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Glaxo-Wellcome
The main issue at hand with the Glaxo-Wellcome merger is how opaque Wellcome was
about the transaction. “Glaxo announced that it was making a hostile bid for control of
Wellcome” [ CITATION Tod11 \l 1033 ]. Unfortunately, the announcement was made to the
surprise of the team at Wellcome. “Wellcome management had heard nothing of the offer and felt
that they had been betrayed” [CITATION Tod11 \n \t \l 1033 ]. Although the Wellcome CEO
tried to make a last-minute push for a different buyer, the damage was done. What should have
happened in this situation was for John Robb, CEO of Wellcome, to communicate with the
organization that talks were active in regard to a potential acquisition by Glaxo. “Crisp
articulation of the strategic rationale forms the basis of multiple communications tailored to
employees, vendors, regulators, and others. These all reflect the main goal: to ensure that the
right message about the merger is communicated consistently” [ CITATION Oli19 \l 1033 ].
Sherman
Ofra Sherman was doomed from the beginning. She was stuck between two organization.
Sherman and her team handled marketing for Promedico but were being paid by Wellcome
Hellas. Her manager was Ephron at Promedico, but it was by title only. Sherman took orders
from Euripides over at Welcome Hellas. On top of that, she didn’t help her cause as she held a
position similar “to that of an owner/manager in the sense she has created and build the team and
also controlled every aspect of its operation” [CITATION Tod11 \n \t \l 1033 ]. To make matters
worse, Sherman would also engage in gossip between Promedico and Wellcome.
When it came time for the acquisition of Wellcome, Sherman was stuck with nowhere to
turn. “I have no boss, I am in the middle of nowhere” [CITATION Tod11 \n \t \l 1033 ]. It’s here
where Sherman made her gravest mistake. Sherman, stuck in the middle, was instructed by
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Braverman not to give information to anyone at Glaxco, and that Euripides would likely be
removed from Wellcome Hellas. Sherman turned around and shared this comment with
Euripides. Euripides was rightfully upset, and staked claim to her team, just as Braverman had,
furthering the quandary of being stuck in the middle.
If I was in Sherman’s shoes, I would have called a meeting with both leaders to resolve
the situation and get direction. If they weren’t able to solve the problem, the conversation would
likely force the conversation to be escalated.
Evaluation of Sherman’s Actions
In my opinion, Sherman is a young up-and-comer who enjoyed a great deal of autonomy
but lacked the professional maturity to handle it. Ultimately, the lack of a true manager ended up
hurting her. There was no one who could offer perspective or development. She enjoyed the
autonomy but lacked the guardrails. Perhaps most disappointing is the position she put her team
in, as the six members of her senior team likely face the same fate as her. Had I been part of this
journey, or an incoming leader, I would have likely terminated Sherman for her actions of gossip
and not following orders. In Proverbs 20:19, King Solomon tells us that “Whoever goes about
slandering reveals secrets; therefore do not associate with a simple babbler” (English Standard
Version). At worst, she would have been placed under probation and provided with a
development plan.
References
Engert, O., Kaetzler, B., Kordestani, K., & Koshy, A. (2019, January). Communications in
mergers: The glue that holds everything together. Retrieved from McKinsey &
Company: https://www.mckinsey.com/business-functions/organization/our-
insights/communications-in-mergers-the-glue-that-holds-everything-together
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Jick, T. D., & Peiperl, M. A. (2011). Managing Change: Cases and Concepts Third Edition. New
York: McGraw-Hill.
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REPLIES
The situation Wellcome found itself in during the merger was austere. Wellcome
employees were under the assumption they had a contract for solid, steady employment (Jick and
Peiperl, 2003). When the announcement of the Glaxo purchase and subsequent merger,
Wellcome employees were in a state of shock. To make matters worse, there was a lack of
communication on the path forward to handle the merger (Jick and Peiperl, 2003). Glaxo-
Wellcome needed to follow the advice of Cowen and Keith (n.d.) and communicate the path
forward. Unfortunately, the relationships established with the Wellcome Israel leadership and the
leadership with Wellcome, Promedico and Glaxo was fractured to say the least (Jick and Peiperl,
2003). The key was to communicate and get those affected involved.
Sherman was a young, successful leader, who had tremendous success with Wellcome
Israel (Jick and Peiperl, 2003). However, Sherman failed to develop relationships with her upper
management and with the other corporation leaders around her (Cowen and Keith, n. d., and Jick
and Peiperl, 2003). While successful in producing a solid team and financial success for the
company, Sherman failed to prepare for the unforeseeable future.
Sherman, as the leader, needed to ask more questions. She need to gather the data and
information in order to make a decision. As the leader, decisions are difficult (Walumbwa,
Maidique, and Atamanik, 2014). Sherman had a strong inner circle and could have used them.
Together, Sherman and the inner circle could have worked together and looked for a path
forward instead of sitting in the unknown (Walumbwa, Maidique, and Atamanik, 2014).
Sherman’s predicament was quite simple. Sherman was sitting in the unknown with
multiple key leaders in multiple organizations trying to tell her what to do at the betterment of
those organizations (Jick and Peiperl, 2003). Sherman got into the predicament by not stepping
up as a leader and handling the crisis appropriately (Walumbwa, Maidique, and Atamanik, 2014).
As a young leader, Sherman’s actions are what I would expect. Sherman was on a
positive glide path. She was on her own, making things happen in Israel with very little oversight
(Jick and Peiperl, 2003). However, similar to how Toyota handled crisis, Sherman handled crisis.
Sherman did not take proactive actions and mismanaged the entire merger (Sysko and Shinde,
2015). While Sherman established a good relationship with her team, she failed to establish a
rapport with others outside the inner circle (Cowen and Keith, n. d.). That lack of relationship
development led to Sherman sitting and waiting to see what happens instead of acting and
interacting with others to understand the next steps of the merger.
Biblical Integration
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While Sherman was very successful prior to the Glaxo-Wellcome merger, Sherman acted
alone. Proverbs 3:6 says “In all your ways acknowledge him, and he will make straight your
paths” (English Standard Version). This verse indicates Sherman needed to ensure there was a
connection to the Wellcome headquarters (HQ). That connection would allow Sherman to have
open lines of communication. Additionally, in Matthew 10, Jesus relied on his disciples to help
him. Sherman needed to rely on Wellcome HQ and the inner circle to help in the merger crisis.
In Response to Michael Verton
Michael, you make excellent points across the board in regard to the Glaxo-Wellcome
topic. Throughout your post, I found several instances in which I agree with you, and I also
found where I felt you had information lacking. Below, I will touch on communication from
leadership, Sherman’s predicament, and Sherman’s mistakes.
You open your post with the argument that the Wellcome leadership should have been
more proactive with their communication regarding the potential acquisition by Glaxo. “To make
matters worse, there was a lack of communication on the path forward to handle the merger”
[ CITATION Mic19 \l 1033 ]. I could not agree with you more. In my post, I argue the same. It’s
a shame those employees were taken by surprise, when a simple communication from the CEO
could have subsided the shock and awe.
Next, you address Sherman. You state that Sherman was a young leader, and that she was
sitting in the unknown. You argue that she needed to be more proactive in her communication
with other leaders in the organizations. I concur. I think Sherman’s situation was one of
weakness, despite her autonomous position. She held a position similar “to that of an
owner/manager in the sense she has created and build the team and also controlled every aspect
of its operation” [CITATION Tod11 \l 1033 ]. She lacked direction and management, and
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ultimately was subject to loss of employment through the acquisition due to her position of
sitting in the unknown.
In terms of Sherman’s actions, I felt that you left out some key details that attributed to
her situation. Sherman engaged actively in gossip between organizations as a means of getting
and sharing information. “Gossip may serve six primary functions within a workplace:
information; influence; intellectual stimulation; venting of negative emotions; promoting
intimacy; and maintaining and enforcing social norms” [ CITATION Nic17 \l 1033 ]. I believe
Sherman was engaging to serve the function of information, influence, and venting of negative
emotions. Sherman also furthered her fractured position by going between bosses and sharing
information that she was asked not to share. I would be interested to know how you would have
handled this, if you were Sherman’s boss or incoming CEO of the newly-formed company.
References
Jick, T. D., & Peiperl, M. A. (2011). Managing Change: Cases and Concepts Third Edition. New
York: McGraw-Hill.
O’Connor, N., Kotze, B., & Storm, V. (2017). What’s to be done when ‘foul whisp rings are
abroad’? Gossip and rumour in health organisations. Australasian Psychiatry.
Verton, M. (2019, April 6). Verton - Glaxo-Wellcome.
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Wellcome Case Study
The Wellcome case study provides a glimpse into the inner turmoil that can be
found inside many organizations during times of corporate mergers and/or
acquisitions. By early 1995 Glaxo unexpectedly announced its intentions to acquire
the Wellcome pharmaceutical organization by means of a hostile takeover (Jick &
Peiperl, 2011). While a merger or acquisition of this nature is complex enough to
begin with, the pre-merger nature of the Wellcome corporation, specifically with the
Israeli division where Ms. Sherman was leading, led to further, undue chaos.
Ms. Sherman found herself leading a small team as a result of a decentralized
organizational structure rooted in Wellcome’s decision to house their Israeli operations
inside a local host organization, Promedico (Jick & Peiperl, 2011). As a result,
Sherman and her team were very confused as to their potential outcomes as a result of
the merger, which effected a company they belonged to more by proxy than by true
structure. By leading this way, creating a unnecessarily complex and unstable internal
structure and by neglecting their internal employee constituency, Wellcome’s
executive leadership had set the course for failure (Jick & Peiperl, 2011). Recent
research shows the direct connection between employee satisfaction and merger
success (Kyei-Poku & Miller, 2013). From their studies, the authors of this research
implicated the “neglect and mismanagement of the human aspects during and
following the actual merger or acquisition” as the crucial factors that can lead to
failure in organizational mergers (Kyei-Poku & Miller, 2013, p. 205).
Due to the disorganization throughout the division, Ms. Sherman was left only
to analyze a multitude of possible outcomes for her company, her division, her team
and herself (Jick & Peiperl, 2011). While she is literally left with no option but to wait
for the inevitable to occur, Ms. Sherman’s leadership style may be responsible for the
level of severity the group faces, a position that is neither right or wrong, but merely
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the result of a poorly organized corporation. Ms. Sherman led her team together as a
very close-knit group, only 16 members in total, which did most everything together,
including sharing office space and eating together almost daily (Jick & Peiperl, 2011).
Now, this familial work-group, that operated autonomously from its parent
corporation, was facing the uncertain fate of being absorbed by a much larger
pharmaceutical organization (Jick & Peiperl, 2011). The closeness of Ms. Sherman’s
team, and their indirect-involvement with the overall Wellcome organization, is
critically important to note, as research shows that “mergers may be perceived as a
threat to the stability and continuation of employees’ current identities” in their
perceived areas within an organization (Bartels, Douwes, & Jong, 2006, p. s50).
Departments with closer bonds between its work-groups are often the most effected
by the negative impacts of corporate mergers, due to the perceived peril to their
established group by the uncertain futures they will encounter together and
independently (Bartels, Douwes, & Jong, 2006). This research shows that indirectly-
involved employees, much like Ms. Sherman’s group, are more concerned with how
their group will be effected rather than worrying about the environment or culture
within the organization (Bartels, Douwes, & Jong, 2006).
References
Bartels, J., Douwes, R., & Jong, M. (2006). Organizational Identification During a
Merger: Determinants of Employees' Expected Identification With the New
Organization. British Journal of Management, s49-s67.
Jick, T. D., & Peiperl, M. A. (2011). Managing Change: Cases and Concepts.New
Yor, New York: McGraw-Hill Irwin.
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Kyei-Poku, I. A., & Miller, D. (2013). Impact of employee merger satisfaction on
organizational commitment and turnover intentions: a study of a Canadian Financial
institution. International Journal of Management, 205-223.
In Response to Robert Chenier
I thoroughly enjoyed reading your take on Wellcome-Glaxo, Robert. I believe you
brought to light some points that I did not consider or include in my discussion. Specifically, I
agreed with your points on the make-up of the organization pre-merger, as well as the identity of
Sherman’s team. I also think Sherman chose to take some actions that did her and her team no
favors, which I address below.
You open by saying, “The Wellcome case study provides a glimpse into the inner turmoil
that can be found inside many organizations during times of corporate mergers and/or
acquisitions” [ CITATION Che19 \l 1033 ]. I agree, but I think the more interesting point with
Wellcome is the disorganization the pre-existed the merger. “Mergers and acquisitions are a great
way to accelerate growth, but when they fail to produce the desired result, a common factor is
poor communication, including a lack of information during the pre-merger period, and
cooperation and coordination post-merger” [ CITATION MIC18 \l 1033 ]. There is no surprise
that the merger was handled so poorly based on the state of the organization. As Jick and Peiperl
point out, “This strange organization structure had served the purposes of both parties for some
years. But as the size of the Wellcome team within Promedico grew, and with it the proportion of
Promedico’s total revenue which Wellcome accounted for, tensions began to grow as well”
(2011).
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My favorite takeaway from your post was in regard to Sherman’s team. What an
interesting setup, and you make some excellent points. From their reporting structure, to the
closeness of that group, they were certainly setup for a letdown. This is especially true given
their lack of organizational direction.
Where I think Sherman took some missteps include how she engaged in gossip between
both organizations in order to get and share information. “Gossip may serve six primary
functions within a workplace: information; influence; intellectual stimulation; venting of
negative emotions; promoting intimacy; and maintaining and enforcing social norms”
[ CITATION Nic17 \l 1033 ]. As if this wasn’t enough, Sherman wrongfully took conversations
between her and one organizational leader and shared it with another organizational leader in
regard to the potential removal of a leader. This furthered her position of being left in the middle
with nowhere to turn. How would you have handled a similar situation if you had an employee
engaging in the same actions as Sherman?
References
Chenier, R. (2019, April 10). DB Forum 2 - Chenier.
DESROCHERS, M. (2018, July 31). How to Handle Internal Communication During a Merger.
Retrieved from Business.com: https://www.business.com/articles/communicating-during-
mergers/
Jick, T. D., & Peiperl, M. A. (2011). Managing Change: Cases and Concepts Third Edition. New
York: McGraw-Hill.
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