2. Identify two companies which have recently merged. Try to read the published information on the two companies. Based on your study identify the present status of the merged company and its efforts in combining the respective organizational cultures. What in your opinion can be other issues which might arise in future?
Glaxo Wellcome-SmithKline Beecham merger creates world's largest drug company:
On January 18, UK pharmaceutical companies Glaxo Wellcome and SmithKline Beecham announced that they would be merging their operations. Glaxo SmithKline will be the largest drug company in the world as well as the largest company outright in the UK. The merger deal is to be completed in the summer of this year and no opposition is anticipated from the monopolies and mergers commission, the government or other regulatory obstacles.
Jean-Pierre Garnier, the company's new chief executive designate, said, "The new company is global, proud of its roots in the UK and of its corporate domicile in the UK. But a world class competitor cannot operate all of its functions from a market that represents only 6 percent of its existence." He said that the new company would be taking decisions of strategy away from its current UK base.
Whilst avoiding specific details, company spokesmen admitted there would be redundancies. Trade unions in Britain have stated that up to 15,000 jobs could go world-wide, out of a total workforce of 105,000, and it is feared that between 2,000 and 5,000 jobs could go within the UK.
Roger Lyons, the general secretary of the Manufacturing, Science and Finance union (MSF), said that many jobs were threatened in Britain. His concern was not so much the livelihoods of the workers involved, but the adverse impact on Britain's traditional place as a leader in the pharmaceutical world market. Lyons complained, "Staff have been kept completely in the dark and we need to now know how a company whose chief executive is going to live in the United States is going to have the same commitment to a company that has traditionally been the jewel in the British pharmaceutical crown. We're unhappy because there have been no discussions about the implications for the future of the science base in the UK."
Most of the jobs are expected to go in the administration departments of the two companies as well as at some of its manufacturing sites. The research and development bases in the UK are seen as an important asset to the company and are not expected to be closed. MSF has requested a meeting with company chief executives and British Trade and Industry Minister Lord Sainsbury on February 26 to discuss the job losses.
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