Case Analysis
A Midsize Pharmaceutical Company
Jennifer Childs is the owner and Chief Executive Officer of a midsize global pharmaceutical company with sales offices or manufacturing plants in eight countries. At an October staff meeting she tells her managers that company profits for the year are expected to be $2,000,000 more than anticipated. She tells them she would like to reinvest this additional profit by funding projects within the company that will either increase sales or reduce costs. She asks her three key managers to get together to develop a prioritized list of potential projects and then to meet with her to ‘‘sell’’ her on their ideas. She mentions that they should not assume the funds will be divided equally among the three of them. She also mentions that she is willing to put all of the funds into just one project if it seems appropriate.
Julie Chen, manager of product development, has had a team of scientists working on a new prescription drug. This effort has been taking much longer than expected. She is worried that larger firms are working on a similar prescription drug and that these firms might get it to the marketplace first.
Her team has not made any major breakthroughs yet, and some tests are not producing the expected results. She knows this is a risky project but feels that she can’t stop it now. Julie believes the company’s long-term growth depends on this new drug, which can be sold worldwide. She has tried to be optimistic at staff meetings about progress on this development project, but she knows that
Jennifer is growing impatient and that her peers believe she should have terminated the project after the initial tests were less than promising. Julie would like to use the additional funds to accelerate the development project. She would hire a highly respected scientist from a larger firm and buy more sophisticated laboratory equipment.
Tyler Ripken, manager of production at the firm’s largest and oldest manufacturing facility, has been with the
Jennifer Childs is the owner and Chief Executive Officer of a midsize global pharmaceutical company with sales offices or manufacturing plants in eight countries. At an October staff meeting she tells her managers that company profits for the year are expected to be $2,000,000 more than anticipated. She tells them she would like to reinvest this additional profit by funding projects within the company that will either increase sales or reduce costs. She asks her three key managers to get together to develop a prioritized list of potential projects and then to meet with her to ‘‘sell’’ her on their ideas. She mentions that they should not assume the funds will be divided equally among the three of them. She also mentions that she is willing to put all of the funds into just one project if it seems appropriate.
Julie Chen, manager of product development, has had a team of scientists working on a new prescription drug. This effort has been taking much longer than expected. She is worried that larger firms are working on a similar prescription drug and that these firms might get it to the marketplace first.
Her team has not made any major breakthroughs yet, and some tests are not producing the expected results. She knows this is a risky project but feels that she can’t stop it now. Julie believes the company’s long-term growth depends on this new drug, which can be sold worldwide. She has tried to be optimistic at staff meetings about progress on this development project, but she knows that
Jennifer is growing impatient and that her peers believe she should have terminated the project after the initial tests were less than promising. Julie would like to use the additional funds to accelerate the development project. She would hire a highly respected scientist from a larger firm and buy more sophisticated laboratory equipment.
Tyler Ripken, manager of production at the firm’s largest and oldest manufacturing facility, has been with the