ICON COLLEGE OF TECHNOLOGY AND MANAGEMENT
Unit title : Organisations and Behaviour
GlaxoSmithKline plc (GSK) is a healthcare company. The Company is engaged in the creation and discovery, development, manufacture and marketing of pharmaceutical products, including vaccines, over-the-counter (OTC) medicines and health-related consumer products. As of August 2016 it had a market capitalisation of £81 billion, the fourth largest on the London Stock Exchange. Culture and Values GSK aims to have a healthy, resilient, high-performing workforce and to have a positive impact on the people and the planet. The company does this by aspiring to build a company culture guided by its values. In addition, GSK has a range of dedicated employee health and well-being programmes. The company is committed to environmental sustainability. Culture includes ways in which people have common understandings and relationships with each other. The GSK work places have an open environment, where there are many opportunities for socialising amongst colleagues. The office has an open-space layout, which is very welcoming and allows you to have a quick chat to your co-workers from time to time. The company is very flexible with its working hours. The high solidarity of communal cultures is often demonstrated through an equitable sharing of risks and rewards among employees.
At GSK there are almost 33,000 employees worldwide from several religions, beliefs and demographics. The personal characteristics of individuals within the organization affect the behaviour of individuals at work. In GlaxoSmithKline employees are driven by the influence they can have on people's health. Its values guide its employees day-to-day actions. Company values like acting with integrity, operating with transparency, and demonstrating respect for people help employees implement these principles themselves.
GSK’s core values are a patient focus, integrity, respect for people and transparency. The company focuses on patient and consumer needs in research and ensures that patient and consumer safety is paramount, through dedicated product quality control and reliable supply. GSK’s day-to-day working culture is built on the foundation of mutual respect and actively seeking, valuing and drawing on the differing knowledge, perspectives, experience and styles in its global community of employees. The company strives to create an atmosphere of transparency which means being honest about what it does, and is open to challenges and discussions on continuous improvement. Leadership Sir Andrew Witty is CEO of GSK. Andrew joined Glaxo in 1985 and has held a variety of Sales and Marketing roles in the UK and abroad, including working in the company’s international operations. A radical overhaul was needed, when Andrew took over as CEO of GSK in 2008. He found his firm's culture similar to that of a police state. He wanted to see at GSK move away from an excessively regimented, rule-based approach towards the “utopia” of a simplified, values-based culture that trusted employees Andrew Witty has been seen as a crossover between an aspiration-led and inspiration-led leader. Many employees love his plans, he said, because it made them feel they were helping the world. Andrew is very different from his abrasive predecessor, Jean-Pierre Garnier. Mr. Witty set the tone for a more open style of management. Whereas J.P., as his predecessor was known, often seemed arrogant, Mr. Witty began his tenure with a listening tour. J.P. controversially insisted on living in Philadelphia; Mr. Witty is not only based at GSK's headquarters in London, but he even plans to move his office next to the staff canteen so he can be more accessible.
Andrew Witty restructured the company. He broke down GSK's research teams into smaller, fleeter units that compete for funding. He diversified the business to minimise risk. He reorganised the company into a new organisational structure and focused on changing the organisational culture. He sliced and diced the company's R&D groups into smaller and more autonomous shops, piloting recent efforts in his industry to boost accountability among scientists and get better returns from R&D investments. His announcement that the company would slash the cost of many of its drugs to people that needed them in developing countries was a perfect example of the difference that leadership can make.
Under his leadership the company grew faster. He was awarded a knighthood for services to the economy and to the UK pharmaceutical industry in the 2012 New Year Honours List. Andrew has been Chancellor of the University of Nottingham since 2013.
One of the stiffest tests for boards of big multinationals is how they handle crises. Sir Andrew Witty’s leadership has also not been without questions and crises. In July 2012 GSK was fined $3bn in the largest healthcare fraud settlement in US history, and in July 2013, GSK confirmed that some of its senior Chinese executives appeared to have broken the law by bribes to doctors to boost sales.
Management of Talent
The company's hierarchical structure is very important factor to consider when understanding the effects of organisational structures on people. A company like GSK uses a relatively flat hierarchy model that gives its executives power from the top down, but some employees prefer more relative equality and more approachability from top managers.
GSK understands that innovation requires elaborate and extensive teamwork across functions and perhaps locations, whereas workers within the functional division of a company tend to perform a specific set of projects. Cross-functional teams often are a way to work on the projects.
Increasingly, isolated specialists cannot achieve high-impact innovation. The GSK research projects are undertaken by teams from different disciplines—such as genetics, chemistry, and toxicology—and in different locations. Without such teamwork, drug development would be much slower and competitive advantage would be lost. The research teams are fully empowered, compact, focused and integrated teams. GSK has been striving towards, and quite successful in employee engagement, thus making the employees feels like part of a family. Imbuing a sense of belonging in the employees usually scores higher on innovation.
GSK uses both theory X and theory Y in managing people. The recruitment is pretty rigorous. The company focuses on creating an inclusive organisation where all employees feel engaged and know their work makes an important contribution. GSK attracts and retains the most talented people by investing in training and development that’s tailored to their needs and builds on their strengths. And, through their approach to leadership development, their employees learn how to motivate team members to perform at their best. GSK values both deep expertise and broad knowledge and experience. The company provides learning opportunities for on-the-job experience, formal development, mentorship programmes and individual support and rotation in different departments. GSK offers a range of benefits programmes (such as a healthcare trust, a share save scheme and a share incentive plan (Sip), performance-linked bonuses, and a trust-based defined contribution (DC) pension scheme ).Since 2009, GSK has given staff access to an online total reward platform to ensure all benefits are easily accessible, allowing employees to make choices quickly.
Technology and the Future
To carry on with its success in finding new products, GSK has more than 13,000 people working across its R&D organisation dedicated to finding new ways to improve the treatment of diseases and illnesses. GSK has an open innovation programme. The open innovation teams are located in their R&D centres around the globe. The team associates, R&D scientists, and marketing experts work in Innovation Hubs in collaboration, and foster creativity. The Innovation Pathway continues with input on licensing as well as developing alliances to identify and develop external innovative technologies that will make the company’s global brands grow. A strong knowledge base of ideas products and processes in the pipeline is intended to ensure the feasibility of ideas at an early stage and also avoid duplication of efforts. The firm ensures sharing of knowledge within the business units through efficient knowledge management systems across its business units and cross-functional teams.
2.1 Some leadership theory discusses three main leadership styles. Compare the effectiveness of the different leadership styles at GSK with any other similar organisation. [P1.1, M2]
2.2 Explain how organisation theory supports and explains the management practices at GSK. [P2.2]
2.3 Use a range of theories and other sources of information to evaluate three different approaches to management at GSK and any other similar organisation [P2.3, D1]
- To achieve M2, you will have applied relevant theories and techniques in comparing the effectiveness of different leadership styles at GSK with any other similar organisation.
- To achieve D1 conclusions on the evaluation of three different approaches to management at GSK and any other similar organisation will have been arrived at through a synthesis of ideas and these conclusions will have been justified.
2.1 Three leadership styles that helps to compare the effectiveness of the different leadership of GSK and AstraZeneca:
There are three styles of leadership such as Authoritarian Style of leadership, democratic style of leadership and laissez-faire style of leadership. In an Autocratic style of leadership, the leader's rule the group based on the decision taken by them only. They dictate the other members stating about the ways to function as per the decision of the leadership (Goleman et al. 2013, p. 40). On the other hand, in the case of Democratic style, the leaders use their leadership skills by encouraging each member of the group to actively participate in the decision- making process. As per the concept of Laissez- faire style of leadership, the leader makes the least contribution to the decision-making a system and they allow the other team members to undertake important decisions and function accordingly (Bhatti et al. 2012, p. 192).
It has been found that GSK follows the Democratic style of leadership, whereas AstraZeneca follows a Laissez- faire style of leadership. GSK involves the active participation of each team member and the leader of the respective company as it has hierarchy structure. The knowledge flows through senior executives to the subordinates. It gives importance to values and need of its workers. In case of AstraZeneca, the workforce of the pharmaceutical organisation is undertaking important decisions for conducting the business operations. It has been noticed that the leader of AstraZeneca contributes minimal effort in the decision- making a system and it allows the team to take their own decision and function accordingly. The workflow of this organisation is directly dependent on the efficiency level and delivery of the individual performance of the employees (Rothlin, 2013, p. 747). The goals of the company range from its vision of researching and ensuring that no ethical practices are performed for selling the medicines and meeting the needs of targeted customers.
2.2 Explanation of the way that supports organisational theory and management practices of GSK:
Organisational theory deals with the evaluation of the company. Von Krogh et al. (2012, p. 277) stated thatthe organisational theory is comprised of viewpoint of rational system and division of workers and employees, a theory of modernisation and theory related with bureaucracy and contingency. It helps to specify the business targets of the organisation and formalisation. It is useful for determining issues and suggesting the ways of resolving the issues. Organisational theory helps the respective company to understand the way of increasing the workflow and productivity of the company. This theory is supporting the management practices of GSK. The management of GSK believes in building an inclusive organisation where each member of the pharmaceutical company is aware of their roles and responsibilities. The employees of the company should be aware of meeting the specified targets of the respective organisation. Therefore, the division of skilled workforce is strictly followed by the organisational theory of GSK.
The structure of GSK is flat hierarchical in nature and the workforce of the unit is directed by rational-legal decision- making system. The employees of the hierarchy control the working process of the subordinate employees which proves that GSK follows bureaucracy format. As per the concept of bureaucracy, the possession of the employees is kept segregated from the monies of GSK. The employees are expected to deliver their best potentiality to ensure the success of the respective company. These workers are provided training as per their job profile. Certain rules and regulations are specified by the hierarchical employees of this pharmaceutical company which clearly indicates that management is aligned with the theory of bureaucracy. This states that the theory of bureaucracy is aligned with the management practices of GSK. The management team members of GSK are capable of analysing the external and internal situation in terms of business operation.
2.3 Application of theories and other information to analyse the different approaches to management of GSK and AstraZeneca:
Different theoretical approaches are related with functioning process of the management practices of the organisation. Cunningham et al. (2015, p. 27) commented that these theories are namely bureaucratic theory, administrative theory, scientific theoretical concept, behavioural theory, co- operative approach, approach of social system, theory of group behaviour, etc. It has been found that GSK follows the guidelines of bureaucratic approach and AstraZeneca follows theoretical approach of Administration. GSK believes in equal contribution of the team member for meeting the business objectives. The workers related with the hierarchical structure are supervising and regulating the working procedure of the subordinate workforce of the renowned pharmaceutical company (Jakobsen, 2012, p.96).
It believes in establishing an inclusive or closed system within the organisational structure. The principles of GSK are created as per the experience of the managerial section and practicing style of the senior executives and managers. The management team of this particular organisation believes in the extensive teamwork for incorporating the imaginative capacity in manufacturing of medicines and selling of medicines in the market (Scahill, 2015, p.30). Formal training and specialisation is required to properly function in the working process of the managers of GSK. On the contrary, AstraZeneca follows administrative approach which gives importance on centralisation. This organisation believes in maintaining a proper order in the working procedures of administrators and managers. It lays emphasis on the undertaken decision of the subordinate workers and analyses their performance based on their contribution in the decision- making process.