Structure and culture at ranbaxy laboratories limited

Ranbaxy Laboratories Limited, India’s largest pharmaceutical company, is an integrated, research based, international pharmaceutical company producing a wide range of quality, affordable generic medicines. Ranbaxy today has a presence in 23 of the top 25 pharmaceutical markets of the world. The Company has a global footprint in 46 countries, world-class manufacturing facilities in 7 countries and serves customers in over 125 countries.

Ranbaxy’s continued focus on R&D has resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. The Company’s foray into Novel Drug Delivery System has led to proprietary “platform technologies,” resulting in a number of products under development.

In June 2008, Ranbaxy entered into an alliance with one of the largest Japanese innovator companies, Daiichi Sankyo Company Ltd., to create an innovator and generic pharmaceutical powerhouse. The combined entity now ranks among the top 20 pharmaceutical companies, globally.

Ranbaxy was incorporated in 1961 and went public in 1973. For the year 2009, the Company recorded Global Sales of US $ 1519 million. The Company has a balanced mix of revenues from emerging and developed markets that contribute 54% and 39% respectively. The Company clocked sales of USD 293 million in 2009 in India.

Ranbaxy is among the few Indian pharmaceutical companies in India to have started its research program in the late 70’s, in support of its global ambitions. A first-of-its-kind world class R&D centre was commissioned in 1994. Today, the Company has multi-disciplinary R&D centers at Gurgaon, in India, with dedicated facilities for generics research and innovative research. Ranbaxy views its R&D capabilities as a vital component of its business strategy that will provide a sustainable, long-term competitive advantage. The Company has a pool of over 1,200 R&D personnel engaged in path-breaking research.

Culture at Ranbaxy

Ranbaxy in the past decade has strived to make a culture based on transparency and trust. It aims to harbour a strong culture of productivity, responsibility and learning. While its official mission statement states “becoming a Research-based International Pharmaceutical Company”, one of its core values states ‘Practicing dignity and equity in relationship and providing opportunities for our people to realize their full potential.’ and ‘Fostering mutually beneficial relations with all their business partners.’

The company believes in the motto ‘Putting people first’, both internal and external. In order to sustain its success and renew its products, it has focused on the people behind its products and not on the products themselves. They strive to provide the highest quality products to their customers to achieve maximum customer satisfaction, which is fundamental to their business.

The culture at Ranbaxy has been evaluated on the following parameters:

Individual Initiative:

Ranbaxy believes in providing autonomy to their employees and let them discover their potential while working for them. Individuals are given responsibility quite early in their careers and their actions impact the business. This has helped in fostering a culture of entrepreneurship within the organization.

Risk tolerance:

Supporting this entrepreneurial culture is the spirit of innovation and creativity. An employee not need be part of Research and Development to bring about innovations. Creativity is promoted in every part of the organization. Genuine mistakes are considered as part of learning and calculated risk taking is encouraged.

Identity:

Employees of Ranbaxy represent what the company stands for. It being one of the very few Indian pharma companies with a significant global presence, all its employees take pride in working for the company.

Reward system:

Salaries and other benefits in Ranbaxy are comparable with the best in the industry and one can expect to be rewarded highly if the performance is consistently outstanding. Ownership in business in the form of stocks is fundamental to personal progression. Besides these, Group Life Insurance, Medical Insurance and Pension plans are some of the other benefits and incentives provided to the employees.

Direction:

It believes in defining clear objectives and priorities for a 3 year pathway. The development plan for 2010-2012 was made year back.

Integration:

Strong emphasis is being given to effective cross-functional teamwork, with a view to inculcate a vibrant, enabling and empowering work culture.

Management Support:

The top management team is entrusted the responsibility of maintaining the professional work culture at company. It is their responsibility to continuously motivate and assist their subordinates.

Control:

Communication patterns:

Diversity

Across the organization, 69% of the total population is male, while 31% is female. Approximately 60% of its employees are below 30 years of age. It truly propagates multi cultural and multi racial employee strength. Ranbaxy workforce of around 14000 people is represented by 51 nationalities with approximately 26% constituting foreign nationals.

Employee engagement

Building employee engagement and commitment, forms a cornerstone at Ranbaxy. Engagement initiatives have specifically targeted four key areas:

Learning and Development

Performance Management

Recognition

Career Development

Ranbaxy believes in consistent ongoing feedback from the employees. For this, they rolled out the Global Engagement Survey, which serves as an invaluable tool to measure the effectiveness of their initiatives and helps them take planned action and build a culture of transparency, trust and going forward.

Effect of the Ranbaxy-Daiichi merger on culture

On June 2008, Daiichi Sankyo, a Japanese pharmaceutical firm acquired 51% share in Ranbaxy, primarily a generics drug making company. The two being completely different in their prime services and goods offered, the language spoken and the way of working, cultural integration between the two is difficult. Infact, there had also been rumors of a cultural clash after the merger.

Structure

Complexity

Vertical differentiation

Horizontal differentiation

The company places great value on employee growth that goes beyond vertical movements and change in designations. To further this, an online internal job posting system, ‘VECTOR’, has been launched globally to facilitate internal movements and lateral career shifts.

Spatial differentiation:

Manufacturing facilities in 7 countries

divided into 8 geographical units

Formalization

Code of Conduct

Ranbaxy is committed to building an organization culture based on values. Its quest for growth and excellence goes hand in hand with unflinching commitment to integrity in all relationships with employees, customers, suppliers, government, local communities, collaborators and shareholders. With this objective the Ranbaxy Code of Conduct was introduced recently by Dr Brian Tempest, CEO and Managing Director, Ranbaxy. The document is a comprehensive compendium of ethical codes, which will guide Ranbaxy corporate practices. It lays down specific guidelines for all employees in various operational areas. These include business ethics, employment policies, equal employment opportunities, sexual harassment, health, safety & environment.

Selection

To inculcate the behaviors described in the company’s ‘Value In Action’ (VIA) Ranbaxy has developed a recruitment process to harmonize the selection of employees across the organization and make it at par with the best global practices.

It involves generating a database from business units across the globe to define the ‘as is’ process i.e. the good practices within the organization to evolve them into a ‘to be’ process. A user’s handbook, ‘Ranbaxy’s Recruitment Guide’ entailing the comprehensive process to be adopted is used to bring in objectivity in the selection process.

Training

To seek, retain and enrich the best available talent, the company provides an environment which encourages initiative, innovative thinking, and rewards performance. It ensures training and development of its personnel through succession planning, job rotation, on-the-job training, and various training programs and workshops.

It uses an interactive Performance Appraisal System to better gauge the achievements and potential of staff members. To increase focus on people that create and perpetuate knowledge, training in the organization is done in work groups rather than mixed participant groups.

Role requirements

Specific behavioral and Organizational Development policies are used to create inter-departmental role clarity and coordination, to clarify internal customer concept and create better functional responsiveness.

Policies and standards

The company has applied rigid quality measures at every stage of manufacturing at their plants. Good quality remains the commitment of every employee at Ranbaxy: from careful selection and analysis of raw materials to meticulous testing of finished products to meet stringent in-house standards.

Centralization

The company believes in providing autonomy to their employees, which has helped foster a culture of entrepreneurship within the organization. Ranbaxy’s Leadership Model focuses on strengthening the leadership qualities across the organization, and thus individuals are given responsibility quite early in their careers and their actions impact the business.