Healthcare European Pharmaceutical Group

1. Introduction

Healthcare European pharmaceutical Group is a multinational Corporation which has 200 subsidiaries globally (such as Japan, China, Latin America, Australia, Germany, France and USA/Canada) and net sales amounted of 5.9 billion Euro dollars (750 million of net profit) from local and oversea markets (Festing & Engle, 2006). The case would analysis the pharmaceutical market of the Healthcare Corporation from internal (domestic area) and external (for international area) aspects (6 points) based on the rewarding Healthcare executives in a dispersed yet integrated firm of the Wolfgang's balancing act" by a HR manager.

2. Descriptive part

Based on the highly differences of product range from the past, headquarters in Germany focus on a few business areas such as oncology and dermatology. In addition, the firm has developed a multi-centered company in order to adapt the changes of global environment such as increasing cost for the research and the development and increasing pressure on prices. Furthermore, Wolfgang Hansen, who holds two Master's degrees of International Management and executive MBA, has been recruited as a new HR manager at Healthcare. Moreover, Hansen's first project is reviewing existing policies and practices. (Festing & Engle, 2006)

There are six documents Hansen had to review, and each document set has been placed in its own folder. The first folder is the Healthcare Group which aims to create a solid base to improve the company's profitability by optimizing the cost structure. The second one is personnel structure of the Healthcare Group which describes the specific of the goal. Next, the leadership competences set the Healthcare Group that there are three sorts of leaderships including Business-related, People-related and personal-related competences. The fourth one is corporate human resource policies which have triggered changes in the structures and processes of Human Resource (HR). Last but not least, it is the global performance system that is about the global individual performance system. Finally, there is an overview of the corporate and HRM strategy that the Healthcare's cross-border strategy to build up the position effects of the IHRM conferences from geographical dimension and cross-culture management. (Festing & Engle, 2006)

3. Analysis

From the aspect of the Folder 1: Healthcare group

In 2005, healthcare company has quite good performance and reached the financial performance that was expected to achieve. Then the management set up some new targets for 2006. Which are:

* Maintain the growth of supply on top products in all important markets to ensure the health care group's business have a positive development. Two factors need to be focused: the adjustment of the strategy on business operation(Ward&Duray,1995); the improvement of operation efficiency of the business

* Optimization of the cost structure of the company can cut off unnecessary cost and transfer the resources to the place where it needed. For example, table 1 illustrate that the R&D, personnel cost have increased by 7% and 3% respectively. Also the annual average number of employees also increased by 2.7%. Table 2 and 3(Appendix 3) demonstrate that both the number of employees and net sales in major international market are all increased from 2004 to 2005. These tables also illustrate that the development of developed country such as Europe, USA and Canada develop much faster than Asia Pacific, Latin America and other activities.

Introducing an advanced information system to healthcare group could optimize the cost structure of the company efficiently. After the information system being introduced, the cost will reduce significantly. Especially in personnel area, such as cost on sending employees to collect data and hiring analyst to analyze data.

From the aspect of the Folder 2: Personnel structure of healthcare group

In 2005 the personnel structure of the healthcare group also have some changes, which are the management have recruited more than 10 percent employees worldwide compare to last year at 28854, while the number of employees work in HQ have been reduced by 232 approximately 33% of the group's worldwide personnel.

According to folder 1, personnel cost is one element of the cost structure of the company. The reason of the personnel structure changing could be:

* The payment of employees is differentiating across the position of the employee. E.g. the employees in HQ usually get more pay than employee in other branches.

* There might be redundancy on employees' duty. Consider the difference on payment, the cost from these employees in HQ is far more than the employees in branches.

The compensation of the employee is determined by their skills. If employees in HQ do not have the skill that the business required, also unable to obtain these skills, then the profitability of the company will be reduced, so the company decides to cut off these positions.

From the aspect of the Folder 3: the leadership competence set the Healthcare Group

Under the requirements of the capabilities of the corporate managers with the challenges ambitions in the future, they should assign diversified jobs to different employees based on the optimizing costs of the structure of Human Resources from the spends of the physical and/or human capital aspects (table 3&4) (Appendix 3). Furthermore, they should also accurate the regulations and/or rules of human resource management (HRM) as different employees had different working competences and experiences. The below statements mention the detail of competencies:

1) business-related competencies

Due to the hypothesis of completing the similar types of accumulated assets, they should focus on settlements and/or achievements of the objectives such as achievement orientation, innovation and change and decision making. Also, they should also prefer to creating, adjusting and improving processes, systems or products. Finally, the employees have the positive contributing ability for decision making of strategies (Markides & Williamson, 1994; Festing & Engle, 2006).

2) people-related competencies

They can motivate and courage employees to perform their ultimate capability such as team leadership, capability development, relationship