Pfizer's Global Organizational Strategy
Pfizer, a pharmaceutical company, has been in business since the 1800's and went global before going global was a common strategy. The decisions made by the management of Pfizer, Inc and the organizational strategies employed throughout the years have had to adapt to the ever changing concept of what it means to be a global company and what management must do to meet the goal of making a profit and corporate expansion.
Pfizer's domestic core competency has been the innovation of new pharmaceutical products and the domestic strategy has been one of differentiation. The domestic industry is that of pharmaceutical products. The international market is very competitive, in particularly the research and development of new pharmaceutical products. There is an increase in pressure to be responsive to the needs of the industry, but also to reduction of costs; which brings in the strategy of transnational.
According to the Pfizer web page, in 1997 Fortune magazine named Pfizer the world's most admired pharmaceutical company. In 1999, Pfizer celebrated its 150th anniversary as one of the world's premier pharmaceutical companies and was recognized for its success in discovering and developing innovative drugs for human discovery. Forbes magazine named Pfizer Company of the Year when Pfizer's investment in research and development exceeded four billion for the first time.
In a 2004 EMBO report, Consulting Resources Corporation (CRC) suggested that moving R&D operations offshore might reduce the putative cost of developing a new drug in the USA from the current cost of between seven million dollars to one billion dollars down to two hundred and fifty million dollars. The change in international intellectual property laws, the growth of the Internet, lower-cost telecommunications, and large educated English speaking populations are further enabling the offshore move. Singapore had a two billion dollar initiative in 2000, which included tax incentives and liberal laws to attract foreign pharmaceutical companies. The prediction is for more pharmaceutical companies to move operations overseas.
Prior to 1997, Pfizer was divided into U.S. operations and International operations. Even though it was the same company, combining the two different operations was probably one of the hardest mergers. The U.S. Model and the International model were totally different. Pfizer incorporated the supply method, manufacturing, sourcing, packaging, distribution, research ad development. According to an article in July 2008, Pfizer is intimately involved with the product development process from the very early stages, proving to be very effective in facilitating product launches.
Increasingly, during this contemporary business era, organizations are going global and the issue of control has gained prominence in international business management. The origin of these issues deal with not only the spatial separation or distance between the head office and foreign location of operations, but also with the diversity of the culture. To address these issues, global organizations need to evolve new organizational structures and control mechanisms.
To better understand the relationship between the organizational structure and the companies control mechanisms, there needs to be an understood relationship with the terms used. This relationship of these terms is addressed in an article on Business Net. Organizational structure, whether grouped together, or integrated by product, geography, function or matrix, is essentially the hardware of the company. The control mechanisms, which include the organizational culture, networks, reporting systems, cross-cultural teams, rewards and incentives, are the software of the company. The key insights for a business going global are to realize the following: • Globalization is driving a wholesale reinvention of organizational structure and management , the need for...
Cited: Brower, Vicki. "Going Global in R&D." EMBO Reports 5 (2004): 333-35.
Roth, Gil. "Top Pharma Newsmaker Interview." Contract Pharma. July 2008. 6 Dec. 2008 .
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