Case | HBS Case Collection | May 2005 (Revised April 2010)

GlaxoSmithKline: Reorganizing Drug Discovery (A)

by Robert S. Huckman and Eli Strick

Abstract

Describes the reorganization of drug discovery at GlaxoSmithKline (GSK) following the formation of GSK from the merger of Glaxo Wellcome and SmithKline Beecham. This reorganization placed nearly 2,000 research scientists into six centers of excellence in drug discovery (CEDD). Each CEDD focused on a small set of therapeutic areas and possessed decision rights over the progression of pharmaceutical compounds through the early stages of development. Describes the proposed structure for the CEDDs and their relationship to remaining centralized departments within GSK's R&D organization. Addresses issues about the benefits of focus vs. diversification in R&D, the role of decentralized vs. coordinated decision making, and the importance of alignment between the structural and infrastructural (e.g., performance incentives) aspects of an operating model. Using the empirical context of mergers in the pharmaceutical industry, the case allows students to build broader insights about the interaction between organizational form and operating performance.

Keywords: Mergers and Acquisitions; Decision Choices and Conditions; Operations; Organizational Structure; Performance Improvement; Research and Development; Pharmaceutical Industry;

Citation:

Huckman, Robert S., and Eli Strick. "GlaxoSmithKline: Reorganizing Drug Discovery (A)." Harvard Business School Case 605-074, May 2005. (Revised April 2010.)