MERCK SHARP & DOHME ARGENTINA, INC. (A)

BUSINESS POLICY

MERCK SHARP & DOHME ARGENTINA, INC. (A) Case WAC

Introduction: This case study is all about a situation where an important decision related to recruitment of 16th candidate for internship program is to be made. The Manager of Training and Development, Ring, had been scheduled to announce the names of the fifteen college students which were chosen to participate in MSD’s highly selective young pro fessionals intern program. But due to

the fact that she is threatened by a middle manager that might go to upper authority to get his way if she does not accept the 16th candidate into the program; Ring has decided to postpone her announcement of the winning candidates. Now Managing Director of MSD’s has called Manager

of Training and Development, Director of human resources and Director of sales, in his office to make an individual recommendation that whether to hire this young man for internship program pro gram or not.

Facts:

1. 16th candidate is the son of a high-ranking official in the government’s national health care program for government retirees, the single largest health care organiz ation in the country. 2. The presence of the 16th  candidate who is the son of a high-ranking official in the government’s national health care program for government retirees, in the company’s

workforce could afford MSD an excellent opportunity to increase sales by insuring that all its drugs were included in the government health care formulary. 3. MSD gets an unexpected advantage as business in Argentina has long been conducted through a web of personal connections. 4. MSD opened its office in Argentina in 1936 covering Uruguay and Paraguay and opened its manufacturing facility in 1979. 5. In 1988, it signed a licensing and distribution agreement with an Argentina Pharmaceutical company, Instituto Sidus, giving it exclusive rights to produce and distribute products marketed by MSD. 6. Before taking the post of managing director in MSD, Mosquera joined the company Merck in 1976 as information systems manager and then served as a financial controller, sales representative, product manager, sales director and executive director 7. Mosquera joined as MD in March 1995, at age 47, with a 5-year planning horizon. 8. Latin America was characterized by high inflation, high protective tariffs and highly authoritarian state but company was not in financial crisis, sales remained flat and competition was intense. 9. MD rebuilt the top management team in one year and placed the right people at right  place 10. Three inter-related goals of company comprised of flatter integrated management structure, complete transparency and empowerment. 11. Restructuring plan of MD transformed the company’s power structure, reorganized the company into business units, eliminated a layer of bureaucracy, gave managers significant decision power, educated old and new employees, actively promoted transparency and a culture that encouraged information sharing, personal initiative and non-authoritarian decision making.

12. MD promoted ethics by developing mission and values statement and conducting seminars on ethical standards. 13. On the basis of ethics, Human resource director gave a recommendation of not hiring the young man. 14. Sales Director gave a recommendation in the favor of young man as it would increase company market share and sales by $5 million a year. 15. MD was aiming 26% growth in sales and 16% 16 % growth in operating expenses.

Core Problem: Conflict of Interest There is a conflict of interest between the Manager of Training and Development, Human Resources Director, and Director of Sales as everyone is looking at the situation taking his h is own  perspective in view only. Director of sales sees this as an opportunity to increase sales and growth thus going in favor of hiring while HR Director emphasizes on ethics thus going against hiring of the 16th candidate. As for the manager of training and development, there is an order by the middle manager to hire the 16th candidate and she is in a fix.

Answer: Never go for an unethical decision and stand by your your morals.