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Critical Evaluation of the application of Leadership & Management Theories within Merck & Co, USA, Assignments of Leadership and Team Management

Leadership and Management Theories

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2019/2020

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Critical Evaluation of the application of Leadership & Management Theories
within Merck & Co, USA
SID: R1703D2424802
Name: Dr. Baridueh Badon (MBBS)
Module Name and Code: Leadership and Management Theories BS4S16 (R-
7996-2424802)
Course Leader: Chrystalla Markou
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Critical Evaluation of the application of Leadership & Management Theories

within Merck & Co, USA

SID: R1703D

Name: Dr. Baridueh Badon (MBBS)

Module Name and Code: Leadership and Management Theories BS4S16 (R-

Course Leader: Chrystalla Markou

Table of Content

1.Introduction

**- Context

  • Aim of report
  • Introduction of the organization
  • Methodology**

2. Critical Review of Literature

**- What is Leadership?

  • Leadership Theories
  • The Behavioral leadership Approach
  • The Leadership Skill Approach
  • Situational and Contingency Approach
  • Management Theories
  • Scientific Management Theory
  • Behavioral Management Theory**

 Bureaucratic Management Theory

3 Critical Discussion Of Practice in The Pharmaceutical Industry

**- Strengths

  • Weaknesses**

 Opportunities

 Threats

 Conclusions

 References

The aim of this study is to look into the leadership and management practices in the pharmaceutical industry and using available examples from Merck & Co , their management theories and practices globally and relation with other pharmaceutical companies. Emphasis is going to look at the leadership, organizational structure and insights, the organization´s mission and vision and how they are a big player in the pharma industry which is having massive challenges in productivity in current times. Introduction of organization Merck & Co is a global healthcare company with 125 years history in making a difference in the lives of humans and animals alike. It is headquartered in Kenilworth, New Jersey with the legal name listed in the New York stock exchange under the symbol “MRK”. The organization has 67,000 employees worldwide. They focus on the business areas of Pharmaceuticals, Vaccines and Animal health with a research and development expenditure of $9.9 billion in 2019 and a revenue of $46.8billion in the same year. They have a robust corporate responsibility with an access to health index of 293M people reached thorough major programs and partnerships 34% of executive positions are held by women. The mission of the organization is “To discover, develop and provide innovative products and services that save and improve lives around the world”, while the vision of the company is “to make a difference in the lives of people globally through our innovative medicines, vaccines, and animal health products. We are committed to being the premier, research-intensive biopharmaceutical company and are dedicated to providing leading innovations and solutions for today and the future. The leadership team consists is led by Kenneth C. Frazier, an African American Lawyer who joined the organization in 1992 as the Chairman of the board and Chief Executive Officer. The team consists of men and women of different backgrounds, races and works of life. (Merck.com, 2020) Methodology The methodology applied in this study is majorly based on secondary research outcomes. Data from company websites, magazines, journals, academic articles on the management and leadership theories and research coming from management and leadership findings in various pharma companies worldwide. The choice of Merck & Co was born out of the idea to review the CEO who is originally a Lawyer by training heading and running one of the largest pharma firms in the world. This report hopes to succinctly ask the following questions: “can Leaders from other sectors succeed in a different sector?”, “Does management and leadership theories effectively affect an organization?” and “Does management and leadership outcomes in the pharmaceutical industry differ from other sectors?”

Critical Evaluation of Literature Review

What is Leadership?

There are many theories of leadership and management. As previously discussed, it is considered one of the most difficult topics to discuss and define. Bennis (1982), argued that there are more than 350 meanings of leadership. Leadership is defined by Schedlitz and Edwards (2014) as “a road’ or “a path”, suggesting some form directing and further validated by Rost (1991), who defined it as to “To lead”, “To Guide” or “To Pull”. Analysts, students and eminent pioneers in fluctuated fields of human undertakings for example, legislative issues, industry, scholastics, pressure groups and so on have created numerous hypotheses that they ponder generally relevant at interims. Consequently, leadership theories were created base the skill of the Leaders at a given time, at interims a confined bunch, they're natural shortcomings as well as qualities in each hypothesis. Northouse in his book, Leadership: Theory and practice in 2016 documented different definitions of leadership over the century to exemplify how notions have changed. According to Moore (1927), i was defined as the ability to impress the will of the leader on those led and induce obedience, respect, loyalty and cooperation. In the 1930s, the definition changed to traits in place of dominance in the previous definition. Coming to the 1940s, the behavioural component came to light, as the behaviour of an individual while involved in directing group activities (Hemphill, 1949). Furthermore, Copeland (1942) differentiated leadership by persuasion from drivership or better put, leadership by coercion. In the 1950s, focused changed to effectiveness as the shared goals of was seen to be fostered by relationships thereby promoting the continuation of group theory. The 1960s were not far from the 1950, scholars such as Seeman (1960) defined leadership as ““acts by persons which influence other persons in a shared direction”. In the 1970s, the focus was around organizational behavour with Burns´s (1978) defining leadership as “Leadership is the reciprocal process of mobilizing by persons with certain motives and values, various economic, political, and other resources, in a context of competition and conflict, in order to realize goals independently or mutually held by both leaders and followers”. In the 1980s, different themes emerged which talked about “ Doing as the leader wishes”, Power of influence on people, focus on personal traits of leaders and transformational leadership which was defined by Burns (1978) as “when one or more persons engage

behavior is less compelling, and their characteristics are not crucially valuable and firm in each circumstance and cases. Following research findings, Stogdill (1948) found intelligence, alertness, insight, responsibility, initiative, persistence, self-confidence and sociability as key traits. The Behavioral leadership Approach As a result of a few of the imperfections distinguished within the trait approach, the need to look at leaders behaviors got to be exceptionally apparent to analysts since it can be watched by having the information of what leaders essentially do and how they carry on. Based on this, it sums to the recommendation that leaders can be made. Naylor (1999) argues that Leader ´s behavior has been stirred by a systematic comparison of absolutist and democratic styles of management and representatives found beneath each sort of management tend to perform particularly. Autocratic style of leadership could be a centralized approach to authority where all the choices are made by the leaders with full authority over all the representatives and in this case, the representatives tend to ordinarily oppose this idea with the way they are being treated and can express antagonistic vibe over time. Democratic style of leadership on the other hand is the inverse, whereby authority is decentralized and in this case, there's continuously consultation with the group before any choices are made which brings around good feelings and wellbeing inside the group. Blake and Mouton (1964) came up with administrative grid that recognizes behavior leadership being spoken to by five fundamental hypotheses and it is fundamentally based on concern for assignments and individuals. (Cole and Kelly, 2016; McCaffery, 2004, p.64) too arrived at the same conclusion to buttress on this by classifying leadership behaviors into tasks oriented behaviors and relationship. The Leadership Skill Approach Katz (1955) proposed a show where he expressed the three particular capacities a leader needed to have in an unexpected way from leadership characteristics or qualities, which are, specialized aptitudes in connection to the leaders capacity on particular zone as well as the utilization of devices and strategies; human abilities based on how the leader can viably work with other workers for the reason of accomplishing the objectives of the organization; and conceptual aptitudes in terms of working with plans, standards and concepts. The Leadership skill approach concentrates on the information and capacities had by the leader and how these aptitudes can be utilized to drive organizational development which recommends that a leader or any person can soak up certain aptitudes through learning, to ended up as amazing leader. This was

affirmed by Northouse (2015) that aptitudes are what leaders can pick up though characteristics are inbuilt characteristics which delineate who leaders truly are. Transformational and Transactional Leadership Approach James McGregor Burns in 1978 introduced a thought of value-based and transformational leaders where he accepted that all heads could be categorized as one of these two classifications. He related Transactional Leadership to bureaucratic authority by seeing it as an exchange of remuneration for dutifulness, consistence and accommodation to persuade adherents by drawing on their personal circumstance, with more accentuation on legitimate force and respect for rules (Jones and George, 2009; Quinn 1988; Yukl 1981). As opposed to transactional leadership, transformational leaders as expressed by Burns (1978) rouse the supporters by invigorating them to survive and dispose of their own personal responsibility to benefit the organization. Transformational leadership consequently is a procedure of mixing, persuading and moving workers to be a piece of the transformational process of the association where significant changes are started and shared objectives and destinations are sought after (Avolio and Yammarino, 2013; Yukl 1989). Bass and Riggio (2006) while tending to transformational leadership expressed different parts of it which incorporates;

  • The inspiration and incitement of the adherents to bring energy and advancement.
  • Accentuation of prime concerns and focus on authoritative goal.
  • Elevation of worker's insight, certainty and moral guidelines.
  • Sharing of qualities to make upstanding, better than average and moral condition.
  • Coaching and tutoring of adherents.

(2013), it was found that occasionally, transformational leaders can be underhanded and thrive under power. Management Theories Management is a lot of facilitated exercises (estimating, arranging, choosing, sorting out, and instructing) to direct and control and association (Cole and Kelly, 2017)The great meaning of the board is held by Henry Fayol. Fayol (1916) who defined management as " To manage is to forecast and plan, to organise, to command, to coordinate and to control” Cole and Kelly (2017) endorsed the abbreviation LANDSCAPE as an assortment of points of view, understanding and information to depict the term the board. Table 4: Meaning ofLANDSCAPE MANAGEMENT L Levels of Management A Activities of Management N Novel aspect of Management D Dealings (roles, duties, deeds) of Management S Science of Management (eclectic set of management theories) C Craft of Management (Skills and competencies required to practice, A Art of Management (The creative, innovative and visionary activities) P Predispositions of Managers (How we see management challenges) E Environment for management (Context) Source: Cole and Kelly (2017) Scientific Management Theory Taylor's hypothesis of scientific management planned at improving financial proficiency, particularly work efficiency. Taylor had a basic view about what propelled individuals to work – cash. He felt that laborers ought to get a reasonable day's worth of effort, and that pay ought to be connected to the sum delivered. Thusly he presented the DIFFERENTIAL PIECE RATE SYSTEM of paying wages to the laborers. Standards of Scientific Management are: Replace rule of thumb with scientific methods : - study the manner in which occupations are performed what's more, find better approaches to do them. Teach : - prepare and build up the worker with improved techniques for ding work. Make this new strategies rules.

Supervise : - give nitty gritty directions and supervision of every representative Piece-meal Pay : - Establish reasonable degree of execution and pay a premium for higher execution. Administrative Management Theory Henri Fayol is referred to as the father of the management. He set down 14 standards of management as introduced beneath: Division of Labour : This considers work specialization, which is all around communicated by financial analysts just like a vital factor for proficiency in the usage of work Authority and Responsibility : Fayol thought about expert in both formal and casual way that originate from extraordinary mastery. Control : He feels that everyone should regard understandings and rules. Unit of Command : This is the rule, which expresses that on representative ought to get orders from one unrivaled in particular. Unity of Direction : According to Fayol, the solidarity of bearing rule suggests that each gathering of activities having some objectives must have one leader and one plan. As recognized from the standard of unity of order, Fayol sees unity of course as identified with the working of staff. Subordination of Individual interest to general interest : In any gathering, the intrigue of the gathering ought to supersede that of the person. At the point when the interests’ contrast, it is the capacity of the administration to accommodate them. Renumeration of Personnel : Fayol sees that compensation and techniques for installment ought to be reasonable and ought to have the option to bear the cost of the most extreme fulfillment to worker and boss. Centralization : Although Fayol doesn't utilize the term, Centralization of Authority, his standard alludes to the degree to which authority is focused or scattered in on undertaking. Singular conditions decide the level of centralization that gives the best over all yields. Scalar Chain : Fayol thinks about the scalar chain as a line of power, a chain of bosses from the most elevated to the least positions. Also, in light of the fact that it is a mistake of a subordinate to leave unnecessarily from the lines of power, the chain ought to be short-circuited. Order : Breaking this standard into material request and social request, Fayol considers it as a straightforward edge for everything. This association is the guideline, which alludes to course of action of things and people in an association. Equity : Fayol sees this standard as one of evoking dependability and dedication from staff with a blend of generosity and equity in chiefs while managing subordinates.

Critical Discussion Of Practice in The Pharmaceutical Industry Merck & Co is a global healthcare company with 125 years history in making a difference in the lives of humans and animals alike. It is headquartered in Kenilworth, New Jersey with the legal name listed in the New York stock exchange under the symbol “MRK”. The organization has 67,000 employees worldwide. They focus on the business areas of Pharmaceuticals, Vaccines and Animal health with a research and development expenditure of $9.9 billion in 2019 and a revenue of $46.8billion in the same year. They have a robust corporate responsibility with an access to health index of 293M people reached thorough major programs and partnerships 34% of executive positions are held by women. The mission of the organization is “To discover, develop and provide innovative products and services that save and improve lives around the world”, while the vision of the company is “to make a difference in the lives of people globally through our innovative medicines, vaccines, and animal health products. We are committed to being the premier, research-intensive biopharmaceutical company and are dedicated to providing leading innovations and solutions for today and the future. As known in the pharma industry, drug development is a long and difficult process, where more than 90% of molecules never making it to market. It naturally takes more than 10 years and an investment in excess of $2.5 billion to reach that point. Competition between companies in similar therapeutic areas are always ongoing to launch a new drug or vaccine to have a competitive advantage in that area. Like most Pharma industries, Merck & Co runs a hierarchical style of management. Strengths The pharma industry is a very lucrative and prestigious place to work. There ´by they are good at attracting and retaining talent. Sharma and Bhatnagar (2019) buttresses the point that talent mindset has helped the organization in electing the best talents from the best pharmaceutical associations. Again, transformational leadership thrives in the pharma industry and Merck & Co. A study by Gracia- Morales et al (2008) showed a positive connection among Translational Leadership and Organizational innovation, among Translational Leadership and Organizational Performance and among Organizational innovation and Organizational Performance. Second, the examination checks that these connections are all the more emphatically fortified in associations with high organizational learning than in associations‐organizational learning than in associations

with low degrees of authoritative learning. Third, the examination bolsters the hypothetical contentions made however not exhibited exactly in the earlier writing. Merck & Co has a strong leadership within its sales team. The sales team is very motivated and promotes revenue generation for the company. In 2019, a revenue of $46.8billion was generated to the company due to the strong sales force. A study done in a Taiwanese Pharmaceutical industry by Yuan and Lo (2018) titled, ) ‘Relationship Among Team Temporal Leadership, Competency, Followership, and Performance in Taiwanese Pharmaceutical Industry Leaders and Employees’ showed that “from the 360 leader–employee dyads of the sales marketing team revealed that team temporal leadership, competency, and followership are positively related to performance and that team temporal leadership is positively related to competency and followership.” Leaders are using more Business Process management in the Pharmaceutical Industry.a research titled Versatile Leadership And The Use Of Business Process Methodologies In The Biotechnology- Pharmaceutical Industry by Kadri (2009) showed that “leaders in biotechnology and pharmaceutical organizations, and the correlations between leaders’ overall versatility and the leaders’ usage, satisfaction, and importance preferences for BPM(s). Survey data from 36 leaders provided a listing of BPM(s) used, which revealed that leaders were using more of scientific BPM(s) and less of artistic BPM(s), resulting in an imbalance. Overall versatility did not correlate with leaders’ preferences for BPM(s) at alpha level of 0.05. The findings support further research on Versatile Leadership and BPM theory. Another evidence shows that transformational leadership is very effective in the pharma industry. A study by Rajal (2010) titled “Leadership Style And Organizational Culture In Learning Organization: A Comparative Study” showed that “Results indicate transformational leadership and organizational culture have a positive influence in the development of learning organization “ Weaknesses The pharmaceutical business is widely controlled and it’s over the top intensity is developing authoritative hesitance towards the advancement of an information sharing society. Nine classes of obstacles to intra- (inside) and between hierarchical (between associations) information sharing have been distinguished. These classifications incorporate significant expense of sharing information, data innovation constraints, information stowing away, absence of socialization, absence of trust culture, non-instructive outlook, hierarchical legislative issues, poor authority and time pressure. (Qureshi and Evans 2015) This argument buttress why Merck and Co do not share internal information with the public or other pharma because of competition and business models and strategies are not published to the public. Data innovation challenges where data is not used to fully make decisions in areas of drug development.

group conforms to a PMO part. As opposed to desires, PMO individuals were not recognized as the most well-known information suppliers in these groups; rather, information was mentioned from before associates. However, a three-layered model is produced for information administration at the bunch level, across groups and the connection with corporate and venture administration structures. Administrative and hypothetical ramifications are examined. This three-level modeling will help give Project Managers to have more voice and connect amongst groups to corporate and venture administration structures. In addition, Hung et all (2005) in a study titled “Critical factors in adopting a knowledge management system for the pharmaceutical industry" showed that after completing statistical analysis, seven factors where noted to be crucial in adopting knowledge management. They include,” a benchmarking strategy and knowledge structure; the organizational culture; information technology; employee involvement and training; the leadership and the commitment of senior management; a learning environment and resource control evaluation of professional training and teamwork” Global Talent Management is crucial in organizational continuity. Garavan (2012) studied the global talent management in science based (Pharmaceutical) firms during the global downturn. The examination explores how on-screen characters see the key needs of the firm during the downturn; the difficulties of adjusting GTM to address these needs; the estimations of top administration in supporting interest in GTM and the difficulties experienced in organizing and controlling GTM forms. The discoveries uncover that on-screen characters considered GTM to be deliberately significant in light of the fact that it empowered firms to all the while oversee scaling back, development and auxiliary arrangement, and it helped them to get ready for development later on. Worldwide organizations practiced control and coordination of GTM during the worldwide downturn through expanded utilization of basic detailing, more noteworthy inclusion of headquarter (HQ) and local HQ in backup ability choices, organizing and psychological control methodologies. Threats The study done by Müller, R. et al. (2013) is likewise a threat to the administrative structures as they are not always recognized within Merck & Co and most pharma industry worldwide. Poor leadership especially Project Managers who are not emotional or show translational leadership to team members will affect the organization. According to strategic management, lab pre clinical research is viewed as a center fitness that conveys‐organizational learning than in associations new chemical substances that become candidate drugs. Pharmaceutical research in disclosure and advancement stages dismiss managerial practices since they in different manners limit logical exercises and force control mechanism. Simultaneously, pharmaceutical specialists accentuate the significance of

leadership. The nonappearance of real administration and the rise of administrative practices involved a sentiment of sadness and loss of an effective past that will never be seen again, among the pharmaceutical specialists. (Styhre and Sundgren, 2003) Conclusion Leadership and management theories are academic studies which has showed enough industrial relevance. The pharmaceutical industry is an industry which fully experiments and implements leadership and management principles. Merck & Co is a global organization making massive strides in the biopharma Research and Development. The studies haves shown that Business Process Management is actively in effect in pharma organizations, Translational leadership is the main type of leadership style practiced in most Biopharma industries worldwide. Project managers as a focal factor in liaising between team members and top management needs to up their games in people management and translational leadership. Hierarchical types of leadership style is impeding the growth of biopharma industries as it stiffens productivity and collaboration. Innovation again is strongly impeded because of hierarchical types of leadership and the use of data needs to be more inclusive in its use by executives in decision making. References Bass, B. M. (1990) Handbook of Leadership: Theory, Research & Managerial Applications. New York: The Free Press. Burns, J. M. (1978) Leadership. New York: Harper & Row. Cole, G. A. and Kelly, P. (2017) Management Theory and Practice. Custom Edition. Hampshire: Cengage. Copeland, N. (1942) Psychology and the soldier. Harrisburg, PA: Military Service Publications. Fayol, H. (1916) General and industrial management. London: Pitman. García Morales, V., Matías Reche, F. and Hurtado Torres, N. (2008), "Influence of transformational‐organizational learning than in associations ‐organizational learning than in associations ‐organizational learning than in associations leadership on organizational innovation and performance depending on the level of organizational learning in the pharmaceutical sector", Journal of Organizational Change Management, Vol. 21 No. 2, pp. 188-212. https://doi.org/10.1108/ Gill, R. (2011) Theory and Practice of Leadership, second edition. London: Sage. Hemphill, J. K. (1949) Situational factors in leadership. Columbus: Ohio State University, Bureau of Educational Research.

Sharma, R. and Bhatnagar, J. (2009), "Talent management – competency development: key to global leadership", Industrial and Commercial Training, Vol. 41 No. 3, pp. 118-132. https://doi.org/10.1108/ Smith, B. D. (2009) ‘An Exploratory Study of Key Opinion Leadership Management Trends among European Pharmaceutical Companies’, Journal of Medical Marketing, 9(4), pp. 291–300. doi: 10.1057/jmm.2009.31. Storey, J. (2010) Leadership in Organizations current issues and key trends. New York: Routledge. Styhre, A. and Sundgren, M. (2003), "“Management is evil”: management control, technoscience and saudade in pharmaceutical research", Leadership & Organization Development Journal, Vol. 24 No. 8, pp. 436-446. https://doi.org/10.1108/ Thomas N. Garavan (2012) Global talent management in science-based firms: an exploratory investigation of the pharmaceutical industry during the global downturn, The International Journal of Human Resource Management, 23:12, 2428-2449, DOI: 10.1080/09585192.2012. Thomas N. Garavan (2012) Global talent management in science-based firms: an exploratory investigation of the pharmaceutical industry during the global downturn, The International Journal of Human Resource Management, 23:12, 2428-2449, DOI: 10.1080/09585192.2012. Weihrich, H., Cannice, M. and Koontz, H. (2008) Management. 12th edn. New Delhi: Mc Graw Hill. Yuan, C.-C. and Lo, S.-H. (2018) ‘Relationship Among Team Temporal Leadership, Competency, Followership, and Performance in Taiwanese Pharmaceutical Industry Leaders and Employees’, Journal of Career Development, 45(3), pp. 227–238. doi: 10.1177/0894845316680087.