Organizational Behavior
Section :( 201)
Dr. Beverly McNally
Part I of the project
Submission date: 17th of October, 2012
Sukina Alkhatem 201001126
Ghadeer Alawami 200901764
Zainab Muhaif
Ibithal Al-Majed
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Introduction:
Nowadays our life is evolving significantly around globalization. It influences
many aspects of this era such as economy, politics, diseases and education. Whether
these aspects affected directly or indirectly, they are correlated to each other.
Meanwhile firms are facing different challenges like political regulations for firms as well
as economical condition of a certain industries. One of the main subjects of this
research is how organizational behavior effects the perception of the pharmaceutical
industry. One of the critical elements that influence the organizational behavior
considerably is the organizational strategy. It is the key for success and developing
strong market position. Effective decision making is depending on understanding and
supporting the strategy of organization. In this paper, business challenges of the
industry will be discussed in more details and how the strategy and theory assist
organizations in overcoming business challenges.
Literature review:
Since the pharmaceutical industry is highly sensitive field, numerous challenges
could arise. On one hand, political challenges relating to how government around world
attempt to contain health care costs. On the other hand, economical challenges such as
poor stock performance and lower revenue growth. These two challenges were
discussed by Kola and Landis, (2004) in finding whether pharmaceutical industries can
or cannot reduce the attrition rates. Particularly it was focusing more on the economical
challenges and how it influences the attrition rate.
Although sales of pharmaceutical firms are increasing dramatically, the time and
costs for producing one single drug is not simple process as it seems. It considered as
risky and expensive business. In order to bring one drug into the market the
manufacturer would go through complicated process of examining and developing. With
the purpose of ensuring the efficiency of the products and eliminate or reduce the
medicines’ side effects. Manufacturers are looking for enterprise methods that could
help them in cutting costs and reduce the timeline of producing new medicine or a
product. It was predicted that the future of pharmaceutical would be changing because
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of market emerging and not only that, even the way of developing drugs would be differ.
(Aggarwal, 2012)
In a very recent article, Khanna, (2012) discussed issues related to the
economical challenge of pharmaceutical industry saying that low productivity, rising
research and development (R&D) costs, dissipating proprietary products and dwindling
pipelines lead pharmaceutical industry to extraordinary challenges. The author
suggested solutions to increase productivity and correspondingly improve economy by
emerging ‘symbiotic model of innovation’ which helps to highlight issues related to the
drug failure process and decrease gaps in today’s drug discovery processes. (Khanna,
2012)
Future leaders of industry supposed to develop a model that is best in
diversification of risks. As stated: “It is diversifying the risk of development, regulation,
fixed costs of labor, manufacturing, legal, pricing, customer-uptake and sales, and
reputation”. In regards to that issues and how to tackle it, research and development
department needs to corporate and work together in order to reach what is expected
and reduce the negative impact of such issues that could face the industry. Research
and development department could play a significant role in solving such risks. As
suggested by Bowe, (2011) to achieve effectiveness in handling risks, companies
should have good business model, management and leadership skills. (Bowe, 2011)
In Rasmussen article, (2002) it discussed the implications of pharmaceutical
industry strategy and described three different models. The author claimed that the
most constant strategy of pharmaceutical industry over the past decades is increasing
scale which means companies cannot afford the costs of developing and distributing
drugs unless they are growing larger. The three models discussed in the article were
blockbuster model, diversification model, and intermediate model. Blockbuster model
was the focus of discussion for its recognition by industry analyst for being the most
dominant model. The theory of that model is basically depends on earning high returns
from distributing small number of drugs. In order to see how the global response to that
drug through the percentage of sales and if these drugs make high returns to the
companies then costs of developing and discovering drugs would be afforded.
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Borrell at (2011) talked about the Therapeutic Strategy Units (TSUs) which is
focusing on taking the clinical workers to the earliest stages of drug discovery. The main
target is to ensure that manufacturers are maintaining creativity in discovery science
and make sure it is reflected positively on the profit of the medical world as a whole. In
my opinion applying the therapeutic theory into the organization would help a lot in
shaping the policy. As a result the organizational behavior will be influenced positively
toward a better perception. Since the strategy of the organization is keeping up the
sense of creativity that will be translated in a very positive perception of the firm and
particularly on products.
Since theory and research influence the way of organizational behavior shaped.
Rickles, Wertheimer, and Smith at (2010) discussed stage theory and how it is applied
in the pharmaceutical industry. The perspective of this theory is to view behavioral
change through process. It suggests that at any point, individuals will be at one stage of
the behavior change process and by time individuals can move to another stage. Also it
says that the factors that an effect on the transition of the stages depends on the current
stage in the behavior change process.
Stage theory has four main elements: The first element is classification scheme
to define the stage. Stage theory has a different role in presenting barriers among
stages .That element helps to classify the stages on any point of time or when moving
to another. The second element is ordering of the stages. Stages have to be in a
systematic order. For the purpose of differentiating the level of people whether they are
at early stage or at late stage. In early stage people are not thinking of adopting target
behavior, but in latest stage people are currently performing the behavior. Although
people stay in one stage sometimes, others might shift between stages back and forth.
(Rickles, Wertheimer, and Smith, 2010, p48-49)
The third element is within the stage, assumption of common barriers to change. Stage
theory thinks that individuals will face similar barriers if they are on the same stage. The
forth element is across stages. Stage theory thinks that individuals through stages face
different barriers. These barriers will help people to interfere and progress through the
behavior change process. For example,” barriers relevant to adherence to asthma
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medication delivered via inhalers probably differ from the barriers relevant to adherence
to oral asthma medication; further barriers associated with different oral medication may
vary depending on their side effect profile.” (Rickles, Wertheimer, and Smith, 2010, p49)
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Resources list:
Aggarwal, V. (14, February, 2010). Challenges for the pharmaceutical industry in age of
managed healthcare. Frost & Sullvian. Retrieved at (16, October, 2012) from:
http://www.frost.com/prod/servlet/cif-econ-insight.pag?docid=193790865
Borrell, B. (2005). Restructurally sound. Nature Medicine. 17(5), 531-533. Retrieved
from
http://web.ebscohost.com.library.pmu.edu.sa:2048/ehost/detail?vid=34&hid=15&
sid=a96df410-245b-41ad-8d98d0d2f1de0f45%40sessionmgr111&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d
#db=aph&AN=60431929
Bowe, C. (2011). Primary Challenges in the Pharmaceutical Industry: An interview with
Christopher Bowe. Forum Corporation. Retrieved at (15, October, 2012) from:
http://www.forum.com/downloads/pdf/Primary-Challenges-PharmaceuticalIndustry-Interview.pdf
Khanna, I. (2012). Drug discovery in pharmaceutical industry: productivity challenges
and trends. Drug Discovery Today. 17(19\20), 1088-1102
Kola, I. Landis, J. (2004). Opinion: can the pharmaceutical industry reduce the attrition
rates? Nature Reviews Drug Discovery. 3(8), 711-716
Rasmussen, B. (2002). Implications of the business strategies of pharmaceutical
companies for industry developments in Australia. Victoria University: Center for
Strategic
Economic
Studies.
Retrieved
from:
http://www.cfses.com/documents/pharma/01-Business_Strategy.PDF
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Rickles, N., Wertheimer, A., & Smith,M. (2010). Social and Behavioral Aspects of
Pharmaceutical Care (2nd ed). Canada: Jones and Bartlett publishers.
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