International Management Decisions UK Pharmaceutical Industry - Free Essay Example

Sample details Pages: 6 Words: 1674 Downloads: 8 Date added: 2017/06/26 Category Management Essay Type Analytical essay Level High school Did you like this example? International Management Decisions: UK Pharmaceutical Industry The pharmaceutical industry engages in researching, developing, manufacturing, and marketing drugs used in healthcare (Shah 2012, p. 36).According toKesic(2008, p. 59), the global pharmaceutical industry has changedmuchover the past few years; because, the intensive globalization is reinforcing a consolidated pharmaceutical industry. Don’t waste time! Our writers will create an original "International Management Decisions: UK Pharmaceutical Industry" essay for you Create order Moreover, mergers and acquisitions are creating alliances that will strategicallyorientatethe global pharmaceutical industry. Kesic(2008, p. 59) points out that alliances are creating strategic synergies within the pharmaceutical industry as competition between various global companies intensifies. Therefore, multinational peer companies dominating UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical industry, face new challenges in international management decisions that influence their operations (Brown Grundy 2004, p. 57). As the industry becomes more competitive, scholars conclude that strategic management will play a key role in international management decisions that are industry-specific to the UK. As an example The University of Manchester, GlaxoSmithKline (GSK) and AstraZeneca announced the creation of the Manchester Collaborative Centre for Inflammation Research in May 2011, a unique collaboration to establish a world-leading translational centre for inflammatory diseases. The industry-sp ecific approaches that UK pharmaceutical companies use to adapt to competitive environments have effects on management decision-making and will always be debatable. Project uncertainty has created precise, yet unrealistic plans for the pharmaceutical industry in the UK (Burgel et al. 2014, p. 14). The pharmaceutical business depends on calculated risks, researches, and innovations to optimize on its defined goals. Therefore, international management decisions made in this industry affect even company-independent institutions, including hospitals (Burgel et al. 2014, p. 14). The UK pharmaceutical industry seeks advice andcooperationfrom institutions that take part in the scientific and therapeutic process to acquire partner specific research and development topics. Since attaining, the scientific and therapeutic economic progress is the main aim of pharmaceutical industries, project management, strategic management and all relevant techniques work to meet the UK industryà ¢Ã¢â€š ¬Ã¢â€ž ¢s overall goal (Tzeng 2014, p. 3). Thus, international management decisions play a key role in the process to solve the risks that the UK pharmaceutical industry faces. The pharmaceutical industry leads all industries in terms of RD spend. Jaruzelski et al. (2011) report that four out of the top five global RD spends and eight out of the top twenty global RD spends are by pharmaceutical firms. Of these firms, six (Roche, Pfizer, Novartis, Merck, GlaxoSmithKline, and AstraZeneca) increased RD spend from 2009 to 2010 (ranging from 0.3 to 53 % increase) despite volatile global economic conditions. This suggests that pharmaceutical firms continue to invest heavily in their portfolios with the top eight spending between $5 billion and $10 billion per year, translating to between 11 and 21 % of annual sales. To make sane decisions for the pharmaceutical industry in the UK,Pharmaà ¢Ã¢â€š ¬Ã¢â€ž ¢s New Productivity Challenge: Perspectives from Europe(2014) recommends that the RD operations should track country-specific regulations. They should also track industry specific trends and accept future developments. Furthermore, since country-specific regulations, just as trends, often change, UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical companiesneedmanagers to watch the trends and regulations in the market.KofinasandSaur-Amaral(2008, p. 257) state that lacking knowledge of language and culture specific to a particular country is inefficient for UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical companies. Furthermore, it has little effect on the innovation strategies of UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical companies. Thus, it is important to optimize resources and time, by applying project expertise, strategic management, and business administration across the decision-making processes. Strategic decision-making covers portfolio management, long-term planning, projectselection, and technological commercial indicators (Stonier2011, p. 6). Decision-making at this level cuts across RD, finance, marketing, and management. Therefore, strategic management will play an important role in creating a competitive business performance for pharmaceutical companies in the UK industry. Portfolio management in new drug development is extremely challenging due to long drug development cycles and high probabilities of failure. According to the Min Ding and Jehoshua Eliashberg (2014) In 2010, a pharmaceutical company like GlaxoSmithKline (GSK) spent over USD 6 billion in RD expenditure and managed a total of 147 RD projects across 13 therapeutic areas in different stages of development. Additionally, managers with a strong commitment to strategic management will focus more on global thinking, enabling pharmaceutical companies to make customers their center of attention (Stonier2011, p. 6). Focusing their management decisions on satisfying the needs of consumers will give them the necessary competitive advantage. Just as Buckley and Carter (2002, p. 29) emphasize, future s uccessful pharmaceutical companies are those that focus on global effectiveness. This requires keen focus on global learning, consistent innovation, and increased global effectiveness. After the financial crisis, most UK pharmaceutical companies desired to improve their international management decisions (Pharmaà ¢Ã¢â€š ¬Ã¢â€ž ¢s New Productivity Challenge: Perspectives from Europe2014). Due to the value of the pound, it has become more expensive to do business in the UK and so firms like GSK are starting to do more research in the US and Asia. With the many risks among portfolio managers, the pharmaceutical industry is embarking on a plan to raise awareness on the different approaches of optimizing risk management. According to Tzeng(2014, p. 3), the bias in investor performance is also raising awareness on the different approaches that optimize decision-making. Recognizing the value of decision-making identifies investments that are undermining international management decisions.Tzeng(2014, p. 3) points out that the pharmaceutical industry has developed various interventions that international managers can use to mitigate biases. Building development programs using behavioral economics has facilitated decision-making within the pharmaceutical industry. The outcome is a catalyzed cultural shift towards excellent decision-making (Tzeng2014, p. 3). Managers are able to use these frameworks to find the biases that may deter decision-making. This gives managers the ability to transform optimal behaviors into good management decisions. Behavioral decision-making is, thus, an important strategic priority for most pharmaceutical companies. The global economic downturn drew attention to deficiencies in the management practices of many organizations (European Commission2014). Specifically, the pharmaceutical industryà ¢Ã¢â€š ¬Ã¢â€ž ¢s risk management decision-making had notable shortcomings. Industry-specific analysis revealed that for large pharmaceutical companies in the UK, personalization created strong links between people and teams engaged in risk management decisions. In addition, the results of the decisions created personal responsibilities towards a particular risk. Therefore, personalized risk management requires supporting elements such as high quality insight, supportive culture, and personal accountability (European Commission2014). The author notes that high quality insight is valuable since decision-making requires quality information, good analytical skills, and competence in interpreti ng relevant industry information. Porterà ¢Ã¢â€š ¬Ã¢â€ž ¢s approach to analysing the global environment also includes related supporting industries which are left out by traditional PEST analysis. This includes infrastructure available in the industry of a particular country. Governments have increasingly focused on encouraging clusters and science and technology parks offering shared facilities and experience, as well as government support. UK examples in the pharmaceutical industry include Oxford and Cambridge, where various industrial links and universities are widely available. Pharmaceutical companies have to engage in decision-making at risk management levels, to allow them transform information into deeper insight. Personal accountability is another attribute that requires decision-making to relate to risk management, thereby creating feelings of genuine responsibility (Shah 2012, p. 121). Organizations have to make sure that they reward personal accountability well and t hat high quality insight teams are engaged in decision-making. Last,leadership teamsneedsupportive behavioral culturesto enforce accountability and insight. The personalization approach applies to UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical industry, given that they make significant investment in new drugs. Companies are increasingly seeking to unlock the power of patients and data, working closely with clinicians and researchers. The NIHR has committed a record investment of  £800m over five years to the creation of Biomedical Research Centres and Units within the UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s leading teaching hospital-university partnerships, and the establishment of two new Translational Research Partnerships. Although the firms have astute formal systems and strict external regulations, they also depend on ethics and standards existing in pharmaceutical industries to make their decisions (Shah 2012, p. 121). This paper holds that the approaches of UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical companies in adapting to competitive environments have effects on international management decision-making. Project uncertainty has created precise, yet unrealistic plans for the pharmaceutical industry. The clamor for strategic advantages has created a deep interest in the decision-making trends of UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical industry. In todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s global marketplace, pharmaceutical companies are facing many challenges that need astute international management decisions. From the study, UKà ¢Ã¢â€š ¬Ã¢â€ž ¢s pharmaceutical industry has knowledge managers whose decision-making practices adjust according to global operations. These managers adjust their practices and behaviors to inspire others towards creative thinking. By itself, sufficient knowledge management is important in responding to the existing challenges. As RD functions are mutating and changing, structural arrangements in decision-making are diversifying to meet this growing challenge. The UK ph armaceutical industry is undergoing increased regulation and knowledge processes that need astute decision-making skills to adapt to new challenges flexibly. Therefore, only improved management experiences in decision-making will enhance production and performance. Brown L., Grundy, T 2004, à ¢Ã¢â€š ¬Ã‹Å"Project Management for the Pharmaceutical industry,à ¢Ã¢â€š ¬Ã¢â€ž ¢ Aldershot, Hants, England, Gower. Buckley, P., Carter, M 2002, à ¢Ã¢â€š ¬Ã‹Å"Process and structure in knowledge management practices of British and US multinational enterprises,à ¢Ã¢â€š ¬Ã¢â€ž ¢ Journal of International Management, vol. 8, pp. 29-48. Burgel, O., Fier, A., Licht, G., Murray, G n.d., à ¢Ã¢â€š ¬Ã‹Å"Timing of International Market Entry of UK and German High-Tech Start-Ups,à ¢Ã¢â€š ¬Ã¢â€ž ¢ Centre for European Economic Research Discussion Paper, vol. 1, no. 51, pp. 1-17. European Commission 2014, Pharmaceutical Industry: A Strategic Sector for the European Economy, viewed 15 Novembe r 2014, https://ec.europa.eu/enterprise/sectors/healthcare/files/docs/pharmastrategy_en.pdf Kesic, D 2008, à ¢Ã¢â€š ¬Ã‹Å"Strategic Analysis of the World Pharmaceutical Industry,à ¢Ã¢â€š ¬Ã¢â€ž ¢ Management, vol. 14, no. 1, pp. 59-76. Kofinas, A., Saur-Amaral, I 2008, à ¢Ã¢â€š ¬Ã‹Å"25 years of knowledge creation processes in pharmaceutical contemporary trends,à ¢Ã¢â€š ¬Ã¢â€ž ¢ Organizational Behavior and Management, vol. 14, no. 2, pp. 257-280. Pharmaà ¢Ã¢â€š ¬Ã¢â€ž ¢s New Productivity Challenge: Perspectives from Europe 2014. viewed 15 November 2014, https://www.janssen-emea.com/sites/default/files/Pharmas-New-Productivity-Challenge-Perspectives-from-Europe.pdf Shah, B 2012, A Textbook of Pharmaceutical Industrial Management, Australia, Elsevier Health Sciences. Stonier, P 2011, à ¢Ã¢â€š ¬Ã‹Å"An insight into careers for doctors with the UK pharmaceutical industry,à ¢Ã¢â€š ¬Ã¢â€ž ¢ viewed 15 November 2014, https://www.abpi.org.uk/ourwork/library/industry/Docume nts/careers-doctors.pdf Tzeng, I 2014, à ¢Ã¢â€š ¬Ã‹Å"Finding Value in Europe,à ¢Ã¢â€š ¬Ã¢â€ž ¢ Executive Insights vol. 15, no. 6, pp. 1-7. Jaruzelski B, Loehr J, Holman R (2011) The global innovation 1000: why culture is key. 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