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Pharmaceutical Organization Structure and Functions

Conference Paper · January 2008

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 Pharmaceutical Organization Structure and
Functions
Subhash Chand, Girish Gupta and Bhawna Gera
Abstract- Organisational structure is the bureaucratic set-up
of an institution by which its staff, facilities and other resources are
organised in such a manner as to be most effective in
accomplishing the purpose for which the organisation is
established. A pharmaceutical company as well as its close
relatives, proprietary drugs and toiletries companies are complex
organisations. Under its roof a team of scientists, technicians and
other specialists come together for representing virtually all the
sciences, along with the contribution made by the management
executives, lawyers, accountants, engineers, system analysts and
may other whose abilities and talents maintains the viability of this
unique business enterprise. Current scenario demands for a
different organizational structure for a large scale pharmaceutical
company and for a small scale pharmaceutical company. Earlier
we are having a common structure in which there used to be only
one administrator and one or two departmental heads. But now a
days when the pharmaceutical companies are becoming gigantic a
need for new structure arises. In the new structure a specialist is
needed for every individual job because every job today demands
for specialisation. The new organisational structure gives us the
benefits of specialisation. This structure can be followed by the
companies manufacturing wide variety of products as well as the
company manufacturing single product but distributing widely.
Pharmaceutical marketing departments are concerned with the
process by which medicinal products are made available to
ultimate consumer from their point of origin. Its manager works
with the objective of profit through customer satisfaction.
Keywords- Bureaucracy, Job Profile, Organizational Silos,
Portfolio.
I. INTRODUCTION
A N organizational structure defines how job tasks are
formally divided in to groups and coordinated. The
new rules of operating in today’s global business
environment make structure and design even more critical.
There are five key elements a manager needs to address
when he designs organization’s structure. These are: work
specialization, departmentalization, span of control,
centralization and decentralization.
Work can be performed more efficiently if employees
are allowed to specialize. The essence of work
specialization is that, rather than an entire job being done by
one individual, it is broken down into a number of parts:
In this work, manager first decides how to divide the
overall task into successively smaller jobs. Manager divides
the total activities of the task into smaller set of related
activities .The effect of this decision is to define job in terms
of specialization and responsibility. Although job having
many Criteria’s the most important one is their degree of
specialization.
S. Chand is with the Institute of Pharmaceutical Sciences, Kurukshetra
University, Kurukshetra (corresponding author to provide phone:
098966534650; e-mail: khambra_4u@yahoo.co.in).
G. Gupta is with Institute of Pharmaceutical Sciences, Kurukshetra
University, Kurukshetra, (e-mail: Girish_pharmacist92@rediffmail.com).
B. Gera is with the University School of Management, Kurukshetra
University, Kurukshetra. (e-mail: Bhawnagera28@gmail.com).
After this manager decides the bases by which to group
the individual jobs .This decision is much like any other
classification decision and it can result in groups containing
jobs that are relatively homogeneous (alike).
Then manager decides the appropriate size of group to each
superior. As we have already noted that this decision
involves determining whether spans of control are relatively
narrow or wide.
In the last manager distributes authority among the
jobs. Authority is the right to make decision without
approval by higher manager. All jobs contain some degree
of the right to make decisions within prescribe limit.
What is needed is an integrated plan for each key
customer in the context of the company’s portfolio, rather
than the traditional plan for each sales force team. The
integrated plan should identify the company’s objectives for
the customer, their needs, how to address them and who will
be responsible for doing so this will lead the company to
identify what type of sales people or teams it needs, what
skills they should have, what roles they should play, what
tools they require, and what system will hold it all together
and provide support. Implementing this strategy requires
new processes and technologies for information sharing,
which in turn requires a change in organizational structure
and the breaking down of information silos within the
organization.
II. THE PROBLEM
Change in the pharmaceutical market requires company
to change their approach and business model. In the part,
medical sales forces have mostly called on doctors and other
prescribes to sell their product. This approach is focused on
transactions and on increasing share of voice. Turnover
among sales representatives is often high, making it difficult
to build relationship with the customer. Several
representatives from the same company might be calling on
the same customer to promote different or the same product,
presenting further challenges of coordination.
For the purpose of our study we had chosen a sample of
50 pharmaceutical companies from top 500 pharmaceutical
companies on convenience basis. In our study, we found
that each company is following a different structure (may be
functional or divisional) according to size of marketing
operations and span of control. As our sampling units were
large pharmaceutical companies, we observed a problem
that is faced by every HR manager of these companies and
that is of employee turnover.
As we went in depth of this problem, we found a reason
of this problem. Previously pharmaceutical companies were
used to appoint diploma holders, graduates and master
degree holders in Pharmaceutical Sciences for the job of
Medical Representatives because the job and work demands
for specialization. But the employees were paid less as
compared to their degree demanded for and as compared to
other professionals having the equivalent qualifications but
working in other industries (except pharma industry).
 So a trend came of quitting the job because of work and today.
salary dissatisfaction. As a result, the companies facing this
problem started appointing non-professionals (graduates,
master degree holders in any stream) for this job and this
situation gave birth to the problem of Pharma Marketing Manager

unemployment on the part of the country. With the passage East Zone Sales Manager
of time, today a new problem has arisen that the new sales
personnel were unable to satisfy the queries of doctors. This Medical Representatives

results in the avoidance of Medical Representatives by the

West Zone Sales Manager
doctors. This again discards the marketing plans of the
pharma companies. Medical Representatives

III. THE NEW STRUCTURE North Zone Sales Manager

Above problem can be solved by adopting the new
Medical Representatives
structure that leads to more specialization. In fact every
structure demands for the specialization. But we are South Zone Sales Manager
suggesting a bifurcation in the job of Medical
Representatives. We suggest dividing it into two parts. We Medical Representatives

are calling the two new jobs as MRD i.e. Medical

Representative for Doctors and MRCW i.e. Medical But this structure is giving birth to some problems which we
Representative for Chemists and Wholesalers. have discussed above. So we are propounding a new
A. Below we are showing a common functional structure for the marketing division of a pharmaceutical
structure of a pharmaceutical company.

Information Make & retain the

demand (Which customer (How to
produce better
information is facilities to the
CEO (Pharmaceutical needed?) customer?)

Finance Manager

Purchasing Manager
Connecting Marketing
Research & Development organization and the process (How
customer (What the
Manager customer demands the company
Production Manager for?) will interact to

Marketing Manager
Human Resource Manager
B. Following to this, we are showing a common
functional-geographical structure of marketing division,
which is followed by any big pharmaceutical company
company. This new structure will be like this:
C. Now in reader’s mind some questions will arise like:
Why two separate divisions for marketing of products
to Doctors and marketing to Retailers/Wholesalers?
And if these exist who will be recruited to these two jobs?
Whether the persons with same educational background will
do both the jobs or the persons with different backgrounds
will be needed?

D. The answer to these questions lies in the following

text:
As we have discussed earlier there should be two
Marketing separate divisions because it facilitates the Marketing
Function. Different professionals will be needed for these
East
two divisions. Their educational level will be different. For
Zone
Medical Representatives for Medical Representatives for
MRD’s job the person appointed must possess a degree or
Doctors Chemists & Wholesalers higher in pharmaceutical sciences because their job profile
West demands for pharmaceutical professionals. And they will be
Zone paid higher because of their expertise and higher investment
Medical Representatives for Medical Representatives for on education. For the MRCW’s job the persons appointed
Doctors Chemists & Wholesalers will be diploma holders in pharmaceutical sciences and they
North will be paid lesser than the above professionals. After the
Zone study we have analysed that the above structure will
Medical Representatives for Medical Representatives for
definitely solve the problem of employee turnover on the
Doctors Chemists & Wholesalers
part of the pharmaceutical company and pharma educated
South
Zone unemployment on the part of the country.
Medical Representatives for Medical Representatives for
Doctors Chemists & Wholesalers
 IV. LAST BUT NOT THE LEAST
Changes in business processes and organization are
necessary to meet customer needs. When focusing on the
customer and the intended interactions with them, many
companies will find that their existing processes and internal
structures are ill-equipped to put the new strategy into
practice. Organizational silos may prevent the transfer of
information, create bureaucracy and lead to internal
conflicts (over responsibility or authority) that get in the
way of engaging with the customer. Internal business
processes need to be developed that successfully implement
the selected strategy, and an organizational structure needs
to be created in which these can be implemented efficiently.
Information needs to be gathered in a comprehensive and
systematic way, capturing what the company needs to know
about its customers and its interactions with them. The
organization should be aligned around the customers, with
all other functions and processes supporting this structure.

V. CONCLUSION
An organizational structure, like any plan, must
reflect its environment. Just as the premises of a plan may
be economic, political, social or ethical, so may be those of
an organizational structure. It must be designed to work and
to help people gain objectives efficiently in a changing
future. In this sense, a workable organizational structure can
never be static. There is no single organizational structure
that works best in all kinds of situations. An effective
organizational structure depends upon the situation. The
present situation demands for the modification in the old
structure that we have discussed.

REFERENCES
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Management Today Principle and Pracctice, 10th ed., TataMcGraw-
Hill, 2007, pp. 160-175.
[2]. M.J. Ivancevich, M.T. Mattesen, “Introduction to Organizational
Behavior,” in Organizational Behavior and Management, 7th ed.,
TataMcGraw-Hill, 2005, pp. 19-20.
[3]. P.S. Robbins, S. Sangs, “Foundation of Organizational Structure,” in
Organizational Behavior, 12th ed., Prentice Hall of India, 2005, pp.
538-540.
[4]. P.C. Tripathi, P.N. Reddy, “Organization,” in Principle of
Management, 3rd ed., TataMcGraw-Hill, 2007, pp. 109-111.
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