GlaxoSmithKline's Strategic Adaptation to Brexit: A Case Study
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Desklib provides past papers and solved assignments. This report analyzes GSK's response to Brexit.

Management and Organization
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TABLE OF CONTENTS
Introduction..................................................................................................................................................1
Task 1...........................................................................................................................................................2
Briefly introduce the organization...........................................................................................................2
Task 2...........................................................................................................................................................4
Identify the organizational Structure of the company and analyze how this structure can help the
company function effectively in the wake of Brexit...............................................................................4
Task 3.........................................................................................................................................................10
Suggest one modern management approach that could help the company, with Brexit imminent.......10
Task 4.........................................................................................................................................................14
Using the STEEPLE framework, conduct a strategic environmental analysis of your chosen company
and identify one current innovative strategic objective of the company in the wake of Brexit............14
Conclusion.................................................................................................................................................17
References..................................................................................................................................................18
Introduction..................................................................................................................................................1
Task 1...........................................................................................................................................................2
Briefly introduce the organization...........................................................................................................2
Task 2...........................................................................................................................................................4
Identify the organizational Structure of the company and analyze how this structure can help the
company function effectively in the wake of Brexit...............................................................................4
Task 3.........................................................................................................................................................10
Suggest one modern management approach that could help the company, with Brexit imminent.......10
Task 4.........................................................................................................................................................14
Using the STEEPLE framework, conduct a strategic environmental analysis of your chosen company
and identify one current innovative strategic objective of the company in the wake of Brexit............14
Conclusion.................................................................................................................................................17
References..................................................................................................................................................18

LIST OF FIGURES
Figure 1: Functional structure of GSK........................................................................................................5
Figure 1: Functional structure of GSK........................................................................................................5
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Introduction
Management is the organization administration whether it is business, governmental body or not for
profit organization. Management is the procedure of the strategy setting of the firm and integrating the
efforts of the human resources to meet its purposes with the use of present resources like natural,
technological, human and financial resources. There are different types of managers in the big
organization structured in hierarchy that are senior managers, middle managers and lower managers
(Pettinger, 2012). Senior level manager makes the strategic goals and take decisions, middle managers
communicate the strategic goals of the senior managers to front line managers and lower manager looks
on the work of daily employees and give them direction. Managers are important in the business to
undertake the management practices that supports in meeting the business objectives.
In the present report, the study relates to the Glaxosmithkline plc (GSK plc), a British pharmaceutical
organization headquartered in Brentford, London. It will review the organization structure, effective
modern management approaches, innovative objectives and industry analysis of the pharmaceutical. The
report is divided into four tasks. It will include the organization overview and history along with the
GSK Plc structure by giving advantages and disadvantages. Finally, the report will also present modern
management approach concerning Brexit impact together with the STEEPLE framework of the
pharmaceutical industry aligned with the business objectives of the GSK.
1
Management is the organization administration whether it is business, governmental body or not for
profit organization. Management is the procedure of the strategy setting of the firm and integrating the
efforts of the human resources to meet its purposes with the use of present resources like natural,
technological, human and financial resources. There are different types of managers in the big
organization structured in hierarchy that are senior managers, middle managers and lower managers
(Pettinger, 2012). Senior level manager makes the strategic goals and take decisions, middle managers
communicate the strategic goals of the senior managers to front line managers and lower manager looks
on the work of daily employees and give them direction. Managers are important in the business to
undertake the management practices that supports in meeting the business objectives.
In the present report, the study relates to the Glaxosmithkline plc (GSK plc), a British pharmaceutical
organization headquartered in Brentford, London. It will review the organization structure, effective
modern management approaches, innovative objectives and industry analysis of the pharmaceutical. The
report is divided into four tasks. It will include the organization overview and history along with the
GSK Plc structure by giving advantages and disadvantages. Finally, the report will also present modern
management approach concerning Brexit impact together with the STEEPLE framework of the
pharmaceutical industry aligned with the business objectives of the GSK.
1
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Task 1
Briefly introduce the organization
Introduction, industry and market share of the organization
Glaxo Smithkline plc is the British organization, headquartered in London. The organization operates in
pharmaceutical, consumer goods and biotechnology industry within a broader pharmaceutical sector of
the economy. The firm was established in 2000 with the merger of Glaxo Wellcome and Smithkline
Beecham and regarded as GSK and started their business. In 2015, the organization stands as the 6th
largest pharmaceutical organization following the Pfizer, Novartis, Merck, Sanofi and Hoffmann-La
Roche. In the year 2017, the organization has first female CEO Emma Walmsley (About GSK, 2019).
The organization has the main listing on the London Stock Exchange (LSE). Till August, 2016 the firm
has market capitalization of £81 billion and stands at 4th largest on LSE. In New York Stock Exchange,
it is regarded as secondary listing.
GSKs drugs and vaccines earned in 2013 is £21.3 billion. The organization top-selling products are
Advair, Avodart, Lovaza, Lamictal, Flovent and Augmentin. Organization consumer’s products are
Aquafresh toothpaste, Abreva, Sensodyne, malted milk drink Horlicks, Breathe Right nasal strips,
Nicorette nicotine replacements, Abreva for cold sores and Night Nurse, a cold remedy from which they
have earned in 2013 around £5.2 billion. The organization created the first malaria vaccine in 2014 but it
was sold out at 5% above cost.
History or success story of the organization
The organization history from 2001 to 2010 is that, organization enters into the acquisition of New
Jersey Based Block drug in the year 2001 at US$1.24 billion. Further, in 2006, the GSk again acquires
the US based health organization named as CNS Inc. whose major products are Breathe Right nasal
strips and FiberChoice dietary supplements in cash amount to US$566 million. In 2005, the Chris Gent
was appointed as chairman of board who was the prior CEO of Vodafone. Further, in 2007 the
organization introduced its first R&D department in China that focuses on research of neurodegenerative
diseases. In 2008, Andrew Witty was designated as CEO who joined the organization with Glaxo only in
2
Briefly introduce the organization
Introduction, industry and market share of the organization
Glaxo Smithkline plc is the British organization, headquartered in London. The organization operates in
pharmaceutical, consumer goods and biotechnology industry within a broader pharmaceutical sector of
the economy. The firm was established in 2000 with the merger of Glaxo Wellcome and Smithkline
Beecham and regarded as GSK and started their business. In 2015, the organization stands as the 6th
largest pharmaceutical organization following the Pfizer, Novartis, Merck, Sanofi and Hoffmann-La
Roche. In the year 2017, the organization has first female CEO Emma Walmsley (About GSK, 2019).
The organization has the main listing on the London Stock Exchange (LSE). Till August, 2016 the firm
has market capitalization of £81 billion and stands at 4th largest on LSE. In New York Stock Exchange,
it is regarded as secondary listing.
GSKs drugs and vaccines earned in 2013 is £21.3 billion. The organization top-selling products are
Advair, Avodart, Lovaza, Lamictal, Flovent and Augmentin. Organization consumer’s products are
Aquafresh toothpaste, Abreva, Sensodyne, malted milk drink Horlicks, Breathe Right nasal strips,
Nicorette nicotine replacements, Abreva for cold sores and Night Nurse, a cold remedy from which they
have earned in 2013 around £5.2 billion. The organization created the first malaria vaccine in 2014 but it
was sold out at 5% above cost.
History or success story of the organization
The organization history from 2001 to 2010 is that, organization enters into the acquisition of New
Jersey Based Block drug in the year 2001 at US$1.24 billion. Further, in 2006, the GSk again acquires
the US based health organization named as CNS Inc. whose major products are Breathe Right nasal
strips and FiberChoice dietary supplements in cash amount to US$566 million. In 2005, the Chris Gent
was appointed as chairman of board who was the prior CEO of Vodafone. Further, in 2007 the
organization introduced its first R&D department in China that focuses on research of neurodegenerative
diseases. In 2008, Andrew Witty was designated as CEO who joined the organization with Glaxo only in
2

1985 and was president of pharmaceutical in Europe of GSK’s till 2003 (GSK today: 2000 – present,
2019).
In 2009, the organization acquires at US$3.6billion a largest Stiefel laboratories and worlds biggest
independent dermatology organization. In the same year, the GSK enters into joint venture with Pfizer to
develop ViiV healthcare which expertises in HIV research. In 2010, the organization acquired Argentine
pharmaceutical company at US$253million named as Phoenix laboratories along with UK sports
organization based on nutrition and maxi nutrition.
Further, from the year 2011 to 2017, its success story is still high. The organization sold its 17 GSK
brands to the prestige Brands Holding at 660millions. In 2012, GSK said that they would invest around
$500million in manufacturing sites in relation to biotech plant. In 2013, the organization acquires at
$3billion a Human Genome Sciences on the purpose of several drugs for complicated diseases (GSK
today: 2000 – present, 2019). In 2014, March, the organization decided to pay $1billion to the Indian
pharmaceutical organization to get the major stake. In September 2015, the organization again changed
their chairman to Philip Hampton who was the chairman of Royal Bank of Scotland. In the December
2017, it is reported that Glaxo raises its share in Saudi Arabian taking the control from Saudi partner
Banaja KSA holding organization by getting 75%.
Relevant and rational information about organization
With respect to getting the success in the business, organization has to face the major controversies also.
In the year 2012, the organization has paid the heavy penalty of $3billion for encouraging the drugs for
illegal use, failure in reporting the safety data and kickbacks to physicians in US. It was the biggest
fraud in the organization history and country as well and for this organization has to make the largest
settlement. Further, the organization also has to enter into the contract with the Department of Health
and Human Services that place mandatory for the GSK to change the way of doing the business that
includes changes in compensation policy for the employees and to maintain and execute the
transparency in the business practices and policies (Mullins, 2016). In the year 2013, they have made
major announcement after this incident that they will not remove sales targets for their sales staff along
with not paying any amount to doctors for promoting their medicines only.
3
2019).
In 2009, the organization acquires at US$3.6billion a largest Stiefel laboratories and worlds biggest
independent dermatology organization. In the same year, the GSK enters into joint venture with Pfizer to
develop ViiV healthcare which expertises in HIV research. In 2010, the organization acquired Argentine
pharmaceutical company at US$253million named as Phoenix laboratories along with UK sports
organization based on nutrition and maxi nutrition.
Further, from the year 2011 to 2017, its success story is still high. The organization sold its 17 GSK
brands to the prestige Brands Holding at 660millions. In 2012, GSK said that they would invest around
$500million in manufacturing sites in relation to biotech plant. In 2013, the organization acquires at
$3billion a Human Genome Sciences on the purpose of several drugs for complicated diseases (GSK
today: 2000 – present, 2019). In 2014, March, the organization decided to pay $1billion to the Indian
pharmaceutical organization to get the major stake. In September 2015, the organization again changed
their chairman to Philip Hampton who was the chairman of Royal Bank of Scotland. In the December
2017, it is reported that Glaxo raises its share in Saudi Arabian taking the control from Saudi partner
Banaja KSA holding organization by getting 75%.
Relevant and rational information about organization
With respect to getting the success in the business, organization has to face the major controversies also.
In the year 2012, the organization has paid the heavy penalty of $3billion for encouraging the drugs for
illegal use, failure in reporting the safety data and kickbacks to physicians in US. It was the biggest
fraud in the organization history and country as well and for this organization has to make the largest
settlement. Further, the organization also has to enter into the contract with the Department of Health
and Human Services that place mandatory for the GSK to change the way of doing the business that
includes changes in compensation policy for the employees and to maintain and execute the
transparency in the business practices and policies (Mullins, 2016). In the year 2013, they have made
major announcement after this incident that they will not remove sales targets for their sales staff along
with not paying any amount to doctors for promoting their medicines only.
3
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Task 2
Identify the organizational Structure of the company and analyse how this structure can help the
company function effectively in the wake of Brexit
Define organizational structure
Organizational structure refers to the activities that are directly aligned with the organization objectives
of the business. Activities are task allocation, supervision and coordination to be done by the managers
of the business. Organization requires being transparent, caring, innovative and flexible in respect of
meeting the sustainable competitive benefits (Champoux, 2017). The structure of the business is also
seen as the glass by which individual’s see the firm and its environment. Organizations are the mixture
of the clustered entities. The organization structure is dependent on the objectives of the business and it
also identifies the medium in which it performs and operates.
The structure also gives the clear allocation of duties for different operations and procedures to various
entities like branch, workgroup, department and individual. The structure also affects the business of the
organization in two manners that is offering the foundation on which standard operating processes and
routine rest and secondly it identifies which person gets the chance to involve in decision making
procedures and till what extent they impact the business actions (Boddy, 2012).
Types of organization structure
There are different types of organization structure. Few of them are explained below:-
Flat structure: This structure has little or no management levels among the employees and
management. Flat structure does less supervision and focuses more on decision making process by
involving the employees.
Tall structure: A tall structure outcome into the one long command chains same like military. As the
business grows the management level number increases and the structure grows tall. In this structure
managers create numerous ranks and everyone has the small controlling area.
4
Identify the organizational Structure of the company and analyse how this structure can help the
company function effectively in the wake of Brexit
Define organizational structure
Organizational structure refers to the activities that are directly aligned with the organization objectives
of the business. Activities are task allocation, supervision and coordination to be done by the managers
of the business. Organization requires being transparent, caring, innovative and flexible in respect of
meeting the sustainable competitive benefits (Champoux, 2017). The structure of the business is also
seen as the glass by which individual’s see the firm and its environment. Organizations are the mixture
of the clustered entities. The organization structure is dependent on the objectives of the business and it
also identifies the medium in which it performs and operates.
The structure also gives the clear allocation of duties for different operations and procedures to various
entities like branch, workgroup, department and individual. The structure also affects the business of the
organization in two manners that is offering the foundation on which standard operating processes and
routine rest and secondly it identifies which person gets the chance to involve in decision making
procedures and till what extent they impact the business actions (Boddy, 2012).
Types of organization structure
There are different types of organization structure. Few of them are explained below:-
Flat structure: This structure has little or no management levels among the employees and
management. Flat structure does less supervision and focuses more on decision making process by
involving the employees.
Tall structure: A tall structure outcome into the one long command chains same like military. As the
business grows the management level number increases and the structure grows tall. In this structure
managers create numerous ranks and everyone has the small controlling area.
4
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Matrix structure: This structure groups the employees on the basis of function and product similarly. A
matrix firm generally applies the employee’s teams to finish the work with respect of taking the benefits
as well overcoming the weaknesses of functional and decentralized manner (Bratton, 2015).
Divisional structure: This structure includes self contained divisions. A division is the gathering of the
functions which manufacture a product. It also uses a plan to compete and function as the distinct profit
or business centre.
Functional structure: A functional structure includes the activities like supervision, coordination and
task allocating. The structure identifies the organization performance and operations. Few of the
functions are production, marketing, accounting and human resources. Through this structure
operational efficiency are developed in the employees but in this structure the major limitation is of
communication in the organization can be rigid that makes the business growth slow and inflexible
(Champoux, 2017).
Organizations structure of GSK
GSK pharmaceuticals follow the functional structure. The board of directors includes chief of board and
particular number of directors. The organization managing director (MD) has the duty to ensure the
organization performance as said by the board’s overall strategy. GSK’s structure comes in the
command of MD in finance, pharmaceuticals and sales, supply chain, medical, vaccines, legal, training,
human resources, government and communication as shown in the chart:
Figure 1: Functional structure of GSK
(Source: Author, 2019)
The sales and pharmaceutical department structure is very much complicated. The sales department has
mainly two divisions that are marketing and sales. Every department has four important areas that are
5
matrix firm generally applies the employee’s teams to finish the work with respect of taking the benefits
as well overcoming the weaknesses of functional and decentralized manner (Bratton, 2015).
Divisional structure: This structure includes self contained divisions. A division is the gathering of the
functions which manufacture a product. It also uses a plan to compete and function as the distinct profit
or business centre.
Functional structure: A functional structure includes the activities like supervision, coordination and
task allocating. The structure identifies the organization performance and operations. Few of the
functions are production, marketing, accounting and human resources. Through this structure
operational efficiency are developed in the employees but in this structure the major limitation is of
communication in the organization can be rigid that makes the business growth slow and inflexible
(Champoux, 2017).
Organizations structure of GSK
GSK pharmaceuticals follow the functional structure. The board of directors includes chief of board and
particular number of directors. The organization managing director (MD) has the duty to ensure the
organization performance as said by the board’s overall strategy. GSK’s structure comes in the
command of MD in finance, pharmaceuticals and sales, supply chain, medical, vaccines, legal, training,
human resources, government and communication as shown in the chart:
Figure 1: Functional structure of GSK
(Source: Author, 2019)
The sales and pharmaceutical department structure is very much complicated. The sales department has
mainly two divisions that are marketing and sales. Every department has four important areas that are
5

vaccines, dermatology, primary care and respiratory. In the marketing division each area is governed by
marketing manager (Lasserre, 2017). The chain of command is listed below:-
Marketing manager group project manager Product Manager Product
Executive or marketing trainee.
For sales division each area is governed by sales manager. The chain of command is as follows:-
Sales manager Regional manager Area business Manager Medical
Representative
The medical department is controlled by General Manager who manages the medical managers of the
four important areas that are vaccines, dermatology, primary care and respiratory. In every area,
executive has to give report to the appropriate medical managers.
6
marketing manager (Lasserre, 2017). The chain of command is listed below:-
Marketing manager group project manager Product Manager Product
Executive or marketing trainee.
For sales division each area is governed by sales manager. The chain of command is as follows:-
Sales manager Regional manager Area business Manager Medical
Representative
The medical department is controlled by General Manager who manages the medical managers of the
four important areas that are vaccines, dermatology, primary care and respiratory. In every area,
executive has to give report to the appropriate medical managers.
6
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The organization finance department structure is simple where the chief financial officer governs the
finance team.
The training department is controlled by training head that has to manage the work of general manager
who is further in charge of the training managers.
The legal department includes legal director who controls and looks over the general managers of
advisory and litigations (Paroutis, 2015).
The HR department is owned by HR head that controls the general managers of industry relations and
executive hiring segments. The Industry Relations General Manager heads the executive’s team and
executive hiring general manager manages the HR manager of three segments that are sales, media and
marketing.
7
finance team.
The training department is controlled by training head that has to manage the work of general manager
who is further in charge of the training managers.
The legal department includes legal director who controls and looks over the general managers of
advisory and litigations (Paroutis, 2015).
The HR department is owned by HR head that controls the general managers of industry relations and
executive hiring segments. The Industry Relations General Manager heads the executive’s team and
executive hiring general manager manages the HR manager of three segments that are sales, media and
marketing.
7
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The supply chain department structure four main areas are addressed that are vaccines, dermatology,
primary care and respiratory. Every area is controlled by division manager (Roh et.al. 2017). The
command chain is as follows:-
Division manager Executives Distributors Retailers
Advantages and disadvantages of the organisational structure type in wake of Brexit
The above presented are the main functional structure of the GSK with its major sub division structure
with presenting the chain of command. In the period Brexit, the entire functional structure is impacted.
For this GSK has implemented the risk based approach to mitigate in the structure. The structure has
turned positive in the way in case of Brexit as the organization can expand their potentials in the EU and
the UK by conducting retesting and medicines certification, transferring marketing authorizations
registered in UK to EU enterprise, updating the packaging leaflet, amending important manufacturing
licenses and then securing additional warehousing (GSK approach to Brexit, 2019). It all signifies that
the major change in supply chains structure will be done due to Brexit.
On the other side, the disadvantage of this structure is that Brexit increase the cost of the business as
changes are to be implemented which amounts for £70 million in the coming years. The additional
charges are £50 million every year which also impacts the financial structure also. These charges show
8
primary care and respiratory. Every area is controlled by division manager (Roh et.al. 2017). The
command chain is as follows:-
Division manager Executives Distributors Retailers
Advantages and disadvantages of the organisational structure type in wake of Brexit
The above presented are the main functional structure of the GSK with its major sub division structure
with presenting the chain of command. In the period Brexit, the entire functional structure is impacted.
For this GSK has implemented the risk based approach to mitigate in the structure. The structure has
turned positive in the way in case of Brexit as the organization can expand their potentials in the EU and
the UK by conducting retesting and medicines certification, transferring marketing authorizations
registered in UK to EU enterprise, updating the packaging leaflet, amending important manufacturing
licenses and then securing additional warehousing (GSK approach to Brexit, 2019). It all signifies that
the major change in supply chains structure will be done due to Brexit.
On the other side, the disadvantage of this structure is that Brexit increase the cost of the business as
changes are to be implemented which amounts for £70 million in the coming years. The additional
charges are £50 million every year which also impacts the financial structure also. These charges show
8

the Brexit impact on the information available. On this account, the changes will be done in the structure
continuously as plans will also be changed and further impact on the financial structure is continuous.
By delivering this changes in the structure of finance and human resources will be impacting highly in
short term although organization has secured the status quo for minimum disruption in Brexit period
(Tsiligiris and de Ruyter, 2018). However, over the long period, it is believed that Brexit will not impact
the business structure materially. Further, training structure will also be highly impacted by the Brexit as
many of the employees will leave the organization comes from EU region. The new hiring of the
candidates will take place and on that case training has to be offered that increases the cost of the
training structure.
9
continuously as plans will also be changed and further impact on the financial structure is continuous.
By delivering this changes in the structure of finance and human resources will be impacting highly in
short term although organization has secured the status quo for minimum disruption in Brexit period
(Tsiligiris and de Ruyter, 2018). However, over the long period, it is believed that Brexit will not impact
the business structure materially. Further, training structure will also be highly impacted by the Brexit as
many of the employees will leave the organization comes from EU region. The new hiring of the
candidates will take place and on that case training has to be offered that increases the cost of the
training structure.
9
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