BIOGEN-IDEC

Group 2-Members:
1. Abhinaya
2. Berengere
3. Dinesh
4. Kanwarjeet
5. Pali
6. Indira
7. Ramya
8. Srivenkatesh
9. Jyotsna


About the organization-Biogen-Idec
Biogen Idec was formed in 2003 due to a merger between Biogen,
founded in Switzerland and Idec, founded in San Francisco. It is
headquartered in Cambridge, Massachusetts.
The merger has been one of the most successful mergers in history
with a good strategic fit, both benefitting from each others synergy.
The research centers of excellence are located in San Diego,
California and Cambridge.
The international commercial and administrative center is in Zug,
Switzerland.
The international headquarters are located in Paris.
Approximately employees 3400 people worldwide.
Known for innovation and strategic alliances.
Direct presence in Western Europe and access to Latin America,
Central and Eastern Europe through distributorship.

What they are known for?
A global biotechnology company which develops
products and capabilities in oncology, neurology and
immunology.
Has two major drugs used to treat cancer and multiple
sclerosis.
Core competency lies in drug discovery, R&D, bio-
manufacturing and commercialization.
Biological bulk manufacturing facilities, with one of the
worlds largest cell culture facilities.

Vision, mission and values of Biogen-Idec
The problem(s) at hand
The prevailing culture in European operations is that of
a relatively centralized controlling style with many
decisions being made at the headquarters. Due to such
bureaucratic process, decision making was rather slow
and onerous
Decision making was not aligned with the business
culture that the company wanted to prevail in European
operations.
Due to absence of direct operations in many emerging
markets, the company was not competitive enough to
launch new products there.
THE OD PROCESS FOLLOWED
Entering into an OD relationship
Clarifying the organizational issue
The issue in this case is reassessment of business strategy by reviewing
the location of the centers of excellence and select the best location

Determining the relevant client
The relevant clients are the employee representatives of the
organization.

Selecting the Change Agent
The project team inside the organization takes the role of the OD
practitioner here.
Also for complex matters which the company didnt have internally , the
company asked for specialist support
Developing a Contract
Mutual Expectations
The project team is expected to select the best location for the
headquarters
Employee rights were very rigorous in France and so the company
involved employee representatives in the decision-making process
Consulted them on the current and future organizational structure
Told them how it would impact the employees
Support from the top management which was extremely essential was
given.
The employees were expected to give their full support.
Time and Resources
Ample time and resources were given to the project team
Ground Rules
Open mindset is necessary for this to be a success.

Diagnosing

Data gathered from internal and external sources
From multiple well accredited sources
Employees were involved in the through out the decision
making process.
In-depth analysis of the location
Biotechnology and healthcare industry, employment and
recruiting, infrastructure, transport, education, language,
social and cultural aspects


Method of Data collection
Mercer Human Resource consulting quality of
life survey
Improves decision making and increase
organizational flexibility

Feedback
Extremely positive results of a corporate
employee survey in which more than 90% of all
the employees participated.



Designing Interventions
Strategic issues are concerned here so the company
needs strategic interventions.
Purpose: Revisit and reassess the business strategy.
The intervention that the company focused on was
technostructural in nature.

This involves:
Finding best locations for the centres of excellence.
Developing more effective relationships with affiliate firms in
Europe and headquarters in the USA.
Giving more control in decision making to the affiliates.
Planning & Implementing
Planning
Two Stages :

1
st
Stage: Data gathering
Refers to relocation and outplacement as staff can be either
relocated or laid off.
Decisions should be based on industry and regional practices.

2
nd
Stage: Distribution of functions and
allocations of resources
Create 3 centres of excellence. Empower affiliates (self-
sufficient).
Redifine the role of headquarters.



Implementation
1
st
Stage - Data gathering.

- Look at potential sites through an in-depth analysis (several cities).
- Examination through several criteria: biotechnology industry,
business environment, infrastructure, transportation, education,
languages, employment, and so on.
- Data drawn from multiple and well-accredited sources (from both
internal and external sources).
- Use of the Mercer Human Resource Consultings Quality of Life
Survey - evaluation of over 30 quality of life criteria (e.g.
social/economic factors, safety, transportations).
- Mapped the locations against these criteria.
- Employees involved.
- Switzerland was choosen.
Implementation (contd)
2
nd
Stage - Affiliate & culture change.
- Clearly define key roles, responsibilities, and processes.
- More resources and control given to management teams
over their local organization.
- Heaquarters set the strategy and affiliates operate by
themselves.
- Both formal and informal lines of communication,
authority, and responsibility are shifted.
EVALUATION OF THE CHANGE
PROCESS
Criteria for good change:
1. Get the specialist support from the beginning
2. Support from top management
3. clarity of Direction
4. clarity of decision making
5. leadership

Institutionalizing change
The staff at the Zug office was extremely supportive to
the change process.
Current employees in Paris were encouraged to visit the
site at Zug in case they expressed interest in potential
relocation.
Risk assessment was done in order to prevent any loss
of talent and to ensure that benefits exceeded any
perceived risk.
Severance pay and benefits were given to employees
who decided to move on to other companies.
New staff was recruited in accordance with the
requirement at the new centers for excellence.
Existing culture:
An analysis of the company values and
assumptions:
There is a focus on excellence
There is a focus on innovation
Bureaucratic style of management
The company culture in the European operation was
centralized controlling style
This is evidenced by the top down decision making.
The decision making was slow
This led to a compromise on the value of speedy delivery of
products to their customers
This also led to competitors gaining on them
Team is given a lot of importance

Change in culture
Competing Vales approach Quinn, Rohrbaugh Biogen
Idec current position in terms of culture
Stability and control
Flexibility and Discretion
Internal focus and Integration
External focus and Integration
Competing values model - analysis
The company follows a rational goal setting
or market model of culture.
The focus is on goal setting and planning with
productivity and efficiency being the end
results.
The Headquarters control of affiliates is very
high.
This approach is sometimes seen as
shortsighted and achieves regular short term
successes.
The company is more externally focused as it
needs to stay ahead of competition at all times.
Culture Change Desired
Focus on a change in the organization structure:
Change from a centralized web culture to a more
networked or matrix structure.
Empower the affiliates with more decision making
authority so as to increase employee morale and
guarantee continued stellar performance.
Involve employees in all decisions made including this
change
Dotted line relationship between affiliate heads and
their HQ bosses.
Make excellence more ingrained in the company
culture.
HQ to only play a role in setting Best practices
and leaving the rest to the affiliate discretion.
Competing Vales approach Quinn, Rohrbaugh Biogen
Idec desired position to be achieved in terms of culture
after intervention
Stability and control
Flexibility and Discretion
Internal focus and Integration
External focus and Integration
Competing values model - analysis
The company will now follow a open system or
Adhocracy model of culture.
Readiness and flexibility are stressed on and the end
results of growth and resource acquisition are seen as
valuable
The Headquarters may lose the high level of control
currently held over affiliates. But in the long term this
would make them more effective and boost employee
morale making individuality and creative thought
company values.
This approach is sometimes seen as an approach that
harnesses the companys combined ability to create
and often leads to a breakthrough.
The company continues to remain highly externally
focused as it needs to stay ahead of competition at all
times.
The Cultural change was
successful
Reasons for success:

There was an extremely clear strategic vision or
high clarity of direction
There was support from the right specialist from
the beginning.
There was support from the top management all
through
There was firm and decisive leadership throughout
the process and there was clarity in decision
making.
The company leaders internalized the change and
practiced it themselves.
Final shift in the organization
Biogen became more adaptable to cultures
and thereby was more flexibility in handling
cultural differences.
The organization structure became flatter as
more number of CoE sprung up to give rise to
multiple decision making points rather than a
centralized structure.

FORCE FIELD MODEL
Force-Field Analysis

Driving forces for the change ranked according to their strength

1. The change will allow the company to launch new products and grow its
direct presence in emerging markets.(10)
2. The change will allow the company to grow faster than its peers and do
justice to its pioneering ability of drug discovery, research, development and
manufacturing facilities. (9)
3. The change will bring decentralized decision making, which will increase the
companies response to localized threats and will make way for quicker
decisions. Eventually making the company more competitive. (10)
4. The change is sync with the mission statement of the company, which
emphasizes on global development , manufacturing and commercialization.
(8)







Sum Total of Driving forces - 37
Force-Field Analysis

Resisting forces against the change ranked according to their strength

1. The change involves relocating employees, providing newer contracts and
outplacing those who choose to part away. This will add to expenses for the
company and will be difficult to execute owing to strict legal process. (8)
2. New organizational structure may lead to unhappy employees which would
lead to applying newer interventions to counter them. (9)
3. There is a high risk of loss of talent because of relocation. (7)
4. Till now the organization has been centrally controlled. The idea of
decentralized decision making may not go well with some of upper
management members (8)
5. The legal process in France is extremely rigorous with employee rights so
terminating and issuing newer contracts will have to be carefully done. (6)
6. The re-organization will lead to massive change in organizations culture,
adjusting to it may prove to be a daunting task . (8)




Sum Total of resistive forces: 46
Countering resistive forces

To counter the resisting forces;
To counter the effect of loss of talent due to relocation,
local talent can be hired. Lucrative Packages were also
offered to the employees who relocated
The loss of morale due to change in organizational
structure can be countered by proper internal
communication and support from the top management.
To counter the change due to culture, the organization
should employ the right OD process for it to be smooth and
not cause friction.
To counter the negative effect of decentralization, top
management must be provided training on how to handle
such changes and they must lead by example.

Resisting forces for the change ranked according to their
strength


1. The change involves relocating employees, providing newer contracts and
outplacing those who choose to part away. This will add to expenses for the
company and will be difficult to execute owing to strict legal process. (4)
2. New organizational structure may lead to unhappy employees which would
lead to applying newer interventions to counter them. (3)
3. There is a high risk of loss of talent because of relocation. (2)
4. Till now the organization has been centrally controlled. The idea of
decentralized decision making may not go well with some of upper
management members (4)
5. The legal process in France is extremely rigorous with employee rights so
terminating and issuing newer contracts will have to be carefully done. (6)
6. The re-organization will lead to massive change in organizations culture,
adjusting to it may prove to be a daunting task . (3)

Driving forces 37
Resisting forces 22



Steps taken
The inquiry was done by the Headquarters
appointed project team.
They checked all the potential centers for
excellence and found out the best practices of
each.
Zug was, in the end, was found to have maximum
amount of good features in terms of employee
welfare, infrastructure and best practices and was
also hence convenient for change to the
Commercial and Administrative headquarters.
The best practices in Zug was to be replicated to
other branches.
Positive Model
Stakeholders and Change
The key stakeholders were identified as staff at
other regions, senior management, affiliates,
staff in France, regulatory and tax authorities
and the US Corporate.
Their ability to be a part of change and the
control was mapped. How much they need to
change and how much they have a control over
that.
The reasons for change was demonstrated in
simulations for the interested employees.
Stakeholder mapping
Transformation
Zug was extremely cooperative.
It was visited and studied by people who were potential
workers there.
Also by people who wanted to replicate the best
practices in Zug.
Heavy severance pay, comprehensive outplacement and
new contracts. minimized loss of key talents.
Through authoritative model of implementation
Prior thoughts about who stays and who goes. This
made the employees transition easier.
New staff recruited wherever required.

Positives
The organization and the project team in particular, had
a clarity in direction.
The data gathering was a smooth process because of the
cooperation of employees and other affiliates.
Cooperation of all the stakeholders who could be change
agents with the project team.
Employees had a chance to touch and feel the
prospective environment. This reduced fear of change
and displacement.
Flexibility of the organization and the hierarchy as such.
Comparative Analysis of the
interventions done
EARLIER

Global HQ was in
Massachusetts and
International operations HQ in
Paris, France
The international affiliates
directly reported to the
International HQ which in turn
reported to global HQ.
Decision making was slower
due to centralization of power
and authority
Paris HQ had responsibility for
finance, legal, HR and
commercial activities
Regulatory affairs, drug safety
and logistics were locally
divided.




Global HQ at Massachusetts
3 Centres of Excellence (CoE) were established and the
International HQ (Commercial and Administrative functions)
moved to Zug, Switzerland based on Mercers report on
Quality of Life and factors conducive for doing business.
Regulatory affairs and drug safety functions were moved to
London, UK because European Regulatory Authority was
present there
Logistics functions was moved to Holland because packaging
operations were done there.
The affiliates were empowered to make decisions to
operationalise the strategy set by the global headquarters.
The affiliates now did not have a direct reporting
relationship to the international headquarters but a dotted
line relationship.
International HQ would share the best practices among the
affiliates and report to the global HQ on the needs of the
affiliates




NOW
Issues in the Intervention
process
They did not employ an external OD
consultant. He/she could have brought in an
impartial third party view to the problem.
There was no strict time limit imposed for the
change process to take effect. (Phases not
clearly outlined)
The conflict in the cultures of Switzerland and
France was not analyzed before going in for
the change.
Questions??