Change Management of Pfizer Company - Case Study Example

Change Management

Introduction

Pfizer incorporation is a globally recognized and world leading company in the pharmaceutical industry. The American based company is headquartered in the New York City and the research and development (R&D) department headquartered in Groton Connecticut. The world's largest pharmaceutical company has been listed on the New York Stock Exchange since 2004 and has coupled the achievement with being part of Dow Jones Industrial Average. The Pfizer Inc Company specializes in the research, development, manufacturing and market prescription of medicine globally both for the human and the animal medicine. The company has earned a reputation for world’s best medicine brands and primarily focus on three business segments including healthcare, consumer, and animal health.

The global reach of the company has a great market share in over 150 countries thereby positioning itself as a competitive company in the pharmaceutical industry (Aladwani, 2001). The company's core competency depends on the effective and efficient Research and development department which is highly associated with its great reputation as the global leader in industrial chemicals. Coupled with research and development, the company utilizes three strategic priorities which include global learning, efficiency and national responsiveness to increasing productivity. However, the large composition of the Pfizer research and development division has resulted in high cost based on the changes in environmental and technological innovations. The high cost experienced by the company has therefore led to the need for the closure of an R&D division to achieve a more centralized research and development design to reduce the cost of production in the company (Kerber & Buono, 2005). Therefore, the paper will explore the changes in the structure of the company, the challenges experienced by the employees during the downsizing process and provide a recommendation for a strategic structure to improve productivity.

The Existing Structure

Pfizer Company has a very complex structure that requires a lot of creativity in developing the organizational structure. The complex structure of the Pfizer Company consists of three primary divisions which include the product division, the global matrix, and the international division. These divisions were developed to scale up the global operations and create a hybrid structure consisting of multi-divisions consisting of the Pfizer Global Research and development division, Pfizer Global Pharmaceuticals, Pfizer global manufacturing, Pfizer Animal health and the Pfizer human health division's (Todnem, 2005). However, all these divisions are coordinated from the headquarters with the board of directors of the company at the helm of decision making on the company financial and strategic development matters.

At the top of the management structure of Pfizer therefore lies the board of directors based on the headquarters followed by the corporate headquarters staff. The leading division of the company is the human healthcare segment but the other divisions also have heads, which exercise control of the relevant departments. The structure then trickles down to the regional heads of departments who then exercise control over the national divisions (Todnem, 2005). These divisions are also well equipped with various departments such as sales department, marketing department, Finance department and the strategic development departments with specific responsibilities that contribute to the vision and mission of the Pfizer Pharmaceuticals. However, with the intention of the downsizing effects in the research and development division, several changes will take place in the structure of the Pfizer research and development division.

The Pfizer executive and leadership body has engaged in the intentions of downsizing the research and development division with the intentions of increasing productivity while saving cost. Therefore, the company has announced the closure of the Collegeville R&D facility to reduce the number of facilities engaged in the research and development segment. The closure of the location will result in several changes in the structure of Pfizer Inc. The first change will result in the transfer of responsibilities from the Collegeville employees to the remaining employees of the remaining facilities (Bryer et al., 2011). The development and placement of the new responsibilities will, therefore, result in the readjustment and the mixing of the staff to respond to the sudden shift in the priorities of the company. Therefore, the change in structure will also be influenced by an inflow of new recruits and exit of retrenched workers due to lack of expertise to match the newly induced pressure.

The structure will also change due to the reconstruction and remerge of the activities previously done at Collegeville to the new locations to ensure the initiatives in progress are maintained and done to completion. Furthermore, the role of the board of director in supervising and making decisions for several facilities will be reduced and the responsibility transferred to the head of the remaining R&D facilities (Bryer et al., 2011). The downsizing process will also change the relationship between the other divisions and the research and development division since some processes previously conducted in the closed facility will be done internally to improve efficiency. Therefore, the change in the organizational structure of Pfizer will be caused primarily by the transfer of responsibilities from one department to another and the cutbacks in the event of downsizing.

Challenges of Downsizing from the Period of Announcement and Final Closing

The primary challenge that comes to the employees during the transition period between the announcements of the downsizing process to the period of final closing becomes the loss of morale among the employee. The process of closing the R&D facility makes the group of individuals working in the facility very unsure of their jobs leading to the loss of morale thereby reducing productivity from the facility before the actual period of closure. Another challenge will involve the sudden shift in the production of goods due to a low number of employees. Therefore, the remaining facilities will have a lot of pressure in trying to meet the demand from the customers while at the same time covering up for the closed facility (Aladwani, 2001). Therefore, the remaining employees will be overworked leading to low productivity from the employees.

Furthermore, fewer employees will not be able to satisfy the customer service rate previously occupied by the closed facility thereby most customers will acquire services from the competing companies. Consequently, the closure of the facility will result in the change in the business process of the company leading to an alteration in the manner in which production was previously handled (Kerber & Buono, 2005). The change in the business process will automatically require additional investment thereby increasing the cost of production which was initially being avoided in the closure of the location of the facility. The most traumatizing challenge among the employees is the layoff from the jobs leading to a lot of depression among the employees which can lead to the development of mental illness cases among the people who lose their jobs.

Recommended Strategies to Assist Employees during the Transition Period

The first strategy to employ in the event of the downsizing process in a company by the employees should involve the acceptance of the situation and remain very objective throughout the period. Absorbing the pain as an individual and internalizing it makes one very focused and allow them to make rational choices in moving forward. After acceptance of the situation, the employees should explore the alternatives available within the company or outside to gain a new employment opportunity and cover up the existing one before it ends. Being positive and hardworking throughout the period is also helpful to an employee since as the company closes the facility the management could recognize the efforts and retain the employee under new responsibilities (Anderson, 2010). The employees should also make a well thought out plan in moving forward from the stressful period through seeking new opportunities in other areas.

Furthermore, the employees should maintain a good communication mechanism with the management to ensure that all the information about their fate with the company is acquired to prevent getting a surprise and being shocked by the management (Bryer et al., 2011). Especially, the employee should gain interest in seeking clarification of any rumors they come across during the period to always remain informed. Most importantly, the employees should seek help from support systems, especially in the company to maintain good health (Aladwani, 2001). Additionally, the employees should be able to understand the legal issues surrounding the downsizing opportunity and seek legal advice before acting to ensure their rights are protected according to the contract between the company and the employee. The primary goal, in this case, should involve focusing on personal life and looking to the future to achieve greater opportunities and avoid being broken down.

Recommendation of a New Structure after the Closure of the Facility

The new structure for the R&D division of the Pfizer Inc. should, therefore, focus on using the disease specific structure so that the facilities focus on specific research and development initiative to avoid overlapping of roles and confusion. The focus on disease structure will, therefore, ensure that decision-making powers are transferred to the heads of the R&D divisions to encourage rational decision making on matters involving medicine production. The board, on the other hand, will remain with the primary role of financial management and strategic planning to achieve productivity (Anderson, 2010). The new structure of focusing on diseases depending on the facility will prevent the further closure of Pfizer's business locations as it will improve the previous structure based on R&D as the core competency of the company. However, all the matters related to the research and manufacturing of the drugs will be transferred to the chief scientist in control of a given research for a specific disease. The new structure of engaging in specificity will ensure that the roles and responsibilities of all the employees in the organizational structure are clearly spelled out to avoid any conflicts in the company (Kerber & Buono, 2005).

Benefits of the New Structure

The new industry structure will ensure that the company prevents overspending on the employees through the engagement of the right talent in the right job placement thereby increasing the opportunities for research. The disease-specific structure in the R&D division will ensure that the allocation of resources is committed for the intended purpose hence reducing wasteful spending on irrelevant resources (Kerber & Buono, 2005). The new structure will also increase the development in research since the technological possibilities available will be adequately explored and tried. Moreover, the structure allows for the development of an effective communication pathway in which the top management and the employees can engage in constructive development through understanding the responsibilities of each party. Through the development of the new structure, it improves the bargaining power of the employees to avoid being removed from their jobs during the downsizing process (Bryer et al., 2011). All the employees are given responsibilities based on their expertise.

Therefore, it becomes difficult to remove an individual from their job. Additionally, the disease-specific focus ensures that the R&D department focuses primarily on research and removes the political influence of the board from the picture leading to an increase in productivity among the employees since the pressure is reduced and gives a conducive working environment (Anderson, 2010). The removal of the influence on research will, therefore, lead to the increase in information sharing among academic researchers causing the development of new modes and medicine for treatment faster and quickly. The new structure therefore primarily focuses on improving productivity, increasing customer services, increasing profitability while reducing cost. The changes in the environment can easily be predicted in good time before damage and corrections made successfully. Therefore, developing a good structure which promotes the value of the business will increase employee empowerment, improve productivity and provide the people with high levels of safety due to quality production of medicine.

Conclusion

Pfizer Inc. has been recognized globally as the leading pharmaceutical company, therefore, leads to the complexity of the development of an effective organizational structure. The company must, therefore, be committed to achieving its vision and mission to increase its productivity. Additionally, the change in the structure of the company will result in changes in the normal business of the company thereby affecting productivity. The downsizing process in most cases affects the employees who become the, most challenged and experience problems such as stress, depression, and even mental illness. Moreover, productivity is affected as a result of the change in business strategy and processes which require more investment to improve. However, strategic planning by employees through the use of well-thought plans and effect communication they can overcome the threat of downsizing or closure of the company location. The employees go through a lot of problems trying to redeem themselves. Therefore, the company should consider their pain and explore alternative means such as salary cut off before settling on the closure of location or downsizing. Thus, the structure and strategy employed by a company become a great competitive advantage in the global market.