Case Scenario 1: Compliance, Inc

question 80

Essay

Case Scenario 1: Compliance, Inc.
Compliance, Inc., (CI) conducts clinical human and animal trials for the pharmaceutical and biotechnology industries. Revenues are split evenly between early and late drug development services. While the bulk of its business is conducted in Europe and the U.S. (10 and 17 subsidiaries, respectively), CI also has subsidiaries in Africa, Latin America, Asia, and Australia. Historically CI operated under a multidomestic strategy, owing to the fact that the clinical testing industry was geographically fragmented to meet the diverse needs of the many strong local pharmaceutical companies and distinct regulatory environments. CI's organizational structure truly reflected the autonomous character of each country's businesses. Many of the country managers have been with CI for over a decade, and have a great deal of discretion over the activities of their home-market businesses. However, globalization of the regulatory environment (both global and local standards), globalization of the biotechnology firms (increasing the geographic scope of their operations), and tremendous consolidation in the pharmaceutical industry (reducing the number of pharmaceutical industry participants to only a handful of major global companies) caused CI to question its multidomestic strategy. Consequently, the firm has begun its transition to a transnational strategy.
-(Refer to Case Scenario 1) What type of organizational structure will likely be needed for its transnational strategy? What impact will this have on the location of particular value chain activities?

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Definitions:

Reasoning Errors

Mistakes or flaws in the process of thinking or reasoning, often leading to incorrect conclusions.

Worthy Argument

A claim supported by solid evidence and reasoning that stands up to critical scrutiny.

Merits

The inherent values or advantages of something, judged based on its qualities or achievements.

Proof

Evidence or argument establishing or helping to establish a fact or the truth of a statement.