Case Study - Structuring an Organizational Development Function

Background

You have been appointed VP, OD (focus on training and development) for a major pharmaceutical organization - Schering-Plough. This is a relatively new function; only limited training and development work has been done in the past. You are charged with defining the structure of the group. You have approval to hire 3 Directors reporting to you and 4 training and development professionals as part of this newly created function.

The Business and Financial Summary

Historically, your organization has done extremely well. Within the past 16 years, prior to the current year, the firm grew from 2.3 billion US dollars to 10 billion in worldwide sales. The 10 billion has been equally split between the US and International sales. This growth has been sparked by a blockbuster allergy product as well as several successful franchises in oncology, cardiovascular, and respiratory. Earnings per share growth (EPS) has been constant each year ranging 15-18%. Based on the stock price averaging $55 per share, market value of the firm has been about 69 billion US dollars.

Recent Developments

Over the past year, a significantly different picture has emerged. The stock has plummeted to $20.00 per share in reaction to a decrease of 2 billion dollars in sales. Note: the market value of the firm is about 30 billion dollars. A new CEO has been appointed. A consent decree from the FDA and investigations by the SEC coupled with shareholder lawsuits have cost your firm about 1 billion dollars from reserves. There has been a loss in confidence by consumers. Turnover is increasing in the scientific and technical groups, and some key general managers and executives have resigned.

You have, along with the executive team, defined a set of core competencies aligned with the vision of the new organization. These competencies include:

• Shared Accountability and Transparency
• Cross-Functional Teamwork and Collaboration
• Listening and Learning
• Benchmark and Continuous Improvement
• Coaching and Developing Others
• Business Integrity

Your Challenge

Define how you would structure the new global Organization Development function. The intent is to re-focus globally the business and gain back customer confidence as well as build internal professional and leadership capabilities.

1. Would you use a Faculty, Customer, Matrix, Corporate University, Virtual or some combination?
2. What would your structure look like?
3. What is the basis/rationale for your recommendation?