Case Scenario 1: Compliance, Inc

question 121

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 obstacles is CI likely to encounter as it attempts to change its structure to support the transnational strategy?

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Definitions:

General Partners

Individuals or entities that manage a partnership and are personally responsible for its debts.

Limited Partners

Investors who contribute capital to a partnership but are not involved in its daily management, and whose liability is limited to the amount they invested.

U.S. Law

The legal rules and regulations that govern behavior and activities within the United States.

Patents

Legal documents granting exclusive rights to inventors for their inventions, preventing others from making, using, or selling the invention for a certain period.