ORGANISATIONAL BEHAVIOUR DR AMITA JOSHI AT SAMUEL DRUGS LIMITED

Group 9- Sec C Bhavya Kakkar Jatin Jain 147 Priyanka Malhotra 183 Vibhu Sharma 186 Karan Batheja 190 Anusha Gupta 194

INTRODUCTION

Dr Amita Joshi, CEO- Samuel Drugs Limited, the flagship company of Houston Group. During a meeting, she was informed that their company lost a major tender for Drug Supply to Ministry of Health of Indian Government. Ironically, Eastern Pharmaceuticals Limited( EPL- a 51 percent subsidiary firm of Houston Group) bagged the order.

Joshi soon realised it was the handiwork of Rajesh Mishra, Head of Marketing at Samuel Drugs and CEO of EPL The loss of order would lead to substantial gap between real and anticipated performance of the company. Disturbed, and brazen by such an act of breach of trust by Mishra, she now pondered over the future course of action to address this debacle.

GOVERNMENT POLICY AND THE PHARMACEUTICAL INDUSTRY The first PM, Jawaharlal Nehru, felt that the drug industry was susceptible to being abused and hence needed to be in the public sector. Consequently these companies soon turned into sick units and the government realised that the drug industry could flourish only with the help of private players. In 1980 the Govt produced several schemes to promote MSMEs in pharmaceutical industry.

SAMUEL DRUGS- A HISTORY

Samuel Drugs was founded by Samuel Houston, who owned 70 percent of the equity and acquired a non functional unit of the state drug corporation and assumed the position of CEO He created the organisational structure that facilitated professional autonomy. The division of responsibility was based on the competencies of people, and the personalities of executives were matched with appropriate job content However, the companys legacy as a bureaucratic government organisation also impacted the organisation structure High degree of formalisation and slow decision making

SUCCESS OF SAMUEL DRUGS

Biggest player among the MSMEs Played a major strategic role in national health programs Firm acquired a reputation for manufacturing and supplying

quality medicines and its presence played a price balancing

role in the competitive business environment

GROWTH CURVE

1989

Acquired Controlling stakes In Tamil Nadu Pharmaceuticals Ltd, Eastern Pharmaceuticals Ltd and Northeastern Drugs Ltd (All Non Profitable For Previous 15-20 yrs)
Samuel Drugs Restructured the Management of the 3 Subsidiaries and appointed itz veteran experts The Organisations Becams Profitable in 3 years.

1996

Houston stepped down from CEO Retaining the Position of Chairman of board. Dr. J.J Mehta was Appointed as CEO. Organisation Began to Stagnate. Registered annual Growth of 11 Percent Compared to 18 Per cent Growth of Overall industry. Board Realized to bring someone from outside to Take charge

2003 Mehta Announced His resignation in 2003 Due to failure in identifying a Suitable Candidate , Board Appointed Rohin das as Interim-CEO 2005 Comapny Reported Its First Ever Annual Loss of INR 20 Million. As a Result Amita Joshi was Appointed as a Full time CEO to revive the Company. She Gauged the Immediate Problems of Huge Employee Cost bill and poor marketing Company Cut its manpower by 40 per cent, Production went up to INR 2 billion. Operating Profit of INR 360 million in 2008-2009

Exports Began to African Countries and Company partenered with a South african company to Provide vitamins and minerals to poverty-striken countries under the aegis of UN.

2009 Samuel Drugs was the Largest among MSME Pharmaceutical Companies in India. Plants in Baroda, Hooghly, Faridabad, Vellore, Sikanderabad and Moradabad. Simultaneous Growth in Top and Bottom Lines Of the Organisation 1300 Employees on Payroll.

DR. AMITA JOSHI

Doctorate in Public administration. Handeled portfolio of joint Secretory in the Ministry of Chemicals and Fertilizers. Habitually defied irrational social norms and spoke out openly again discrimination against women. She Joined the Indian administrative services in 1970.

She took an early retirement from IAS and accepted the Offer For CEO position in Samuel Drugs.

She was circumspect in her use of companys resources. At early stage only as the CEO, she recognized that marketing required a thorough revamping in order to create demand. The current director of marketing was retiring, with no immediate subordinate possessed the required skill set for the job. Financial constrains and uncompetitive salary structure made it difficult to hire the best from the industry. After considerable thought and consultation with the board, an unusual appointment of Mr. Rajesh Mishra was made, who was the general manager of sales.

RAJESH MISHRA

Started his career with Samuel Drugs only. Was a youthful person who steadily has risen through the ranks. After being selected, Mishra quickly grasped the situation at hand and impressed Joshi with his foresight and marketing skills. He got several orders for the company in the very initial two months. Joshi gave Mishra increasing autonomy, permitting him to take major decisions on his own, as his position in the company strengthened.

He commanded great respect for his composure during pressure situations and his crisis management skills. He earned greater status than other functional heads in the organization.

THE GROWTH OF EPL

The subsidiaries, mainly used for marketing and distributing products made by the parent co. were in worse financial conditions than Samuel Drugs. The primary goal was to extensively market the products through these subsidiaries. Major profit was to be retained by the subsidiaries and only a margin was to be passed on to Samuel Drugs.

The future of EPL seemed promising so it was decided to collaborate EPL with Samuel Drugs for extensive marketing and distribution of entire portfolio of generic drugs in West Bengal. Seeing his excellent performance as the marketing head of samuel drugs, rajesh mishra was appointed as the managing director of EPL as an addition to his job for a temporary period of 1 year. The confirmation of his position as the managing director in EPL was contingent on his performance within that year. Mishra worked very hard to do justice to both positions.

Samuel drugs once again became a strong contender in the market and the bottom line started growing. EPL became the biggest distributor of Samuel Drugs. It was also outsourcing some of its manufacturing activities. This turnaround earned Mishra good reputation in the industry.

THE IMPORTANT GOVERNMENT TENDER

The ministry of health of the indian govt has invited tenders from drug manufacturing companies giving preference to MSME category to buy generic drugs in bulk to supply to hospitals in remote areas. Mishra, being a trusted and a capable colleague was handed over this great responsibility of preparing a strong bid on behalf of samuel drugs. Samuel drugs was awarded only one-tenth of what it had hoped for while epl got 10 times what samuel drugs got.

WHAT WENT WRONG?

EPL grabbed a huge tender to supply generic drugs in bulk to hospitals in remote areas. Clash of organizational position: As the director of marketing at Samuel Drugs, Mishra had access to all the contacts that Samuel Drugs had built over the years and he mobalised them for his own interest. Joshis subordinate-turned-peer strengthened his own position through epl at the cost of samuel drugs limited.

QUESTIONS

WHAT WERE THE STRENGTHS AND WEAKNESSES OF JOSHI AND MISHRA?

JOSHI Strengths: Assessed the shortcomings of the culture in the organization, and addressed them. She delegated responsibilities, and gave employees the entire credit. She encouraged everyone to give her feedback directly. Every employee was empowered to have a say in what the organization did.

She used to consult all the key stakeholders . This was highly appreciated by everyone. She tried to inspire her employees by her actions. Impressive personal code and ethics Well experienced in ministry of health ,chemical and fertilizers department.

Weaknesses: Joshi gave too much autonomy to mishra which backfired. She struggled to garner support of all the stakeholders.

MISHRA STRENGTHS: He was a rational person. He was logical and charismatic. He could convince everyone of his capability and his passion for the job. His composure in the face of pressure. Possessed ability to rise in his career in a short span of time Possessed good inter personal skills to maintain excellent relationship with his previous bosses Impeccable performance record High success rate at handling negotiations with clients alone

Weaknesses: He was promoting the interests of the subsidiary he was heading at the expense of the samuel drugs. He was only interested in strengthening his position. Couldnt balance his professional goals with his moral values and ethics

WHAT CAUSED THE CONFLICT IN THE ORGANIZATION?

Joshi realized that marketing required a thorough revamping in order to generate demand for the products. The current director of marketing was retiring, and financial constraints made it difficult to hire the best from the industry. They decided to go for a unusual appointment. Rajesh mishra,who was general manager of sales, was chosen to take charge of the marketing department.

With time Mishra's position strengthened in the organization, joshi gave him increasing autonomy, permitting him to take major decisions related to his job without having to consult his superiors. The Ministry of Health of Indian Government had declared its plan to buy generic drugs in bulk to supply to hospitals in remote area. It was something that could change samuel drugs fortunes overnight. Mishra was given the responsibility to prepare a strong bid on behalf of samuel drugs.

Executive assistant informed her that their company lost a the tender for Drug Supply to Ministry of Health of Indian Government. Eastern Pharmaceuticals Limited( EPL- a 51 percent subsidiary firm of Houston Group bagged the order. Joshi soon realized it was the handiwork of Rajesh Mishra, Head of Marketing at Samuel Drugs and CEO of EPL.

Mishra was promoting the interests of the subsidiary he was heading at the expense of the samuel drugs. He had knowledge about the deal Samuel drugs wants to grasp and taking advantage of this information, he went against the parent company and misused his resources and contacts he came in contact with in Samuel drugs.

DID JOSHIS PREVIOUS EXPERIENCE IN THE GOVT SECTOR HINDER HER UNDERSTANDING OF MISHRA?

In her prior company, everyone worked towards the organisational goal with trust and faith. Therefore she expected the same amount of trust from the employees of the present company. The excessive trustworthiness backfired consequently.

WAS BEING A WOMAN A CONSTRAINT FOR JOSHI IN HANDLING THE SITUATION ?

Dr Amita Joshi , a doctorate in public administration was a non conformist of social norms . She spoke out openly against discrimination against women . This symbolizes her impromptu of inner strength and daunt nature. She had already handled important positions in ministry of health and finance and was also the joint secretary in ministry of chemicals .

Since the organizational structure in government is similar to Samuel Drugs ( bureaucratic ) she might have faced or heard about the similar situations earlier too. She had already succeeded in establishing a positive relationship with customers and independently assessed and addressed the shortcoming of culture in organization . Her approach of consulting all the key stakeholders and addressing their concerns at every decsion point was highly appreciated by everyone in the organisation.

WHAT WERE THE ALTERNATIVES AVAILABLE TO JOSHI?

Marketing director of Samuel Drugs and Manager Director at EPL were the same person- Mishra The CEO should have hired another person and given just one role to Mishra. The company should have invested in an expert instead of the unusual appointment of Mishra and might have achieved better results as an experienced person would not compromised on his ethics for achieving personal growth.

IF YOU WERE JOSHI WHAT WOULD YOU HAVE DONE?

Mr Rajesh Mishra needed to be removed from one of the posts, preferably from the post of Marketing head of Samuel Drugs . This eventually would have reduced his span of control and misuse of information . One of the major reasons for Mishras attitude was higher autonomy and freedom to take decisions without consulting the seniors . Need of Higher centralization and Formalization .

If the extreme steps had to be taken , (or to set an example) he could have been easily fortified from his positions under the code of conduct or breach of information act .