Managing Change in Organisations

Beximco Pharmaceuticals Ltd (BPL) is a leading manufacturer of pharmaceuticals products in Bangladesh and the company is the largest exporter of pharmaceuticals in the country and all of the facilities of the company are certified by global regulatory bodies of Australia, Gulf nations, Brazil among others (Beximco, 2010). The company has more than 3,000 employees with the same moral and social responsibilities the company values most.

The company was integrated in 1976 and started its operation in 1980 with the manufacturing and marketing of products of Bayer AG, Germany and Upjohn Inc., USA under licensing arrangements (Beximco, 2010). The company started its manufacturing in 1983 and exported its operation in 1992. In addition, the company is the largest producer of Metered Dose Inhalers (MDIs) in the country (Beximco, 2010). As a public limited company, its shares are actively traded in Dhaka Stock Exchange and Chittagong Stock Exchange, and Beximco Pharma has the unique distinction of being the only company in the country listed on AIM of London Stock Exchange.

Moreover, the company has some overseas offices and associates in Australia, Bhutan, Cambodia, Chile, Ghana, Hong Kong, Indonesia, Jordan, Kenya, Kuwait, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Saudi Arabia, Singapore, Sri Lanka, Vietnam and Yemen. Furthermore, the company has the authorised capital 9,100 million Taka and paid up capital 1,824 million Taka. In addition, the company has around 68,000 shareholders (Beximco, 2010). Beximco pharma earned profit of 311, 024, 000 taka in the year 2009 while it was 151, 445, 000 taka in the last year and the growth was around 105%. The company was not affected by recent recession because of its changing business policy in the country.

a) Identify and Discuss the background to change that exists in today’s economy. During the recent worldwide recession in economy each and every country in the world was affected. Bangladesh is not apart from this recession. Asian Development Bank projected Bangladesh’s GDP growth at 5.2 percent for 2010, fearing continuous fallout from the global economic turmoil (Daily Star, 2009). In addition, the ADB Dhaka office revealed that ‘the effects of global financial crisis on Bangladesh economy in 2010 are likely to be deeper than in 2009’ (Daily Star, 2009).

Moreover, on industrial growth in Bangladesh, it said adverse effects of the global economic slowdown are expected to dampen export sector growth in 2010, which, in turn, will hit domestic industrial production. It also said the deficiency in power, gas and other basic infrastructure are the major supply-side bottlenecks of growth in industry, expectedly 6 percent in the year 2010 (Daily Star, 2009). According to International Monetary Fund (2008) in Forum Magazine, the global economic environment is becoming worse day by day and all forecasters project a slowdown in the Bangladeshi economy in 2008 and a recovery in 2009, with inflation expected to remain high throughout the forecast period (Rahman, 2008).

Rahman (2008) also added that ADB revealed that the slowdown in economic growth in the 2008 financial year ‘is attributed to the erosion of business confidence and the effects of the natural disasters’. The projected recovery in 2009 rests on the assumptions that business confidence will return and there will be substantial external assistance to mitigate the effects of the natural disasters.

ADB forecasted that there are three major channels through which a worse-than-expected global slowdown could affect Bangladesh: investment, exports, and remittances. As US recession is worse than anticipated, or if one or more of the major European countries enter a recession, exports will suffer. A sharp slowdown in exports will have additional impacts on investment, employment, and household income. However, after considering the above major issues, the Bangladeshi companies need to change their business policy to continue their business profitably.

b) Develop systems to involve appropriate stakeholders in the introduction of change. There are two types of stakeholders of Beximco Pharmaceuticals Ltd. These are internal stakeholders and external stakeholders. Internal Stakeholders External Stakeholders Among these internal and external stakeholders, the following stakeholders were directly and indirectly related with the change process of Beximco:

Suppliers are very important and powerful stakeholder. Suppliers helped the company by providing raw materials for medicine on credit and sometimes with less cost. Additionally, Beximco pharma introduced some inexpensive medicine products in the market during the recession and cut the price of some existing products. Beximco pharma continuously pressurised and finally managed its suppliers to introduce the inexpensive materials for the existing medicines so that they can minimise the prices of the products. Besides, suppliers provided the delivery on time so that Beximco can operate its business smoothly.

Customers Customers are also involved in Beximco pharma’ s change process. If there was no customer, the company change process would not be successful. Beximco temporarily stopped the production of some expensive medicines for first two three months from their list and customers was positive. Furthermore, Beximco newly introduced substitute medicines were highly accepted by customers and thus the change process of Beximco Pharmaceuticals Ltd became successful.

According to Mullins ‘most planned organisational change is triggered by the need to new challenges or opportunities presented by the external environment, or in anticipation of the need to cope with potential future problems, for example, intended government legislation, a new product development by a major competitor or further technological advances. Planned change represents an intentional attempt to improve, in some important way, the operational effectiveness of the organisation’.

Moreover, organisational change is necessary to match with the current situation of the business environment and economy. For example, during the recent recession all over the world, most of the large companies implemented change to match with the economy and retain the previous sales level. Besides, the change of Tesco, Proctor ; Gamble (P;G), Marks ; Spencer (M;S) and McDonalds’s business policy are mentionable.

 

‘Established companies should not undertake business-model innovation lightly. They can often create new products that disrupt competitors without fundamentally changing their own business model. Proctor ; Gamble, for example, developed a number of ‘disruptive market innovations’ with such products as the swiffer disposable mop and duster and Febreze, a new kind of air freshner. Both innovations built on P;G’s existing business model and its established dominance in household consumables’ (Johnson et al., 2008).