Merck Sharp & Dohme Argentina, Inc. Case Analysis

Inside the Case Method – Harvard Business School

Merck Sharp & Dohme Argentina, Inc. Case Analysis

September 17, 2018

1. Evaluation of Mosquera’s 1-year Performance

1. Plan

1. Management Plan (1-year)

1. Goals

1. Flatter
2. Transparency
3. Empowerment

1. Culture Plan (3-years)

1. Dynamic, Modern

1. Information sharing, personal initiative, non-authoritarian decision making

1. Sales/Market Share

1. The national companies that dominate the pharmaceutical market by 53% sell pirated copies priced 30-50% lower than MSD, lack of research and development, and without patent regulation from the Argentinian government it is difficult to project better sales. The goal of Mosquera’s management and culture plans was to enhance the performance in the sales department. According to exhibit 1, from quarter 1 to quarter 2 there was an increase of the amount of US dollars in the market, but, a slight decrease in the percentage of Group I products by 0.1%. Additionally, although there are no other significant changes to Group II and III, there were an increase of jobs from 175 employees to 200 employees. This shows that the company is growing internally but not externally through the market. Within a year or so, hopefully, the company will show more quantitative results rather than qualitative results.

1. Accomplishments/Improvements

1. Mosquera was able to change the management structure completely within a year. He saw minimal opposition from employees except for management and a successful culture that is willing to embrace the mission statement and cultural policies put into place. He has unconventionally hired females and outside personnel for some management positions which has turned out successfully. All in all, from a qualitative perspective Mosquera’s plans have transitioned smoothly in the company.

1. Failed Goals

1. As mentioned above, there is no market share nor sales increase with no cost advantage. However, there are many reasons that this as not achieved which include the recession, bribery, and the pirated drugs. Although, Mosquera increased the sales force, MSD is still out numbered 1 to 3 compared to competitors’ sales representatives. Additionally, there needs to be an increase in research and development to create drugs to have a drug not pirated from competitors. MSD could have an innovative advantage if Mosquera focuses on research and development.

1. Mosquera’s Value System vs. Traditional Culture

1. Original Organization Structure

1. According to Mosquera’s analysis of MSD structure, MSD had a hierarchical, pyramid structure where the information flowed vertically, and decisions were made by four to five people. The rigid hierarchy led to little information sharing, no innovation, domination by powerful cliques, managers that lacked professional education, and ill-informed employees.

1. Ethnocentric Approach

1. In this case study, Mosquera used an ethnocentric approach to reorganize the structure and culture of the business. He took the organization structure of MSD’s central base and what I would like to call it a “cut-and-paste” approach. In the case study, it states that he worked in a mixed-gender work environment where 43% of the Merck sales force was female. Additionally, he incorporated ethical values that he learned from his father into the culture of the company. Each of these values are valid and ethically sound, however, I believe Mosquera should have been more considerate of the employees who valued the structure that was already instituted in the company. This could have prevented more stubborn, but, talented employees from leaving the company and he could have had a lower employee turnover rate.

1. Hostede’s Model

1. Power Distance (49)

1. Argentina has a relatively low power distance. This is interesting because the original organization structure resembled a high-power distance culture. When Mosquera decentralized the power in the company, it is not surprising that the process went a lot smoother than trying to flatten a power structure in a high-power distance culture like China.

1. Individualism (46)

1. Argentina has a slightly collectivist society. This can explain why the company was dominated by a powerful clique but operated based on the individualistic values of the managing director and like-minded managers. But, again, the change to a more fluid organizational structure with more individualistic views can easily be made.

1. Masculinity (56)

1. Argentina is slightly masculine. This is a stark contrast to the highly dominated authoritarian original organizational structure where the managing director is highly competitive with his ideas and would not let any other employee challenge them. The managing director position was a fuel of his ego needs. When Mosquera changed the organizational structure, it allowed Argentinians in the company to become more competitive and use these more masculine traits.

1. Uncertainty Avoidance (86)

1. Argentina has a high uncertainty avoidance. This explains the high bureaucratic original organizational structure and why very few employees made decisions. However, it is quite ironic that the need to obey these laws are very weak which is shown through the corruption in the pharmaceutical industry. Mosquera might find it easy to have the Argentian employees not obey the rules of the past organizational structure, but, he might have a difficult time to have Argentinians obey his organizational structure.

1. Long-Term Orientation (20)

1. Argentina has a short-term orientation. This describes why in the original organizational structure many of the managers and employees worked within the immediate concerns with the company. This resulted in managers making decisions or the lack of thereof to consider any variation in the organizational structure. For Mosquera, guiding employees to think and evaluate decisions about the future can be difficult and challenging.

1. Indulgence (62)

1. Argentina has a relatively high indulgence. This contrasts the old organizational structure which never allowed employees to express their optimism and optimism. Mosquera can use this energy to help further his structural plans and continue the open-minded work environment that he plans to have.

1. Hofstede graph:

[pic 1]

                                Hostede-insights.com

1. Internship Issue Dilemma Strategy

1. Issue Defined

1. In the training and development program, there are 15 spots available and the 16th candidate is related to a high-ranked government official in the healthcare department that can recommend the company’s products on the national healthcare system and increase sales by $5 million annually. The difference between the 15th and the 16th candidate points are not that far apart.

1. Meeting

1. Employee’s Involvement with Direct Affiliation

1. Mosquero brought all of the employees, Training and Development Manager: Silvia Ring, HR Director: Cristina Quinteiro, and Sales Director: Martin Rodriguez Hunter, that this decision impacts and would be knowledgeable towards the situation. This directly ties into Mosquero’s goal of empowering employees to be decision makers in a situation that directly involves them. I believe this meeting was a brilliant way to handle the ethical dilemma in which both sides of the decision were present and able to cross-examine the pros and cons to accepting the intern into the program.

1. Candidate Decision

1. Instead of a definite answer, I believe that the interns should do another task to gain/loss points. Since the 15th and 16th candidates are so close in points, it would allow the 16th candidate to earn the internship spot instead of handing the position over. This decision would appease the sales director and the HR director. It is a little unethical, but it allows the 15th candidate to also demonstrate their knowledge and skills to remain in that position. One of the disadvantages of this approach is that it will cost more to continue the training process.