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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.
It has been described in the literature that on the process of an firm is knowing a change, how the firm finds, picks up and forms its figures are the most important faces for its future. As convolution 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. Useless to say, this ability has related to firms sustainability. As deGeus argued, the 27 long lived firms had a commonalty task which comprised a complete renovation in their business portfolio (Hopkins, 1998). Thus the importance of change and change management in today's turbulent business environment has intensified.
To achieve and sustain our position as the world's leading research-based health care firm. Our continues success as a business will assistance patients and our consumers, our shareholders, our families, and the communities in which we serve around the world.
Pfizer Inc. is world's most leading research-based healthcare firm. subsequent its June 2000 takeover of Warner Lambert Company, Pfizer was controlled 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,the treatment of angina and hypertension; Lipitor, a cholesterol reducer; Zoloft, an antidepressant; an oral antibiotic,Zithromax; Diflucan, an antifungal product; and Viagra, the famous treatment for erectile dysfunction. Warner-Lambert buyer markets a number of foremost consumer brands, including such over-the-counter healthcare mainstay as Benadryl, Sudafed, Listerine, Visine, and Ben Gay; in the confectionery area, Dentyne, Trident, Halls & Certs; Schick and Wilkinson Smooth shaving products; and Tetra fish food Products. Pfizer Animal Health Section is a world leader in medicines for pets and livestock. On the progress side, Pfizer Global R & D spends $4.5 billion a year shepherding candidates through the product pipeline, which at any one time can contain more than 130 possible new products. R & D efforts also are aided by the 250 alliances that Pfizer has formed with academic world and industry.
Pfizer's Early History:
In 1849 Charles Pfizer, a chemist, and Charles Erhart, a confectioner, began a partnership in Brooklyn to manufacture bulk chemicals, Charles Pfizer & Company. While producing iodine preparation and boric and tartaric acids, Pfizer pioneered the production of citric acid, a product Pfizer continues to market to soft drink companies, using large-scale fermentation technology. By the end of the 19th century, Pfizer was producing a wide range of industrial and pharmacological products and had offices in New York and Chicago. In 1900 the company was incorporated in New Jersey as Charles Pfizer & Company Inc.
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 pharmaceutics industry with an increase in generic manufacturers. Thus with a lot of patent expiries due soon and with empty pipelines, the begining of fresh curve was an issue.
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.
Economical: 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 pharmaceutical industry, it would be quite impossible to assist the existence of other sectors. One must commend that the expression covered by the pharmaceutical manufacture is something not to comprise entertained. It includes the eudemonia of all, thus, no other sector would carry on to exist if this sector is carried off from the totally of the economic world..
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.
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 CHANGE PROCESS OF PFIZER:
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 that issue change has affected the components of the model and moreover, applying it as the basis of this change management audit report. The effect 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 shows 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.. 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:
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, authorizing 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 empathies 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.
Establish a Clear 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.
In order to admittance the attitudes of the stakeholders and their power towards the change, they can be scored using the Ruchelman's 'Prince' System (1985) as follows:
Issue position (-3 to +3)
Power (1 to 3)
Salience (1 to 3)
Total support by stakeholder
The calculations can be seen as:
Score of all the stakeholders supporting the issue = 14
Absolute values of stakeholders opposing the issue = 12
Scores of stakeholders with zero issue position = 2
Total units of support (for and against) in the system = 28
Units of support in favour of the issue = 14 + (assumed) half of 2 = 15.
Proportional support = 15/28 = 54%
This relation shows that the results should be clearly implicit before it can be specified what behaviors are required. Once the behaviors are identify, the change process can be address the development of the required competencies.
Determine Actionable First Steps:
PFIZER has provide clear guidelines for people to make the important steps. It is noticeable from the literature (Andrew, 1995) that the success of the change program depends upon the steps which has been taken. If the steps are taken positively by the workers they can be the first symbols of success. Drawing upon Chorn (2004) that change attempt can be failed because no one knows from where to start. Having spoken a vision, it is needed to break down the apparition into its split parts. listing the actions needed to bring about these objectives should be done. Finally setting routine measures needs to be taken care of. This stepwise approach ensure that milestones are reached in time and the conversion takes place in a time bound framework
The alteration of the R&D department from a particular unit towards seven smaller, sovereign CEDDs and the cultural change that will go with it can be seen as people oriented and also as ignoring the task requirements. As the teams will be working independently and there would be a competition between the teams therefore the state that can found with over prominence on teams can be illustrate with the help of John Adair's circles (Handy, 1993) bellow there:
So in order to keep the squad focused on the task, the stability between team, task and individual needs should be catered. This can be done by having a self-governing leadership style within each CEDDs. As the needs for inspiration is high, confidence in individual scientists is also high and the value organization adopted due to the change in culture is also loyal to innovation therefore the leadership style that best match to overcome this restriction is flexible and elected.
The substance, context and process (Pettigrew 1985) of the change in the R&D department of PFIZER during the post integration period of its merger can be evaluated by analyzing the Effectiveness, Appropriateness, Accessibility, Efficiency and Economy of this change.
The performance of the R&D department can be gauge by a comparative analysis of the company's pipeline, operation efficiency and costs before and after these changes. Drawing upon the statement of the then selected CEO Jean-Pierre Garnier who announced the basic objective of the division of R&D department into CEDDs was to increase the productivity of the department as the company had an empty pipeline at the time of merger (Emerald, 2004). As the discovery of the molecules is a lengthy process therefore after 4 years of these changes the results started to pour in. In 2005, PFIZER has been estimated to have one of the largest and most gifted pipelines in the industry, with 140 projects in clinical development, including 88 new chemical entities, 32 product line extensions and 20 vaccines (Datamonitor, 2005). This shows the efficiency and effectiveness of the change under consideration.
In order to sum up this assignment, it can be accomplished that the content, perspective and procedure adopted by PFIZER under the glow of peripheral market changes throughout the post amalgamation of the company can be seen as a good practice in the change management scenario. The PESTEL analysis of firm shows that the need for change expected by the administration was needed at that time and the assessment strengthens this argument. The process adopted by the firm can as well be seen as the best practice to be used for benchmarking in the business because the cultural aspects were covered and dealt with during the change. consequently in light of the discussion provided with the help of relevant theories the change management at PFIZER.