Free Custom «GlaxoSmithKline Strategic Business Context» Sample Essay

«GlaxoSmithKline Strategic Business Context»

Introduction

GlaxoSmithKline is an international business organisation that specialises in the pharmaceutical industry with a reputation in innovative research, product development, and biotechnology solutions. The organisation has its headquarters in the UK. Moreover, it operates in more than 100 countries across the globe, employing around 100,000 individuals in various capacities (The Telegraph 2016). Therefore, it can be expected that the company’s HR component is rather complex due to its size and diversified market context. Human resource management entails more than recruiting, firing, and compensating the employees. The role of HR within an organisation like GSK is largely diversified considering that the company’s human capital has paramount significance in the performance of the organisation. Thus, GSK is expected to invest significantly in their HR, while also aligning the HR strategy with the overall business mission for relevance and effectiveness within their specific corporate contexts. On the one hand, the aspect may seem to be an easy task considering that the company follows the overall business strategy to guide the HR department along with all the other departments. On the other hand, GSK is a very large and diverse corporation. Hence, the organisation operates numerous large departments with varying roles and goals. The strategic management component of a business is aimed at streamlining the goals and roles to follow the same strategic direction. The key focus in the current paper is to use HRM to analyse GlaxoSmithKline’s strategic business context. In the analysis, the paper examines management challenges confounding GSK and makes recommendations on how the pharmaceutical manufacture industry can overcome the challenge.

Responsible Management and HR in GSK’s Context

Responsible management revolves around the concepts of sustainability, responsibility and ethics as applicable within organisational contexts. Sustainability is defined as a concept that involves the ability to achieve the current goals of the organisation without compromising the organisation in the future (Harzing & Pinnington 2010). A sustainable company is effective in its existence both in the present and in the future. For GSK, sustainability entails being able to operate effectively now and in the future. Thus, the company’s longevity in the industry is equally important as the current performance in the global pharmaceutical market (Porter & Kramer 2011). A responsibly managed organisation considers the future as a part of the sustainability concept. The approach implies working towards social, economic, and environmental sustainability in a balanced approach for effectiveness within the organisation. Social sustainability focuses on the impact of the society on the organisation and how it can be managed for the best results. Environmental sustainability is the way the organisation influences the environment and potential mitigation or minimisation strategies for the sake of the future generations (Yi & Ricks 2012). Organisations that fail to protect the environment in their operational policies and business processes often have a negative image in the industry. The public perception limits their market potential, while also putting the future success at risk. Economic sustainability refers to the company’s impact on the economy and the economy’s impact on the organisation. Companies have to ensure that they can withstand the prevailing economic circumstances during hard times, while also contributing positively to the economy both in the long term and short term future.

On the other hand, responsibility focuses on how the company interacts with its various stakeholders. Business organisations have to maintain a good relationship with all stakeholders for a smooth operational environment internally and externally. The factor explains the need for various operational strategies aimed at engaging and appeasing the stakeholders, especially employees, governments, shareholders, interest groups, and the society. In most cases, the company’s values need to be aligned with the stakeholders’ interests to avoid conflict and encourage collaboration in the possible contexts. Companies that face problems with their stakeholders tend to spend excessive time resolving the conflicts rather than focusing on the organisation’s growth and development. Thus, avoiding the conflicts through application of an effective strategy is always a better option. It may be impossible to align the organisational goals and objectives with every group of stakeholders considering that there are different parties involved, each with a unique focus. For example, shareholders may be solely focused on maximising their investment in the organisation, while the employees aim to proceed with their careers and probably make more money. Without finding a common ground or making concessions in order to accommodate the needs of a particular group of shareholders, conflicts are likely to arise and create losses that challenge the existence of the organisation (Academy of International Business, Ibeh & Davies 2009). Thus, it follows that each organisation should be able to find a common ground that allows for a win-win situation for all stakeholders.

Ethics in the corporate context refer to a framework guiding the operations of the organisation in terms of moral limitations. Each company is defined by its ethical environment, since it determines the reputation in the industry. Companies generally have to ensure that they have a working moral and ethical framework that safeguards their reputation and protect their position in business. However, in order to keep the organisation in line, there is a need to formulate the right policies and operational regulations that will guide and restrict the employees within the company. In the case of GSK, it must be appreciated that the employees act on behalf of the organisation; thus, any of their moral and ethical representations reflect on the corporation worldwide.

From a HR perspective, the abovementioned components of responsible management require a careful and effective approach in terms of how the company recruits, trains, and rewards employees. In order to understand the situation of responsible management at GSK, it is critical to examine how the company’s HR approach is aligned to the goals and objectives of responsible management in the pharmaceutical industry within a global context. At GSK, one of the current goals is to simplify the operational process so as to make it more effective and efficient without compromising the quality of the products or services offered by the organisation. The approach entails restructuring the organisation’s business processes in the way for each department to be fully functional and efficient. The main benefit of a simplified operational process would be the cheaper cost of running the business. Moreover, the employees will also have the opportunity to work in positions that require their skills and talents. Also, the shareholders are assured of optimal returns for their investments. The customers can also be assured of good quality products and services at all times. However, in order to achieve the goal, the company has to redefine its HR approach and strategy with the aim of creating a new workforce. The human resources have to be sensitive to the concerns of the organisation with respect to the identified components of their responsible management approach.

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The Challenge

GSK currently operates in a global context with offices in over 100 countries in various parts of the world. With close to 100,000 employees and the diversity of the cultures in operations, a significant challenge for GSK relates to running a seamless HRM strategy that is aligned to the overall RM strategy (The Telegraph 2016). According to Hofstede’s cultural dimensions, organisations generally require to consider the uniqueness of the cultural environments, within which they operate. The methodology enables the businesses to be relevant and successful, as they blend in with the masses and appeal to the new market rather than exerting or experiencing a culture shock. Therefore, in each individual culture, there is a need for the corporation to restructure the organisational practices in order to stay relevant and effective within the respective cultural environment. However, it becomes rather difficult to exercise consistency, especially with respect to the company’s HR strategy. Each new market requires a specific HR approach as dictated by its cultural context. Currently, the company’s operations in China are significantly different from the same in the US. The case is primarily apparent because the company has not been able to reconcile the Chinese cultural dimensions with the organisational goals in a way that enables the employees to work effectively within the set organisational performance parameters without a compromise. So far, the compromise corresponded to the quality of service received by the Chinese customers (Cavusgil, Knight & Riesenberger 2012). For an international business, the general expectation is that there will be some level of consistency across the borders in terms of core values, company policies, and practices. At GSK, the unification has been very difficult to achieve, and the company’s operations are rather inconsistent on the international arena. With over 100 different cultures to blend with, the state of GSK’s organisational culture is understandable and yet ineffective in a business context. Thus, the organisation requires a more accommodating and yet definitive HR approach to be applied across the national borders.

Recommendations

An organization as large as GSK is likely to face numerous challenges related to consistency in organisational culture and policies, especially owing to the cultural differences in the countries of operations. In order to ensure that the company stays on the right track on all fronts, GSK has to embrace RHRM and IHRM as relevant to the specific contexts, within which they are operating.

International Human Resource Management (IHRM)

International HRM is a HR approach that is useful for organisations that have to operate in a variety of markets across the world. Unlike domestic HRM, international HRM embraces the differences among the employees in the various locations and enables the company to retain control over the recruitment, training, development, performance management, and compensation of the employees regardless of where they are in terms of geographic location (Lawler, Benson & McDermott 2012). The approach means that the company’s HR practices are centralised with a uniform consideration for the cultural differences within the markets where the employees are being sent to work. The key advantage of IHRM is that it enables the company to consider the relevant issues affecting their employees and resolve them from a central point, thus enabling the adjustment of organisational strategies as required (Hill 2014). For example, if the employees being sent to work in war-torn country are unable to complete the normal working hours, the company needs to evaluate their performance with relevance to their working conditions. At the same time, the company still needs to understand the severity of the situation within the local market, realising a need for a general perspective in the performance evaluation and management (Merchant & Van 2012). The assumption means that the organisation needs to make adjustments from the top of the hierarchy in order to handle the situation on the ground effectively. Having a seamless coordination in the company’s HR approach will ensure that the departments are informed about the challenges faced in one region, allowing the company to pool resources and solve the problem while avoiding losses or mitigating the consequences. As a management concept, IHRM simply enables the organisation to align their HR approach across the board in order to ensure that the human capital management concept is effective to keep the business sustainable even in the international market. Hiring employees with the knowledge of the organisational needs within the global context is highly beneficial as they will not be derailed by smaller departmental goals (Bucker & Poutsma 2010; Baumuller 2006). The clarity, with which IHRM organises employees, is significant in an international context as it eliminates the inconsistencies that cause discrepancies in the operations by hindering the strategic management component at GSK (Festing, Budhwar, Wayne, Dowling & Scullion 2013). Currently, GSK majors in domestic HRM, based on the concept of cultural dimensions. The methodology may work effectively owing to the amount of cultural diversity in the organisation. However, it creates significant number of disconnects within the organisation. For example, the Chinese recruitment and training policies do not blend with the approaches used in GSK’s America. The discrepancy challenges the company’s ability to transfer employees from one region to another without requiring some induction training. IHRM would ensure that the company’s employees can work effectively in any branch within the organisation, since the basic training is similar and HR approach is the same across the borders. As a result, the need for training would be limited to the cultural aspect of the transfer as the employees may require help settling in.

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Responsible Human Resource Management (RHRM)

Responsible HRM is all about aligning the organisation’s practices with the goals and aspirations. In the GSK case, it must first be appreciated that the current HRM situation has limited effectiveness. GSK needs to operate effectively across the national borders without having to worry about the cultural differences. Therefore, GSK will have to incorporate RHRM into their management practice with a special focus on talent and performance management (Tulder & Zwart 2006).

Currently, GSK is has about 100,000 employees. In order to capitalise on the human talent, the company must consider placing the appropriate people in the right positions in the organisations. The appropriate skills in the job placements ensure that the company and employees both work for the mutual benefit. The above decision will lower operational costs while maximising productivity and increasing organisational performance sustainably (Browaeys & Price 2015). To enforce talent management, the company will first have to define the roles and responsibilities of the employees. The approach implies conducting job evaluations to define relevant detailed job descriptions to guide the employees through their responsibilities within the organisation (Brewster, Sparrow, Vernon & Houldsworth 2011). The company has many professional departments that have to be evaluated for crafting the definitive job descriptions before assigning the employees based on their competencies (Neelankavil & Rai 2014). The process is similar to recruitment and selection, except that the employees continue working in their current positions as the job evaluations take place (Porter 2008). The approach is actually a practical solution that enables the company to work more effectively and in a cost-efficient manner, where the right people handle the corresponding tasks. Moreover, the strategy does not have many limitations considering that the organisation already employs the most talented employees in the pharmaceutical industry (Shenkar & Luo 2008). Thus, the talent management component is an additional exercise on an already existing and relatively effective HR strategy. Restructuring can be expected to be less costly in terms of time and resources compared to creating a new workforce.

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For an international organisation, performance management is a complicated process that involves 100,000 interviews with employees in GSK. However, it must be appreciated that the offered performance management strategy may be mandatory for the large organisation. In line with the RHRM concept, it is prudent for the company to measure key performance indicators that are relevant to the corporate goals and objectives. First, GSK is looking to be sustainable within the global pharmaceutical market. The employees need to be evaluated based on their contribution towards the common goal. The assessment approach may include the number of accounts the marketing team is able to score, or the number of suppliers the procurement team closes an account with, or even the number of distributors that are comfortable doing business with the organisation (Foot & Hook 2008). The selected approach depends on the department.

The main idea in the case of GSK is to focus on the market aspects that are actually related to the employees and find a way to improve the employee’s efforts (Kew, Stredwick & Chartered Institute of Personnel and Development 2005). When the marketing team is encouraged to increase sales in a given market, they tend to work harder thus yielding impressive results. Moreover, when employees know exactly the organisational goals, they are more likely to accomplish the tasks. For example, At GSK, making sales is just as important as making innovative product developments. Therefore, the company should not only focus on the sales volumes, but rather on formulating practical solutions that the customers need. Thus, the organisation’s best and most practical strategy is to evaluate the performance of the employees on the international arena with respect to the individual requirements, based on the customer needs (Deresky 2014). Accessibility, accountability, sustainability, and awareness are particularly important goals for the pharmaceutical organisation in the international market.

Conclusion

The first major component of strategic business operations for an international organisation includes the seamless management of its various components with a centralised policy followed by all the departments in the organisation. From an HR perspective, the greatest challenge at GSK is the inconsistency the company has to account for with while operating in the international market. Working in many culturally different countries implies that the company has to keep modifying its HR approach to suit the cultural dimensions of the individual country. The approach limits the effectiveness of the organisation owing to the inconsistency and inefficiency of the operations. In order to address the challenge in a practical and effective manner, the company needs to centralise its HRM under the concept of IHRM, allowing the headquarters to take responsibility for all aspects of HR management in the organisation, starting from recruitment and selection, training and development, talent management, compensation, and employee relations. Formulating overall policies to guide the regional departments will ensure that the company continues to work towards the same set goals and objectives regardless of the unique underlying circumstances in each geographical location. Finally, maintaining a clear corporate picture assists the organisation to achieve their future goals.

 

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