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Case Study

The managers in the pharmaceutical industry in Pakistan give lower strategic importance to HR functions for several reasons: 1) Their main focus is on short-term financial gains and reducing costs, so they see HR initiatives as extra expenses without immediate benefits. 2) Decision making is centralized with the owner, who is mainly interested in making money rather than long-term benefits of HR. 3) Pakistan has high unemployment, so companies find it less costly to replace employees rather than retain them through benefits and HR initiatives. To overcome these deficiencies, companies could: 1) Create inter-organizational networks to share HR best practices. 2) Learn from multinational companies operating in Pakistan. 3) Have the government impose HR responsibility standards on companies.

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Irem Aàmar
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101 views2 pages

Case Study

The managers in the pharmaceutical industry in Pakistan give lower strategic importance to HR functions for several reasons: 1) Their main focus is on short-term financial gains and reducing costs, so they see HR initiatives as extra expenses without immediate benefits. 2) Decision making is centralized with the owner, who is mainly interested in making money rather than long-term benefits of HR. 3) Pakistan has high unemployment, so companies find it less costly to replace employees rather than retain them through benefits and HR initiatives. To overcome these deficiencies, companies could: 1) Create inter-organizational networks to share HR best practices. 2) Learn from multinational companies operating in Pakistan. 3) Have the government impose HR responsibility standards on companies.

Uploaded by

Irem Aàmar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

Question No.

What are the possible reasons for lower level of strategic importance by the managers for
hr functions in pharmaceutical industry of Pakistan? Mention at least three of them.

Answer:
Despite the understanding of HR strategic importance in NCs by top management, they are still
not willing to implement it in their organization because;

 Their focus is mainly on financial gains in the short run by reducing cost and
increasing sales. Due to this short term approach to gains they treat HR initiatives as an
extra expense with no immediate benefit to the company.

 Only one person (owner) in many pharmaceutical companies have authority of the
entire business that is responsible for making major decisions .Owner is mainly not
interested to implement hr practices because they mainly focus on making money and not
realizing long term benefit of hr function to their organization. Due to this centralized
authority those management persons who can bring about hr related changes cannot
implement so.

 As there is high level of unemployment in Pakistan with high level of educated people
available in the market. Pharmaceutical companies in Pakistan finds it less profitable to
focus efforts on retaining employees and giving them benefits as Cost is involved in
giving benefits to employees. Hiring a new employee is less costly compared to taking hr
initiatives to retain old one. This factor is responsible of low strategic importance of hr
initiative not only in pharmaceutical industry but also in other sector of Pakistan.

 National Pharmaceutical companies operate in a Price sensitive market as compared to


multinational companies which are more research oriented. HR initiative will increase
their operating cost which will erode the profit of company as price cannot be increased
of medicines due to tough competition.

 In Pakistan most of the managers work on their past experiences and believes. They are
not ready to take chance to implement new concept of HR. They are following their
traditional approaches that have guaranteed them success in the past.
Question No. 2

How can the pharmaceutical companies overcome the strategic deficiency in their HR
functional area? Give at least three recommendations.

Answer:

Pharmaceutical companies can overcome their deficiencies in HR function as follows;

 In every organization there should be inter organizational collaborative network where


the managers and employees can learn from other organizations about their HR policies
implemented.

 As multinational pharmaceutical companies have better implemented hr practices


therefore they should play their role as carrier of change in the industry of Pakistan
and promote hr strategic benefits.

 There should be some regulations passed by government or standards imposed on


pharmaceutical companies about the HR responsibilities for employee development.
These regulations should be continuously monitored for its effective implementation.
This will also help to organizations to compete with companies in foreign markets

 NCs should get new ideas and suggestions by reviewing previous researches
conducted by others about HR practices and policies and incorporate those policies in
their organization.

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