Example of Change Management

Topics: GlaxoSmithKline, Pharmaceutical industry, Merger integration Pages: 11 (3813 words) Published: October 28, 2012

The change situation that has been chosen is the cultural change and post merger integration of the R&D department of the company in 2000. During the process, an organization is experiencing a change, how the organization finds, decides and forms its figures are the most important aspects for its future. The ability to change means a tacit process, prepositional concept that lies in the bottom line, because explicit skills are after all merely snapshots of what an organization currently has. Needless to say, this ability has relation to an organization's sustainability. The importance of change and change management in today's turbulent business environment has escalated.

GlaxoSmithKline is a British multinational pharmaceutical, biologics, vaccines and consumer healthcare company headquartered in Brentford, London, United Kingdom and employees about 100,000 people. GlaxoSmithKline (GSK) is among the top 20 FT Global 500 companies and among the top 5 pharmaceutical companies in the world. GSK develops, manufactures and markets pharmaceuticals, vaccines, over-the-counter (OTC) medicines and health-related consumer products. The company primarily operates in 116 countries and its marketing is done in over 125 countries. GSK's history goes as far back as 1859 when Beecham opened the world's first factory built solely for making medicines at St Helens in England. Since that time the group has passed through many phases, but the turning point came during the merger of Glaxo Wellcome and SmithKline Beecham in 2000, it had also seen a merger of Glaxo and Wellcome in 1995. There was a major impact on the culture, structure, stakeholders and strategy of the company due to this merger. Innovation is at the heart of GSK's aims and the company promotes this through its unique culture. The objective of the company as described by its Annual Reports is to become the undisputable leader in the pharmaceutical and consumer health industry. GSK has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012, it had a market capitalisation of £74.8 billion, the fifth-largest of any company listed on the London Stock Exchangeand, also it has a secondary listing on the New York Stock Exchange. CHANGE SITUATION:

The merger of 2000 can be seen as the proper use of 'sigmoid curve' (Handy, 1994), as the company started a new curve before the first one declined. Both the legacy companies had the time, resources and energy to get the second curve through its initial floundering before the first curve declines. But it was the experience and management capabilities of both the companies that lead them through a successful change management program. This merger can be illustrated as follows:

During the process of change management the company emphasized upon creativity and innovation (Emerald, 2004), it realized that without these the company was at risk from the highly competitive pharmaceutical industry with an increase in generic manufacturers. Thus with many patent expiries due soon and with empty pipelines, the start of new curve was an issue. Considering these external stimuli the CEO of the company Jean-Pierre Garnier tried to reconcile the concepts of being big and think small by dividing the R&D department into seven " centers of excellence for drug discovery " (hereafter CEDD) (Financial Times: April 2, 2001). This change was based on the success of biotechnology companies, where independent small teams were working. The change can be categorized as planned transformational and can be represented on the following diagram:

The change situation of the R&D department during the post-integration period at GSK can be seen as transformational as it fulfills the five key indicators of transforming change. The announced change influenced the culture prevailing at the department, changed...
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