Faculty of Management Technology

German University in Cairo

HROB 712 Change Management

Final Project Report

Company: Al Kahira Pharmaceuticals & Chemical Industries

Submitted by:
Mariam Abdelaleem 46-0339(T1)
Kareen Adel 46-573 (T1)
Nabila Yasser 46-7920 (T2)
Nouran Ahmed 46-6282 (T1)
Mostafa Aboulaban 46-1411 (T1)
Laila El Mofty 46-0723 (T1)

TA: Miss Amira Mirghani

Course Instructor: Dr. Ahmed Amin

Date of submission: 30th of December, 2021

1. Introduction

Al Kahira Pharmaceuticals & Chemical Industries was established in 1962. Ever since then, it’s
been one of the largest pharmaceutical companies in the Middle East. Its scientific office is
located in Garden City, Cairo - it also has several branches located in Shobra, Bahary,
Alexandria, and Assiut. They provide a wide range of medicinal drugs and some of the most
popular ones are Brufen, Prisoline Eye Drops, and Proximol. Recently, they’ve been developing
various ways to enhance their presence digitally that will be discussed within the range of this
report.

2. Company Profile

2.1 Organizational Structure

The organizational structure is a vertical type where decision making is centralized and formal
reporting relationships exist. The hierarchy is made up of 4 levels that are comprised of the
chairman & managing officer within the first level, head of production sector, head of
commercial sector, head of export sector, and head of financial sector, the third level is made up
of head of research and oversight sector, head of administrative affairs and HR sector, head of
planning sector, head of procurement and stores sector, and the fourth level is made up of head of
legal affairs sector, head of internal audit and QA sector and head of engineering sector.

2.2 Organization Culture

It has an individualistic culture, that is customer focused, values integrity, and values continuous
improvement, research, and development.

2.3 Organization Strategy

2.3.1 Mission

“We are committed to becoming a significant leading pharmaceutical local and regional player
through innovation, quality, and competence to continuously make a difference.”

2.3.2 Vision

To grow its business through the supply of high quality medicine to the healthcare market while
maintaining sustainable growth, innovative solutions, and ethical responsibilities, their basic task
is to enable people to lead a healthy, and good quality of life.

2.3.3 Objectives (with categories)

The social impact within the context of the company is centered around improving and aiding in
helping people through their medicine and providing better healthcare. Their constituents are
made up of the general public all over Egypt due to their various branches who are in need of
medicinal products. Their internal operations are centered around constant research and
development of their products and prospective ones. Their financial perspective is to develop
diverse medicinal products that serve various purposes and are affordable while maintaining high
quality standards. Organizational capacity can be attributed to their strategic leadership, program
and process management, networking and linkages.

2.3.4 Competitive strategy (Porter generic strategies)

Al Kahira Pharmaceuticals try to make the most out of cost leadership and differentiation as it
targets a broad market. In terms of cost leadership, Al Kahira Pharmaceuticals offers medicine
that is affordable while maintaining high quality. In terms of differentiation, Al Kahira
Pharmaceuticals, are recently in the midst of releasing medicine to help in treating COVID-19 to
be widely available everywhere.
3. External Environment

3.1 Economic Environment

3.1.1 Unemployment

Unemployment rates fluctuate over the years. After 2011 and the Arab Spring rates increased and
stayed high for a while then decreased 2018 then increased again in 2020 at 10.45%

Stubborn high unemployment rates in Egypt could be due to issues that educated youth face
when applying for their first job as well as the under-employment of workers in formal sectors
(Hassan & Sassanpour, 2008). As opposed to employment in informal sectors who lack legal
recognition such as domestic work and street vendors.

3.1.2 Poverty
According to CAPMAS, the poverty rate in the fiscal year 2017/2018 was 32.5% while in
2019/2020 it was 29.7%. Which means it fell by 2.8 percent. This decrease could be attributed to
the state’s focus on developing the social aspects which was done through economic reforms.

3.2 Government
3.2.1 Regulations & Legislations

Back in the day they followed the Act 185 as they were a business sector while now they fall
under the Act 159 as they are a contributing sector

3.2.2 Tax Laws

As they are a government owned organisation, therefore, all tax laws that apply in Egypt are
applied to the company.

3.3 Socio Cultural impact

3.3.1 Corruption
 source: Transparency International

The Corruption Index in Egypt decreased to 33 Points in 2020 from 35 Points in 2019 and 2018.

The company has central auditing which limits corruption.

3.3.2 Quality of Life

According to the state information service, in the Arab world, Egypt ranks 8th while it ranks at
69th internationally. It was also stated that the state enforces strategies and housing plans that
focus on the QOL for different classes of Egyptian families. Also, according to the “Egypt Vision
2030” which is focused on achieving justice and sustainable development.

In the company, the quality of life is good to some extent as salaries are generally low,
opportunities of advancement are very hard, and are dependent on seniority.

4. Task Environment

4.1 Competition

Investment companies such as EPICO, PharmCo, and MUP, etc. International companies such
as: Novartis and Glaxo.

4.2 Market Positions

They are the 59th company in terms of value in Egypt with production with over 1.2 billion
Egyptian pounds which amounts to 100 million per month.

4.3 Research & development

Constant research about existing products like: presoline, proximol, and aldomet. Very recently,
new developments, such as medicine for treating Covid-19.

5. Organizational Problem

The company has been facing an issue with trying to adapt to the digital world as most of the
decisions are centered within the hands of the company’s seniors where they never gave much
attention to the importance of going digital and were focused more on the company’s internal
core activities. However, ever since COVID-19, and the rise of the digital age, they were forced
to think of alternative methods to conduct business and market their products. Hence, the efforts
that were made to be a part of the digital world took place.

6. Type of Change Organization undergoing

A new site is under construction and a page on Facebook. Alliances with 10,000 doctors were
made through taking their emails, addresses, and phone numbers where they consented to
receiving messages about the recent products and developments or Kahira Pharmaceuticals. They
collaborated with Medshare which is a company based in UAE which provides various services
for doctors where the data of the doctors that was earlier collected will be uploaded on it to
obtain a database. Packaging of the products is in review to provide a more attractive and
modern look. They also hired a marketing agency to help in branding the company and provide a
launching event as the company has been operating for 60 years. Advertisements on the
companies buses are applied and banners will be hung in the streets of Al Kasr Al Aini.

7. Impact of Change

7.1 Impact on External Environment

Brand of the company will increase and the market share will also increase. Patients are able to
trust the company more.

7.2 Impact on Internal Environment

Our interviewee stated that the change would increase feelings of honor and achievement among
employees. We deduce that this could be due to increased internal communication and
overcoming obstacles regarding the change. Also, it is predicted that the marketing department
would be especially busy with the changes regarding social media platforms such as Facebook .
Moreover, hiring a marketing agency would require increased integration among departments
such as HR and marketing in order to ensure success with the agency. Additionally, the new site
that is under construction would require the organizational structure and maybe even design in
order to place employees in the new site. This means that the HR department would be very busy
with this change.

8. Criticism & Recommendation

Criticism
● Decisions are centered within the hand of the company’s seniors which can hinder their
growth.
● Decisions are very slow and are time consuming.
● The company was ignoring the Digital changes.
● Al Kahira Pharmaceuticals needs to enhance their employment of resources.
● Al Kahira Pharmaceuticals are focusing only on its core business.

Recommendations

● We recommend enhancement of their employment of resources to attain their goals

more effectively and efficiently.

● We also think that Al Kahira Pharmaceuticals should employ younger employees.

● We also recommend that the company uses a horizontal linkage in the information
processing structure by making teams or establishing a cross-functional information
system, direct contact, or hiring full-time integrators. As we took in the lectures, full-time
integrators are located outside the department and are responsible for coordinating
several departments. Horizontal linkage is designed for learning. It refers to the amount
of communication and coordination horizontally across organizational departments.
Horizontal links have many benefits. Like face-to-face communication, decentralized
decision making, shared tasks, and many teams and task forces.

● This horizontal structure would also be beneficial when helping employees adapt to
change. This is as it encourages communication and flexibility across departments. For
example, the HR department would need to coordinate with the marketing department
when dealing with the marketing agency.
 ● We also recommend that the firm tries to adapt with external changes to avoid facing
problems and to be up to date.

9. References :
Hassan, M., & Sassanpour, C. (2008). Labor market pressures in Egypt: why is the
unemployment rate stubbornly high?. Journal of Development and Economic Policies, 10(2),
79-115.
https://www.wiego.org/informal-economy/occupational-groups
https://tradingeconomics.com/egypt/corruption-index
https://www.sis.gov.eg/Story/159372/Egypt-ranks-8th-in-Arab-world,-69th-internationally-in-bes
t-quality-of-life-index-in-2021?lang=en-us