BUSINESS POLICY

MERCK SHARP & DOHME

ARGENTINA, INC. (A)
Case WAC




Introduction:
This case study is all about a situation where an important decision related to recruitment of 16
th

candidate for internship program is to be made. The Manager of Training and Development,
Ring, had been scheduled to announce the names of the fifteen college students which were
chosen to participate in MSDs highly selective young professionals intern program. But due to
the fact that she is threatened by a middle manager that might go to upper authority to get his
way if she does not accept the 16
th
candidate into the program; Ring has decided to postpone her
announcement of the winning candidates. Now Managing Director of MSDs has called Manager
of Training and Development, Director of human resources and Director of sales, in his office to
make an individual recommendation that whether to hire this young man for internship program
or not.
Facts:
1. 16
th
candidate is the son of a high-ranking official in the governments national health
care program for government retirees, the single largest health care organization in the
country.
2. The presence of the 16
th
candidate who is the son of a high-ranking official in the
governments national health care program for government retirees, in the companys
workforce could afford MSD an excellent opportunity to increase sales by insuring that
all its drugs were included in the government health care formulary.
3. MSD gets an unexpected advantage as business in Argentina has long been conducted
through a web of personal connections.
4. MSD opened its office in Argentina in 1936 covering Uruguay and Paraguay and opened
its manufacturing facility in 1979.
5. In 1988, it signed a licensing and distribution agreement with an Argentina
Pharmaceutical company, Instituto Sidus, giving it exclusive rights to produce and
distribute products marketed by MSD.
6. Before taking the post of managing director in MSD, Mosquera joined the company
Merck in 1976 as information systems manager and then served as a financial controller,
sales representative, product manager, sales director and executive director
7. Mosquera joined as MD in March 1995, at age 47, with a 5-year planning horizon.
8. Latin America was characterized by high inflation, high protective tariffs and highly
authoritarian state but company was not in financial crisis, sales remained flat and
competition was intense.
9. MD rebuilt the top management team in one year and placed the right people at right
place
10. Three inter-related goals of company comprised of flatter integrated management
structure, complete transparency and empowerment.
11. Restructuring plan of MD transformed the companys power structure, reorganized the
company into business units, eliminated a layer of bureaucracy, gave managers
significant decision power, educated old and new employees, actively promoted
transparency and a culture that encouraged information sharing, personal initiative and
non-authoritarian decision making.
12. MD promoted ethics by developing mission and values statement and conducting
seminars on ethical standards.
13. On the basis of ethics, Human resource director gave a recommendation of not hiring the
young man.
14. Sales Director gave a recommendation in the favor of young man as it would increase
company market share and sales by $5 million a year.
15. MD was aiming 26% growth in sales and 16% growth in operating expenses.

Core Problem: Conflict of Interest
There is a conflict of interest between the Manager of Training and Development, Human
Resources Director, and Director of Sales as everyone is looking at the situation taking his own
perspective in view only. Director of sales sees this as an opportunity to increase sales and
growth thus going in favor of hiring while HR Director emphasizes on ethics thus going against
hiring of the 16
th
candidate. As for the manager of training and development, there is an order by
the middle manager to hire the 16
th
candidate and she is in a fix.
Answer: Never go for an unethical decision and stand by your morals.