Organizational Structure in the Pharmaceuticals Industry Essay

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Organizational Structure in the Pharmaceuticals Industry

Pfizer and Johnson & Johnson are the largest and most successful pharmaceutical companies in the world today. Each company has a massive workforce and conducts business in countries all over the globe. Both companies have used a high degree of horizontal differentiation in order to manage their business units more effectively. Operating companies are grouped together by their function, as well as the type of product the produce. There are concerns about the lack of control that results from decentralization. The benefits, however, appear to outweigh the risks, as evidenced by the successes enjoyed by Pfizer and Johnson & Johnson.

Organizational Structure
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Pfizer’s operations can be split into two distinct categories: research and global health care businesses (“Pfizer Announces,” 2009).
After the acquisition, Pfizer formed two separate research organizations. The PharmaTherapeutics Research Group focuses on small molecule research, while the BioTherapeutics Research Group concentrates on large molecules. Within each group, small teams work on specific projects of high potential. This decentralized structure provides sharper focus and less bureaucracy for those working in this critical field (“Pfizer Announces,” 2009).
Upon acquiring Wyeth, Pfizer reorganized its operating companies into two diverse categories: Pfizer BioPharmaceutical Businesses and Pfizer Diversified Businesses. Pfizer BioPharmaceutical Businesses contains five distinct biopharmaceutical businesses: Primary Care, Specialty Care and Vaccines, Emerging Markets, Oncology, and Established Products. Pfizer Diversified Businesses is made up of four unique businesses: Animal Health, Capsugel, Consumer Health, and Nutritional Health. Each of these nine businesses has clear expectations for results from initial product development to the end of the product’s life cycle (“Pfizer Announces,” 2009). This type of decentralized environment provides employees with a sense of pride and ownership in their products. Each business is also able to react more quickly and respond more directly