Kenneth Frazier: The Merck CEO
1. How Ken Frazier has demonstrated his effectiveness as a crisis leader?
Frazier authorized the drug makers defense in the extensive Vioxx lawsuit. His decision to face single patient lawsuits one after the other was initially regarded with high risks and appeared to take longer (Randall, 2011). However, the tactic was fruitful, and therefore, gave rise to similar strategy being used by other drug makers afflicted by lawsuits. As a result, Fraziers handling of the crisis propelled the ranks to his companys pharma division, and finally to the Mercks helm (Randall, 2011). At the end of his first year, Frazier acted instantly on changing the face of Research and Development through appointing Roger Perlmutter to replace Peter Kim - the longest serving chief of Research and Development department. Roger Perlmutter is a Mercks old hand with a successful record of achievements at Amgen prior to his departure in 2011 (Thompson, 2013).
2. What type of organization is Merck?
Merck is a traditional organization where the helm management gives directions of what is to be done or implemented. Kenneth Fraziers most recent move is constant multibillion investment in research and development, while the firm is facing fresh generic competitors to high performing products, which are tough, and have come as a surprise. Minimal productivity in research and development has seen the whole industry cutting down research expenses. Merck has opted to purchase drug entrants, allowing minor and more agile firms to take the initial forthright risks (Randall, 2011). In order to increase earnings and fund dividends, cost cuts are vital when the sales are dismal. Cost cuts can assist hold up stock values, or in any case create some time for the company to reconstruct its product range in either way (Randall, 2011). As the CEO of Merck, Frazier pulled Mercks 2013 earnings projections, articulating he wanted the company to aim at providing long-term benefits, not attaining short term figures. Merck does not mind becoming the industrys leading research spender, despite their high spending on research and development (Herper, 2013). The CEO acknowledges an almost religious conviction in allowing his scientists best perform their responsibilities (Johnson, 2012).
3. Ideas on how Frazer can institute to enhance innovation.
After Frazier took the helm of the company, he pulled Mercks 2013 earnings projections, articulating he wanted the company to aim at providing long-term benefits, not attaining short term figures. Analysts such as Les Funtleyder of Miller Tabak doubted Kenneth Fraziers wisdom, as he put it in The Wall Street Journal: Merck could end up wasting billions (Herper, 2013). Kenneth Frazier should keep his research and development aim, even though the Merck stock has delayed the Pfizers cost cutting. He should instigate discharges and layoffs of research and development, such as those mentioned previously in July, aimed at managerial backing in those sectors and not focused on scientists. Furthermore, the CEO should target more partnerships to improve Mercks market position.
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4. A strategy that Frazer has articulated for moving mark forward.
Kenneth Frazier has always been a diehard supporter of the companys technological endeavors. In that sense, one can argue that Frazier has adopted a strategy that encourages innovation within Merck. Even in situations of poor stock performances and loads of doubts, the chief executive officer asserts that he does not intend to make vast changes, as far as the strategies of the company are concerned. Mercks board has supported Frazier to situations of giving him a sixteen percent raise for the year 2012, with additional 2.5 million dollars as an incentive package pay. During the replacement statement, the committee alleged his (Frazier) strong leadership assisted the firm to trounce the fundamental difficulties faced in 2012 (Thompson, 2013). Frazier has been associated with Merck for a period of more than thirty years, initially as an external lawyer, and later as the firms general adviser and principal marketer.
5. Supporting facts that the Merck Board of Directors used in making decisions to appoint Ken Frazier as Merck next CEO.
Mercks performance and growth has been dismal in the last few years. The company has initiated more new drugs in the last six decades than any organization in the pharma industry. However, the company is only positioned 5th in new medicine approvals in the last ten years. To appoint Frazier as Mercks CEO, the Board of Directors considered his role in the company helm as a strategic mastermind. Fraziers experience and legal knowledge also contributed to his CEO appointment. Especially, considering that Merck desperately needed to get out of their financial crisis. In fact, Fraziers legal knowledge largely contributed to the Board of Directors decision to make him the CEO of Merck.
6. Evidence showing that drug research is a high risk and time consuming process.
According to investigation, research on drugs is both high risk and time consuming process. As per Ken Frazier, from every 10,000 compounds screened, only 1 can be approved as drug (Kate & Laird, 1999). In that sense, scientists need a lot of time to conduct their researches on drugs. It also proves that they have to take a lot of risks to come up with a drug that is usable.
7. Ken Fraziers personality and leadership traits that align with leading and learning and knowledge driven organization like Merck.
Up to now, Kenneth C. Frazier perceives himself via the facet of his training as an attorney, that is, he is yet to grow into a decisive and commanding CEO. He is careful not to make any other person look bad, apparent through his vigorous efforts in interviews, trying to make it clear that Peter Kim was never fired, making him appear to worry that he may be viewed, as making a lot of extensive changes (Johnson, 2012). His character is the consequence of carefully learnt lessons from his ascent to the peak. Regarding this argument, Frazier can be perceived as someone that is willing to learn from other people.
8. Fraziers source of power.
Fraziers power comes from his ability to influence other people. His influential power at Merck enabled him to change the face of the Research and Development Department. His influential power convinced Merck to employ Roger Perlmutter in place of Peter Kim. The latter was the longest serving chief of Research and Development Department. Roger Perlmutter is Mercks old hand with a successful record of achievements at Amgen prior to his departure in 2011 (Thompson, 2013). Considering Mercks financial crisis, Fraziers source of power is appropriate; his influential power has forced the company to move out of the crisis through restructuring and considering options that were not implemented initially.
9. Evidence from the case suggesting that Mr. Frazier is a beneficiary of effective mentoring and coaching.
Evidence suggesting that Frazier is a beneficiary of coaching and mentoring is well articulated in the case study. The case includes simultaneous influences that impact on the individuals within the organization itself. Such are the influences that have made Frazier what he is today; his long association with Merck has molded him, with benefits to the company into his current position of the CEO.
10. Evidence that Ken Frazier is an effective strategic leader.
Evidence showing that Frazier is an effective strategic leader can be found from his recent activities and achievements mentioned in this study. Kenneth Fraziers most recent move is constant multibillion investments in Research and Development, while the firm is facing fresh generic competitors to highly performing products. Merck opted to purchase drug entrants, allowing minor and more agile firms to take the initial forthright risks (Randall, 2011). Since the sales are dismal, to increase earnings and fund dividends, cost cuts are vital. Cost cuts can assist hold up stock values, or in any case create some time for the company to reconstruct its product range in either way (Randall, 2011).