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Case Analysis: Biocon Ltd.:Building A Biotech Powerhouse

2750 words - 11 pages

1.Assumptions•Organizational Culture: According to Mazumdar-Shaw, managing infinite risk has not been part of the traditional mindset at Biocon. In this case, it is difficult for Biocon to make the necessary changes smoothly and in a sustainable manner without the right organizational culture and values being adopted.•Resources: Moving from a competency in enzyme production to drug discovery requires expenditures of large amounts of money. As mentioned in the case, "there would be some questions about whether the company was spreading its resources too thinly across different stages in different sectors." Given the limited financial resources available, Biocon is in a dilemma over ...view middle of the document...

Nevertheless, there are also considerable pricing pressures from low-cost Chinese competitors.•The regulatory environment is changing, and a process patent is no longer protected under the relevant regulations.•There is a very low probability (0.002) of clinical trials reaching the commercial stage.The Primary Problem(s) The great potential growth for "designer drugs" in the future has created an excellent market opportunity for Biocon. However, Biocon is under both internal and external pressure. Internally, the current culture at Biocon is averse to risk-taking. For example, senior managers take no active interest in the vision and provide little support for its implementation. Externally, increased generics market competition and low prices have made it hard for Biocon to secure its revenue through the generics route alone. In addition, the changing market and regulatory environment has made investment in drug discovery far riskier. Biocon is facing problems in selecting its corporate and international strategies so that it can survive fierce competition and achieve its corporate goals.3.ImplicationsImplications for the Organization:•Biocon keeps using a de-risked model. The problem that results is that the current organizational culture will not meet the expected operational requirements.•The organizational culture and values play a fundamental and highly significant role in supporting the organization's goals. If the culture and values are positive and helpful, they can help to motivate staff, promote excellence in job performance, encourage initiative and innovation, provide the foundations for a successful and healthy organization, or at the very least prevent the employees from becoming dissatisfied. In Biocon's case, it is apparent that its conservative culture is no longer suitable for the current organization and that maintaining the current culture in such an environment is not feasible.•The current organizational structure does not support a process of continuous organizational learning and evolution, and professional development for its managers and employees. As a result, the board of directors is reluctant to move forward and make any potentially profitable innovations. This is extremely damaging for Biocon's long-run development.•Under the current conservative culture, the spirit of the message regarding the vision is unable to be effectively communicated throughout the organization. Senior managers at Biocon prefer the stable status quo and dislike communicating new concepts.Implications for the Personnel:•It seems that the board of directors at Biocon is not as active as Mazumdar-Shaw in promoting the vision of expanding the company's drug discovery competency. They are anxious to realize the vision, but allow for no action that could lead to harm to the financial viability of Biocon. The corollary of this is that no actions are taken to significantly help Biocon become a world-class drug...

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