PHARMACEUTICAL MERGER

Pharmaceutical Merger: Who Goes, Who Stays?

Pharmaceutical Merger: Who Goes, Who Stays?

Introduction

In this case study analysis, I am going to discuss the problem associated in the merger of two pharmaceutical companies. This case reflects the major decisions involved in the merger and the impact on those decision on every shareholder. The writer of this case is David Light. This analysis will include the identification of the major problem, background of the problem, the causes of the problem and the possible solution of this case.

Description

This case discusses the merger between DeWaaL Pharmaceuticals and BioHealth Labs. The key people involved in this case study are CEO Steve Lindeel and Karspar van de Velde. The case has got highlighted in the newspapers and press wants to know what is going to be the future of this decision. Both companies have a long history of selling drugs and Steve and Karspar are long lost friends. Initially, it seemed the merger between two companies was fruitful. However, both organizations faced managerial issues, which they planned to implement their decisions (Light, 2001).

Diagnosis of the Problem

Problem statement

Who should stay in the company and who should be fired?

Background of the problem

The key people of Steve Lindeel's company which is DeWaaL Pharmaceuticals are resigning. Steve already has two executive for each available position or slot, and he has to decide, who should stay and who should leave? The stock prices of the company are declining (Light, 2001). Currently 120 employees are working in the company and only 65 are on senior manager position. According to Steve Alison Whitney, who is an experienced employee should stay in the company, and CFO, COO and Head of R&D must not leave should continue to work with DeWaaL Pharmaceuticals. On the other hand the head of human resource department, operation manager and the global marketing manager were selected BioHealth Labs.

Causes of the Problem

The main point of conflict was the fact that there were differences in the management style and decision making of those persons, due to which the stock price of the company is declining. Another problem was that Christian Myers was the head of the human resource department. Therefore, Bruce Bollinger, who was the current HR manager of the company, should be demoted so that Christian Myer can take his position. Steve decided that he should not reduce the salary of Bruce Bollinger so that he does not get de-motivated. Apart from this, employees should be selected on the basis on their knowledge, skills, abilities, IQ, experience and past performance. However, there were serious concerns regarding the fairness of the policy. Christian Myer was taking a lot of time to resolve the issue. It was unclear that who should remain and who should be fired. However, his approach was effective and practical, and Steve was hopeful that he will keep employees with High IQ level because he trusted those employees (Light, 2001).

Symptoms

Merger is not an easy decision. There are several pros and cons associated with the ...