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Edward Hall developed the iceberg analogy of organisational culture. Apply the various layers of his analogy to Eli Lilly. In your answer, you need to explain each layer of the iceberg analogy and apply each layer to the case with appropriate examples. (9 marks, of which 1 mark is awarded to the correct explanation of each level, and two marks are awarded to the correct application to the case and provision of appropriate examples)

Eli Lilly and Company was incorporated in 1901 in Indiana, USA, to succeed to the drug manufacturing business founded in 1876 by Colonel Eli Lilly. Lilly is a global healthcare leader that unites caring with discovery to make life better for people around the world. Since the company was founded, they were committed to creating high-quality medicines that meet real needs, and today they remain true to that mission in all that they do. The companys formal vision, mission and values are:

Mission statement: We make medicines that help people live longer, healthier and more active lives. Vision statement: We make a significant contribution to humanity by improving global health in the 21st

Century. Company values: Integrity, excellence and respect for people.

Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. In 2018, the company was voted a Best Place to Work. The company worked hard to earn this by prioritising diversity and inclusion. The company also work and behave in a way that reflect its values. They made some internal changes that they believe contribute to being a Best Place to Work. They recruit, retain and develop the best people and ensure that their employees come to work willing and able to give their best. They also employ people with competing perspectives to drive innovation and creativity. They believe an understanding of the changing and rapidly diversifying healthcare marketplace and first-hand experience is the best place to start.

The company discover, develop, manufacture and market products in two business segments human pharmaceutical products and animal health products. In the human products segment, the companys products include endocrinology, neuroscience, oncology, immunology and cardiovascular products. Most of the products that the company are selling today were discovered and developed by their own scientists and their success depends to a great extent on their ability to continue to discover, develop and bring innovative new medicines. The companys organisational structure are indicated in the following figure and explained below:

1|Page

CEO and Board

N-1

N-2

Level N-1 of the organisational structure, consists of the following positions:

• Chief Financial Officer

• Chief Ethics and Compliance Officer and Senior Vice President

• Chief Information & Digital Officer

• President Oncology

• President Diabetes

• Senior Vice President and Chief Scientific Officer

• Senior Vice President Legal Counsel

• Senior Vice President and President Bio-Medicines

• Senior Vice President and President of Lilly International

• Senior Vice President and President Elanco Animal Health

• Senior Vice President of Corporate Affairs and Communication

• Senior Vice President Quality

• Senior Vice President Human Resources and Diversity

• Senior Vice President and President of USA and Chief Customer Officer

Level N-2 of the organisational structure, consists of the following positions:

• The Chief Procurement Officer and Audit Executive report to the Chief Financial Officer (CFO).

• The Deputy General Council and Vice President Patents Intellectual Property and Litigation

  reports to the Chief Ethics and Compliance Officer and Senior Vice President

• Corporate Vice President Anti-COVID Therapies and the Senior Vice President Molecule Innovation Hub report to the Senior Vice President and Chief Scientific Officer

• The Chief Media Officer, Senior Director and Chief Operating Officer and Vice President Global Communications report to the Senior Vice President of Corporate Affairs and Communication

• The management of Campus Recruiting, Talent Sourcing and Diversity, Recruiting and Staffing, Leadership Recruiting, Human Resources and Diversity, and Diversity and Inclusion report to the Senior Vice President Human Resources and Diversity

• The management of Device and Delivery, Medical Devices and Combination, Manufacturing Operations, Active Pharma and Dry Products, Managed Healthcare, Device Manufacturing and Manufacturing and Quality report to the Senior Vice President and President of the USA and Chief Customer Officer

One of the biggest challenges facing Eli Lilly (which is also true of the entire pharmaceutical industry) is from generic pharmaceuticals. In the United States and the European Union, the regulatory approval process for human pharmaceuticals exempts generics from costly and time-consuming clinical trials to demonstrate their safety and efficacy, allowing generic manufacturers to rely on the safety and efficacy of the innovator product. Therefore, generic manufacturers generally invest far less than Eli Lilly do in research and development and can price their products much lower than Eli Lillys branded products. Accordingly, when a branded human pharmaceutical loses its market exclusivity, it normally faces intense price competition from generic forms of the product. Public and private payers typically encourage the use of generics as alternatives to brand-name drugs in their healthcare programs. Laws in the United States generally allow, and in many cases require, pharmacists to substitute generic drugs that have been rated under government procedures to be essentially equivalent to a brand-name drug. Where substitution is mandatory, it must be made unless the prescribing physician expressly forbids it. In many countries outside the United States, intellectual property protection is weak, and the company must compete with generic or counterfeit versions of their products. The moment the companys patent on a product runs out, the company faces the threat of losing billions in revenue, due to other drug manufacturers that will start selling generic versions at much lower prices. For example, in October 2011, Lillys 20-year patent on Zyprexa (a schizophrenia drug) expired that generated a revenue of US$5 billion per annum. The company has faced the same dilemma before. In the mid-1990s its patent expired on Prozac (a drug for depression), taken daily by 40 million people and generating 35 per cent of the companys sales. The company will face a similar situation in future from 2022 to 2025 four more of its products will reach its patent expiry date. In the pharmaceutical industry, billions of dollars can evaporate overnight as drug patents expire and competitors enter the market. To overcome this threat, Lilly needs to grow its drug pipeline.

But how? One of the companys strategies is to encourage faster, less expensive innovation, which is never easy as we have experienced with the COVID-19 pandemic and the search for an effective vaccine. The company is one of the major role players in the development of a COVID-19 vaccine and a monoclonal antibody that prevents infections. The companys antibody treatment Bamlanivimab, was given an emergency use authorisation by the U.S. Federal and Drug Administration (FDA) in November 2020.Bamlanivimab is used for the treatment of adults over the age of 65 who are diagnosed with mild-to- moderate COVID-19 and pediatric patients 12 years and older, who are at high risk for progressing to severe COVID-19. The company planned to provide a million doses of the antibody by the end of 2020, and increase its capacity in 2021, which should contribute tremendously to its revenue and profits. However, in April 2021, nearly 30% of the U.S. population has been vaccinated against COVID-19, hitting demand for antibody drugs that already suffered from slower-than-expected uptake by hospitals. The company's single antibody therapy is no longer being used in the United States after lab tests showed bamlanivimab alone was not effective against some of the new coronavirus variants widely circulating. It is still being used effectively in combination with etesevimab, another Lilly antibody drug.

The company plays a leading role in distributing COVID-19 vaccines to developing countries. In 2021, they donated and distributed thousands of vaccines to India, experiencing its third wave of the virus.