Goran Kapicic at Actavis China free essay sample

Question 1 : Identify the factors that contributed to Kapicic’s successful turn-around of the company It can probably be seen that there are many factors that contributed to the successful turnover of Kapicic. However, from my point of view, there are three main factors that brought about the success of Kapicic which are his education background, understanding of Chinese culture and the way he influenced his employees. Firstly, Kapicic was privileged to be born in an well – educated family. His characteristics were mostly influenced by his father’s philosophy which made him to work first, if he wants to enjoy a wealthy life afterwards and his father had always been strict to him. Such rigid disciplines had built up important characteristics and working ethic for his future career. Furthermore, after graduated from the University of Zagreb, Kapicic had started working as marketing and sales manager before he was moved to Beijing. It might be true to say that he had a careful preparation for his life long career in China. We will write a custom essay sample on Goran Kapicic at Actavis China or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Secondly, living in China for more than 19 years had built Kapicic a substantial knowledge of the Chinese market , culture and people. In an interview, Kapicic once stated :â€Å"I strongly believe that leaders need to know their business inside out. They need to understand their people and operations.† (Pg 4, Goran Kapicic at Actavis China). Additionally, Kapicic also understood the concept of face which is very important for doing business in China. For example, he gave Li the largest office of the company even bigger than his own office and he never treated his employees at a lower level. He called them his partner, instead. Finally , the most crucial factor is the way that he influenced people. Actavis was initially a lost-making firm with a lot of negativity. When taking over Actavis, Kapicic had brought a brand new refreshing leadership style. It is understandable that Kapicic spent most of his effort on improving staff quality because he understood clearly that people are the fundamental unit of an organization. One of his successful strategies is to never treat his subordinate as second-in-command and he left the autonomy to his employees, which means they had their own decision and solution to the issue. However, he always offered a listening ear and useful advises to anyone who was in need. Delegating the right things to the right people as well as thoroughly praising them also had a remarkable result in influencing people, too. Song  Chenya – his sales manager were strongly motivated by Kapicic. He felt trustworthy and more responsible working with Kapicic. However, painful decisions are unavoidable in doing business and he had made some difficult decision to fire some employees who stood in the way of this company moving ahead. Facing the loss of the whole sales team due to conflict with the sales manager, Kapicic didn’t compromise and make the uncompromising decision. As a result, the sales departure then could recruit an excellent salesperson from other company, the tough decision of Kapicic had finally paid off. Question 2 : Critically discuss Kapicic’s leadership style. According to Don and John (2011), transformational leadership involves anticipating future trends, inspiring followers to understand and embrace a new vision of possibilities , developing others to be leaders or better leaders and building the organization or group into a community of challenged and rewarded learners. In brief, a transformational leader can be described as visionary, inspiring, daring and ethical. Considering thoroughly Kapicic’s personalities and characteristics, we can conclude that Kapicic obtains the transformational leadership style. His leadership style was shown clearly through the three crucial priorities that he embraced. First of all , Kapicic believes that he had the ultimate responsible for providing strategies to achieve the European standards as well as to make profit for the firm. He had carried out some main changes to in the firm by changing its working culture and ethics, replacing key personnel such as Song and Li. In his belief, people are the determinant of the success of a firm, therefore, he put most of his efforts in developing his staffs and employees Second of all, Kapicic is quite a challenge lover. He has never been afraid to take on difficult tasks. For him, rescuing a failing company makes him excited and successfully achieving something that is described as â€Å"mission impossible† is an ultimate challenge to him . When he first came to China in 2005, Actavis was well-known for its negativity and bad image in many business forums. However, after 6 years with attempts to recover the company, it has changed from a loss-making company to a profitable one. Furthermore, the responsibility and enthusiasm of workers have also been improved. Previously, when there came troubles, there were only finger-pointing blaming at each other. Now, everyone takes part for the mistake they made and start working altogether to solve the problem. Third of all, Kapicic has been ultimately inspirational to his employees. Kapicic believed that inspiration and motivation doesn’t come only from speeches and talks. Leaders need to understand their people and operations, talk to their people, listen to them and also share information with them. Not only Kapicic has successfully motivated his employees, he also developed other people to become leader, too. Let’s take Song Chenya – Manager of Sales Department as an obvious example, Kapicic trusted Song’s strategies and talents and gave Song opportunity to take control over his work which made Song feel very content. Within 16 months working at Actavis with the eager of learning and hard-working, Song became the manager of both sales department, leading the team of 90 people. It’s quite true to say that under Kapicic’s leadership style, Song has strongly developed his characteristics to be a leader, too. Furthermore, Kapicic believed that developing more leaders for the company is his mission, too , since the company cannot rely on Li and him solely. However, there are some drawbacks in Kapicic’s leadership style. For instance, leaving the autonomy to the employees without supervising closely might lead to the result that the vision of the leader and the understanding of his employee are wrongly aligned. Furthermore, lazy and unmotivated staffs will easily exploit the given empowerment, becoming lazy and not focusing on the job. Nevertheless, this could be overcome by a close supervision to each assigned task and a well – established compensation system. Question 3. Kapicic obviously places much emphasis on staff development. How should he manage this effort when the company operates in a highly competitive environment with low margins? It is quite true to say that Kapicic placed most of his effort in developing employees since he strongly believed that people are the determinant of an organization and it requires a high-quality developmental program for a good outcome. However, Actavis has just moved from making loss to earning its very first profit and generic drug industry is a highly competitive market with thin margins. Therefore, to take on the decision whether to invest strongly in developing staffs and employees, there are few things that need  to be thoroughly considered. First of all, was it the right time for the investment in developing employees. If so, how should employees be classified and ranked for the development process. Second of all, what kind of developmental programs should be selected, or should Actavis employees be developed through on-the-job experience ? Furthermore, who shoul d be in charge as company’s training providers ? Firstly, I strongly believe that it is the exact time to invest on developing staffs. Employees need not only to be enhanced in specialized skills but also intrapersonal ones, how to interact with or to motivate other people in order to work smoothly with each other for a better outcome. Additionally, choosing the right employees for the development process is important, too. It will help to save not only the explicit cost ( money spent on establishing the course ) but also the implicit cost (time that employees spent on studying instead of manufacturing). For example, employees from departments such as manufacturing, RD should be classified as theoretical-oriented. On the other hand, those from sales , marketing, HR departments would need intrapersonal skills more. Thus, classifying employees plays a very important role in saving cost for the company. Additionally, ranking employees is important, too. There are many ways that a manager can rank his/her employees, however, I believe that employees should be ranked base on their performance, and for each level of performance there will be a different developmental program. People whose performance are the best should deserve a high-level training program , and those who have the lowest outcome should be fired. Secondly, It is my belief that Actavis China should chose an on-the-job training program for several reasons. First of all, it does not require the development of potentially expensive training facilities . Company does not have to pay a training company/college. Furthermore, it is the senior highly skilled and experience staffs who will teach the new staff the exact skills they need for a particular job. Second of all, since on-the-job training is performed right at the work area, training tends to be focused on practical learning. Furthermore, restructuring the compensation and benefit system is also a solution that a manger could come up with. A well designed system will not only save money for the company but also increase the job satisfaction for  the employees. Remember that benefits that the employees receive extra are not necessarily money. For example, health and life insurance could be offered for workers to relieve them from certain fears ( injury, death ). We all have different kinds of needs. Some of us want money so they work for the company which gives them higher pay. Some value achievement more than money, they would associate themselves with firms which offer greater chances of promotion, learning and development. A compensation plan that hits workers’ needs is more likely to motivate them to act in the desired way. Question 4: How will news of the acquisition by Watson affect the employees of Actavis China? Is there anything Kapicic can do in advance so his people will be better prepared? On the 25th of April 2012, the event that Watson had acquired Actavis Group for approximately EUR4.25 billion to become the third largest worldwide generics company was publicly announced. This event obviously would cause some dramatic changes in the structure of Actavis company as well as negative effects on the employees morale. First of all, this event would initially result in a stressful and nervous workplace. Changing has never been easy to both employees and managers, especially when they cannot involve in making decision that has great impacts on their job – the fear of being under control of somebody else who doesn’t have the same experience and expertise. Consequently, this would affect the performance of the company negatively. Second of all is the fear of losing job. Hardly ever do two organizations have the same culture and characteristics, therefore when they come together as one, conflicts are unavoidable. According to Linda Pophal – a communication consultant with Strategic Communications, LLC, â€Å"as these groups get to know each other there will inevitably be conflict and perceived or real losses on both sides†. The loss could be their jobs, their opportunities or even the formal power that they previously had. This fear thus has negative effects on the productivity as well as the spirit of employees, some might even quit the job to look for somewhere else better. Third of all, competition and attempt to keep the jobs or to protect the position in the company will result in hatred and conflict between the old employees and the new comers in the company. Such competitiveness will obviously result in lower performance , cold tension and stress at workplace or sometimes even violence. Acquisition and merger happens frequently in business nowadays, however changing and adapting to new things has hardly ever been easy. Some may refuse to change, some may even quit the job for another opportunity. During the acquisitions and mergers, I strongly believe that the manager plays a crucial role in helping his employees to overcome these difficulties. The below are several recommended strategies that a Kapicic could do to help his employees. Firstly, being empathetic and supportive is very important. Understanding how difficult it is for the employee to change is necessary. Kapicic should put himself in his employees’ shoes to identify those who are in trouble of the changes and help them to overcome it. When employees can feel the empathy and the concerning attitudes of the manager, they will willingly start to provide information. Such openness also help to build up collaborative problems solving, which may overcome barriers to change. Secondly, providing a clearly upcoming plan for the acquisition is also a very effective strategy. It might be better to have your employees carefully prepared and know certainly what they need to do. Finally, staff communication is crucial. People are more likely to resist change when there are uncertain and vague information. Communicating effectively can reduce gossip, rumors and fears among the employees. The less information management shares with employees, the more employees will engage in speculation about the upcoming transaction. Minimal communication from management leads to drops in employee morale, productivity and job satisfaction. Effective company management can hold meetings and provide frequent communications with employees to explain the acquisition reasons and provide an integration plan and timeline so employees feel they are part of the process.