Business Management

HRM Summative #2
Hiram A.M
17/10/23

Healthy Nation (HN)

Healthy Nation (HN) is a pharmaceutical organization that used to operate in the public sector, selling its
medicines (drugs) to hospitals at very low prices.

With increasing government funding over several years, HN increased the number of employees in its
Research and Development Department, which was staffed by scientists, and in the Manufacturing
Department. However, both departments were inflexible and inefficient. Resources were significantly
under-utilized, and innovation limited.

HN’s structure used to be hierarchical, with a very long chain of command and channels of
communication. Senior management made the decisions and set the production levels. Consequently, the
scientists in the Research and Development Department never developed decision-making skills, and
development of new medicines was slow. In 2021, after many years of losses, the government sold HN to
a profit-maximizing global pharmaceutical manufacturer, Global Pharma (GP).

To improve productivity, efficiency and flexibility, the management of GP reorganized HN as a shamrock

organization by:

outsourcing the production function to a well-known manufacturer;

retaining the Research and Development Department, along with its scientists and support staff, and
employing additional staff when required.

In addition, two major changes were announced:

Establishing performance-related pay for the scientists based on a new appraisal system to increase
productivity levels.
Using an expensive external company to provide off the job training to the scientists to develop
innovative decision-making and improve teamwork.

These changes have proved to be very unpopular, and the scientists in particular are resisting the changes
and the short time frame in which they will be implemented.

(a) Define the term public sector. [2]

A public sector is the part of the economy that the government owns and responsible for, such as: public
schools and public hospitals.
(b) Explain one benefit and one limitation for GP resulting from the implementation of the
shamrock organization structure for HN. [4]

The implementation of the shamrock organization structure to Healthy Nation by Global Pharma can
bring multiple benefits for GP but also some limitations. A possible benefit could be by outsourcing the
production function to a well known manufacturer with expertise and specialization, GP reduces
operational costs which allows them to increase efficiency and cost savings due to the outsourcing of the
production function to an external manufacturer. However a possible limitation is that there is a possible
chance of control loss and quality of assurance by the manufacturing process, requiring careful care to
keep up production quality.

(c) Explain one advantage and one disadvantage for GP resulting from the introduction of off the
job training for HN’s scientists. [4]

A possible advantage that can come out of GP using off-the-job-training is that by this training program,
HN scientists can develop new skills, learn more and increase creative ideas. This can result to new types
of medicines which can lead to more revenue and contribute to their reputation.

However, one disadvantage of having HN scientists doing off-the-job training is that it can result in some
resistance from the employees, specifically if the changes and demands are happening rapidly. This can be
because the scientist is used to their normal work routines but additionally having to do training can be
tiring and tedious which can result in reduced productivity and motivation from the scientists.

(d) Discuss two human resource strategies that GP could use to reduce the scientists’ resistance to
the changes. [10]

Managing employee resistance is a crucial task in the dynamic world of corporate transformation.
Resistance emerged as a major issue after Global Pharma (GP) acquired Healthy Nation (HN) and made
considerable changes, particularly in the scientific community. GP can use performance reviews as part of
a program of performance-based rewards and incorporating scientists in decision-making through
inclusive change management as an effective human resource tactic to lessen their resistance to change.

How successful this inclusive change management scheme depends on the active participation and
engagement of employees in the decision-making process. Participatory decision-making gives scientists
a say in the modifications. GP tries to encourage scientists and makes them feel like valuable participants
in the process by asking for their advice on how improvements may be best implemented and responding
to their concerns.

The second strategy to manage with the resistance of employees can be by giving employees performance
appraisals. By connecting these performance reviews to Recognition and Rewards, GP may successfully
implement this plan. Scientists who achieve or surpass the established limits ought to be acknowledged
and rewarded. The importance of their contributions can be reinforced by many forms of recognition,
including financial incentives, promotions, or opportunities for professional advancement. With the help
of concrete rewards and possibilities for professional advancement, this integrated method not only
assesses the work of the scientists but also inspires them to accept the adjustments.

In summary, using these two human resource strategies can be effective in reducing resistance amongst
HN's scientists towards GP's rapid changes. By using inclusive change management. The combination of
inclusive change management, active involvement of scientists in decision-making, and performance
appraisal as the cornerstone of performance-based incentive programs is a powerful strategy. This
approach not only empowers scientists by recognizing them as key actors in change, but also inspires
them by transparently recognizing and incentivizing their valuable contributions. By implementing these
strategies, GPs can create a more collaborative and productive atmosphere within the organization,
allowing everyone to play a key role in achieving positive change.