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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
MSME’s 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 company’s 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 MSME’s
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 company’s 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.
Joshi’s 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.
Couldn’t 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 JOSHI’S 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 Drug’s ( 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 Mishra’s 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 .