Case Qusetions from Chapter 7, book \"Fundamentals of Management\" eighth editio

Question

Case Qusetions from Chapter 7, book "Fundamentals of Management" eighth edition

1. Your boss asked you to compile a brief report on Genetech's overall approach to product innovation. What will you say in your report? ( structure your report from the three forms of innovation, which are radical versus incremental, technical versus managerial and product versus process)

2. A man name Schwan needs suggestions on how best to follow through on a man name Humer's commitiment which is( keep the twp respective research and early development organizations as independent units, merging the two R&D units) and his own. It is no surprise that your boss has asked you to furnish her with two or three ideas that she might pass on to the CEO. What will your suggestion be?

3. Roche Group is an immense company: It employs more than 80,000 people in 150 countries and posted revenues of $48 billion in 2012. There will undoubtedly be changes at Genetech. Generally speaking, what sort of changes might you expect in the following areas organization structure and design, technology and operations, and people, attitudes, and behaviors?

Explanation / Answer

Ans;

1.A research facility at Genentech headquarter has a good infrastructure to support various aspects of innovation. The company comes up with the product innovation with necessary support though consumer research and situational analysis. Genentech approaches innovation in unique manner where it makes balances among different aspects of innovation for their product portfolio.
It starts with an existing product portfolio that needs incremental innovation. Here, new and revised products are upgraded with fixing of many side effects / negative issues. Thus, it has helped company to hold the existing market share. Besides, Genentech conducts research to find out scope of new product that is hugely required by the consumers. It is called radical innovation and Genentech identifies opportunities for it. It is the part of product innovation also as objectives of both innovation functions remain same for Genentech.
Genentech gives importance to the implementation of quality management practices such as TQM & HACCP. It not only works as managerial innovation, but also it works as a process innovation. Genentech uses to eliminate waste, streamline the process and improve coordination among different functions.
Besides, Genentech uses state of the art technology to get the maximum benefits out of research activities. It is also the part of innovation strongly practiced by Genentech.
Thus, it is concluded that Genentech works on innovation on various levels. It is not only about the launch of new innovative product, but also brings in innovation in process development, improvement in existing products and in implementation of quality culture in the organization.

2.

My suggestion would be not to merge the two R&D units as it would tend to kill innovation. The need to innovate is not a success in many organizations because they lack the required creative individuals or simply because they fail to recognize opportunities. If the two units are merged, it would result in a change in the present organizational culture of the two units and this can potentially destroy innovation.

My suggestions are:

(i) operate the two R&D units as independent units and do not alter their culture, set of values and beliefs.

(ii) encourage intrapreneurship in both the units. This will encourage creativity and innovation.

3.

Roche Group is multinational company with high revenue and huge number of employees across the globe. In general there are several challenges across various areas of operation and management they have to face because of their size and worldwide presence. We can categorize the areas in which they might be facing Operational Issues are

1-Cultural Differences across the globe

2-Currecny Fluctuations

3-Time lag

4-Managing their Supply Chain

5-Managing their Finances in this dynamic fluctuations

6-Communication gap/lag within and outside organization

7-Managing Logistics within and outside Organization

8-Getting accurate Forecast Demands

9-Managing Raw Material Supplies and their Supplies.

These are some of the basic challenges that this Company might be facing. However managing these issues are not a very complicated task and can be achieved with some high level Organizational Changes and taking help of ERP System.

1-ERP System: The Technological Changes : For big companies having operations across the Globe, 1st thing that they need is an ERP System for the entire Organization and avoid using any local legacy system or technology or any manual data collection or process. This way entire Organization will be on same page, communication will be very fast and status updates will be easily and readily available from anywhere across the globe which aids in taking immediate decisions and people will be proactive to situations rather than being reactive. This is the age of Information and any ERP System is a must for quick flow of information across the departments, employees and management.

2-Organizational Changes: For any multinational company the real challenge is the huge variation in the culture, behavior and habits of the people from country to country. Anything which is legal in one country might be illegal in another, similarly every word or gesture has varying meanings in different sets of people in different parts of the earth. Now this does not mean that all plans across 150 Countries must be left independent of each other. They have to be linked to each other in some way or the other else entire Organization will fall apart in few years. To overcome such a situation best way is to have a strong leadership a the top management and local leaders at each country level who has strong bonding and understanding of the local environment and also a strong management skills and loyalty for the Organization. These local leaders must be given freedom and free hand to do Medium to Short term planning which must be driven by the Long Term plan laid down for the Organization. The Organization must have Flat structure and un-necessary hierarchy levels and fat should be removed from the system, people at local level should be given authorization and autonomy to do things and they must be made responsible for their deed and rewarded for good things. A strong bonding across the hierarchy level is required for the success of the Organization.

3-Supply Chain Changes: Entire Organizations Supply Chain must be studied in depth to get the understanding of the way material moves one end of the Supply Chain to the other end which means questions like below should be answered first

A-Where do we Purchase Raw Material from.

B-Where do we Make items, Cost of Manufacturing

C-Cost of Purchase of Raw Materials in different locations.

D-Cost of Logistics, Holding Material, Local and Global Taxes, Insurance etc.

E-Where do we have our Customers

F-Labor Cost across the globe and working Conditions and Environment

G-Are we Make to Order, Make to Stock or Assemble to Order

H-Impact of Environment and Nature etc etc.

After getting answer to all such questions Organization must first decide its Supply Chain from end to end Optimize their Network so that with minimum investment and movement, best and most efficient Supply Chain can be established which can react to fluctuation market demands almost within real time. Supply Chain must be organized and if required re-aligned in such a fashion that goods, products and services reach the customers as and when demanded and there must be either no time lag or minimum time lag.

There might be several other minor changes required at the local level of operations but in general above 3 are the most important changes required for the success of any multinational Organization in this dynamic world. Moreover other minor changes will more or less fit into above 3 groups only.

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