GSK’s strategic intent is to become the indisputable leader in its industry – not simply in terms of size, but in how it uses that size to achieve its mission. Its strength lies in its establishment as one of the world’s leader in pharmaceutical industry by providing its consumers with reliable medical products. It has already taken hold seven per cent of the world’s pharmaceutical market. With its research and development centered on providing vaccines, oncology products and four major therapeutic areas – anti-infective, central nervous system (CNS), respiratory and gastro-intestinal/metabolic.
But it does not only stop there. GSK’s core competence lies in its drive to help people around the world by constantly developing, discovering and unraveling the secrets of health and diseases at the same time providing health care solutions. It doesn’t only focuses on research and development but also uses its wide GSK network for clinical development by forging ties with health organizations such as the World Health Organization.
However, since GSK are constantly developing vaccines and drug discovery, they are also prone to constant government regulation and patent licensing. Since they are also branching out to genetics and bio technology it will take several years for the recent development to be made public and be useful to people. There is also the possibility that its capitalizing in the development of biomedical science may not be met with commercial success and the price of development of new drugs is soaring.
However, GSK makes sure that situated within the organizational fabric of R&D, are regulatory-affairs and marketing staff who ensure that development efforts directly address the requirements of regulatory bodies and the needs of medical professionals and their patients. GSK maintains a close and open relationship with its stakeholders by reporting to its stakeholders twice a year, where it announces its half-year and full-year results. However, GSK shareholders have been vigilant and wanted transparency in the merging of GSK.
In 2002, a pay-out was made to CEO Jean-Pier Garnier. In his article Strings Attached in cfoeurope. com, Ben Maclannahan explained that chairman Sir Christopher Hogg argued that the payout was necessary to bring Garnier’s salary into line with that of his peers in the US. (According to the AFL-CIO, the federation of American labour unions, Pfizer CEO Henry McKinnell received $34m, or around €27m, in total compensation including stock grants in 2002, while Merck’s Raymond Gilmartin picked up $22. 5m, or €18m. )
But stung by the criticism, the firm took action. Its remuneration committee, which had commissioned Deloitte & Touche to carry out an independent review of GSK’s remuneration policy in 2002, asked the consultants to widen the scope of their probe to also examine alternative structures for Garnier’s package. The review included consultation with major shareholders along with representatives from the ABI and the National Association of Pension Funds, who had jointly orchestrated the rebellion.