Sanofi - Mod Term Report.docx

TERM REPORT: MANAGEMENT STRATEGIES AND ORGANIZATION DYNAMICS Submitted to: Ma’am Shagufta Ghouri

Submitted by:

Sadia Shahid

16009

Neha Arshad

23787

Hafiza Nida

23643

Siddiqua

23434

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Letter of Transmittal December 7, 2018 Ms. Shagufta Ghouri Faculty, HRM Institute of Business Management

Dear Ma’am Shagufta: We are submitting the attached report entitled “Term Report-Management Strategies and Organization dynamics”. This report discusses the vision, values, industrial analysis, external and internal environment impacting the global organization – Sanofi. It also contains details about the business, challenges faced by managers and global objectives. We would like to extend our gratitude to you for making us understand the significant concepts and business realities. Thank you for the support, we hope you find this report satisfactory.

Sincerely,

Regards, Sadia Shahid Neha Arshad Hafiza Nida Siddiqua

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Contents INTRODUCTION...............................................................................................................................................................4 Sanofi – As a Global Healthcare Provider...................................................................................................................4 Walk through History in Pakistan...............................................................................................................................4 Vision:.........................................................................................................................................................................5 Mission:......................................................................................................................................................................5 Values:........................................................................................................................................................................5 Grand Strategy - Globalization:...................................................................................................................................6 Global Objectives:.......................................................................................................................................................6 Globalization Strategies:.............................................................................................................................................8 Factors Impacting International Environment:...........................................................................................................9 Global Challenges:......................................................................................................................................................9 Strategic Inter-Organization Partnership:.................................................................................................................10 Corporate Social Responsibility:...............................................................................................................................11 INDUSTRY STRUCTURE..................................................................................................................................................13 Porter’s Five Forces Analysis:....................................................................................................................................13 ..................................................................................................................................................................................15 PESTLE Analysis:........................................................................................................................................................15 Swot Analysis:...........................................................................................................................................................16 Generic Strategy:......................................................................................................................................................17 BCG Matrix................................................................................................................................................................18 Organization Structure:............................................................................................................................................21 Characteristics of Culture:........................................................................................................................................22 Type of Culture:........................................................................................................................................................23 How Employees Learn Culture.................................................................................................................................24 Decision Making.......................................................................................................................................................26 Change and Resistance to Change:...........................................................................................................................27 Employment and Work Force at Sanofi....................................................................................................................28 Recruitment at Sanofi:..............................................................................................................................................29 Organizational Development Change Techniques....................................................................................................30 CONCLUSION:................................................................................................................................................................31 RECOMMENDATIONS:...................................................................................................................................................31 REFERENCES:.................................................................................................................................................................32

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INTR ODU CTIO N HIST ORY IN PAKIS TAN VISIO N& MISSI ON VALU ES GRA ND STRA TEGY GLOB AL OBJE CTIV ES STRA TEGI ES TO ENTE R INTE RNAT IONA

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INTRODUCTION Sanofi – As a Global Healthcare Provider Sanofi is a global healthcare company headquartered in Paris, having presence in over 100 countries with 79 manufacturing sites in 39 countries and an over 100,000 employees working towards providing innovative solutions to people on almost 170 countries around the world. Sanofi’s strong portfolio offers solutions for a broad range of therapeutic conditions. Sanofi, is the 7th largest pharmaceutical manufacturing company in Pakistan. It manufactures over 1.5 billion tablets, 35 million oral liquids, and almost 38 million ampoules and vials annually bringing effective, affordable, quality medications to the local market.

Walk through History in Pakistan In 1967, the company started its operations in Pakistan named as Hoechst Pakistan Limited, and inaugurated its manufacturing facility in 1972. By 1977, company got listed at the Pakistan stock exchange as a public entity. From 1985 to 1996, company diversified into the production of agrochemical formulation and specialty chemicals, which was later sold Clariant Pakistan Ltd. and Hoechst Pakistan Ltd. changed its name to “Hoechst Marion Roussel (Pakistan) Ltd.” with core business restricted to pharmaceutical activities. Later in 1999, Hoechst AG & Rhone Poulenc S.A. globally merged their life sciences business into a new company known as Aventis Pharma (Pakistan) Ltd. During 2004 Aventis was acquired by Sanofi Synthelabo to form a company called Sanofi-Aventis S.A. which was later changed to Sanofi-Aventis Pakistan in 2005, the legal entity continuous to be called by this name today, however, the name was changed to Sanofi Pakistan in 2011.

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Vision: “To work passionately, every day, to understand and solve healthcare needs of people across the world.”

Mission: “To enhance the quality of life of the greatest number through providing a continuum of care by answering unmet medical needs of the community and promoting access to quality healthcare.”

Values: Following values shape the behaviors and ethics of people working at Sanofi around the globe:

1. Respect & Protection of People & the Environment Respecting people by embracing diversity, respecting the opinions and needs of people coming from different communities. Preserving Health & Safety and protecting people and the environment by ensuring a safe and healthy workplace for the employees and external partners, and minimizing environmental footprint of company’s activities and products to protect surrounding communities.

2. Integrity in Managing Company Information & Business Practices In order to maintain trusting relationships with the stakeholder and preserve its reputation, Sanofi believes in protecting confidential information regarding trade, maintaining integrity in business practices by fighting with bribery & corruption and being transparent about product’s efficacy and safety.

3. Teamwork and solidarity Integration of departments and collaborating with all stakeholders to generate best performances to improve people’s lives and winning together as One.

4. Innovativeness & Courage Sanofi encourages its people to innovate, assume accountability and responsibility and learning from past experiences and failures.

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Grand Strategy - Globalization: Sanofi is a global organization working towards empowering life of people around the globe. Strategies are designed in Headquarters-Paris treating world as a single unit, all the standard operating procedures, products design and features, production standards, quality management and marketing strategies are standard throughout the world bounded by its code of ethics.

Global Objectives: To compete in the global market, Sanofi has established a global strategic objective roadmap based on 4 pillars: reshape the portfolio, deliver outstanding launches, sustain innovation in R&D, and simplify the organization.

1. Reshaping the portfolio Reoriented towards biologics, they have segmented their portfolio into 5 global strategic business units:



The

Corporation - Sanofi Headquarters in France

Corporate Level Strategy

General Medicine & Emerging Markets

Diabeties & Cardiovascular

Sanofi Genzime

Business Level Strategy: Strategic Business Units

Sanofi Pasteur vaccines

Consumer HealthCare

General Medicines & Emerging Markets consists of Sanofi's Established Products, Generics, Consumer Healthcare, and all pharmaceutical businesses in emerging markets. 

Sanofi Genzime or The Specialty Care global business unit consists of medicines in rare diseases, multiple sclerosis, oncology and immunology, including the two, investigational biologics, sarilumab and dupilumab.

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The Diabetes & Cardiovascular unit consists of Sanofi's Diabetes Care medicines as well as Cardiovascular.

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Sanofi Pasteur includes vaccines and animal health products.

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*Rest of the World: Japan, South Korea, Canada, Australia & New Zealand. *Emerging Markets: Brazil, Russia, India, China, Pakistan, Middle East

2. Delivering Outstanding Launches Asper this strategy, Sanofi is focused on introducing new medicines and vaccines, in 2017 Dupixent was launched, which is the only biological medicine for treating moderate-to severe atopic dermatitis, followed by the launch of Keyzara to treat rheumatoid arthritis. In addition to launches, Sanofi also leaned towards acquisitions to expand its molecular base, for example, sanofi acquired Bioverativ, who is the global leader of hemophilia market, and Ablynx, a biopharmaceutical company specialized in Nanobodies.

3. Sustain innovation in Research & Development Sanofi has continuously adapted its R&D model in recent years to enhance its development excellence. In 2017, 5.5 Billion pounds were invested in R&D across Europe & North America.

4. Simplify the organization Establishing a more agile organization through a cost reduction program and Uniting the different parts of the company behind a single vision, a common set of values and a shared culture.

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Globalization Strategies: Sanofi uses the following strategies according to requirement in different countries that they do business in. Sanofi serves approximately 100 countries and each country or state requires a different strategy. 

Outsourcing: The biggest outsourcing that Sanofi did was in 2010 with Covance, a research and drug development company in the United States. Sanofi used their central laboratory services for their own benefit for almost five years. Then another company in UK named SCM Pharma provided their services to Sanofi to provide a radiolabeled product - jevtana to treat Cancer.

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Exporting: Sanofi exports its products to many countries. First it is analyzed by the organization that whether installing a plant cuts costs or exporting does, then the decision is taken whichever is more beneficial for the company. One of the places that Sanofi exports to is Dubai since it is extremely hot and humid, there would have to be chillers installed which could cost a lot so the cost cutting thing to do was to export.

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Acquisition: Sanofi has acquired more than thirty companies including organizations, laboratories and corporations. The biggest acquisition in Sanofi’s history till date was the acquisition of Aventis, a French pharmaceutical company, in 2004 after which the company’s name became Sanofi-Aventis but it was later changed to Sanofi in 2011.

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Factors Impacting International Environment: There are several global trends suggesting opportunities for the Pharmaceutical industry. 

The increase in Global population and the higher probability of aged, therefore higher demand for medical treatments.

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Increased R&D requirements by the industry resulting in innovative medicines.

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Emerging markets, rising middle income class and informed patients are demanding better quality medicine.

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Big Data, scientific and technological innovation in the fields of genomics are transforming treatments.

Global Challenges: In 2015 when the chief executive officer of Sanofi France was fired due to some clashes with the board of directors, a new CEO was appointed named Olivier Brandi court who had job experience from the US and was American but had French nationality. Upon being appointed, he faced many challenges regarding his work. • Managing Cross Culturally: He faced conflicts with the French people who questioned his style of management and had different opinions about doing work. • Decision Making: He was not supported by the employees of the organization when he made some new decisions and tried to implement them. • Leading: Brandi court’s leadership style was new for the French employees and he had to slowly and gradually implement the new changes so employees accept them. Similarly, when Sanofi came to Pakistan, they had to make a lot of changes according to the culture, working style and temperament of the people. Sanofi Pakistan is under the supervision of Sanofi Saudi Arabia which in turn is under the super vision of Sanofi France. So, dealing with Saudi Arabia resulted in difficulties for the Sanofi Pakistan due to cultural differences, differences in management style, and language barrier. The people of Sanofi Pakistan have to make sure that they understand each and everything and they justify everything before taking any action regarding any matter.

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Strategic Inter-Organization Partnership: Sanofi believes in collaborating and partnering with such organizations who are working towards a similar goal as them. Sanofi welcomes partners who want to work with them for finding cures and providing well-being. They are partners with many Research and Development groups of various universities, institutes and organizations to bring innovations about healthcare. Sanofi has a range of products to offer for different types of medical issues and they are partners with suitable organizations which could help in the development of products of those specific categories. These categories include: 

Cardiovascular: Sanofi plans to remain committed to develop new therapies by making partnership with pioneers of the industry of this field. They collaborated with Regeneron and launched a treatment which helped adults to reduce their LDL cholesterol levels.

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Immunology: Sanofi is in partnership with Regeneron for Dupixent which is a biological drug for atopic dermatitis, a immune mediated disorder. They seek partners to work on small molecules and nucleic acid-based approaches.

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General Medicine & Emerging Markets: Sanofi is partners with various small businesses to provide the over the counter general medicines and is still working towards betterment in this area.

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Vaccines: Sanofi provides a wide range of human vaccines protecting against 16 infectious diseases. They are working with teams from different organizations to develop effective vaccines for complex diseases.

Corporate Social Responsibility: 

Support Community: Sanofi’s staff is actively involved in raising awareness and funds through various programs, one of which is the Teenage Cancer Trust which receives donations to work on supporting the cancer patients through free treatment and course of medicines from Sanofi’s oncology range of medicines.

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Donations: Sanofi receives donations from sponsors or business partners to help support their initiatives of charitable support programs which are helping patients who are financially not able to bear the expenses of treatments. Sanofi provides their own medicines to such patients all their lives and try to promote well-being.

Through the funds raised by Sanofi, for the first time in Pakistan, Sanofi Genzyme provided free of cost diagnostic services for LSD cases and are facilitating the treatment of many patients through their International Charitable Access Program. Sanofi collaborates with its stake holders to gain their support in working towards to provide vital treatment to many patients with rare diseases.

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“CSR is a key asset of our strategy and has always played a fundamental role within our business by enhancing our ability to deliver our strategic objectives” – Sanofi Pakistan.

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PORT ER’S 5 FORC ES ANAL YSIS PEST LE SWO T GENE RIC COM PETE CHAPTER 2: INDUSTRY STRUCTURE & TIVE EXTERNAL STRA ENVIRONMENT ANALYSIS TEGY BCG MAT RIX

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INDUSTRY STRUCTURE Porter’s Five Forces Analysis: The five competitive forces determine the attractiveness of an industry by defining its structure and how companies are competing with each other in the particular industry, this analysis help in anticipation of the profitability and formulation of strategic positioning. Let’s have a look at the configuration of five forces of Pharmaceutical Industry in Pakistan.

1. Threat of entry: Low There are over 800 pharmaceuticals operating Pakistan, having state-of-art manufacturing plants, global expansion and strong brand identities providing them economies of scale, new entrant can face strong retaliation from the market due to rivalry amongst the existing competitors. The industry requires huge capital investments in shape of setting up manufacturing plan, machinery and research & development. Furthermore, it is difficult to obtain licensing as government has strict policies according to the nature if business, Drug Regulation Authority of Pakistan issues license and patents if the production meets the standard criteria increasing the barriers to entry as intense documentation is required to pursue operations. The producers of branded medicine & molecules have patents sustaining proprietary differences, however, as soon as the patents get expired, counterfeit products are readily available in the markets. The distribution channel involves the medical institutions and doctors who primarily are the customers of the industry, who later sell these products to the end user, their patients. Established firms have well designed distribution channels given the long-term relationships with the customers, therefore to is difficult for a new entrant to assess distribution channels as it also requires a lot of marketing & sales costs.

2. Bargaining Power of Buyers: Low Primary Influencers of the pharmaceutical industry are the doctors and medical institutions who then prescribe the medicine to their patients who are the end users, there are large number of customers as compared to the pharmaceutical firms in the country, the firms also provide incentives to these doctors to sell their products. Each customer has relatively low portion of purchase as medicines is a consumable product with an expiry date. The customers don’t face any costs when switching between suppliers, as DRAP (Drug regulation authority) has imposed price caps to make the medicine affordable and accessible to the majority. Doctors are very knowledgeable regarding the product’s pros and cons, however, there is an increased awareness amongst patients to have information regarding the product as well, therefore there has been a shift in marketing efforts towards the users. The majority of Pakistani population have low incomes, therefore they are price sensitive, although branded medicine has an edge in terms of quality for which people are willing to pay an extra price.

3. Bargaining Power of Suppliers: Medium The inputs for Pharmaceutical products are unique and differentiated, the companies require high quality raw material as any compromise over quality can prove to be fatal which impacts adversely on firm’s reputation as well as is subject to intense lawsuits. It is difficult to switch between suppliers easily and cheaply as the raw material accounts for major portion of the total costs as well as the selection criteria for suppliers requires close inspection according to the company’s requirements which is a 13

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cumbersome and costly process. There are many potential suppliers within and outside the country, cost of imports also impacts the total cost, however, the supplier cannot enter the industry as producing medicine requires a lot of R&D and licensing in addition to manufacturing unit which makes the industry’s business important to suppliers, therefore bargaining power of buyer is medium.

4. Threat of Substitutes: Medium Counterfeit medicine and generic drugs can not be categorized as substitutes because they have a similar industrial structure, similar form and perform similar function as that of branded pharmaceutical products, the customers, suppliers and competitors of generic products are same as that of branded medicine. Substitutes, on the other hand, has different industrial structure, perform similar function but in different form, in this case, the substitutes for pharmaceutical products are the herbal and homeopathic medicine manufacturers as they have different inputs, different form, different distribution channels as they directly target the users and different suppliers. These products have performance limitations, however there is an increased trend of moving to organic and herbal treatments, which makes the customer likely to switch to substitutes for non-fatal, and less chronic diseases for example skin infection and flu, these products are usually less costly then allopathic medicine.

5. Rivalry amongst existing competitors: High Pharmaceutical industry is one of the fastest growing industry in Pakistan with an annual growth rate of 12 %. The demand for the pharmaceutical products remains constant throughout the year. There are strong brand differences with competitors different in size in terms if market share, investments, global presence and product lines. Customers (doctors) understand the complexities of products and do not face any cost in switching, which intensifies marketing efforts, the competition is also price based especially amongst local producers of generic drugs. The industry also requires huge investments in terms of fixed capital and attainment of licenses which makes it difficult to get out of business easily. As market is getting saturated companies are going global which means worldwide launches, global branding and heavy investment in promotion as shorter product life cycle and to gain competitive advantage.

Conclusion: The industry is moderately attractive, major opportunities arise from low threat of entry and low bargaining power of buyers, existing companies should invest in R&D and launching innovative solutions to leverage from the opportunities. Mediocre threat of substitute and bargaining power of supplier can be avoided by improving the quality of products, reducing environmental footprint, reducing side-effects of medicine and backward integration, companies may want to produce their own raw material. The major concern is rivalry, which can be reduced through shifting the competition in price to innovation, more patented medicine can be produces to avoid counterfeit competition.

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PESTLE Analysis: 

Political & Legal factors: 1. Strict regulations by DRAP for production of medicine, licenses are difficult to obtain as the criteria is very stringent defending on the nature of business. 2. Government regulates the prices of drugs to make it accessible shrinking the profit margins. 3. Heavy import duties on raw material increases the costs of production. 4. Increased taxation on foreign manufacturers and brands discourages investments.

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Economic Factors: 1. The reduction in consumer disposable income due to global economic crisis will have an impact on those countries using health insurance models particularly where part payment is required. It also increases competition as consumers will switch to low priced generic products. 2. Increased pressure from shareholders has caused a consolidation of the industry: more mergers and acquisitions will take place over the coming years. 3. Parallel trade free movement of the product across the Europe without any trade barriers which will affect the local manufacture because the distributor will buy drugs in low price markets and export them to high price markets example buying the product from manufacture in Poland and exporting them to Ireland.

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4. The exchange rates and currency problem are also one of the major issues, for example a drugs price in USA will be higher as compared to that of in Pakistan for the same product, the currency exchange rate and consumer purchasing power puts price caps. 5. Emerging countries like India, China, Brazil and Russia are attractive markets.

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Social Factors: 1. People practice self-treatment, demand for over the counter products is higher. 2. Patients are becoming more informed; their expectations have changed and demand for higher quality. 3. People are also aware of the side-effects of chemically produced medicines, there is an increased demand for organic, herbal products.

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Technological Factors: 1. The evolution of the internet is also stretching the marketing boundaries, direct consumer marketing is increasing, revolutionizing the distribution channels. 2. Innovation is enabling companies to produce person specific medicines which can increase profit margins using biotechnology and genetics. 3. Advance manufacturing practice lead to optimized solutions. 4. Innovative communication channels lead to online treatments for patients.

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Environmental Factors: 1. There’s an increased concern for environmental footprint of industries using chemicals. 2. Companies have increased investments in Corporate social responsibilities to serve communities.

Swot Analysis: 1. Strengths: 

Strong Brand Identity: Sanofi has a strong brand image which brings in Goodwill, Customer loyalty and investors due to trust in companies’ operations.

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Research and Development: The company has a well-established R&D focused on introducing advanced medical Solutions with focus on: Thrombosis, Cardiovascular diseases, Diabetes, Vaccines and oncology.

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Diversified range of markets: Sanofi has a diversified product portfolio, catering to the needs of vast market. The product lines include vaccination and medicines for human healthcare as well as animal healthcare.

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Medical Marketing Department: Sanofi closely works with all its stakeholders to utilize their insights in finding innovative solutions.

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State of the Art manufacturing Plant: Sanofi manufacturing plants exist in over 79 countries.

2.

Weakness 

Recruitment procedures lack personality assessment of people.

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Only one molecule was introduced in Pakistan in the past 7 years.

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The production requires long time frames due to clinical trials which last 10-15 years.

3. Opportunities 

Increasing demands due to increase in ageing populations

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Innovation in biotechnology.

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Emerging markets with increasing middle class.

4. Threats 

Price caps by governments to regulate prices.

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Increased concern for environmental foot print.

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Growing market for low-cost generic medicines.

Generic Strategy: Sanofi is strategically positioned against its competitors with a broad differentiation strategy, the products are branded and high quality, the product portfolio is diverse catering to a broad fraction of customers. 17

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Cost Leadership

STRATEGIC POSITIONING Differentiation

Broad STRATEGIC TARGET

Focused

BCG Matrix

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ORG ANIZ ATIO N STRU CTUR E CULT URE DECI SION Low MAKI INTHigh NG CHA ERN Market GrowthNGE AL EMPL OYE ENV MEN IRO T& WOR NM KFOR ENT CE

AN ALY SIS

Relative Market Share High Claforan Haemaccel

Low

No Spa Clexane

Flagyl Amaryl

Lasoride Phanergan

According to the results of Boston Consulting Group (BCG) Matrix, Claforan and Haemaccel lies in the 1st quadrant of the matrix that represents organization best long-run opportunities for growth and profitability. And because it is the segment with high relative market share and a high industry growth rate it should receive substantial investment to maintain and strengthen the dominant position. Flagyl should be made a star brand, given its high market share, which require more investments as well.

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Organization Structure: Sanofi has a Matrix Structure, Sofi Global is divided into five Global Business Units (GBU’s) and presence 20

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in international market is divided in to 4 Regions. All regions report to the Corporate head quarter’s in France. The departmental division shows how all departments support each GBU. Matrix Structure 

Regional Division for the production and distribution of the Sanofi Portfolio

General Medicine & Emerging Markets

Consumer Diabetes & Specialty Care Healthcare Cardio CORPORATE HEAD QUARTERS Vascular

Sanofi Pasteur

United States Europe Emerging Markets Rest of the World 

Departmental Division

General Medicine & Emerging Markets

Consumer Healthcare

Diabetes & Cardio Vascular

Specialty Care

CORPORATE HEAD QUARTERS

Sanofi Pasteur HR

Marketing Production Sales Finance

Characteristics of Culture: 1. Innovative and Risk Taking: High “The degree to which organization encourages employees to be innovative and risk taking” 21

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Innovativeness is high at Sanofi, employees are being encouraged to bring innovative solutions to problems. They have annual award programs like “Out of box thinking” award, “Sanofi Ideal” Awards through which people are motivated to bring innovation.

2. Attention to Details: High “The degree to which employees are expected to exhibit precision, analysis and attention to details” This characteristic is also high because Sanofi given the nature of business, management and employees pay great attention on every detail, such as procurement of high-quality raw material and inputs which are tested multiple times before the putting into production. The medicine formula itself is carefully researched to identify potential pros and cons.

3. Team Orientation: Medium “The degree to which the work is organized around the team rather than individual” This characteristic is measured as medium because it varies department to department. For instance, the marketing department is highly team oriented as brands are divided amongst teams such as a brand manager of diabetics & cardiovascular medicine brand would be working with his team to carry out all the activities related to brand including arranging information seminars, visiting doctors & institutions, leading sales team etc. In Human Resource department, on the other hand, the work is more individualistic and each person is responsible to perform a particular task. A person may be looking after the hiring and the other may be responsible for documentation. Therefore, team orientation is highly dependent on type of project and work.

4. Outcome Orientation: High “The degree to which organization focuses only on the output rather than how the output is achieved” Result orientation is high at Sanofi for example yearly sales target are devised for each brand, brand managers then design the strategy to achieve set targets, by the end of the year is there’s a gap between desired and actual performance, then the brand manager is held accountable. If the outcome is not what it was expected then the person by whom the strategy was designed is being call out to give reasons of Why the strategy did not work properly? And if the strategy was well defined then each and every member (employee) related to that task is being called out to give reasons of wrong execution of strategy.

5. Aggressiveness: Low “The degree to which employees are aggressive and competitive rather than co-operative” Sanofi is low in this characteristic because its values clearly guides the employees to work with unity, during the interview the employees emphasized on the fact that their supervisors and peers are very helpful and cooperative.

6. Stability: Low 22

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“The degree to which the organizational decisions and actions emphasize on maintaining the status quo” Sanofi is low in this characteristic because of the following reasons:  

They design their strategies internationally with respect to the environment or market conditions. Changes are bought on the basis of requirement from one country to other country for example: In which country the Research and development should be increased, in which country they have to increase sales, where they have to increase production all changes are made by studying the market and external environment.

7. People Orientation: High “The degree to which management decision takes into account the effect on the people within the organization” Sanofi is high in this characteristic because it has given autonomy to its employees to participate in organizational activities, the policies are designed in a way that allows employee to acts freely to meet their needs. Reward system is also designed keeping the focus on employee well-being. The company’s values put great emphasize on protection of all stakeholders and providing a safe and healthy work environment to employees.

Type of Culture: The right fit between the company’s strategies, culture and environment are associated with four types of culture based on two dimensions, (1) the extent to which the external environment demands flexibility or stability, (2) the extent to which a company’s focus is internal or external. The table below identifies the four types of culture:

NEEDS OF ENVIRONMENT Flexibility

Strategic focus

Adaptability Culture

Stability

Achievement Culture

Internal External CLAN CULTURE

Bureaucratic Culture

As per our understanding, Sanofi follows Clan culture, which is also known as involvement culture. Characteristics of Clan Culture:

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1) This culture puts emphasize on participation and involvement of employees in orders to adapt with the changes occurring in the external environment. 2) This culture pays high value to address the needs of employees, and the organization can be characterized to have caring and family like environment. 3) Cooperation, helping peers, considering both employees and customers and reducing status difference are valued by the managers. Following are the reasons which shows Sanofi has Clan Culture: There is an open-door policy, employees can discuss issues with the senior management, employees are less competitive with others instead they help each other creating a family like environment which also a part of their values. Although Sanofi’s strategies are made in tandem with the changes occurring in external environment but its code of ethics places boundaries on the actions that can be taken. For example, in Pakistan there is cut throat competition between branded pharmaceuticals and generic pharmaceuticals, there are many unethical practices prevalent in the market to gain market share, but Sanofi cannot adopt these unethical practices like bribing the doctors to prescribe their medicine as it would hurt the company’s reputation globally.

How Employees Learn Culture: Employee can learn culture through following ways  Language 

Rituals

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Material Symbol



Stories

What we observe at Sanofi that employees can learn Sanofi’s culture from its activities i.e. Rituals and Stores. Stories at Sanofi: The company’s Annual Internal letter contains the achievement of employees by name, success stories are shared, and failures are celebrated as a learning experience. One such story was shared with us which shows that the employees are not being penalized upon any mistake a story was shared by a Sanofi employee that he arranged for a marketing campaign costing around PKR. 40000, however the date of the event got postponed which resulted in loss of money, now the manager instead of penalizing the employee, treated it as a learning experience. Rituals at Sanofi: Annual sales conference in which whole sales team is gathered in a specific city of Pakistan where different team building activities are carried out, in this meeting cross functioning or random pairing of employees, managers, directors and country head occurs which shows how they try to reduce power distance and encourage involvement. 24

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Material Symbols: Company’s core values, vision, mission, code of ethics and other motivational quotes were placed as wall hangings around the campus as an act of reinforcements:

- A shot featuring material symbols at Sanofi.

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Decision Making Programmed Decisions: These are the routine decisions for which Sanofi has clearly defined guidelines to be followed by employees of middle and lower management at all levels for their day to day activities, these guidelines outline the standard operating procedures for each department governed by the code of ethics. Non-Programmed Decisions: These are the decisions which are one of a kind. Non-programmed decisions are result of such situations which are new and have no history available. At Sanofi, these decisions are only made by the top management and then the appropriate work plan is delegated to the workers. For example, Strategies are devised in Headquarters for each country, which are then forwarded as action plans to all Sanofi companies in the world Sanofi implements Rational Model in their decision-making process which involves identification of problems, listing down all alternatives, selecting the most beneficial alternative, implementing the chosen alternative and then gathering feedback. This model implies that in case of a problem, these steps should be followed to take a rational decision which would prove beneficial to all. However, it is not always possible to know all aspects and complexities of a problem, in which case Sanofi prefers the Bounded Rationality Model which tells to break the problem in smaller parts that are easily understandable to a satisfying level, and then to take a decision. The decision-making style of the managers at Sanofi is Analytical. They try to gather as much data as they can and then they analyze and interpret everything to come to a conclusion to make a decision. Since it is a Pharmaceutical company, they have to be extremely careful while making any decision as it could affect many people’s life so they try to adapt Behavioral style as well which involves communicating with employees, customers and other stake holders to keep matters clear and to gain their insight in order to take decisions that help others and the organization to achieve their goals. SHARED DECISION-MAKING T SANOFI

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Change and Resistance to Change: Two specific change examples were shared with us, one was related to people’s behavior and the other was related to structure. Situation 1: Change in Promotional Criteria – Employee Behavioral Changes The promotions in Sanofi Pakistan were done on seniority basis that is Years of experience with the company. They came up with a strategy to change this and to give promotions based on the performance of the employees. Due to the implication of this new strategy, many promotions which were due in the current year were held back to first promote those who deserved it based on the evaluation of their performances. This change led to a lot of overt and immediate resistance by the senior employees who said they deserved the promotion first because they have been serving the organization since a long time. Sanofi handled this situation well by communicating with the senior employees and making them understand why this change was necessary. They also promised to give them their due promotion the next year. Since managers had a good and positive relationship with their employees, they believed them and waited for a year and as promised, managers gave them their promotion in order to be fair with everyone in the company. Situation 2: Redesigned Portfolio - Structural Change. As discussed earlier in this report, Sanofi redesigned its portfolio by forming global business unit, Sanofi Pakistan faced problem when they tried to merge their two different divisions of medicine into one. Since every division has its own brand manager, due to this merger, one of the two brand managers were laid off and one stayed back as the brand manager of the new combined division. This caused immediate resistance by the employees who were being let go. Sanofi dealt with this resistance by implementing change fairly, Employees were given solid reasons for their laying off., furthermore, they also facilitated the employees by giving them golden handshake that is a handsome amount of money which would support them in their finances till they find another job.

Who brings change at Sanofi Pakistan? Sanofi Pakistan uses Internal Change Agents for implementation of new ideas, plans or strategies. They believe their organization has sensitive and confidential information with which they cannot take the risk of letting someone in from outside as a consultant. They also have the annual “Change agent awards” to encourage employees to bring in change.

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Employment and Work Force at Sanofi 1. Workforce Diversity: Globally at Sanofi, they believe in work diversity. There is high emphasizes on respecting the diversity of people, their background and experiences and that is embedded in their values. 2. Work-Life Balance Sanofi US received the 2017 Seal of Distinction from the World at Work Alliance by creating a balanced work-life environment. The company has the policy of flexible hours, employees are supposed to work for 45 hours a week, employees can arrange their working hour according to their need. Females, at times and given a genuine reason, are allowed to work from home as well. 3. Gender Equality Global Gender Balance Board set up by Sanofi Executive Committee Council to focus on driving gender equality within the organization. Currently, Sanofi Pakistan faces issues with gender equality, the percentage of women working at Sanofi is significantly less, but in congruence with the global policy, Sanofi Pakistan is working on implementing strategies on hiring more women. There is an incentive program, where women currently working with the organizations are rewarded for providing referrals of competent women profiles. 4. Job Sharing Since Sanofi is a manufacturing organization, Job sharing is present is the form of shifts, usually morning and night, for employees working in production department. 5. Telecommuting: Females, at times and given a genuine reason, are allowed to work from home as well. Sales force spread all over the country is reporting to their managers via cellphone, which are also traced. 6. Virtual Offices: Brand Managers, Assistant brand manager and sales force stay connected via conference calls etc. given the nature of their job as it requires continuous travelling. 7. Involvement Programs: Sanofi practices participative management by actively employees in decision making, but the focus is usually on middle management. Factory workers are represented by the union in board meetings.

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8. Reward System: Sanofi has modular pay plans developed through market research, so basically, it’s a pay matcher. The compensation is based on the Job cadre of the employee, the threshold of grades is developed maintaining internal and external equity. Variable pay includes bonuses which are usually given once year after appraisal. In factory, some employees are hired on daily wages and piece rate pay, for example employees in packaging department.



Workforce distribution across generation In Pakistan

The company has a headcount of 1189 employees out of which 52% are in sales. Cohort

Age employees

of Ratio employees

of Designation

Boomers

40-60

50%

Upper level management

Xers

25-40

40%

Middle level management & Sales

Early 20’s

10%

Sales, APM, trainees & internees

Millennial

Recruitment at Sanofi: Recruitment at Sanofi, like another organization, is an ongoing activity throughout the year. The hiring criteria at Sanofi Pakistan, as told by their Senior Manager HR, involves screening the employees on the basis of following: 1. Experience in relevant field 2. Education and trainings 3. Communication and presentation skills 4. Professional appearance It can be said, that the hiring process is based upon analyzing Surface level diversity, Sanofi does not incorporates taking any personality tests when hiring people. 

Person –Job fit according this theory, organization usually take personality test to test the capability of candidate. The theory argues that satisfaction is highest and turnover lowest when personality and occupation are in agreement. At Sanofi Pakistan, they do not practice such activities.



Person organization fit. It essentially argues that people are attracted to and selected by organizations that match their values, and they leave organizations that are not compatible with 29

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their personalities and such personalities are discovered by Hofstede’s five value dimensions of national culture which has discussed.

Hofstede Model 

Power Distance: It is the degree to which inequality prevails regarding the work position of employees. Sanofi Pakistan is low on Power Distance. Employees are allowed to communicate with each other and they have an open-door policy where they make each other feel like family. Cooperation, helping and supporting each other out are the main traits at Sanofi.



Uncertainty Avoidance: It deals with a society's tolerance for uncertainty and ambiguity. Sanofi Pakistan is high on Uncertainty Avoidance. They have guidelines and structured policies for most of its operations.



Collectivism vs. Individualism: It is the degree to which people prefer to work in teams or prefer to work alone. Sanofi Pakistan is medium on collectivism and individualism. It differs from department to department. Some employees of particular departments are encouraged to work in teams while some from other departments are preferred to work individually.



Masculinity vs. Femininity: Masculinity refers to the degree to which males have the decisionmaking power and Femininity refers to the degree to which equality prevails. Sanofi Pakistan is high on Masculinity and low on Femininity. In fact, there are very few female employees at Sanofi Pakistan and they have a male dominated workplace.



Long term vs. Short term: Long term refers to the degree to which people talk about past, present and future while Short term refers to the degree to which people talk about present only. Sanofi Pakistan is high on long term plans as they have many projects planned for their future and they have many products in their pipeline.

Organizational Development Change Techniques Organizational Development techniques are a collection of planned intervention built on humanisticdemocratic values that seeks to improve organizational effectiveness and employee wellbeing. OD values the human and organizational growth. It has a number of values on which the techniques are formulated: 

Respect for people.



Trust and Support.

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

Power equalization.



Confrontation.



Participation.

Sanofi goes through changes every now and then according to the need of the customers, employees, and the environment. These changes are implemented through the following organizational development techniques: 

Sensitivity Training: Sanofi uses the unstructured group interaction to change the behavior of employees. Employees are brought together to have informal conversations to get to know each other and be more accepting towards diversity.



Team Building: To enhance the trust, understanding and coordinative efforts between team members, Sanofi encourages them to participate in group activities. They are given group projects which may help them in having people with different areas of expertise and would be a chance of gaining experience working with diversified people.



Appreciative Inquiry: It identifies the unique qualities of an organization on which the members can work on to bring change through improvement in performance.

Employees at Sanofi are encouraged to find their strengths and design an action plan to reach towards where they want to see the organization and start working on it.

CONCLUSION: Sanofi is efficiently managing its internal environment with respect to the changes occurring its external environment, having a strong presence around the world through mergers and acquisitions to develop core competencies. Company has a strong portfolio, catering to the needs of abroad customer base, serving the community, Sanofi is also engaged in CSR activities. Company’s culture supports the organization in achieving its objectives.

RECOMMENDATIONS: 1. Sanofi should include personality tests in its recruitment process to better understand the deep level diversity of workforce. 2. Participative management should extend to all levels if employment, lower level people are closer to operations, processes and customers, therefore can provide better insight. 3. In addition to increase female representation, there should also be attempts to employee disabled people if Sanofi really wants to embrace diversity.

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REFERENCES: https://www.sanofi.com/en/about-us/sanofi-at-a-glance http://www.codeofethics.sanofi/ http://fakemedicinesrealdanger.com/web/sanofi_engagement_ https://www.sanofi.com/en/about-us/healthcare-solutions https://www.sanofi.com/en/our-responsibility/ethics-and-transparency https://en.jobs.sanofi.com/recruitment-process https://en.jobs.sanofi.com/interview https://www.sanofi.com/en/about-us/sanofi-at-a-glance https://www.sanofi.com/en/our-responsibility/equality-and-inclusiveness https://www.sanofi.com/en/investors/company-overview/strategy https://www.sanofi.com/en/investors/company-overview/socially-responsible-investment https://www.sanofi.com/en/investors/company-overview/key-financial-data https://www.sanofi.com.pk/en/about-us/our-manufacturing https://www.sanofi.com.pk/en/about-us/empowering-life https://www.gallup.com/workplace/234917/sanofi-chro-culture-identity-two-different-things.aspx http://justmeans.com/blog/sanofi-culture-of-employee-engagement https://www.ccl.org/blog/creating-global-organizational-culture/ https://www.forbes.com/sites/jacobmorgan/2015/10/20/three-ways-sanofi-pasteur-encouragescollaboration/#206594bd2e15 https://www.sanofi.com/en/careers/grow-with-us/diversity-and-inclusion

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