Cultural Challenges Of Integration Harvard Case Solution & Analysis

Introduction

The case discusses the acquisition of the two pharmaceutical companies Daiichi Sankyo Ltd, an innovator drug company from Japan acquiring Ranbaxy Laboratories Ltd, a generic company of India. Innovator drug companies are referred to as those companies that develop and manufacture a drug through a new combination, or develop an innovative product and gain the right of patent for its medicine. However, generic drug companies are referred as those companies who simply wait for the patent to expire and then develop similar products under a different brand name. Since there has been a shift in trend for pharmaceutical industry players due to the existence of many generic companies which have led to an increase of copying of medicinal formula and developing their own brands shortly after the expire of their patents. The innovative drug companies have been facing huge threats regarding their future as innovative drug companies have limited benefits which are gained in developing first hand medicines. Therefore, the trend started to shift towards innovative drug companies to enter generic drug companies and market emerging economies.

The case discusses the problems faced by Daiichi Sankyo Ltd when it acquired Ranbaxy Laboratory Ltd in order to enter the Indian market. Since the merging of the two companies, Ranbaxy faced number of problems regarding the entrance in the US market and also within the top executives of the company as there were growing concerns for management issues between the two companies. The cultural problems had led to a decrease in revenues and as well as fall in the share price of the Indian Ranbaxy Laboratories Ltd. The company in the industry focused upon implementing a hybrid model that integrated well with the innovative drug company and generic drug company. The case embarks on the issues of implementing a change in the management program which focuses on integrating the hybrid business model so that companies may compete globally. Furthermore, the paper also addresses key issues of cultural diversity that shall be faced by Daiichi Laboratories Ltd in an acquisition with Ranbaxy Laboratories Ltd.

Question 1: Using Hofestede’s Dimensions of Culture compare and discuss Japan and India’s culture (use latest dimensions (6) . Relate these dimensions to the impact on the merger integration process and specifically, comment on impact on corporate/managerial values.

Answer 1: Hofestede Cultural Dimension Model has been designed by Geert Hofestede in order to examine the cross cultural dimensions (Ting-Toomy, 2012). The model comprises of 6 dimensions which have been discussed below:

Power Distance Index (PDI)

This dimension entails to determining the degree to which the expectations and the acceptance of the lower members of the organization to whom the power is distributed unequally. Therefore, PDI pertains to the equalities within an organization which is performed by the higher power member while measuring their behavior and communication patterns with the lower member of the organization. PDI for Daiichi Sankyo is considered at a higher side than Ranbaxy because many top management managers of Ranbaxy left the company due to the differences in the way of their thinking in running the business which parted their ways.

Individualism Versace Collectivism (IDV)

The concept of individualism focuses on the individual rights and goals where an individual considers his own personal achievements over the organization’s goals. However, the concept of collectivism is opposite of individualism where the goals of organization are more important while working in groups and combined effort is appreciated. According to the case, it seems that Daiichi Sankyo is only considered about its own company regardless of the fact of a collectivism approach. The company did not admire the cultural difference between the organizations which is the reason why many of the top management had to leave the organization due to the different approach. The company did not want to accept ideas from Ranbaxy and always wanted to enforce their ideas on others.

Masculinity Versace Feminity (MAS)

This cultural dimension discusses emphasis on the distinct roles of males and females in different cultural settings. While considering the Indian and Japanese culture, the Indian women mainly believe on improving the quality of their life, whereas, Japanese women are more focused towards being competitive in every race of their life..............................

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