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Introduction :

Glaxo Smithkline is one of the largest pharmaceutical firms, headquartered in

London with major of its business in United States. This case study is about the
company’s success formula in the past, the factors influencing the reduction in
profit and the issues faced dew to some organisationa changes. We are going to
use some of the theoritical concepts and propose some methods which can be
beneficial for the company.

GSK’s critical implementation issues compared to past performance:

GSK has been a very successful company with a big history. It has had good
success in the mergers and acquisitions in the past. It looks that the company
has been successful in identifying the upcoming companies, new innovative
products and acquiring them. But in the recent year the company has been
concentrating mostly on internal development. It has involved high amount of
employees in the internal innovation. This can create miscommunications and
high level of dilution in the organizational management. There is a lot of
change in the organizational structuring. The radical change has high risk of
failure. GSK’s goals and its principles are affected. Its move to be experimental
hasn’t come out well. Their past has been successful in the external innovation
has been successful, so the implementing the high volume internal innovation
hasn’t been well because of the time spent for their R&D is very higher and the
patent expiration kicks in before the company sees any considerable profit out
of them. They don’t seem to be well prepared for the worst case scenario where
in the profits can be very low to the projected. They seem to have used radical
improvement strategy which hasn’t have produced good results.

70 DPUs working on the future of the company – Implementation efforts and

special program needs:

The company has been instrumental in deploying 70 DPUs, of which each

have their fixed role in the development of new products. When implementing a
high concentrated internal innovation strategy the company has to be prepared
with a clear strategy. It has to define the immediate responsibilities and the
actions that need to be taken to start with the process. And there should be
formulated needs of actions that need to be taken care of in the later stages of
the innovation. They need to be well defined with the timelines. They have to
carry out evaluations at various stages of the development so as to assess the
success rate, if we can eliminate the projects which are not worth it or which
has threat of new entrants before its going to be launched. There is always a
threat of new entrants with similar purpose when we have lot of products in
pipeline. Internal innovation can be very time consuming when compared to
outsourcing the innovation or buying the technology which has been already
developed. Innovation can sound very misleading that it can always lead to very
high profits and competitive advantage, but we need to be very careful in
spotting them, allocating the skilled workers to carry out the operations and a
structured approach to attain the goal faster and profitable.

The below shown diagram is a representation of operations improvement

model suggested by Slack, Chambers and Johnston. This gives us an idea about
the derivable for implementing the new organizational structure. In this model
we can follow the continuous improvement strategy and eliminate the failures
and stop the process before it worsens the case.
 Operati Operation
ons s process
Operati
strategy Total improvem
Desig ons Improve quality ent makes
n manag ment managem processes
Failure
ent better
preventio
Plannin
ement organizes n and
g and process recovery
control improvem stop
ent processe
s
becoming
worse i
)
Slack, Chambers, Johnston (2007)

The four elements of implementations are very essential to any project or a

plan. We should have a proper leadership governing the 70 DPUs and
maintaining them from deviation. Sharing the knowledge and the best practices
among the DPUs so that effort is not wasted on the issues that are dealt with a
solution. We need to have a proper communication channel between t he DPUs
and the management, so that there is no miscommunication or missing of
information. Since few DPUs are external we need to have a proper channel in
the information sharing among them. Company must be anticipating a worst
case and be prepared with an alternative plan in place.

Special evaluation needs for GSK:

GSK must be evaluating the performance in various terms and time intervals.
It is essential that the overall company performance is improving with the
innovation. It is not beneficial if only few areas of innovation is result yielding
and the changes made doesn’t impact the overall performance to a great deal.
They should increase the concentration of employees in the innovation process.
They have to increase the skilled labor which essentially would speed up the
rate at which new products are developed, so that the company makes profit
within a short time frame and eliminates the license issues and threat of
substitutes. They should have a more controlled approach so that the DPUs are
delivering the appropriate results.

The factors which influence me that GSK’s evaluation is doing well is the
structure that they have developed which clearly identifies the key areas of their
concentration. They have allocated the appropriate resources and team to
support their key areas. In the introduction of DPUs they have broken down the
big innovation team to small groups, so that they are easy to track and they
have their own defined tasks. Their concept of “cross-fertilization” of ideas is a
key factor which reduces the teams efforts on sharing best practices and leads
to new innovative ideas by healthy discussions. They have an evaluation team in
place which is able enough to find the projects which aren’t meeting the
expectations.

Control systems for GSK:

They should allocate specific funds for innovations with calculated terms and
provide clear directions on the innovation mechanisms and products. They
should mainly have to introduce an external evaluation mechanism so that they
are monitored without any deviations. This will align them and eliminate the
projects with minimal or no return on investment. Introduce a KM system so
that we identify readily the resource required for the projects planned.
Continuous monitoring of companies alignment with the companies goals will
keep it on the course. The mention of GSK having goals which cannot be
pursued needs to be addressed as any company should work only on its best
capability but not with the goals which cannot be achieved. So we need to
establish a controlled approach to assess the goals and objectives of the
company and device plans to work on them.
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