MGT210 TERM PAPER

Managerial Report on NOVARTIS

Submitted to:
Mahmud Shamsi (MUI)
Lecturer
School of Business
North South University

Submitted by:
Malik Meraz Mumin 0930091530
Md. Sazidur Rahman 1130884630
Kazi Saad Hebab 1210737030
Shamsul Arifeen 1230963030
Safwan Habib Ababil 1310569030

Semester: Summer 2013

Section: 23
Date of Submission: August 29, 2013

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LETTER OF TRANSMITTAL
Date: 20 December, 2012

To,
Mahmud Shamsi
Lecturer,
School of Business,
North South University
Dhaka, Bangladesh

Subject: Submission of MGT210 report.

Dear Sir,

We are honored and pleased to submit you the report titled “Novartis Bangladesh Limited”. All
the members of the group have contributed to complete the paper, as a part of our course
requirement.

The objective of the report was to give students, of this course, a brief introduction in building
the basic management foundation in understanding the dynamic environment under which a
manager pursues a collective dream, where functions like planning, organizing, controlling and
directing are performed. We, therefore, have prepared this report on the basis of both primary
and secondary data. Primary data was collected by taking interview of the manager during the
period of the working hour; while secondary data was collected from Novartis’s website & both
printed document of the company.

We would like to end this short letter by expressing our gratitude for guiding us through the
whole report and we hope that you find this report reflects upon the fact that we have, in fact,
learned in large amount from this course. Such being said, we hope you will accept our report.

Thank you.

Yours Sincerely,

Malik Meraz Mumin

Md. Sazidur Rahman
Kazi Saad Hebab
Shamsul Arifeen
Safwan Habib Ababil

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 ACKNOWLEDGEMENT

First of all, we want to give thanks to almighty Allah, who has provided us the brilliant
opportunity to build and complete this report successfully.

We would like to thank Mr. Sanjib Kumar Ghosh who has helped us by giving valuable advice
and time. We would also like to thank him for providing guidelines and information.

We would like to thank the authority of Novartis Bangladesh Limited Company because we have
taken a lot of information from them.

Above all, we cannot refrain our self from giving heartfelt thanks to Mahmud Shamsi, Lecturer,
School of Business, North South University for giving his valuable advice to prepare the report.
He helped us determining the objective of the report and guided us through to get to the end. The
format prescribed by him is pretty user friendly.
At last we want to give thanks to our group members, without whom making this report was
impossible.

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 TABLE OF CONTENTS
No Topic Page No.
1 Executive Summary 5
2 Introduction 6
3 Novartis in Bangladesh 6
4 Company Overview
i. Mission Statement
ii.Vision Statement
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5 Manager’s Background 6
6 Situation Analysis 9-10
7 Social Responsibility 10-11
8 Officers Of The Company 11-12
9 Management Issue 12-14
10 Objective 14
11 SWOT Analysis 14-15
12 Conclusion 15-16
13 Reference 21
14 Vi s i t i n g C a r d 22

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 1. EXECUTIVE SUMMARY

Novartis Bangladesh Limited is public limited company limited by shares and was incorporated
in Bangladesh on July 17, 1973. Now Novartis Bangladesh Limited is the leading manufacturer
of pharmaceuticals products in Bangladesh. With its headquarter in Basel, Switzerland, Novartis
is dedicated to discover, develop and successfully market innovative products to prevent and
cure diseases. Novartis Bangladesh is being focused on knowledge and skills which have been
reflected in Exporting Pharmaceuticals products (Medicine) to Novartis Global markets.

We would like to bring to your notice that Novartis Bangladesh requires status to the rest of the
world promoting exports especially to the Europe Market. The company also requires sending
key personnel to its own and other stakeholders for training abroad to learn new products and
medical treatments as a part of awareness building. The company also needs to make honored in
country perspective to be dignified as exporting organization in pharmaceuticals sector.

This paper has attempted to analyze the different management practices of Novartis Bangladesh
Limited in the corporate world.
First of all, the report contains an introduction part, which relates our effort and research
methodology.

Then, we had narrated the briefing about the business and made some analysis of the strength,
weakness, opportunities, and threats. The initial capital, the firm’s mission and vision statement
and its objectives was also stated.

Later, the whole managerial process including the company structures, Function of Management
was stated.

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 2. INTRODUCTION

Novartis International AG is a multinational pharmaceutical company based in Basel,

Switzerland. According to the Fortune Magazine (July 20, 2009 issue) it was the sixth largest
Pharmaceutical Company in terms of revenue. Novartis was created in 1996 from the merger of
two Swiss companies, Ciba-Geigy and Sandoz Laboratories which at present employs nearly
100,000 people worldwide, has a presence in over 140 countries including Bangladesh, and its
products range includes Pharmaceuticals, Vaccines & Diagnostics, generics medicines, over-the-
counter (OTC), animal health and contact lenses and lens-care (Novartis Website). This report
investigates Novartis’s marketplace and its activities in Bangladesh.

3. NOVARTIS IN BANGLADESH

In 1973 the Ciba Geigy (Bangladesh) was registered as a joint stock company (Novartis
Bangladesh website). It then launched researched pharmaceutical products in the Bangladeshi
market. In 1986 Ciba Geigy introduced its first generic product in the Bangladeshi market,
Servipham. The company began to export its products from Bangladesh in 1995. In 1997, Ciba
Geigy and Sandoz merged to form Novartis (Bangladesh) Limited and introduced its first OTC
product. In 2000, Novartis (Bangladesh) Limited became the first pharmaceutical company in
Bangladesh to be awarded the EU GMP certification.
Novartis Bangladesh awarded the National Export Trophy for the years 2002-2003 and 2003-
2004 from Bangladesh government’s Export Promotion Bureau (Novartis Bangladesh website).
Novartis Bangladesh is one of the top pharmaceutical exporters of Bangladesh that exported
US$15 million medicines in 2007, which is 44 percent of the total pharmaceutical exports from
Bangladesh (Daily Star report, 2008). Though its export value is quite impressive, its generic
division Sandoz’s performance in Bangladesh’s local market is not as good as Novartis’s
patented products. Sandoz positioned 15 in top 20 pharmaceutical companies in Bangladesh.

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 4. COMPANY OVERVIEW

i.Mission Statement:
Novartis Bangladesh Limited wants to discover, develop and successfully market innovative
products to cure diseases, to ease suffering, and to enhance the quality of life. They also want to
provide a shareholder return that reflects outstanding performance and to adequately reward
those who invest ideas and work in the company. (www.novarties.com.bd)

ii.Vision Statement:
Novartis Bangladesh Limited is committed to “development with a human face” and wants to
help promote the emergence of a lasting social environment where human rights are guaranteed,
basic needs are satisfied and there is maximum possible equality of opportunity and social justice
for all. (Annual Report 2009)

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 5. MANAGER`S BACKGROUND

In this report we have collected information about managerial activities of finance department of
“Novartis Bangladesh Limited” from Mr. Sanjib Kumar Ghosh.

Educational Information:
He completed his MBA discipline in Accounting/ Finance as well as professional degree such as
ACMA/CA.

Professional Information:
He has 5-6 years practical experience in Business Finance & Analysis. Besides this experience
he has expertise knowledge in the arena of extensive knowledge of accounting processes & its
effects on business, knowledge of International Accounting Standards, Novartis Accounting
Manual, Bangladesh Accounting Manual, special knowledge about Pharmaceutical Market as
well as about market, product, competition and business process. He holds proven skills &
knowledge on Financial System & Analysis, SAP and Advanced MS Office.

Manager’s post on this organization:

He is the Head of Business Planning Analyst in Finance Division.

Manager Role:
He usually performs informational role in this organization. He submits his financial analysis to
the decision making authority.

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 6. SITUATION ANALYSIS

Internal factors:
The internal factors those are affecting the company’s decisions and strategies in the short &
long run are stated below. Novartis has got an enthusiastic set of employees who work under an
inspiring board of directors in an excellent physical work environment. The 4 internal factors
are:
i.Owners:
The owners of Novartis have created a huge bulk of employment opportunities in our country.
They also spend a large amount of money on CSR. Moreover, they are one of the highest tax
payers of the country.
ii.Board of Directors:
Novartis’s Board of directors is one of the best boards of directors among country’s different
multinational companies. Their achievements are high regarding the pharmaceutical industry in
the country. They are very highly skilled in managing a company like Novartis. The proof of
their reputation is the achievements of Novartis.
iii.Employees
Novartis has got a highly skilled set of employees who are very enthusiastic for achieving the
objective of the company.
iv.Work Environment:
The work environment inside the company is very much friendly in nature. The company
provides a worker friendly state among the company so that they does not feel hazy rather feel
like home as a part of the company’s policy.

External Factors:
i.Competitors:
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However there has been an economic downturn in some of the rising pharmaceuticals, the
number of pharmaceuticals is still on rise. Towards the year 2005 a number of small
pharmaceutical companies have emerged as a threat to the
market leaders. Novo Health Care & Pharma has completely
dominated the pellets division and thus has threatened the
pellet sales of INCEPTA. There are many more examples that
conclude in the same thing. That doesn’t matter what is the
size of the pharmaceutical of our country. Each player in this
market is a competitor to others.

ii.Economic Impact:

Economy is the corner stone of a country’s development. A pharmaceutical like Novartis has to
have to do largely with the country’s economy. When the economy of a country boosts up, the
buyers will have a strong financial hold and thus can have access to drugs. If such situation arises
that the country’s economy is not doing well and so is the people, they won’t have that financial
strength to buy medicines of high range price. Thus, the Pharmaceutical along with the industry
can collapse.

iii.Customers:

The company is presently following distributional model as a means

to reach the customers. The company under this model is being
benefited largely.

iv.Political Impact:

Political uncertainty or unrest has definite influence on the day to day business of the company
and does impact overall supply chain management activity which cause potential loss to the
business as well.

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 7. SOCIAL RESPONSIBILITY

Novartis has been vocal about its social commitments for at least two decades and the emphasis
on corporate citizenship has amplified after signing the Global compact. Novartis Foundation for
Sustainable Development has been fostering sustainable healthcare development projects and
stakeholder-dialogue for last 25 years. Since 2000, Novartis has provided free treatment to more
than 3 million leprosy patients all over the world in partnership with Whom and has been
involved with campaigns against leprosy since 1986. As a result, the prevalence of leprosy has
been dramatically reduced around the globe. Under a separate five-year agreement with the
WHO, Novartis is providing fixed combination tablets to treat 500,000 tuberculosis patients in
the world’s poorest countries. Novartis also provides Coartem for malaria at no profit to
developing countries where malaria is endemic. Last year alone Novartis implemented access to
medicine programs worth over USD 570 million reaching more than 4.25 million patients in
need.

Another nonprofit new entity for research & development of drugs for tropical diseases has been
established recently in Singapore called Novartis Institute for Tropical Diseases. The focus of
this institute at the moment is on dengue fever and tuberculosis.

In Bangladesh Novartis provides financial support to local initiatives and creates opportunities
for staff to engage in community and contribute efforts and time where it is most needed. In the
recent past Novartis Bangladesh Limited has extended support to BRAC, in order to extend
healthcare facilities through BRAC health centers to the ultra-poor of the country and also
provide low cost prosthesis for physically disabled people of the country. Novartis Bangladesh
Limited is also involved in supporting local development initiatives like Utsho & the Dhaka
Project. The organization also have liaison with schools that caters
to children with psychological disability.

In the past few years Novartis Bangladesh Limited have been

actively involved with The Dhaka Project, a NGO set up by Dubai
based Emirates stewardess, Maria Concaecao. The project

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rehabilitates street children and their families with the objective to empower these individuals
with the knowledge necessary to obtain self sustainability.

8. OFFICERS OF THE COMPANY

The Board has approved an organogram with modern features ensuring clear lines of delegation
of authority and reporting for accountability for effective decision making, evaluation of
performance on merit for both rewarding and disciplinary action. The organogram of Novartis
Bangladesh Limited is as follow

Company Executive Committee (CEC)

Name Salary
Asfaque Ur Rahman 1000000 TK

M Mansur Alam 400000 TK

Tauheed Hossain 350000 TK

Ashfaque Ur Rahman 350000 TK

Ala Uddin 500000 TK

Shah Mohammad Ibrahim 450000 TK

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 9. MANAGEMENT ISSUE

Good Issues:
i.Training & Development
Novartis maintains a training division in order to get the best
possible output of its human capital that  offer both on-the-job
and off-the- job at both theoretical and practical training
opportunities through a range of Local, Regional and
International Training programs that include both functional
and managerial levels on the basis of Training Need
Assessment.

ii.Values & Behaviors

Values and behaviors should serve every associate as guidelines and benchmarks in daily work
and should especially be helpful during the annual performance review.

At Novartis they strive to be:

 Results driven
 Customer and quality focused
 Innovative and creative
 Competent workforce
 Dedicated to best-practice leadership
 Fast, clear, action oriented, taking initiative
 Expecting empowerment and accountability
 Committed to their work and self-disciplined
 Living a culture of mutual respect, candor, trust, integrity, and loyalty
 Open up the communication, partnership and collaboration, compassionate.
iii.Performance Management

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Performance Management is a critical Business & People Management Process. Novartis
Bangladesh Limited uses Performance Management System (PMS) as a tool for their associates
to:

 Improve the quality of their work

 Enable them to overcome their problems
 Motivate them to achieve higher levels of performance
 Receive or provide feedback

PMS drives business by aligning individual goals with business objectives, aligning team
members towards a common objective, involving all associates to achieve business results and to
achieve SMART( Sandoz Management Analytic Reporting Tool) objectives that leads to
Business growth.

PMS also Drives People by making individuals accountable for their performance, improving
individual performance by creating a competitive environment, developing associates based on
skill gaps and rewarding associates based on pay for performance philosophy.

iv.Talent Management
Organization and Talent Review (OTR) is one of the key HR processes that helps Novartis
Bangladesh Limited in developing leadership talents who will fuel the business to build a
leadership pipeline by identifying the leadership potential of associates and providing strategic
developmental moves and executing development plans, that measure the depth of the talent
pipeline and build a common understanding of talent and potential by ensuring retention of key
talents and the effective management of their talent pools.
Consequently, Novartis commit to providing practical processes and programs which ensure the
identification, development, and inspiration of their current and future leaders. Novartis is
committed to give their associates the opportunity to grow and realize the full potential through
fostering an environment of continuous performance improvement and continuous personal
development for all.

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Novartis believe that through this commitment, which offers challenging and rewarding career
opportunities, they enhance their attractiveness as an employer of choice.

Novartis uses international assignments as a key strategy, not only to utilize the skills of its
people where operations require those most, but also to provide exposure to different global
practices, as an opportunity for assignees to develop their careers.

At Novartis, living and working abroad means expanding the distribution of knowledge and
skills, increasing globalized thinking, and enhancing the development of leadership
competencies.

Bad Issues:
i.Technical Issue: Often during monthly reporting Internet Connectivity gets interrupted since
reporting package has to be done in web. In addition, due to strict deadline all the reporting
entities across the world log in the system at the same time. These two issues come really as a
challenge during actual and planning time line.
ii.Waste management: They have lacking in managing waste. Recently Ministry of
Environment has warned Novatis by giving an open letter. And Novartis is trying to overcome
this threat.

10. OBJECTIVE

Through their projects and programs Novartis Bangladesh Limited contributes to improvements
in the health of poor people in developing countries. In doing so, they are guided by the World
Health Organization’s definition of “health”: Through their own research and advocacy work,
they promote and support the development of corporate responsibility practices with reference to
developing countries. They encourage actors of industry, government and civil society to
cooperate in the improvement of the living conditions and health of poor people in developing
countries.

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Plans:
i.Operational Plan:
Novartis has a short term plan to boost their sales figures so that it can lead to higher sales
revenue which will result in sales growth and turn the sales percentage into double figure.

ii.Strategic Plan:
The Novartis has two stated strategic plans:
 Outperform market growth: Novartis has a plan to increase their market share through
increase in sales in compared to their competitor. Higher market share will allow
Novartis to enjoy competitive advantage over its rival companies.
 Being cost efficient: Novartis has another plan to reduce their cost of production and to
make their production system more efficient so that it can minimize overall costs which
will lead to higher profits for the organization.

iii.Directional Plan:

Novartis follows certain plans to promote their products and reach their customers. It has a group
of field-workers who represent its products to the target market. These field-workers go to
doctors with samples of their products and convince them (doctors) to prescribe their(Novartis)
medicines. Thus, informing those (doctors) about their (Novartis) products benefits. The field-
workers do not need to follow any obvious rule of consulting doctors. They are just allocated
certain time-period to consult with certain number of doctors by their company. It is totally up to
them when to consult doctors and which doctors to consult.

iv.Standing plans:

Novartis has ongoing plans that provide guidance for activities performed repeatedly. “Retain &
Grow Talent” is a plan of Novartis that involves training their employees regularly after six

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months so that they raise the interpersonal skills of their employees and as a result employees
will remain in the organization as well as gather more experience.

11. SWOT ANALYSIS

The following SWOT analysis captures the main strengths and weaknesses within the company,
and describes the opportunities and threats of the company.

Strength:

 Highly experienced Senior Executives some of whom has local and International
significant pharmaceutical literature.
 Good reputation with high image.
 Global top tier quality certification enabling export to 39 different destination of the
world.
 Efficient, skilled, experienced and dedicated staff members.
 Advanced IT system for all financial & operational activities.
 Large customer base & product development capabilities & outstanding professional
services.
 Resources are available in Bangladesh.
 Increasing presence in the market Regulatory performance is strong and positive.
 Access to global expertise and resource.

Weakness:

 Following global process & standard sometime cause extra lead time for fast-to-market to
initiatives.
 High price of product to complement global standard & quality.

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Opportunity:

 Government support.
 TRIPS enforcement (Trade Related aspects of Intellectual Property Rights) would enable
us to boost current business landscape & future growth prospects.
 New launch molecule/product in the global timeline.
 Functional and Technical development through different global initiatives.
 Opportunity to enter into the global market.
Threat:

 Hiking price of raw materials more and more factories, especially small ones, are facing
closure due to price hike of raw materials. As Novartis have just entered in the market, it
will be a great threat.
 Inadequate Power supply: The industry sources also blamed lack of adequate power
supply for making the industry more vulnerable. We will also have to face the same
problem.
 Frequent Currency Devaluation
 Decent number of competitors in pharmaceutical industries.
 Competitors are offering innovative new product and services regularly. Matching with
them is sometimes difficult.
 Chances of losing high potential people to the competitive or other organization which
will lead to reduction in the company’s resources.
 Ethical behavior and practices offered by the competitive companies.

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 12.CONCLUSION

Novartis Bangladesh Limited has been a successful company on its field of production,
marketing and management over the years. It has been carrying out its mission, vision and
objectives through various successful managerial activities. Its managerial concerns have been
highlighted through the interview with Mr. Sanjib Kumar who is the head of business planning
Analyst in finance division of Sandoz. Novartis is highly choosy about its employee recruitment
of which, we can be sure from its employee recruitment processes. Novartis has been
maintaining a strong and strict span of control in order to maintain its high quality. It has
carefully spotted its strengths, weakness, opportunities, and threats that it may expect from its
target market. Not only that, it has showed a great deal in handling competitors, economic
impact, political impact and customers through a well-organized organizational structure. It has
also performed various social welfare works and social responsibilities to uphold its customer
value. Therefore, it will not be wrong of Novartis to expect that it will remain a highly successful
company in the future too, if it is able to uphold its current management and managerial rules.

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 13.REFERENCE

 Novartis, “Welcome to Novartis Bangladesh”, “http://www.novartis.com.bd/index.html”,

18.12.2012

 Novartis, “Mission & Aspiration”, “http://www.novartis.com.bd/about_mission.html”,

18.12.2012

 Novartis, “Corporate Social Responsibility”, “http://www.novartis.com.bd/corpo_social.html”,

18.12.2012

 Novartis, “Our Culture”, “http://www.novartis.com.bd/career_culture.html”, 18.12.2012

 Stephen P. Robbins & Mary Coulter (10th edition)

 Sanjib Kumar Ghosh, Head Business Planning Analyst (Finance), Sandoz, Novartis
Bangladesh Limited.

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14. VISITING CARD OF MANAGER

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