In January 1995 “Glaxo announced that it was making a hostile bid for control of Wellcome, which would create the world’s largest pharmaceutical company.” (Jick & Peiperl, 2011, p. 354) Wellcome is a U.K.-based pharmaceutical company. Wellcome has operations in Israel. “Wellcome itself was being taken over by arch rival Glaxo.” (Jick & Peiperl, 2011, p. 347 “By acquiring Wellcome which ranked between tenth and twentieth worldwide in revenue.” (Jick & Peiperl, 2011, p. 348)
Wellcome brought to the takeover a company which developed, manufactured and marketed worldwide human healthcare products. To include subsidiaries in 33 countries. “Its products could be divided up into tow categories, prescription and non-prescription (over the counter) medicines, with the former representing over 85 percent of the total revenues.” (Jick & Peiprel, 2011, p. 348) The hostile takeover by Glaxo created much uncertainty within many employees and the management of Wellcome, who had claimed they did not have any knowledge of the bid to take the company. One individual in particular Ofra Sherman and the team they lead for Wellcome had much uncertainty in the outcome for her and her team. Glaxo was not providing much of any guidance of the roles many would play if any.
What should they have done?
Glaxo could have taken more firm steps for a successful takeover. Glaxo could have implemented a process whereby Wellcome employees were given advance warning as much as possible to what was going to happen. Glaxo also could have developed a better team attitude by integration of many if not all of Wellcome and its staff and employees.
“Mergers and acquisitions (M&A) are controversial because of their perceived adverse effects on employment. These transactions are often followed by restructuring, divestments and plant shutdowns, leading to layoffs and reductions in employment.” (Kuvandikov, Pendleton, and Higgins, 2014)
Did Ofra Sherman do the right thing?
“No organization can institute change if its employees will not, at the very least accept change. No change will “work” if employees don’t help in the effort.” (Jick & Peiprel, 2011, p. 336) In many ways yes she did. Many leaders thrown into uncertain times or situations will have doubt and fear of the unknown. You cannot let you team see this. The first step is to be very honest with your team. Explain the situation as best as you see it. Be prepared to field hard questions with hard answers. Also have a plan of attack. How you and your team will survive this and move forward.
What would you have done?
“The business environment is not static but operates in a state of flux and constant change; there fore alternate goals must also be determined to ensure that the business is prepared to meet a variety of future scenarios.” (Satterlee, 2013, p. 72) Did Sherman prepare herself and her team for unknown changes in the future? Not really should could have done a better job this is based on our reading that she was involved in almost every facet of her team and her business. One last aspect that she can do is “Often the leader must serve as a heat shield for subordinates who are working the crisis. (Dees, 2013, p. 194.)
What was Ofra Sherman’s predicament?
Ofra Sherman’s predicament was to jump ship and go directly to Glaxo. Or to use her muddied chain of command and work the issues this way. “Officially Sherman had a manager at Promedico.” (Jick & Peiprel, 2011, p. 353) Sherman’s boss was her manager in name only. “Sherman’s peers at Promedico envied her.” (Jick & Peiprel, 2011, p. 354) Sherman was not one to rely on Promedico management in her daily duties. The only real link was “receiving information from them about what was happening within Promedico.” (Jick & Peiprel, 2011, p. 354) She had to be very careful about the flow of information because she knew it would filter back up to Promedico.
How did she get into it?
Sherman and the different entities in this example had no clear cut guidelines. No clear lines of reporting or over site. Sherman was experiencing “a major reaction to change is a feeling of losing control.” (Jick & Peiprel, 2011, p. 341) In my opinion she should have worked on clearing this aspect up before the situation ever developed into what it is currently.
How do you evaluate her actions as described in the case?
Sherman is a good leader overall. The true evaluation of her leadership skills thru this trial is how she handles conflict and does she shield her team. “Conflict is a process that begins when an individual perceives that he or she has been negatively affected by another individual or group.” (Satterlee, 2013, p. 172) Sherman displays this with her non-free flow of information with Promedico. “Relationship conflict occurs when individuals within a group fail to communicate effectively. This type of conflict can escalate so that everyone directs attention and energy towards the conflict and little attention is paid to the organization’s goals. (Satterlee, 2013, p. 173)
Dees, R.F. (2013). Resilient leaders. Williamsburg, VA: RFD, LLC.
Jick, T. D., & Pieperl, M. A. (2011). Managing Change; Cases and Concepts (3rd ed.). New York, NY: McGraw-Hill
Kuvandikov, A., Pendleton, A. and Higgins, D. (2014), Employment Change after Takeovers: The Role of Executive Ownership. British Journal of Industrial Relations, 52: 191–236. doi: 10.1111/bjir.12012
Satterlee, A. (2013). Organizational management and leadership: a Christian perspective (2nd ed.). Raleigh, NC: Synergistic International Inc.