Organizational Structure in the Pharmaceuticals Industry

Industry bring up Pfizer and Johnson & adenylic acidere angstrom Johnson atomic number 18 the largest and well-nigh successful pharmaceutical companies in the adult male today. separately friendship has a spacious men and conducts business in countries either over the globe. Both companies have utilize a mellowed degree of direct specialism in order to come their business units more than effectively. Operating companies argon grouped together by their function, as well as the type of fruit the produce. There argon concerns about the lose of dominance that results from decentralization.The benefits, however, appear to outweigh the risks, as evidenced by the successes enjoyed by Pfizer and Johnson & deoxyadenosine monophosphatetype A Johnson. Organizational Structure in the Pharmaceuticals Industry Johnson & group A adenylic acid Johnson and Pfizer be both pharmaceutical companies that howevertocks be found near the top of the issue 500 list. Johnson &amp Jo hnson was graded 33 and Pfizer 50 on this socio-economic classs list (Fortune 500, 2010). The complexity of this industry requires a re totallyy large workforce with many specialize roles. More specialized roles in an organization call for more antitheticaliation at bottom the company.There is a extensive deal of all terzetto types of differentiation in spite of appearance each company level differentiation, vertical differentiation, and spatial differentiation. This luxuriously level of differentiation results in a very complex organizational anatomical coordinate (Nelson &amp Quick, 2011). Globalization presents signifi elicitt disputes to all organizations that operate in many different countries. These challenges ar typically created by the ethnical differences that whitethorn exist among the countries in which a company operates. Hofstede retrieves work-related attitudes are formed by five dimensions of cultural differences.These dimensions are as follows in dividualism vs. collectivism, strength distance, uncertainty avoidance, masculinity vs. femininity, and time orientation (Nelson &amp Quick, 2011). It is important for a company to cut into these dimensions when developing its organizational structure for the international marketplace. Johnson &amp Johnson owns more than 250 companies fit(p) in 57 countries. Each run company is placed into one of three business segments consumer health care, medical devices and diagnostics, and pharmaceuticals (Company Structure, 2010).This potpourri is based on the types of products the company produces. The assort of subsidiaries in this manner represents horizontal differentiation. Johnson &amp Johnson gives each operating company a fair amount of control within their milieu. This modify structure rump create concerns about lack of control, but there are benefits as well. As stated above, many of these companies are dictated outside of the United States. The decentralized str ucture yields much of the power to the leadership within each company and country, who are more familiar with the environment in which they are working.Furthermore, decentralization provides a great hazard to develop employees. The leader of a littler subsidiary whitethorn move to a larger sister company if he or she performs well. vicissitude buttocks a want thrive in a decentralized environment. When people are developing ideas in independent environments, there is greater creativity. Innovation and creativity are paramount in the pharmaceuticals industry (Johnson &amp Johnson chief operating officer, 2008). Pfizer, like Johnson &amp Johnson, utilizes a elevated degree of horizontal differentiation within its organizational structure.Like many companies, Pfizer has gone by several periods of restructuring over the past hardly a(prenominal) years. The latest round of restructuring occurred after Pfizer acquired Wyeth in 2009. Pfizers operations can be split into two d istinct categories investigate and spheric health care businesses (Pfizer Announces, 2009). later on the acquisition, Pfizer formed two separate look for organizations. The PharmaTherapeutics Research pigeonholing focuses on pocket-sized molecule research, while the BioTherapeutics Research Group concentrates on large molecules. Within each group, small teams work on item projects of high potential.This decentralized structure provides cardsharper focus and less bureaucracy for those working in this critical field (Pfizer Announces, 2009). Upon acquiring Wyeth, Pfizer reorganized its operating companies into two several(a) categories Pfizer BioPharmaceutical Businesses and Pfizer Diversified Businesses. Pfizer BioPharmaceutical Businesses contains five distinct biopharmaceutical businesses primeval Care, Specialty Care and Vaccines, Emerging Markets, Oncology, and launch Products. Pfizer Diversified Businesses is made up of foursome unique businesses Animal Health, Capsu gel, Consumer Health, and Nutritional Health.Each of these cardinal businesses has clear expectations for results from initial product increase to the end of the products carriage cycle (Pfizer Announces, 2009). This type of decentralized environment provides employees with a sense of pjustifye and willpower in their products. Each business is overly able to react more rapidly and respond more directly to consumer inescapably in this decentralized structure (Besthof, 2009). fleck there are many benefits to a decentralized structure, there are too drawbacks as well. Management often propagation does not like to yield power and control to others, which may result in micro-managing.There is also concern whether the values and honorable standards of f number management are be practiced by those making criticial decisions. This may be of limited concern for situations in which it is difficult to monitor the activities of those trusted to determine these decisions. When wor king in a global environment, however, the benefits of a decentralized structure for sure appear to outweigh the risks. Nelson and Quick believe the three biggest challenges facing managers today are globalization, diversity, and ethics (2011).All three of these issues are sure enough present in the pharmaceuticals industry, and in particular for large global companies such as Pfizer and Johnson &amp Johnson. Decentralization can be very beneficial for a company operating in a global environment. Managers working daily in that country should be actively mingled in decision making, since they are to the highest degree familiar with the environment. Operating globally can also bring diversity issues to the forefront. These issues can also be aided by decentralization, which allows situations to be addressed by those nestled to them. Ethics is a major challenge in the pharmaceuticals industry.In a decentralized structure, upper management must be able to trust that others are d oing things the right way. If they are not, the reputation of the entire organization may be damaged by the light decisions of one person in a relatively minor role. Pfizer and Johnson &amp Johnson have many similarities in the structure of their organizations. Both companies utilize a high degree of horizontal differentiation, some of which is necessary by their wide range of operations. Each company, however, has also made a consignment to allowing these business units to operate with a high degree of autonomy.ReferencesBesthof, Robert. (2009). Pfizer Makes Push in ophthalmic Market With Restructuring, R&ampD Strategy. Ocular Surgery News. Retrieved October 13, 2010, from http//www. osnsupersite. com/view. aspx? rid=42818 Business Wire. (2009, April 7).Pfizer Announces Operating Structure and get hold of Senior Leadership Posts to Be in effect(p) Immediately Upon Close of Wyeth Acquisition. Retrieved October 13, 2010, from http//www. businesswire. com/news/ alkali/20090 407005717/en/Pfizer-Announces-Operating-Structure-Select-Senior-Leadership Fortune 500. (2010).Retrieved October 7, 2010, from http//money. nn. com/magazines/fortune/fortune500/2010/industries/21/index. html Johnson &amp Johnson. (October 2010).Company Structure. Retrieved October 11, 2010, from http//www. jnj. com/ colligate/about-jnj/company-structure email&160protected (2008, June 25).Johnson &amp Johnson CEO William Weldon Leadershipin a Decentralized Company. Retrieved October 11, 2010, from http//knowledge. wharton. upenn. edu/article. cfm? articleid=2003 Nelson, D. L. , &amp Quick, J. C. (2011).Oranizational behavior Science, the real world, and you. Mason, OH South-Western Cengage Learning.