Dr.

Amita Joshi at Samuel drugs limited

Name- Pankaj Tiwari

20-07-2019
People and The Organisation
 EXECUTIVE SUMMARY
After Independence, various state entities were incorporated in India with objective to free the
country from dependence of imports and to provide medicines at affordable prices. But this
policy of promoting public sector organisation is ineffective in several industries, and
pharmaceutical industry was amongst the worst hit. This leads to promotion of MSME in
pharmaceutical industries and various tax breaks were introduced.

Samuel drugs was founded by Samuel Houston, started its operation on August 15, 1982. In
1989, Samuel drugs acquired controlling stakes in three state owned corporations which were
declared non-profitable units for past 15-20 years. Samuel drugs restructured the Management
of the three subsidiaries and appointed its veteran expert in key positions, these organisation
became profitable within 3 years of takeover. Under the leadership of its founder and CEO,
Samuel drugs grew to the biggest player amongst the MSMEs in 1994. In 1996, Huston
stepdown from the CEO position but retained the position of chairman of the board.
Dr. J.J. Mehta, a stalwart of Samuel drugs, was appointed CEO. His vision had become limited
to bottom line growth. He was doubtful about the growth possibilities in the global generic drug
market. Consequently, the organisation began to stagnate. The growth percent decline by 38%.
In 2003, Mehta announced his resignation because of ongoing health issues. The board decided
to appoint interim CEO as Rohin Das. Although the board had identified a potential candidate
for the position of CEO, but the final appointment was delayed more than six months due to
certain disagreements amongst the board members.

In 2005, the company reported its first-ever annual loss of INR 20 million. As a result of poor
financial performance, the board appointed Dr. Amita Joshi as a full-time CEO. she find the
problems of the organisation were its huge employee cost, poor marketing and poor bottom line
performance. She sketch out plan to resolve immediate problems and devise long-term growth
strategies. She cut manpower by 40%. Production went up to INR 2 billion and company
reported an operating profit of INR 360 million in year 2008-2009. The company started
exporting to African countries. In 2009, Samuel drugs was the largest MSME pharmaceutical
companies in India. The top and bottom line of organisation started growing simultaneously.
Rajesh Mishra, an unusual appointment. Who was general manager of sales at Samuel Drugs,
was chosen to take charge of the entire marketing department. His appointment was
controversial because the position of functional heads were awarded only to those who has
completed at least four years as vice-president. During the first two months, Samuel Drugs got
several orders that helped meet its working capital needs. Joshi gave him increasing autonomy,
permitted him to take major decisions related to his job without having consult to his superior.

In the meanwhile, When an extensive review of the subsidiaries was carried out to assess their
potential for revival, EPL(Eastern Pharmaceuticals Limited) emerged as one unit whose future
seemed promising. When the committee began to review the possible candidate for the position
of Managing Director of EPL, Joshi couldn’t think of anyone better candidate than Mishra.
Mishra was offered the post in addition to his current job, for temporary period of one year. EPL
also began to do well, and had become the largest distributor of generic drugs manufactured by
Samuel Drugs.
The government of India had invited tender form drug manufacturing companies and, in this
process, suppliers under the MSME category had been given preference. Joshi knew that it
was something that could change Samuel Drugs’ fortunes overnight and decided to try to
procure a major order for her organization. She called upon Mishra to take all necessary
actions to prepare a strong bid on behalf of Samuel Drugs. As the director of Samuel Drugs,
Mishra had access to all the contacts that Samuel Drugs had maintained over the years and
he had mobilized them to promote his own interests. And EPL had got an order 10 times that
of Samuel Drugs. It become clear to Joshi that all these days Mishra had been promoting the
interests of the organisation that he headed at the expense of Samuel Drugs.
 FINDINGS
• Management- As in this case, Samuel drugs acquired controlling stakes in three state own
corporations which were non-profitable for past 15-20 years and restructured the management
and appointed its veteran expert in key positions and within 3 years of takeover they turn into
profitable units. I find management can revive an organisation.

• Succession Planning- As in this case, there was nothing planned before that who will lead the
organisation and its hit the organisation to its lowest. Where the organisation occur the loss
for the very first time.

• Vision- It’s very important to have a clear vision of your organisation, as in this case the
vision of the organisation was not cleared by Dr. J.J. Mehta and this lead to the 38% decline
in growth rate of the organisation.

• Top and Bottom line- Both are equally important, it is of no use to look after any of one only.
• Planning and Goals - It is very important to sketch out the plans to reach the goals, as in this case
when Dr. Joshi became the CEO of the Samuel drugs she immediately sketch out the immediate
problems and devise long term growth strategies.

• Principal-Agent Problem – As in this case there is a conflict of interest between the management
and stakeholder regarding the selection in the organisation.

• Organisation Climate and Culture – These two are very important component in any organisation
and play a vital role in employee motivation, perception, assumption, value and artifact.

• Behavioural Bias – It’s a limitation to Organisation behaviour, and its cause dependence,
discontentment, indiscipline and irresponsibility. As in this case Dr. Joshi is dependent on Mishra
and Mishra was discontent and irresponsible.

• Individual Characteristic – Every individual has distinguish qualities and traits and there are
positive and negative characteristic. As in this case Mishra dishonesty is a negative characteristic
of him.
Thank You