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Merck Sharp & Dohme Argentina,

Merck started business in Argentina back to 1915, by authorizing with the H.K. Mulford
Company as the local distributor for its pharmaceutical products. In 1954, when Merck & Co.
entered itself in Argentina, this relationship was end. Merck merged with Sharp & Dohme in
1939, when they opened the office in Argentina to form a MSD. The Merck Sharp & Dohmes
headquarter located in Buenos Aires, which target the market of three countries, Argentina,
Uruguay and Paraguay. In the early years of its business in Argentina, the company imported all
pharmaceutical products but in 1979, they opened a manufacturing facility in Pilar, Argentina.
Due to the severe economic recession in 1980s, the inflation rises which made difficult to set a
price at the affordable level. In 1988, Merck signed a licensing and distribution agreement with
Instituto Sidus, which was Argentinean pharmaceutical company. According to the terms, Sidus
purchased the manufacturing facility of the Merck and get the exclusive rights to manufacture
and distribute products in Argentina and Paraguay. In the agreement, Sidus had the right of
refusal for licenses of new products developed by Merck and introduced after the agreement.
In the result of this agreement, Merck still sustain a strong position in Argentinean market with
$2.8 billion. According to the agreement, the sales were divided into three categories. Group I
include those products, which were promoted and distributed by Sidus, Group II include those
which were distributed by Sidus and promoted by MSD and Group III for those which were
promoted and distributed by MSD. In the third category of sales, products which were licensed
by Merck, not by Sidus. By all these efforts, Merck still came in the top-tier of pharmaceutical
market in Argentina.
Before 1989, the culture of Argentina was comprised of national economy in which high tariffs
imposed on the imports and the policies of domestic business activity were dictated by the
authoritarians. Such policies boosted in inflation rate up to 3000% and economic environment
was completely uncompetitive and unproductive. All these policies show that the Argentina had
closed economy. No growth, no competition and no ethics would follow.

Managing Director:

Profile of Directors in Merck Sharp & Dohme Argentina

Managing Director
Antonio Mosquera
HE joined Merck in 1979, as an information systems manager in Spain, his home country. He also had
served as a financial controller, sales representatives, product managers and sales director in Spain,
England and USA-Canada. He also worked as Executive Director for new business Latin America at
Merck headquarters in Whitehouse Station, New Jersey. In 1995, he joined Merck Argentina as a
Managing Director, at the age of 47 years.

Human Resource Director
Cristina Quinteiro
She had a law degree from Buenos Aires University and spends her career as a Human Resources
manager for a large manufacturing company. For industrial concern, she was sent to Japan to study that
countrys unique work methods and came away from the experience a firm believer in the work-team
concept. She also founded the process of Working in cross-functional teams and not in silos an
enlighten alternative to the authority-based management of Argentinean companies.

Director of Sales
Martin Rodriguez Hunter
He had an experience in sales, marketing and finance in a variety of industries. He also spent four years
with local US-based pharmaceutical company.

Unionization among the sales representatives

No motivation wether moral and finance.ial
No ethics or morality exists to do a job.
Sales representative were more than enough.
Emplohyees not qualified for their respective post.
Sales reps were legally to have a license thst could be obtained through completing 2 years of a union run
program. And admission is generally confined to friends and relatives of members.
Employees did only what dat told innovation and personnel initiative were discourage

The exhibit 1 shows us the market share of MSD in comparison with other companies in the
industry. Till second quarter of 1996, the share of the company has shown a falling trend and fell
from 4.8% to 4.4% from 1994 to 1996. Meanwhile, MSDs competitors like Novartis, Bristol
and HMR have increased their market share rapidly in the same time period. The exhibit 2 shows
us the changes in the organizational structure made during Mosqueras time as MD. We can see
that new departments have been added including Legal and Training & Development. Further,
there is a shift from purely functional departmentalization to a cross-functional and product
departmentalization through the formation of new business units which involve employees from
various functional groups. The new structure is designed to support the transition to lower
bureaucratic levels and higher delegation of authority .This exhibit 3 shows the Mission and
Values of the firm. The point most frequently stressed is related to the importance of an ethical
culture which focuses on integrity. Emphasis is also laid upon professionalism, teamwork,
respect, empathy, open-mindedness and also on persistence. And also emphasis on corporate
values such as a commitment to their customers, employees delegation of responsibility and
performance measurement (which include transparent and fair evaluation systems) .The exhibit 4
shows us the sample questions from the companys newly developed 360-degree appraisal for
evaluation of managers. It is entirely in line with the values of the company. The virtues of an
ethical system are conspicuously highlighted. The other core values are also incorporate. The
exhibit5 shows the Performance Appraisal Process Values. The focus is on transparency and
commitment to the philosophy of constant improvement. Respect and dignity are also considered
key in the process in addition to support for Merit Increase and Reward System