Organizational Structure and Pharmaceutical Industry

This assignment delves into the relationship between organizational structure and its influence on the pharmaceutical industry. It examines how various structural models affect competitiveness, integration processes, particularly in multinational enterprises, and the coordination required for effective operations within complex supply chains. Case studies from companies like Square Pharma and Sun Pharmaceutical Industries Ltd. provide real-world examples to illustrate these concepts.

Running head: MARKET OF SQUARE PHARMACEUTICALS LIMITED
Market of Square Pharmaceuticals Limited
Name of the Student:
Name of the University:
Author Note:

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Answer 1:
The business strategy Square Pharmaceuticals Limited adopted to gain major share of
the pharmaceutical industry in Bangladesh consists of several strategies like an efficient
product strategy, financing strategies, human resource management strategy and stakeholder
management strategy. The previously mentioned stated strategies are being elaborated in
detail as follows:
Product strategies:
Square Pharmaceutical Limited manufactures finished pharmaceutical products,
pesticides, herbal products and agro-veterinary products. The products of the company are
available in various forms like tablets, capsules, suppositories, injections, liquids and dry oral
powder. One can infer that product line of the company enables it to cater to the needs of
various types of customers like domestic people, agriculturist and pet owners. The
intermediate customer base of the company consists of various wholesalers and retailers of
the medicine who stock its products. Farmers and agriculturists use the agro-products like
pesticides. Veterinary laboratories and people having animals demand the veterinary
products. This extensive product line helps it to cater to large variety of customers and earn
huge revenue, which gives it the high market position.
Financing strategies:
Square Pharmaceuticals Limited has adopted very efficient financing strategies, which
ensure steady flow of funds to support its vast operations. The company is a public limited
company listed on the stock exchanges of Dacca and Chittagong. This allows the company to
generate huge amount of capital by issuing shares in the securities market. Square
Pharmaceuticals Limited has a extensive product line which the company price differentially

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to reach both the rich and the poor people. This allows the company to generate huge amount
of fund by catering to the large consumer group. The public limited company also started
exported its products from 1987 which allows it to earn foreign currency. Thus, a
combination of its public limited status, an extensive product line and overseas market help
the company it earn huge revenue and dominate the pharmaceutical markets in Bangladesh.
Human resource management:
One of the most spectacular strategies Square Pharmaceuticals Limited adopted to
dominate the pharmaceutical market in Bangladesh is its efficient human resource
management policies, particularly pertaining to supply chain management. The human
resource department conducts an extensive and rigorous interview process to ensure that the
company is able to acquire high standard supply chain managers and executives. The HRM
also arranges of training and induction of the newly hired staffs to ensure that they learn and
improve their job roles. This efficient talent management strategy of Square Pharmaceutical
enable to acquire, manage and retain highly efficient employees which gives it more
advantage in the Bangladeshi pharmaceutical market.
Stakeholder management:
The above discussion clearly shows that efficient stakeholder management and is one
of the key factors behind the top position of Square Pharmaceuticals in the pharmaceutical
market in Bangladesh. Firstly, the company manufactures high quality products, which
benefit business and individual customers. Secondly, the company earns huge profits and
ensure capital maximisation of the shareholders. The company gives salary increment to its
internal stakeholders like employees, which increases their job satisfaction. The case study
mentions that Square Pharmaceuticals exports products to overseas. It can be inferred, from
the statement that the company can comply with the policies laid down by its home country

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government, Bangladesh as well as host countries governments. This analysis shows that the
power of Square Pharmaceuticals to benefit a large number of stakeholders like customers,
shareholders, employees and governments has led to the growth and dominance of the
company in the Bangladeshi pharmaceutical market.
Answer 2:
The vision and mission of Square Pharmaceuticals are well aligned with the business
objectives, which the company can aim to achieve in the long-run. The vision of the company
is to obtain leadership in the pharmaceutical market in Asia and carry out aggressive research
and development in the medical science. The mission of the company is to operate
responsibly and manufacture high quality products. The pharmaceutical company can adopt
three objectives based on its vision and mission namely, more rapid foreign, acquisitions and
mergers and strengthening marketing and brand power. Square Pharmaceuticals Limited can
aim to achieve the following long-term business objectives based on its mission and vision:
Objective 1: More rapid foreign expansion:
The mission Square Pharmaceuticals Limited is to gain leadership in the Asian
pharmaceutical market and the company needs to enhance its foreign expansion strategies in
order to achieve this mission. The pharmaceutical market in Asia is dominated by China,
India, Japan and Singapore, all of which have more developed pharmaceutical sectors
compared to Bangladesh (genengnews.com 2017). These economies have their own
pharmaceutical companies, which have expanded globally and hold far stronger position than
Square Pharmaceuticals. For example, the revenue earned by China National Pharmaceutical
in the year 2014 is USD 37340000000. The Indian pharmaceutical multinational company
Ranbaxy Limited earned revenue of USD 591262.49 in 2014 (Sunpharma.com. 2017).
Square Pharmaceuticals earned revenue of USD 111286.86, which is very low compared, to

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its Chinese and Indian counterparts (squarepharma.com.bd. 2017). It must also be noted that
Indian and Chinese pharmaceutical companies have evolved into biggest pharma-
conglomerates in the world and Square comes nowhere close to them. Hence, the first long
term objective of Square Pharmaceuticals Limited (SPL) should be rapid foreign expansion to
gain higher competitive advantage in the Asian market.
Objective 2: Acquisitions and mergers:
The mission of SPL is to acquire top position in Asia while its vision is to
manufacture high quality products. It must be noted that the top Asian pharmaceutical
markets like Japan, India and China have presence of American and European
pharmaceutical companies like Pfizer. The Asian pharmaceutical companies too have
acquired subsidiaries in the western markets. This collaboration between the western and
emerging Asian pharmaceutical markets facilitate huge flow of information and resources
between them (sunpharma.com 2017). This encourages huge amount of innovation and
research, which has led to development of India, China, Japan and Singapore into medical
research hubs. An analysis of this discussion shows that SPL should also acquire companies
and laboratories in the overseas to carry out open innovation and offer more advanced
medical products (Jones et al. 2016).
Objective 3: Strengthen marketing and brand power:
SPL must strengthen its marketing and brand power in order to gain competitive
position in the Asian pharmaceutical market. Pharmaceutical companies from Singapore,
India, China, Malaysia and Japan dominate the pharmaceutical market of Asia. The Asian
pharmaceutical market also experience presence of subsidiaries of western companies like
Pfizer. These two groups of companies carry out robust marketing activities to strengthen
their brand value (Jary and Wileman 2016). Square Pharmaceutical Limited should carry out

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aggressive marketing and brand strengthening activities to strengthen its market position. The
company would have to make its marketing strategies strong and that would take years
because it has to grow financially to be able to compete with the powerful companies of
China and Japan. This would require several years and the top management should adopt
marketing and brand strengthening as the third important long-term objective (Manzoli et al.
2016).
Answer 3:
Square Pharmaceuticals Limited would face several problems if it fails to realise the
importance of linking its departments like accounts & finance, marketing & sales,
administration & human resources, supply chain and production. Each of these departments is
interrelated and collaborates towards making the company operate smoothly and earn
revenue. If the apex management of Square Pharmaceuticals Limited fails to coordinate
between these departments, there would be problem in smooth operation of the company,
which may disrupt its very existence in the competitive market of Asia. For example, the
accounts departments allocate funds to all the other departments like marketing and HR
(Owen et al. 2013). The marketing and sales department markets the products in the market
and obtains orders for delivery. It forwards the details of the orders to the production
department, which in turn passes the information to the supply chain department. The supply
chain department uses the funds allocated to it by the accounts department to acquire the raw
materials. The production department uses the raw materials to produce the finished goods,
which the marketing and sales department sells to the customers. This operation of the sales
and marketing department generates revenue, which is recorded by the accounts and finance
departments. The administration department manages the operations of all these departments
while the human resource department provides them with staff. This explanation clearly
shows that the coordination between these departments contributes towards smooth

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functioning and generation of revenue (Listou 2015). Thus, if the apex management of
Square Pharmaceuticals fail to integrate these departments, it would face the problem of
carrying out its smooth business operations, which would in turn jeopardize its
productivity, profitability and very existence in the pharmaceutical markets of Asia
(Sallnäs 2016).
Answer 4:
The given case study draw comparison between two companies namely, Square
Pharmaceuticals Limited and its competitor Watson Pharmaceuticals, now a part of the Irish
multinational pharmaceutical company, Actavis Generics. The organisational chart of Square
Pharmaceutical Limited shows that the assistant general manager (AGM) and the executive
director of administration (EDA) reports to the managing director. The HR manager,
marketing manager and the supply manager reports to the AGM. The production manager,
quality control and finance manager reports to the EDA. A CEO to whom the general
manager (GM) and director of administration (DA) report heads the organisational structure
of Watson Pharmaceuticals. The assistant HR manager and the industrial relation officer
report to the HR manager. The assistant finance manager and budget officer report to the
finance manager (Närman, Johnson and Gingnell 2016). The HR manager and the finance
manger in turn report to the GM. The sales and the marketing officer of Watson report to the
marketing and sales manager while quality control officer and the assistant production officer
report to the production manager. The production manager and the marketing and sales
manager report to the DA. The following section would compare between the two companies
on the grounds of the organisational structure discussed above:

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Span of Control:
Square Pharmaceutical Limited follows flat structure where the span of control of one
post spreads over a larger area. For example, AGM directly controls the HR, marketing and
the supply chain managers. The MD is the skip level officer of these three managerial posts
and hence exercises indirect control over them (West 2014).
Watson compared to Square, follows a tall structure where the top managers have
limited span of control. For example, the CEO can exercise direct span of control over GM
and DA. He has indirect control over HR manager, finance manager, marketing and sales
manager and production manager. However, the CEO has no direct control over the lower
rung managers of the company (Sundararajan, Bhasi and Vijayaraghavan 2014).
The above discussion shows that Square follows flat structure and the span of control
of manger is larger. Watson, on the contrary follows a tall structure where the span of control
of a manger is restricted to a small number individuals.
Chain of command:
The chain of command practiced at Square Pharmaceutical as pointed out is shorter
and more direct. Watson, on the other hand follows a tall structure which multiple chains of
command. For example, the AGM directly controls the HR manager, the finance manager
and the supply manager. The tall organisational structure of Watson more complicated. A
chain of command consists the assistant HR manager, HR manager, GM and the CEO. A
second chain consists of the industrial relationship officer, the HR manager, GM and the
CEO. Thus, it is evident that compared to Square, the chain of command at Watson is
multiple and more complicated (Miśkiewicz 2017).

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Lines or communication and decision-making:
The lines of communication at Square are shorter and more direct due to its flat
organisational structure. The lines of communication at Watson are more complicated and
indirect due to its tall organisational structure.
Decision-making at Square is more dynamic and direct owing to shorter lines of
communication. The decision-making at Watson is more lengthy and complicated because of
several posts and the need to take their approvals before implementing decisions.
Type of structure:
Square follows a flat structure while Watson follows a tall structure. However, it can
be pointed out that the tall organisational structure adopted by Watson resembles the
pharmaceutical MNCs like Pfizer (D'Alessandro and Mohtadi 2016).
Answer 5:
The supply chain department supervises its human resource needs by human resource
plan. The following are some of the factors, which can affect the human resource planning of
the department:
Span of business:
The case study clearly points out that the employees of the supply chain management
are hired to procure the raw materials and maintain relationship with the suppliers. It also has
mention about exporting of finished but has no clear mention about sourcing of raw materials
from abroad. Assuming that the supply chain and the business span of Square is not big as its
other Asian counterparts, the human resource planning of the supply chain department is
limited to Bangladesh. This limited span of business and raw material acquisitions lead to the
supply chain department recruit less number of employees (Ahearne, Lam and Kraus 2014).

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Weaker brand equity of Square:
The selection process of Square mentions about interviewing candidates while the
training and induction clearly mentions about on-job training. One can point out that these
procedures are more appropriate for candidates who are fresher or have less experienced.
However, all departments need to acquire experienced employees from multinational
companies in the same field for strategic positions. The case study does not mention
acquisitions of employees with experience of working at other multinational pharmaceutical
companies. It can pointed out that the weaker brand equity of Square compared to its Asian
counterparts prevent it from attracting employees having rich experience of working in other
pharmaceutical MNCs (Godman et al. 2014).
Answer 6:
The following are the recommendations for the human resources practices at Square
Pharmaceuticals Limited:
Recruitment and selection:
The company must aim to recruit and select employees having experience of serving
and making decisions at multinational pharmaceutical companies preferably from leading
companies like Pfizer. This would enforce more dynamic and aggressive decision making
processes, which would boost the business operations of Square in the Asian market.
Training:
The company should extend its training programmes to accommodate both
inexperienced and experienced candidates. The training provided to inexperienced candidates
can consist of induction and on the training but they are not sufficient for experienced
candidates. The experienced should be provided more detailed training and induction, like a
formal conversation with the regional head and other departmental heads. This would enable

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newly hired managers to be more acquainted with the strategic positions of Square and help
in taking decisions that are more dynamic (Sung and Choi 2014).
Performance appraisal:
The performance appraisal of Square involves top bosses making decisions regarding
appraisals of their subordinates. However, it has no scope of junior employees giving
feedback about their bosses, which would be considered during appraisal of the latter. This
empowerment of the subordinates would make the senior employees more responsible
towards their subordinates. This would minimise ill-treatment and exploitation of
subordinates in the hands of their superiors. This would contribute towards a more ethical and
equable organisational culture within Square (Jones et al. 2016).
Compensation and motivational rewards:
It is recommended that Square should diversify its employee motivational and
compensation rewards. The case study speaks about financial rewards like gratuity while
healthcare benefits at discounted rates in the only nonfinancial motivational rewards. The
compensation scheme should be extended to accommodate financial rewards like incentives,
earned leaves and share of profits. The non-financial rewards can be flexible timings, social
functions and work from home facilities. These additional motivational and compensation
rewards would motivate the employees to work harder to achieve their targets (Lu et al.
2015).
Answer 7:
The human resource strategies and the business strategies are linked moderately to
achieve its business objectives. The case study shows that the objective of Square
Pharmaceuticals is to acquire leadership in the pharmaceutical market of Asia and to bring
about new innovative products to earn more revenue. Considering these two business

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objectives, the human resource strategies are not fully equipped to achieve the objectives.
The human resource policies are fixed by the human resource department after consulting
with the other departments like finance and marketing. This strategy is appropriate for an
expanding pharmaceutical company (Martins et al. 2014). The recruitment process consists of
advertising vacancies on online job portals. The selection process is about written
examinations and medical tests. These processes are appropriate for inexperienced candidates
but not for experienced candidates. The HR department must frame more area specific
recruitment process like an experienced employee appearing of a managerial post interview,
should be given technical examinations to test his actual knowledge and decision-making
power. The training and induction is restricted to on-job training and induction (Mehralian
and Shabaninejad 2014). This is once again appropriate for executives but not for managers
who require a more detail induction like introduction to the top managers to whom they
would report on daily basis. Hence, in the light of the above discussion it can concluded that
the human resources strategies of Square are moderately consistent with the business
requirements.

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