This night had an eerie silence. Mr.

Parmeet Sethi sat in his king-size office looking out

of the window, his eyes searching for answers in the dark sky line. He had put in 17
years of hard work for the company. The avenue had been conquered, the goals
achieved, and the path ahead decided. The term as the CEO of the largest Indian
Pharmaceutical Company was witnessing the final steps. The tenure had indeed been
an exemplary one, yet there were several questions that remained unanswered and
even unattended to.

The company that was once run as a family business was about to act spectator to a
dramatic change in the organizational structure. An outsider had just been appointed as
the successor. It seemed, family wasn’t really bigger than the business. Or was it?

Pravas Pharmaceuticals Pvt. Ltd.

Pravas Pharmaceuticals Pvt. Ltd. had been in the business of drug distribution and
manufacturing for about 7 decades. It was setup in 1937 originally as a distributor for a
Japanese company; however, in just about 3 decades it saw a significant transformation
in business and scale and eventually moved on to become country’s largest
pharmaceutical company. It had flourished to such an extent that now it stood erect
with product exports to about 125 countries with ground operations in 46 and
manufacturing facilities in 7.

The company was established as a family business and had been as such ever since.

Mr. Parmeet Sethi

Mr. Parmeet Sethi, CEO and Managing Director of Pravas Pharmaceuticals Pvt. Ltd.,
assumed charge in July 1999 after the demise of Dr. Mohnish Kohli. An electrical
engineer and an MBA from FMS, Delhi, Mr. Sethi joined the company in 1977 as
Business Development Manager and then rose to become the President
(Pharmaceuticals) in 1993. Having been instrumental in developing the pharmaceutical
exports business of the company in the 80’s, he was appointed as the CEO and
Managing Director of the company in 1999 and was responsible for the company’s
major growth and portfolio expansion. In 2004, however, he was now ready to step
down from this position to start his entrepreneurial journey.

To shape up his plans, he chose a successor for the company in Dr. Ben Affleck, a
Lancaster University product with PhD in Chemistry and experience of over 32 years,
yet an outsider for the till-now-family-run business. He had joined Pravas in 1995 as the
regional head – Europe, CIS, and Africa and ad held responsible positions earlier in his
career with Pusons plc, Maxo Holdings, and PD Pearle.
Present Situation

The net consolidated global sales of the company were in excess of US Dollars 950
million for the year 2003. The company was well on its way to exceed the sales target of
US Dollars 1 billion that was set 10 years ago for the year 2004. Pravas had made
significant progress over these years towards its mission of "Becoming a Research
Based International Pharmaceutical Company".

With increasing emphasis on ' Drug Discovery' & ' Drug Delivery' Research and on
enhancing its presence in the developed markets both in the generics and prescription
segments in its pursuit of the vision "GARUDA", the company was evolving as a
specialty pharma company. The drooping market scenario, however, made the picture
look a little dim.

As Mr. Sethi resigned, he emphasized once again on his philosophy of strategic

expansion and advised the company to focus on two future trends - more product focus
from the marketing side, viz. rationalising the portfolios to weed out the non performers;
and increasing the pace of consolidation and strategic alliances.

The results of most top pharma companies had been lower than expectations due to the
sluggish market, major factors being - destocking by wholesalers and retailers due to
the scenario where goods and services were freely available at competitive rates; and
the market’s tending towards lifestyle diseases.

What Pravas needed at this point in time was a leader that could lead the company
towards these strategic changes just as the predecessors had been doing over the
years. A fundamental difference here, though, lied in the face of changing market
scenarios and increasing globalization scales of the company.

The choice to be made in this case was really that of an outside leader or that of the
same old family-business principles as was exemplified by the stupendous performance
of the company over the past 7 decades? Was training and leadership development the
need of the hour? Or was it a change in the organizational culture to accommodate
evolving market and global conditions acting as the demand of the situation?