Daiichi-Sankyo Case Essay

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Memorandum To: Daiichi-Sankyo Members of the Board CC: From: Date: 7/28/2014 Re: Acquisition of Ranbaxy Laboratories Ltd. During the post-acquisition evaluation of both Daiichi-Sankyo and Ranbaxy Laboratories Ltd., I have discovered two major issues that need to be addresses immediately. First of all the US Food and Drug Administration’s U.S. ban on more than 30 Ranbaxy generic drugs and stop on approval of new drugs. Secondly, the cultural differences that may negatively affect the Hybrid Model implementation and the FDA issue resolution. Facts During 2004 and 2005, Dinesh Thakur and Rajinder Kumar, two Ranbaxy employees, had investigated and brought to management’s attention examples of drug test reports fabrication that took place on multiple occasions. To cover up the issue, Ranbaxy accused Thakur of visiting graphic websites using his office computer, and forced him to resign in 2005. Kumar left the company voluntarily before the incident occurred. Thakur a naturalized, US citizen moved back to the USA and contacted the Food and Drug Administration which started investigating his claims. As a result, on 16 September 2008, the Food and Drug Administration issued two warning letters to Ranbaxy Laboratories Ltd. and announced a U.S. ban on more than 30 Ranbaxy generic drugs and stopped approval of new drugs. The decision has been made based on the FDA’s concern about manufacturing “lapses” at two plants in India. In order to identify major cultural differences that need to be taken into consideration when building synergies, we have used the Cultural Dimensions theory by Geert Hofstede. Power Distance – According to Hofstede’s study, there is a quite a difference between India’s and Japan’s scores. India scores high on this dimension, 77, indicating an appreciation for hierarchy and a top-down organizational structure. Employees are dependent on

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