Swiss Business and Corporate CultureResearch Paper

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Swiss business culture - case study of Novartis International AG

Business culture in Switzerland is formal and focuses on building reputation and respect between business owners and their clients. This aspect of the Swiss makes it necessary to form long lasting relationships with every client they handle. The only way to command respect is through competence, efficiency and good performance. Furthermore, the business environment in Swiss separates personal from public thus learning the business aspect of their business partners is crucial. The Swiss expect their partners to be prepared when negotiating deals and will always appreciate it when decisive and conclusive decisions are made almost instantly.

Despite this, Swiss may care less about formalities compared to German speaking nations but are still keen on punctuality and appearances. There is a significant emphasis on hierarchy observations with bosses being highly respected although they work with colleagues to reach a decision. It is this need for consensus that makes decision making difficult. It forces companies to focus on making unanimous decisions, call for meetings before making a final conclusion on any topic. Switzerland is a combination of regional influences, customs and homogenous etiquettes excluding language nuisance (UK Trade & Investment, 2013).

Swiss business management methods- a case study of Novartis International AG

Corporate background

Novartis, whose Latin origin name means art, is a biotechnology and pharmaceutical company whose headquarters is in Basel, Switzerland (Novartis, 2010) and was formed in 1996 after the merging of pharmaceutical and chemical companies, Ciba-Geiger AG and Sandoz. The merging of these Basel located companies remains the largest in the world to date making Novartis the third largest pharmaceutical in the world having over 100000 employees worldwide and registers a 49 billion U.S. annual revenue.

Furthermore, it is one of the fastest growing companies in the world emphasizing on drug development annually. This explains its second rank in fortune magazine as worlds most admired company. This company has four main business areas including pharmaceuticals, vaccines and diagnostics, Sandoz and consumer health (Reinders, 2010). The fact that all its drugs are protected by patents makes it one of the most notable players in the industry as its solutions are helping the society.

Norvatis is subject to laws of Switzerland especially on securities. It is also subject to the SIX Swiss Exchange rules that include corporate governance directives where it is incorporated in the governance standards. The governance, nomination and corporate responsibility committee regularly reviews principles and standards of good practices in addition to recommending improvements to corporate governance framework for consideration by full board (Norvatis, 2015, p.93).

Dealing with such a company that is subject to a couple of securities and laws makes things more plausible both to consumers and resellers. The Norvatis, which is subject to the rules of the SIX Swiss Exchange rules conforms to all its industry standards. The reviews from authority third body experts will not only force the company to keep to its standards but also ensure that it is punished whenever it operates outside the agreed upon terms.

Vision, core values and cultural priorities

To be the world's most respected and successful healthcare company (Novartis, 2015, p. 16). Their values define their culture while helping execute their strategy according to the company's mission and vision that plays an integral role in helping new employees and the company in general achieve what the customers and public in general expects of them.

Also described is the expected professional behavior from employees. By giving its employees a charter and code of ethics to live by, Novartis ensures responsibility and accountability across the table. Each employee knows what is expected of him or her and the consequences of breaking any of the guidelines stipulated in the document.

Innovation: Novartis also believes in funding innovation on strong science by encouraging smart risks and experiments whose aim is to encourage creative thinking and offer practical solution for both health and business environments. This ensures that all the solutions from Novartis are both relevant to the current market and unique and considerate towards marketing changes.

Quality: The quality of service and products delivered is crucial to guarantee customer trust in any company or society. This is achieved through standard upgrades, training and technology advancements, all of which are geared towards making the employees more effective and skilled at handling their specific jobs.

Teamwork and collaboration: Teamwork is also encouraged to deliver new products to customers leveraging creativity and diversity for a global workforce. By working together as a team, Novartis' employees can share their ideas better and work towards achieving the innovation, quality in relevant goals. Novartis is known for its great team of players whose aim is to achieve goals. The focus remains on maintaining quality and high ethical values.

Performance: All the employees have the drive and power to deliver results even under the most extreme conditions. The ability of the company to put the very best in everything they do increases its reliability and the general quality of the services and products put forth.

Courage: Courage is the other value this company strives to achieve in the sense that associates can voice their ideas and break the norm barrier even when faced with challenges of resistance and moral dilemmas. The goal is to encourage them to take great risks even in the event of a high failure possibility.

Integrity: The code of conduct that upholds high ethical standards is a great way to assist associates apply the necessary standards at work. The current code of ethics focuses on getting the very best out of its staff, something that all the associates and business partners understand and respect. Moreover, there is a chance for investigation in case of wrong doing with the necessary follow up and corrective action (Novartis, 2015, p.17).

Financial performance

The sound financial performance registered by Novartis in 2014 is attributed to continued product growth and expansion in emerging markets thus offsetting the effect of generic competition. This led to the achievement of USD 58 billion similar to the 2013 levels in terms of report and 2% up in constant currencies. The group operating income was USD 10.7 billion while the operating income margin 18.5% of the net sales. The group net income rose to USD 10.3 billion while earnings per share rose to USD 4.21 and 2014 cash flow increased by 8% to USD 10.8 billion due to high operating cash flows. Core operating income went up by 3% while the core operating income rose by 0.5% to 25.5% of net sales due to the efforts of enhance productivity and reduce the 0.7% negativity brought about by foreign exchange rates. Core net income rose by 3% to USD 12.8 billion and core earnings rose to 5.23 USD registering a 4% increase (Novartis, 2015, p.22-23).

Group operating income rose by 1% to USD 10.7 billion including a $0.9 billion gain from blood transfusion diagnostic units and a $0.3 billion gain on commercial settlement offset by a $1.1 billion impairment charge related to the divestment to CSL on influenza vaccines business. The negative 6% income resulted from emerging market currencies more so the ruble and yen against the U.S. dollars causing an operating income of 18.5% of the net sales, which is 0.1% reduction, compared to the year before. Furthermore, a 0.8% increase was offset by a 0.9% negative impact in the current year. The IFRS needs depreciation as well as amortization charges on not only tangible but also intangible assets on halting operations of OTC, animal health and vaccines cease as of April in 2014, which was the portfolio transformation declaration date. The overall effect is a positive impact of USD 277 billion for the whole year and a general income margin improvement. There is also the Vaccines of USD 552 million and total expense recognized in corporate discontinuing operations in 2014 of USD 271 million related to the transformation transaction related expenses (Novartis, 2015, p.129-130).

Changing market paradigms

Human population characteristics are influencing major societal changes. Over a billion people are expected to inhabit the world by 2025 majority of them being in developing countries as per UN. People over 50 years also increase by 500 million with health and living standards improvements and this age is expected to register the fastest growth rate accounting for 25% of the world's population by 2025. As a result, illnesses and diseases also shift as chronic illnesses and non-communicable diseases increases accounting for more than 25% of illnesses during the same time rising from 60% in 2010 as revealed in WHO survey and projections (Novartis, 2015, p. 14).

With the changes in demographics and changes in society, there could be chances that the company has to reorient its business plan. The changes in demographics affects more than the type of health services people subscribe to. It will have an impact on the type of drugs that need be purchased. As this changes, the demand for a variety of drugs changes hence the need to manufacture something in… [END OF PREVIEW]

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