Case Study.

Read the Case study and answer the following questions accordingly. (1 X 20 = 20 Marks)

You are a group of top managers of a large well-established pharmaceutical company that has made its name by pioneering innovative new drugs. Intense competition from other companies in the pharmaceutical industry, plus increasing government pressure to reduce the price of drugs, has put pressure on you to find ways to reduce costs and speed product development. In addition, the emergence of large health maintenance organizations (HMOs) and other large buyers of drugs has made marketing drugs much more difficult, and marketing managers are demanding an increased say in which drugs should be developed and when. To respond to these pressures, you have decided to create cross-functional teams composed of people from R&D, marketing, finance, and top management to evaluate the potential of new drug products and to decide if they should be pursued.

1. How will the change in structure affect the relative power of the different functions?
2. How likely conflict to occur because of these changes, and what is will be the source of the conflict?
3. What can you do to help manage the conflict process to make the new operating system work as you hope it will?
4. What will you do in the above context as a top manager of the organization?