Merrimack Pharmaceuticals, Inc. (A)

In 2006, Merrimack Pharmaceuticals was a fast-growing biotechnology company. Its leadership team was divided over whether to keep R&D organized in functional departments or transition to interdisciplinary teams. As a small company, Merrimack's R&D organization had established a culture of collaboration across scientific disciplines that some worried would diminish with larger functional departments. Others were concerned that an interdisciplinary team-based design would be inefficient and difficult to manage. This case describes the two proposed organizational designs and presents the arguments within Merrimack's leadership team for and against each. It highlights the tradeoffs associated with each design as they relate to accountability, efficiency, innovation, product orientation, and people management at every stage in the R&D process. Students will explore the relationships between task complexity, collaboration, and organizational design in R&D.