Social:
- Globalization changed lifestyle of people which acted in favor of pharmaceutical companies
- With increase in global population especially old people pharmaceutical companies were also prospered
Technological:
-
Price of packaging materials were increased as a result of increasing cost of energy.
- Invention of new innovative technologies help in discoveries in medical field
Legislation:
- Government’s price control policy affect pharmaceutical companies
- Government’s strict policy on pharmaceutical industry entry
- Safety regulations should be followed by pharmaceutical companies
Environmental:
- The pressure from animal right activists regarding testing of the research-based pharmaceutical products on animals
So it is clear from PESTLE analysis that Ranbaxy decided to make change in the R&D department after merging because of strict laws, decreasing innovation, tough competition and raising costs. Change process is carried out all organization, but the one which successfully handled it can attain competitive advantage.
Drivers for change
In modern world an organization to survive it should continuously change in order to meet the requirements of the market. Factors that force an organization to change are termed as drivers for change (Albert, 2008). Several factors force organization to change. Some among them are:
External triggers
- Industrial downturn or recession
- Drastic happenings in business industry like change in demography
- Change in demand and consumer trends
- Technological development
- Change in economic environment like new trade area
- Political change
- Globalization
- Fierce competition
- Regulation/deregulation
- Change in government regulations and laws
Internal triggers are the factors inside the organization which trigger need for change. Some among them are:
- Poor performance
- Change in the team
- Need for innovation
- Merger and acquisitions
- Organizational strategy
- Employee outlook
- Workforce change
- New equipment
- Decrease in profit
- Collaboration with other companies
Objectives for the proposed change
The objectives for the change should be precise, measurable, realistic and applicable (Burnes, 2009). The most important thing in an efficient change program is objectives that are supported by all the stakeholders
- Attain competitive advantage in global market
- Increase in productivity
- Reducing the time of launching new drugs in the market by implementation of effective technology
- Serve the customers all over the world
For attaining the objectives of the company some actions have been planned.
2.
In modern industry, in order to survive in the market organizations need to develop constantly. For development they have to implement change in the organization continuously according to the environment. The change process is very difficult to implement and it requires clear objective and skillful planning to attain the objectives. Considering the current situation and the state organization desire for, the change process is selected and implemented accordingly. The actions required to achieve the objectives are significant in the change procedure.
The Organizational Change
The method by which organization attain the goal which they craved for can be termed as organizational change (Jim, 2010). Usually it is done when an organization is losing their customers or facing losses or internal and external pressures like recession. Quality is developed in all aspects of the organization if the organizational change is skillfully planned and implemented (McNamara, 2008).
The organizational change bring drastic change in the organization by introducing innovative products and services, restructuring and reorganizing which help to increase efficiency and productivity of the organization. Implementing new technology is an example for small change process.
Types Of Organizational Change:
- Changing the outlook and behaviors of employees
- Strategic changes
- Change in implementation of technologies
- Operational changes such as Structural changes
THE CHANGE PROCESS:
Organizational change is hectic and disturbing for employees. So proper understanding the type of change and other aspects of implementing the change will assist them to cope with the process and will lessen their anxiety.
The above figure give idea about the change process
Types of Change
- Developmental: Improving or fixing a process in an organization is termed as developmental change
- Transitional: In this type of change, current situation is changed to desired situation through planning and periodical change
- Transformational: Reformation of organization by changing perceptions and structure of organization and its teams.
Planning the change process
Fig: Change process planning
Setting mission and objectives is the first step towards planning the change process. The core values of organization are termed as mission. According to the business vision of the organization manager set the objectives for the organization.
The organization’s micro and macro environments in which the organization operate are analyzed next. SWOT and PESTEL are used for internal and external analysis respectively. With the help of these methods the strength, Weakness, Opportunities and Threats faced by the organization are identified which assist in identifying the aspect in the organization that need change.
After conducting environmental analysis the next step is to overcome the weaknesses and threats of the organization. For this, change in organization is necessary. Considering the type of organization and problems in front of them, the appropriate change process is selected.
- Implementation of Change process:
The implementation of change process is a very difficult task. Appropriate resources should be there to carry out organizational change. Sometimes the organization may face financial difficulty or resistance from people associated with the organization. So while implementing the change the manager should be very careful and have to work on above matters. Then only the changing process will meet with success.
Planning change model
Kurt Lewin theory of ‘Force- Field’ analysis
Kurt Lewin proposes that a force field is balanced by driving forces and restraining forces that maintain its status quo. For successful change to takes place in an organization the driving forces should be stronger than resisting forces. By handling the resisting forces or reinforcing the driving forces the change process can be made effective.
Growth plans of Ranbaxy
Tough competition
Price policy of competitors
Reorganization of R&D department to launch new innovative products after the merging
Employees resistance
Requirement of resources
Time scale and cost issues
Considering the Force-Field analysis the objectives for the proposed change and the change process are determined only after discussion with stakeholders. In order to attain the objectives of the proposed change several processes were planned.
Change at Ranbaxy
After merging the R&D department of Ranbaxy was changed. The department was grouped into 7 independent units. The company was practicing planned transformational change and it can be well understood from the diagram given below:
RANBAXY STRATEGIC CHANGE POSITION
Ranbaxy followed transformational type of change after its merging since it satisfies the characteristics of transformational change. Transformational change is a major change and it intends to change the existing culture of the department, forms new teams and new leaders and their operational styles. After transformational change the organizations rebirth occurs and it is developed into a new organization that is quick in learning, adapting and in improving since it changes the strategy, mode of operations, culture and structure of the organization.
The manager followed the below steps in order to achieve the objectives
Categorize the nature of the change process that was going to implement
Proper understanding of the change and how to execute them in the organization is very necessary to make the change a positive one.
Identify the response towards the change process
It is very essential to see things through employees’ eyes to make them actively involve in the change process
Ensure top managements’ support
Agreement and support from top executives are necessary while carrying out organizational change.
Develop commitment towards change
Communicating with stakeholders will make them dedicated towards the change
Support the change process
Change can be hectic and may put demands on organization and staff.
3
Models for change
Kotlers’ eight steps to successful change
Create urgency: make people understand the need for change by informing about possible crisis and motivate them to change and make specific, achievable objectives for proposed change
Create a guiding team having strong commitment along with intelligence and expertise
Develop appropriate vision and strategy that facilitates in change process
Make use of all communication methods to communicate the vision and make all participate in implementing the change process
Empower the actions: Eradicate hindrances, facilitate support and feedback, change structures, reward progresses
Produce short-term wins by setting simple goals.
Nurture and promote will power and change process. Emphasize on accomplished and future goals.
Sustain the change through better leadership, customer service, staffing and promotional actions
Lewin’s three-step model of the change process
-
Unfreezing the status quo
-
Changing to a new state
-
Refreezing to make the change permanent
UNFREEZING/REFREEZING MODEL FOR CHANGE
According to Lewin, the change process can be divided into three steps. They are
Unfreezing: Detecting the problems and understanding the necessity of change
Changing: Espousing new behavior and intelligence by changing old behaviors
Freezing: Analyzing and reinforcing the change by continuously adapting according to feedback
Rules or guidelines for successful change management:
Careful planning, active participation of stakeholders as well as insightful execution is required for change management (Partridge, 2007). Stakeholders are those people who are affected by the change in the organization. While managing change proper implementation is necessary as problems will occur if change is imposed, rather change should be practicable and rational. In management of organizational change these issues are very important
Change should be implemented carefully so that employees can adapt to it easily. Managers should act wisely since generally changes disturb people.
Make sure that the stakeholders are involved in the change process. Convince them the necessity of the change. Involve them in discussions on planning, execution and managing the change and seek for their opinions.
Have open face to face communication regarding significant features of managing the change.
Avoid quick changes as it will worsen the matters. Problems will get complicated and difficult to rectify if tried to change swiftly without skillful planning.
Work load can be lessened by sharing the responsibilities by making people part of planning and execution of change management. The involved people will have a feel of belonging by doing so. Conduct workshops, training classes etc in order to make people aware about requirement of the change, how to manage it and seek for their involvement.
While managing bad news the managers should be very cautious. Discussing with people during the time of crisis will prove beneficial for the organization. The leaders who do not consult the people during crisis are considered as weak or bad leaders by work force. Respect workforce and be kind to them they will return the same.
Principles of change management
Always seek active support and assistance from stakeholders
Understand the current situation of the organization
Decide what you want to achieve and how to get what you want
Carefully plan the steps to reach your destination
Seek active participation from people through open communication
Human factors involved in the proposed change
In implementing the changes that are proposed, people associated or stake holders has got great part, as their support is essential for success of the change. Usually, the main problem while implementation of the proposed change are resistance from stake holders.
Reasons for resistance to change:
- Ambiguity about the reason for change and its effects.
Misunderstanding regarding the benefits of the change process. People may have fear of losing authority and work with the implementation of the change process
- Reluctance to give away or lose self interest and other benefits
Sometimes the change process may downsize the organization which will result in losing the job or some other benefits of some people. The change may cause conflict in self interest and priorities of people
-
Perception that the proposed change won’t benefit the organization.
Sometimes some change may cause problems which the change initiators may have missed.
4) Not having trust. Employees will resist change if staff do not have faith in the management
- Familiarity with the existing situation
Some might resist change because they are comfortable with the existing condition in the organization.
-
Peer pressure: pressure from colleagues or groups who opposes the change.
Some unions oppose changes even if the change is beneficial.
- Perceptions
- Technological fear
- Workload increase
Ranbaxy faced some sort of resistance from its employees. Instead of becoming harsh on employees they handled it skillfully. While dealing with human resources the manager acted very carefully as work force and their support are very essential for effective implementation of the change process. In order to overcome the resistance what change initiators did was thinking from employees’ perspective which made them aware about problems of employees and the reason behind the resistance. Once the reason was identified then the remaining was not that difficult.
The change initiators started communicating with the people and made them understand the necessity of the change process and how important it is to attain the objectives of the company. Managers made people participate in planning and designing the change process which gave them a sense of belonging and dedication towards the company. The workforce were given time to cope with the idea of changing the organization.
Communication and training process improved the morale of employees and their fear was also reduced. Continual learning and training sessions helped to sort the technological ignorance and fear. The positive attitude of the manager helped to overcome the resistance to change and make people actively involve in the change procedure which made the implementation procedure easier even at most frustrating phase of it.
Process of implementing the change
Manager selected necessary skillful employees and gave them proper training and resources as part of changing program. Right people is necessary for planning process to become successful (Ansoff, 1998). Support and dedication from top executive helped in efficiently executing the intended change procedure (Senge). The change initiators were successful in attaining the support of opinion leaders and others. Support from people has got great part in effective implementation of the change process (Rogers,2002 pp. 281, 326). Manager was able to acquire the resources like time, training, budget and people that were required for change procedure (Ansoff, 1998 p. 428). Short term goals were set in order to encourage people. Resistance from stakeholders were skillfully handled by the manager. Organizational culture were changed to somewhat friendly which encouraged people to learn and improve. Learning from mistakes and correcting it is essential for organization to develop (Rogers, p. 394). The manager of Ranbaxy exactly followed this and rectified the mistakes through appropriate changes.
4
Change Management
Execution of methods to attain the objectives of a organizational change is termed as Change Management. Adopting specific objectives for the process and structuring systems in the organization for successfully attaining the purpose are part of this. It has its influence on procedures, work culture, structure, people, strategy and customers of the organization.
A well planned or orderly method of changing organization from existing condition or state to a preferred future state is termed as change management (, 2008). This approach help employees adapt themselves to the changing industry which will result in organizational development and hence competitive advantage in the market.
Skillful management of change process is necessary to attain the objectives and to increase productivity of the organization (Annabel, 2009). If they are not properly managed the effect will disastrous for the company.
Lack of clear vision, ambiguity regarding the change process, poor planning, absence of early wins, poor dedication, legacy of previous change, resistance from workforce, fear of failure and deep-rooted culture are some of the major reasons behind failure of the change process (Henderson, 2005).
For a change process to be successful dedication from top management, proper communication, active participation from stakeholders, procedure for learning, alignment between culture and technology are necessary.
Since organizational change management is a well structured approach, it first analyzes the existing condition. This help to identify the ability of the organization to change and the necessity of change. Change Management process also involve objectives, content and changing process.
Responsibility of managing change
The management and top executives should manage the change skillfully so that employees can handle it easily. The manager should think from employees’ perspective and then make employee understand the need for change and how to cope with it ( 2010). In modern world what works is communication and interpretation rather than forcing and commanding and people expect this from managers. Change should not be forced on employees. Involve people in planning and execution of the change process.
Change has its significant influence on people. They are the one who is mostly affected by change process. Changing the policies, locations and structures will result in new working environment and system which will be frustrating for people associated with it. In order to avoid this make them understand the necessity of change, how it can be done, the benefits etc through proper open and continuous communication and make them actively involve in all aspects of change from the beginning so that they can easily cope with it.
In developing understanding among workforce and deciding the values, policies, methods, structures regarding the change process conducting workshops really helped Ranbaxy. Staff surveys were conducted in order to find out the problems of employees and the relationship among them. The employees filled them anonymously. Proper actions were taken considering the findings from the survey.
Capable teams were selected and skillful leaders were appointed as they play relevant part in change process. The leaders lead the change with their actions which made things easier for the people.
The change process
For the purpose of finding out the efficiency of the change process Ranbaxy used European Foundation for Quality Management (Excellence Model). For estimating the performance of the organization in various phases of change management this framework is widely been employed. This model is used in several industries. Here this model is employed to determine the influence and effect of change process in various aspects of Ranbaxy. This framework shows that the implementation of change in R&D department proved beneficial for Ranbaxy in gaining and sustaining competitive advantage in the market. It is clearly depicted in the EFQM diagram given below with the help of arrows.
THE IMPACT OF CHANGE ON RANBAXY
From the above structure clearly indicates that people, process, resources, leadership are influenced by the process of change which in turn will have effect on customers and hence on key performance results.
Initially people were not ready to welcome the change. As the change process was carried out during global recession some problems were faced by employees. This resulted in resistance towards change. The merging resulted in competition among the inside workers, which caused for low morale. According to Kubler-Ross Transition Model this phase of change is termed as ‘Denial Stage’. The mental condition of employees of Ranbaxy during the change process is given in the following model
Form the above model it is evident that Ranbaxy was in need of a process that could change the employees’ denial towards acceptance in restricted time.
Evaluation
By analyzing the effectiveness, credibility and suitability of division of R&D department of Ranbaxy after the merging integration its content, context and process can be evaluated.
By comparing pipeline and productivity of company prior to and after the change process the performance of R&D department can be determined. During the merging process the company CEO informed that their pipeline is empty and the objective of the change process is to increase the productivity. Once the change process was implemented and settled the results were amazing and Ranbaxy were having hundreds of clinical development projects, several product line extensions, lot of new chemical entities and were having promising pipelines.
Conclusion
From the above report it can be summarized that changing procedure selected by Ranbaxy in order to achieve their objectives which was determined after analyzing the macro environment of the company’s merging with Daiichi Sankyo Company was appropriate. From the PESTLE analysis and the evaluation given above it is evident that the change was necessary for the company at that time. The theories and relevant models described above show that the changing process selected, division of R&D department, and the way Ranbaxy managed the organizational change are really appreciable. It can be said that other companies should learn from Ranbaxy how to change and when to change in order to sustain in the fierce market. Hence the efficiency of the change process were proved.
REFERENCES
-
Ansoff E, (1998), ‘’, Sage Publications, London UK
-
Annabel Beerel (2009),’ ’, Sage Publications, London UK
- Bernard Burnes (2009), ‘Managing Change’, Pearson Education Ltd
- Henderson, J., McAdam, R. & Parkinson, S. (2005) An Innovative Approach to Evaluating Organisational Change, International Journal of Technology Management, Vol. 30 Issue 1/2.
- Kotter, John. 1996. Leading Change. Harvard Business School Press.
-
(2007), ‘’,
- McNamara, C., (2008). Organizational Change and Development (includes the Field of Organization Development) [Online] Available at: http://www.managementhelp.org/org_chng/org_chng.htm [Accessed 22 March 2010].
-
, , (2008), ‘’, Sage Publications, London UK
