Case Scenario 1: Compliance, Inc

question 70

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 more than 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 was likely to have been in place under CI's multidomestic strategy?

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Definitions:

Organizational Structure

The way in which a company or organization is arranged, including the hierarchy of roles and the layout of departments.

Geographical Distribution

The physical location where products are sold or the spread of a population across a given area.

Product Differentiation

The strategy of distinguishing a product or service from others in the market to make it more attractive to a specific target market.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.