AFT PHARMACEUTICALS INC MEMBERS OF SENIOR MANAGERS TEAM BACKGROUND AFT PHARMACEUTICALS Inc (hereinafter referred to as the “Company”) has been undergone significant financial loss within the last 3 consecutive years. Senior Managers Team has identified 75% of the production cost inefficiency is caused by a non-core manual packaging operation of the Company. Hence the Board decided to transform the current packaging process by outsourcing specialised packaging services company, XYZ Co, as a subcontractor which utilises a range of proven procedures and processes backed up with the most sophisticated automatic technologies. Senior Managers Team anticipated this transformation will potentially improve operational efficiency, although it will require the Company to take structured actions to successfully implement the change. DISCUSSIONS The Contract Pharma worldwide industry survey (2016) indicated 48% of pharmaceutical companies adapted packaging outsourcing services to meet with all sterilisation and labelling requirements as per Victorian Drugs, Poisons and Controlled Substances Act (2006). Also, Australian packaging industry trend 2016 revealed slowing pace of upstream manufacturing is expected to have a negative effect over the next 5 years. Thus, companies are outsourcing their packaging operations to reduce costs and remain competitive in the face of rising import penetration as well as allow themselves to focus on drug innovations rather than packaging logistics (Lo 2016, p. 4). In terms of the cost implication of this change, Senior Managers Team estimated that the Company will be incurred to pay 1.7 million dollars for one-time redundancy compensation of current employees as per the Fair Work Act (2009). However, the Company will be able to save 0.6 million dollars per annum by reducing operational cost. CONCERNS • Potential failure in the early stages of the change program due to lack of communication in countering employees’ resistance towards changes and aligning them to overall strategic direction of the organisation (Tamilarasu 2012), • Personal bias of employees who are responsible for planning and implementing change programs (Raineri 2011), • Inadequate planning of change program may cause potential disruptions to current operations, • Insufficient management emphasis on change leadership and accountability in spearheading the change within the organisation. RECOMMENDATIONS The Senior Managers Team proposed the following recommendations to the Board: 1. Immediately form Change Strategist Team involving employees from each affected department of the Company. Mobilise internal resources to sustain the change, ensure accountability and reinforce employees’ commitments for the team to work in liaise with HR Department to communicate shared needs of the change and convey all perceived outcomes of the change within the company (Becker, Huselid & Ulrich 2001). 2. In the following week, establish a Union within the organisation to work in collaboration with the Australian Workers’ Union to protect the right of current employees during this transitional change. As well as cooperate with the Department of Employment (2016) and recruitment agencies for on-hire employee services and assist redundant employees getting transferred to other departments within the Company or getting employed in other organisations. 3. Assign Change Strategist Team to create benchmark plan based on the organisational capabilities, monitor the progress and report implementation process back to the Board monthly basis to ensure continuity of the change and successfully complete within the next 6 months (Pettigrew & Whipp 1993). REFERENCES Becker, BE, Huselid MA & Ulrich, D 2001, ‘The HR Scorecard: Linking People, Strategy and Performance’, Boston: Harvard Business School Press, p. 186. Contract Pharma 2016, Improving Packaging Processes to Meet Regulatory and Patient Needs, Contract Pharma, viewed 18 March 2017, . Department of Employment 2016, Help for workers who have recently lost their job, Australian Government, viewed 18 March 2017, . Department of Health & Human Services 2006, Drugs, Poisons and Controlled Substances Regulations 2006, State Government of Victoria, viewed 18 March 2017, . Fair Work Act 2009, Redundancy pay and entitlements, Fair Work Ombudsman, viewed 18 March 2017, . Lo, B 2016, Packaging Services in Australia, industry report, IBISWorld, viewed 18 March 2017, retrieved from IBISWorld Database. Pettigrew, A & Whipp, R 1993, Managing Change for Competitive Success, Blackwell, Oxford. Raineri, A 2011, ‘Change management practices: Impact on perceived change results’, Journal of Business Research, vol. 64, no. 3, pp. 266-272. Tamilarasu, V 2012, ‘Change Management’, International Journal of Management Prudence, vol. 4, no. 2, pp. 26-31. .