Title: Midterm Report AS1

Module code: UNL1002

Module Leader: Nama Rashid

Innovation on Modern
Business Organization

Student ID: 7000128

Word count: 2000
 Executive summary

This report aims to show and analyze the impact of innovation in modern businesses. In the
beginning it will provide a brief introduction regarding the definitions of innovation and
businesses environment and the model that Hikma Pharmaceuticals s using into their business
model. In the first analysis the focus is the innovation technology that is specifying issues
related to the potential as well the possibility of generating income because of new
technology and improvements in productivity. The analysis continues with the second part
that is focus on economic strategies offering a perspective of embracing the innovation in the
changing times and due to COVID-19 pandemic. Nonetheless, the report also highlights the
risk of decision making do to constantly changing market. For the final part of the analysis
the report will show the ethical part and the programs that helps to integrate the company in
to the surrounding communities. Based on the finding and the analysis the report in the end
will include a conclusion and two recommendations that is aimed to help in the future with
the decision making.
 Contents Page

Introduction ……………………………………………………………… 1
Assessment of General Business Environment …….…..……...………... 2
Technological ……………………………………………….…… 2
Economic …………………..………..………………….………... 3
Environmental ………………………..…………….……………. 4
Conclusion ……………………………………………....………………. 5
Recommendation ………………………………………………………… 6
References ………...……………………………………………………… 7
Introduction

The key to success for every business model in our modern times is innovation. One word
that defines everything; new ideas, products, services, ways to communicate, promote and
that word has the power to adapt or to improve the model of the business so that it can
reaches a greater potential. Finding a definition for innovation is difficult task because even if
using Google to search the definition the result will be more then 300 million depending on
which model is based the business and the point of view assess with PESTLE (Political,
Economic, Socio-Cultural, Technological, Legal, Environmental).
The definition of business organization, Woodward (2020) refer in his article Business
Organization that, is an entity formed for the purpose of carrying on commercial enterprise
on all the three forms individual proprietorship, partnership, or corporations (limited
liability).
However, in his article Purcell (2019) stated that Innovation is a concept that refers to the
process that an individual or organization undertakes to conceptualize brand new products,
processes, and ideas that will ensure the success and grow in today`s corporate climate.
With all the above in mined HIKMA PHARMACEUTICALS PLC is a company that used
innovation to grow and become one of the biggest pharmaceuticals company’s today. Samih
Darwazah founded HIKMA more than 40 years ago and the purpose has always been to
provide high-quality, affordable medicines to the people that needed it most. The main
principals of the company are to continue using innovation and find practical solutions for the
millions of people that they serve through their products.
The main objective of the report is to examine what makes innovation so important in
business model today and through this learn about the steps to take in becoming more
innovative and remaining relevant in this changing environment.

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Assessment of General Business Environment
The next section will assess Hikma Pharmaceutical from the Business Environment
perspective by using tree factors:

Technological

The most important aspects of the company to analyze and with the biggest financial impact
is technological department that helped in developing, adapt and grow into the business that
is today. The biggest improvement to life in the past 50 years has been the growth in
technology PEW Research Center (2017), and as a result company like HIKMA that
embrace innovation have had an advantage in ultimately meeting the demands of their
customers and helped them expand. The department of innovation have used the new
technologies not only to modernize their products but also to improve the communication not
only between employees but also with customers by bringing them closer to the product. The
internet and the websites allowed the interaction between employees - customers and helps
them to find answers to their questions and doubts about the product.

The efficiency of operations nowadays with technology helps business understand its cash
flow and preserve precious resources such as time and physical space by manage the storage
costs of holding a product with warehouse inventory technologies. Furthermore, technology
creates a dynamic team within the business operation center by helping the factory managers
communicate with employees at different location and coordinate faster delivery over a large
geographic area. With having computers in every department improves the communication
and interactions between all the levels of the company by eliminating social tension. Harish
Saras (2019) wrote on her article that the impact of technology has two sides on work related
stress that brings positive effects (faster communication, performance management, virtual
meetings, more comfort, speed in processing operation) and negative effects (fear of losing
jobs, less personal interaction, high risk of losing date, an expectation to be available 24/7).

As mentioned above, the people in charge of taking decisions in the company have taken
advantage of the technological innovations and improved the process involving production to
become more successful and profitable. The general idea about innovation is all about doing
something differently from anyone else. It is a complex process that requires control
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constantly, always searching effective changes in the market, monitoring technical and
economic indices becoming flexible for increase in efficiency of innovation activities.

Economic

If used properly with innovation comes expansion more income, sales, work force and
financial markets that bring growth in the company to become more successful and
profitable. HIKMA Pharmaceuticals PLC continue to grow while staying one step ahead of
the competition because they value the positive impact of innovation. Business model
innovation articulates the changes to the means of creation, and it might often involve
management innovation. Management innovation is defined as the invention and
implementation of a management practice, process, structure, or technique that is new to the
state of the art and is intended to further organizational goals Birkinshaw et al., (2008).

It is also possible to observe financial benefit because of financial decision making and
improving their products to the needs of the clients by improving the productivity. On this
subject of modernizing and growth in the Generics Meet the Management (2021), Brian
Hoffmann that is the President of Hikma Generics business unit, talks about the financial
choices they made in the las 6 years and about the effect of that strategy. The impact of
acquiring new companies and diversified manufacturing technologies brought a significant
growth in portfolio scale and profitability. The report shows that even in the las 2 years that
the entire world was affected by COVID-19 Hikma has grown 6% in revenue 2020 regarding
2019 and this is achieved based on understanding the system of flexibility control, research
and innovation processes. Taking in to account that innovation processes have a high degree
of uncertainty and depending on the changes in the external environment.

With the help of proper financial control the company has achieved identifying and eliminate
factors and processes which do not promote the best interests of the business. This type of
financial control had a positive impact in investments and development of new process that
maintained and even brought growth in the economy of the company despite of the
limitations which wore placed in this pandemic times. In the future, economic growth will be
provided due to scientific and technical progress and intellectualization of the main
components of production in all spheres of economy Gapsalamov (2015). It will allow
optimizing economic activity of the entity, improving the control and management system,

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raising susceptibility of the organization to innovations, developing effective mechanisms of
implementation of innovative projects.

Environmental

Business environment is a combination of two factors (internals and externals) that coexist
and maintain each other in balance. The internal environment is referring to all the factors
and departments that are well within the control of a company and has a direct influence on
all operations. External environment includes factors that exist outside the company’s
control. They tend to be unpredictable as a company cannot possibly control or predict a
change in them. Hikma achieved a balance between these two factors by adopting and
integrate environmental, social and governance into the business. The company find
sustainable development goals like good health and wellbeing, quality education, gender
equity, decent work and economic growth, industry, innovation, infrastructure, climate action
that aligned perfect with the values of the business and helps them stay committed in
supporting global efforts to achieve these goals.

Hana Ramadan VP of Corporate Social Responsibility stated in the Sustainability Report

(2020) that the company takes seriously their responsibility to find new ways to access
medicine and believes that putting medicine within the people rich not only transform their
lives but also enriches communities. In order accomplish this directive the company
alongside partners created medicine donation program and each year the amount allocated to
this program was increased, in 2019 it was 3.1 million and for 2020 it was increased to 4.1
million, the value of the medicine and tools provided to local hospitals, clinics and
pharmacies. Alongside the donation program Hikma wants to support and make a difference
in assisting the education by providing support to students and teacher. Through the
partnership with web platform CareerVillage in 2020 the company establish connection with
more than 5700 students around the world to provide mentorship and career advice
mentioned in Hikma Sustainability Report (2020).

Nonetheless, Hikma knows that with all that expansion comes environmental challenges like
direct fuel usage, electricity consumption, water consumption, renewable energy generation
and usage that's why they have in place many energy efficiency projects and renewable
energy system in almost all the facilities an d all the countries their operate. The company is

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committed to make all operations more energy efficient and environmentally responsible by
creating infrastructure for faster access to their facilities, adopting hybrid or electric vehicles,
minimalize gas emissions, promoting solar photovoltaic system. With the help of all the
environmental programs Hikma wants to achieve a minimal carbon footprint on the
environment demonstrating the commitment to the fight against global warming and climate
change.

Conclusion

In conclusion the idea behind this report is to demonstrate that by using innovation into the
business model HIKMA Pharmaceutical PLC has establish an important relationship between
innovation and productivity that help them expand into the company that is today. To drive
business growth, stay relevant in changing times, and differentiate from the competition,
business leaders must be able to think creatively and embrace innovation into their business
models. This will allow optimizing economic activity improving control and better
management of the entity developing efficient mechanism in their decision making.

For the economic strategy and the decision taking until now the company is showing that
they are capable to adapt to the changes suffered in the last two ears and there able to make
the necessary modifications to their business plan in order to expand into a profitable
business. Following the same directive and closely looking for changes in the market today
Hikma has the potential to lead a rapid expansion allowing them to escalate even higher to a
more successful and profitable company. The growth in the business implies also more
efficiency because of the productivity increase and the capital growth gives more possibilities
to the company for even more investments.

The company is fallowing his ethics directive in providing equal and fair opportunities to all
employees by contribute to a supportive work environment and values different experiences
and perspectives that ensures everyone`s voice is heard. By supporting freedom of
association and collective bargaining across Hikma the employees are assured that there are
represented, and their rights are protected. The company is committed to diversity and prides
itself on a culture of inclusion eliminating discrimination and hiding based on merit
irrespective of their race, gender, religion, or sexual orientation. Hikma is demonstrating
involvement not only to the pollution problem of the environment like global worming but
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also dedication to education and helping communities around them. To achieve a higher level
of life quality true health and wellbeing the company have programs for social integration,
student education and the environment sustainability.

Recommendations

Following the guidance of Velasquez et at (2010), definition of ethics is based on well-

founded standards of right and wrong that prescribe what humans ought to do, usually in
terms of rights, obligations, benefits to society, fairness, or specific virtues. In terms of ethics
Hikma has tree values that distinguish them from other competitors: Innovate, Care and
Collaborate making them rely on individual and collective progress by sharing a common
purpose to put their better health within reach for the millions of people who rely on their
medicines.

After analyzing the technological, economic, and environmental aspects of HIKMA

Pharmaceuticals PLC and based on the findings we can recommend two ideas that could
improve the decision making in their company.

The company should continue to use technological advancements and innovation in

their decision making that will ensure increase at economical level and this factor
will help them to take advantage and expand more than ever before.

By using experience, they gained from the beginning of the company if they embrace
innovation and continue with environmental programs the company will have a
sizable advantage in meeting the needs of their customers and make a difference in
the environmental impact.

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References

Birkinshaw, J., Hamel, G., Mol, J., 2008. Managemant innovation. Acad. Manag. Rev. 33(4),
825-845.

Gapsalamov, A. R. 2015. Conditions of soviet economy development in the middle of

XX century and factors of its crisis. International Business Management.

PEW Research Center. 2017 – Biggest improvement to life in the past 50 years.

Manuel Velasquez, Claire Andre, Thomas Shanks, S.J., and Michael J. Meyers. 2010. What

is

Ethics? Markkula Center for Applied Ethics.

Will Purcell. 2019. The Importance of Innovation in Business.

Woodward, S. Nicholas. "business organization". Encyclopedia Britannica, 29 Oct. 2020,

https://www.britannica.com/topic/business-organization. Accessed 12 November 2021

Generics Meet the Management. 2021. – www.hikma.com

Harish Sara. 2019. Impact of technology on Work related Stress - www.harishsaras.com

HIMKA Sustainability Report 2020 - www.hikma.com