Background
Merck operates as a global health service provider. Outside the United States and Canada, the firm is known as MSD. Merck has curved a niche for itself with regard to production of medicine, vaccines, biologic interventions, consumer and animal health products. Currently, the firm operates in 140 countries with its policies being tailored towards increasing accessibility of healthcare (Barrett 1998, p.40).
Mission
Merck’s mission is embedded in provision of innovative, distinct products and services that serve to save and improve life and satisfy customers’ aspirations. This is in line with the firm’s commitment towards improving the firm’s publicity by enabling the firm to be identified as a great place to work at and provide investors with robust rates of return.
In addition, the firm’s mission and values are in tandem with the company’s corporate responsibility strategy which gives a clear guideline on how they perceive their responsibilities in respect to global and animal health, access to medicine, ethical and sustainable business undertakings, input into scientific innovation, good employee relations and returning value to consumers in terms of earning of dividends (Byrne 1987, p.83).
Number and Types of Employees
Merck Pharmaceutical and vaccine division has field based employees inclusive of those working at the firm’s headquarters. At Merck, employees are required to demonstrate high degree of integrity and ethics. They have to appreciate that their ability to excel is determined by integrity, knowledge and skills. Merck only recruits individuals who are highly skilled and qualified. Before an employee is allowed to serve in any position within Merck, their employment and education history have to be reviewed. In addition, the employees are not expected to have any criminal record (Cloud 2000, p.B7).
Description of Stakeholders
Merck engages itself in public and private sector partnerships to find solution to societal problems like lack of education, environmental challenges, and disease menace. This is attained from development of an insight that engaging in these activities alone may not create substantial impacts. Under this backdrop, Merck’s has partnered with different companies like Sanofi Pasteur, Schering Plough and other corporate bodies to ensure that they reach out to other potential markets (Eucklund 1984, p.114).
Review of Merck’s Organizational Structure and Its Effectiveness
Merck is managed by a well organized board of directors whose membership is fifteen individuals. Directors take part in election of the chairman of the board who is the president and the chief executive officer. Merck has an executive committee that is chaired by its chief executive officer. The chief compliance officer consists of the president and his deputy.
The deputy who is the executive vice president is the one who is mandated with the responsibility of human resource and consumer care together with the president. Some of the other members are comprised of the executive vice president with: chief financial officer, president Merck Research laboratories, president Animal Health, general counsel, chief medical officer.
The rest are executive vice president global services and chief information officer, president of global human health and chief strategy officer and senior vice president in charge of emerging markets research division in the Merck Research Laboratories (Harris 2000, p.A1).
The Board is comprised of different committees. These committees are charged with a number of tasks which include audit, corporate governance, compensation and governance, finance, public policy and social responsibility, and research. It should be noted that each task is handled by a different committee as suggested by the names of the outlined tasks.
The group that audits cross-examines the integrity of firm’s financial statements. This is done in order to determine whether they meet the conditions required of them (Cloud 2000, p.B7). This group is also responsible for preparing the audit report that is part and parcel of the proxy statement.
Committee charged with corporate governance responsibilities undertake a number of recommendations to the firm’s board with regard to a number of issues as outlined below.
- The board’s size and composition
- Individuals who qualify as board members
- Board nominees
- Board members compensation
- Assessing the boards effectiveness
Compensation and benefits committee discharges the board’s responsibilities, oversees the competency and qualification of the Merck’s senior management team, and writes an annual report where analysis on compensation of executive is done. The report is normally included in the company’s proxy’s statement.
Finance committee carries out reviews and recommends to the board on issues pertaining to finances and policies like stock purchases, dividends, portfolio management, investment and policies related to debts. The committee also identifies critical issues for the board’s consideration in complex financial transactions evaluation like mergers, and acquisitions (Harris 2000, p.AI).
Public policy and social responsibility committee advices the board of directors and Merck’s management team on policies and practices that are concerned with Merck’s responsibility as a global corporate organization, its obligation as a global pharmaceutical company whose products and services affect and quality of peoples lives (Harris 2000, p.AI).
The research committee is charged with the responsibility of identifying areas and activities critical to drug and vaccine discovery, development and licensing. The committee evaluates effectiveness of drug and vaccine discovery, development and licensing strategies. They update the board regularly on their evaluation processes and practices (Barrett 1998, p.40). In addition, the committee recommends on modification of strategies to the CEO, the board and the president of Merck research laboratories.
Stakeholder’s Relationship
Merck’s stakeholders include patients and their families, doctors, health care experts and scientists, payers, governments, multilateral organizations and market regulators, surrounding communities within the area of Merck operation, their suppliers and business partners, trade and industry associations, Merck’s employees, the shareholders, investors, environmental shareholders, experts from the academia and NGO’s (Koberstein 2000, p.44). Merck’s main preoccupation is the patient and is primarily accountable to them. Therefore, meeting the health needs of patients is the prime goal of Merck’s as an entity.
The primary intension of Merck’s is to excel in medicine. They intend to attain this by providing adequate and reliable information (of medicines and vaccines they manufacture and researches) to their professionals (doctors and healthcare workers). Valuable information is shared during their research programs through interactions with the relevant personnel. In so doing (interacting and sharing), insights on expected needs and opportunities that can exploited are gained.
With regard to payers, complaint over escalating costs of drugs Merck has responded by attributing the high costs of drugs to the quality of the drugs and vaccines they manufacture. In carrying out its business, Merck partners with numerous governments, regulators and other multilateral organizations. They work with policy makers, legislators and world governments to make sure that policy and regulatory landscape allow patients to get access to medicine and vaccines.
The regulatory environment should be conducive for ethical business practices, science and innovation. Merck Incorporation strives to make positive contribution to surrounding communities by operating safely and responsibly towards economic and social emancipation of the surrounding communities. For effective research, manufacture and supplying and distribution of medicines and vaccines, it is vital for the concerned entity go for the best partners and suppliers. This has thus prompted Merck Incorporation to seek out for the best of the suppliers and research partners.
Merck, therefore, aims at having a wide and diverse logistics base that takes into consideration the welfare of the suppliers as regards to labor, employment, safety and health and finally protection of the environment. Merck engages with many trade and industry associations with a view to constructively informing related debates on how to access medicines and vaccines globally. Merck puts concerted effort in identifying the best organizations and individuals with which to work with to address challenges that the society faces (Koberstein 2000, p.44).
The partnerships are geared towards improving global health. Moreover they also work tirelessly to improve health and science education, protection of the environment and ethical business practices. These partnerships have contributed to private companies curbing and prevention of challenges faced by the society. The objectives of developing such partnerships are aimed at product development.
Again, they are vital in the distribution a donated product(s) or to enhance health services. Within the supply chain, Merck’s is also closely working with environmentalists with the aim to reduce negative environmental impacts of its operations and products. Merck has engaged in different corporate social events to woe potential investors hence its listing on FTSE4Good Index (Langreth 1998, p.B7).
By identifying opportunities to serve the needs of their clients and responsibly managing business for better financial performance, Merck creates value for its shareholders. They measure and report performance and work hard to retain their assets. There is also the strife to create a good working environment for the purposes of professionalism, high productivity and safety to their employees. They labor to avail a positive working environment for the employees engaging in team work, diversity and inclusion and fostering professional development.
Analysis of What Has Been Learned
Merck Incorporation organizational structure from the board of directors, the CEO, the executive directors and the board’s committee purpose and mandate are in line with the company’s mission and vision. The firm’s partnership with different stakeholders also is in line with its mission and vision.
United States Health Care Institutional Organizations Management
Health care management is normally referred by different names including health care administration. Leadership is very crucial in health care management within an organization. Leadership in health care system has been looked at in different perspectives by different schools of thoughts but the most used definition has been ‘an ongoing conversion among people with deep care for something they perceive to be very important. Best leadership should be one that is able to adapt approaches and make these approaches fit needs of different groups. Certain leadership demands that technical expertise is shared by demonstrating to people how things are supposed to be done while the leaders undertake to do close supervision (Nolan 1998, p.294).
To improve the quality of service delivered, health care institutional organizations can embrace aspects of transactional leadership and transformational leadership. Transactional leadership operates within the laid down rule structures. It emphasizes incremental change by capitalizing on symptoms or single loop learning. However, transformational leadership endeavors to upset the status quo and the laid down rule structures replacing them with anew order (Nolan 1998, p.295).
It is therefore fondly referred to as double loop learning as it focuses on breakthrough changes. Health care institutional organizations policy makers and practitioners should determine whether the changes they want to initiate can be made within the existing current rules or whether new rules are necessary.
Fundamental improvement of the quality of health care an institutional organization leadership should be addressed at individual level, micro- system, organization level and at environmental level. The government should ensure that it creates an environment that encourages improvement of quality in terms of payment to the health care personnel and the health policies they formulate. When quality has been enhanced then definitely there would be demand for services rendered by health care institutional organizations (Nolan 1998, p.296).
The leadership of health care organizations should contemplate coming up with a vision for quality improvement, provide necessary resources towards improvement of quality and prioritize accountability for results. Microsystems and groups must undertake to implement characteristics of effective teams. Policy makers, managers and clinicians should decide on when, how and whether they intend to face difficulties of changing how medicine is practiced. Reliance on one charismatic leader in a health care organization would be near catastrophic in multi-stakeholder health organizations where different people favor different management skills.
Strategic leadership should be integrated to embrace aspects of core skills in communication, networking across conventional boundaries, analytic and diagnostic skills, sharing of vision and initiation of effective design. Leadership development programs should involve physicians, managers, nurses, managers and board members. Such group based development programs reinforces group/team micro-system approach hence faster spread of leadership practices within an organization (Nolan 1998, p.297).
Organizational Culture
The health care organization where I was a customer valued quality as a driving force for change. At the organizational level, the health care provider recognized that health care organizations are multicultural due to the fact that they employ a variety of professionals. Clinical culture was founded on deep socialization experience, where as the managerial culture was embedded on social and behavioral sciences (Ovreitveit 1999, p.240).
The knowledge and culture of the practicing physicians do repel manager’s efforts to standardize practice and come up with rules and regulations aimed at achieving health care system objectives. Managers look at physicians as means through which they achieve organization patient care goals where as physicians look at organizations as means to achieving their professional career. The organization developed a double learning loop in an effort to come up with a culture that is conducive for quality improvement (Ovreitveit 1999, p.241).
Legal Aspects of United States Health Care Administration
Combination is always considered a restraint to trade but care givers in America consider collaboration in areas pertaining to computerized diagnostic tools, calibrated treatment and record keeping. All this can only be affected by having in place an up to date health information technology. This has prompted institution of American Recovery and Reinvestment Act which sought to oversee automation of medical records and putting in place communication infrastructures that link health care providers, patients, organizations and resources.
Health care IT is considered to help in improving quality of medical care, reduce medical costs, increase efficiency in service delivery and make treatment affordable to all (Ovreitveit, 1999, 241). This system makes it easier to manage outbreak of infectious diseases like the swine flu.
Competition in Provision of Health Care
Health care system is witnessing competition that cannot contribute towards organizational success. This arises from the fact that it occurs over inappropriate issues, wrong level, time and geographic market. The nature of competition has resulted from a number of factors which include
- Poor public policy formulation
- Poor choices by parties charged with health planning
- Employers and hospitals
A right kind of competition is very healthy for success of a health care organization and the general community. Right competition will ensure that value of the services provided to the customers improve as the costs fall. Zero-sum competition in health care system has however resulted in division of value rather than increasing it. In addition, it prioritizes shifting of costs rather than reducing it hence no net value creation (Ovreitveit 1999, p.245).
Reference List
Barrett, A., (1998), “Can Merck Grow Without a Megamerger?” Business Week, 22, p. 40.
Byrne, J. A., (1987) “The Miracle Company,” Business Week, pp. 84+.
Cloud, D.S. (2000) “Pharmacy-Benefit Management Firms Got Subpoenas in Drug-Marketing Probe,” Wall Street Journal, p. B7.
Eucklund, C.S., and Judith H.D. (1984), “Merck: Pouring Money into Basic Research to Replace an Aging Product Line,” Business Week, pp. 114+.
Harris, G.,(2000) “Cold Turkey: How Merck Intends to Ride Out a Wave of Patent Expirations,” Wall Street Journal, pp. Al, A8.
Koberstein, W., (2000) “The Inner Merck: Chairman Ray Gilmartin Charts Pace-Setting Growth,” Pharmaceutical Executive, pp. 44-48+.
Langreth, R., (1998), “Merck Raises Its Estimate of Astra Sum,” Wall Street Journal, p. B7.
Nolan, T. (1998). Understanding Medical Systems. Annals of Internal Medicine 128(4):293–8.
Ovreitveit. J. (1999). A Team Quality Improvement Sequence for Complex Problems. Quality in Health Care 8(4):239–46.