which interventions are likely to have the most impact. The answers are dissimilar for every organization.
PFIZER has adopted a four step plan of act towards the creation of cultural change. This change process accepts comprised slightly modified from the force field analysis proposed by (Lewin 1951) to fit the change situation of PFIZER. The steps that were attempted by the company can be summed up in the form of following diagram:
Four steps cover the following four points:
1. Make sure that the R&D department and people empathise the pressure of change - why do we need to change?
2. Acquire and share a clear vision about wherever the organization and section is headed - where are we going?
3. Assign the aim to the individual, departmental and firm's capabilities for change - what do we need to make the change?
4. Make a plan of action that outlines what has to be done to get it all started - what do we have to do tomorrow when we come to work?
Build Pressure for Change:
The force of change is necessary for the effectiveness of a change program (Chorn, 2004 & Atkinson, 1996). Therefore, in order to accept the initiative of cultural change at PFIZER a sense of urging was made to divide the R&D section into 7 CEDDs. Without it, the initiative appears to sink and other priorities acquire precedence and organizational behavior doesn't change.
The re-alignment and change program of PFIZER's R&D section into CEDDs has come up after the analysis of the company's perspective and the competitive surroundings. It can be seen that for a very farseeing period of time the company comprised unable to produce any new smash hit molecule and its patents of invention were breathing out one after the other, arriving hard to contend with generic manufacturers (Chemist, 2005). Management and staff need to understand that they face threats and opportunities; this frequently creates sense of urgency.
In order to define the matter and thus create a sense of importunity a stakeholder mapping was done by the company. The company specified that the core and peripheral stakeholders for this change and grouped them together to make a strategy for each group. The definition of these groups availed the company in brining about the modify successfully. Dissimilar stakeholders for the change can be attracted on the following diagram:
This diagram shows us that the first step showed scientists and shareholders to be the core stakeholders in this change and the sense of hurry was induced into these with the help of a clear shared vision.
Establish a Clear Shared Vision:
These are alike to the second pace of the forced field analysis (Lewis, 1951). If there is no clear, shared vision the alteration begins quickly but then dies out because people don't know what they are taking aim for (Atkinson, 2005). Therefore it is the duty of the leader to not just commune this sight but also make employees see the pragmatic example of it. In the case of PFIZER, though the CEO Jean-Pierre Garnier transmitted the vision of competitiveness and innovation with practicality to its managers but they were unable to communicate this message over their employees. The managers were actually repellent towards the change as it makes their jobs on risk.
In order to draw a list of driving forces (Lewis, 1951), the company identified the possible impacts on each of its stakeholders and devised a strategy to tackle these affects smoothly. The stakeholders and the impacts conceived by the company can be summed up with the help of following table:
Ensure that the Department has the Capacity to Change:
It was build by the senior management of the PFIZER company that if the department and the employee do not have the needed capacity for the change then this change will create concern and frustration. It was realized that people were though briefly in the rejection phase they still want to change but do not have resources to do so.