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A Study on Ethical Customer Management and Organizational Sustainability in Pharmaceutical Industry in Malaysia

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Pharmaceutical industry is not just a commercial business, their products are about life and death, and improving our life quality. This paper aims to study the ethical issues in customer management and how it contributes to organizational sustainability in Malaysia pharmaceutical industry. A quantitative research designed to collect primary data from questionnaire and secondary data from journal and articles focused on ethical customer management and pharmaceutical sustainability. The paper recognized 5 pillars; Direction, Posture, Organization, Behavior and Environment in DPOBE sustainability model and aligned them into ethical customer management in pharmaceutical which contribute positive impact towards organization sustainability in Malaysia. The findings of this paper serves as a guideline to pharmaceutical customer service agents in Malaysia SSC. It emphasizes the importance of ethical customer management and its impact to organization sustainability.
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A Study on Ethical Customer Management and Organizational
Sustainability in Pharmaceutical Industry in Malaysia
Lee Yu Han, Lawrence Arokiasamy, and Joel Tham Kah Marn
Master of Business Administration, Business and Law Faculty, International University Malaya-Wales, 50480 Malaysia
ABSTRACT. Pharmaceutical industry is not just a commercial business, their products are about life and
death, and improving our life quality. This paper aims to study the ethical issues in customer management
and how it contributes to organizational sustainability in Malaysia pharmaceutical industry. A quantitative
research designed to collect primary data from questionnaire and secondary data from journal and articles
focused on ethical customer management and pharmaceutical sustainability. The paper recognized 5 pillars;
Direction, Posture, Organization, Behavior and Environment in DPOBE sustainability model and aligned
them into ethical customer management in pharmaceutical which contribute positive impact towards
organization sustainability in Malaysia. The findings of this paper serves as a guideline to pharmaceutical
customer service agents in Malaysia SSC. It emphasizes the importance of ethical customer management
and its impact to organization sustainability.
1. INTRODUCTION
1.1 Introduction Table 1: 2014 Top 10 pharma companies by global sales
#
Company
Origin
2014 ($m)
2013 ($m)
Growth (%)
1
Novartis
Switzerland
47101
47468
-1
2
Pfizer
United States
45708
47878
-5
3
Roche
Switzerland
39120
39163
0
4
Sanofi
France
36437
37124
-2
5
Merck & Co.
United States
36042
37437
-4
6
Johnson & Johnson
United States
32313
28125
15
7
GlaxoSmithKline
United Kingdom
29580
33330
-11
8
AstraZeneca
United Kingdom
26095
25711
1
9
Gilead Sciences
United States
24474
10804
127
10
Takeda
Japan
20446
19158
7
Source: Global Data (2014)
Since the very first true antibiotic, penicillin was
developed in 1940s; pharmaceutical industry has been
developing rapidly to maintain a steady supply of life-
saving medications and improving life quality (Yeoh,
1994) (Landmarks,2017). According to PMLive and
GlobalData, among the 20 top global sales
pharmaceutical companies, majority are companies
originated from United States and Europe (PMLive,
2017). As one of the most innovative and research-
intensive industries in the United States,
pharmaceutical firms are constantly facing pressures
from the governments and stakeholders (Bunniran,
McCaffrey, Bentley, & Bouldin , 2009). From a
molecule concept or idea discovery, to experiments,
research & development, clinical trials, to obtaining
approval from FDA and finally marketing the new
drugs to the public, it takes approximately 10 to 15
years (Pilon & Elias, 2015). While there are other
factors that affect a patent duration, the common term
of a new patent is 20 years from the date on which the
application for the patent was filed in the United States,
based on data published on FDA website (United
States Food & Drug Administration, 2017). The cost to
develop a new drug was estimated at $802 million
(Bunniran, McCaffrey, Bentley, & Bouldin , 2009) in
year 2009. However, the cost has increased
enormously to approximately $2.6 billion in 2015
(Pilon & Elias, 2015).
© The Authors, published by EDP Sciences. This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0
(http://creativecommons.org/licenses/by/4.0/).
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With expensive investment and long experiment
duration needed on 1 medication, drug pricing is a
global issue. In 2008, pharmaceutical expenditure in
the European Union has recorded high at €180 billion
(Kenneally & Walshe, 2012). The figure is about 17%
of EU countries’ total expenditure on health, on
average. There are particular concerns about the
growth of pharmaceutical research cost in Ireland and
the government is continuously looking for policies
towards economic sustainability and welfare of their
peoples.
Over the year, health expenditure in Asian countries
has increased along with economic growth in countries
like Thailand and Malaysia. The demand for quality
health care in public and private sectors has also
increased (Teerawattananon, Tangcharoensathien,
Tantivess, & Mills, 2003). Thailand national health
expenditure in 1994 was 3.56% of GDP with 49%
spent on public sector and 51% in private sector. In
1996, 63% of their health expenditure was recorded on
private sector while public health sector had only
consisted of 21%.
In Malaysia, approximately $52 million was spent by
the Government on drug purchases in year 1995 (Babar
& Izham, 2009). After 10 years, the amount increased
to $ 235.6 million in 2005. In 2003, total health
expenditure per capita was recorded at $ 374 with 3.8%
of GDP was allocated to health expenses. The
pharmaceutical industry in Malaysia mainly focuses on
formulation development and licensed manufacturing
from multinational pharmaceutical companies.
According to a report in 2004 by Malaysian Ministry
of Health, a total of 5750 employees were hired in the
local pharmaceutical industry, exporting drugs worth
of $ 128 million to over 30 countries. In year 2005,
Malaysia pharmaceutical market was valued at $350.7
million where 25% was exported (Babar & Izham,
2009).
World Health Organization (WHO) emphasized that
continuous supply of medication to meet the needs of
the present (Kenneally & Valerie, 2012) is crucial for
the health and wellbeing of human being. With new
deceases discovered and evolved every now and then,
development of new vaccines has to be carried out in a
faster speed and more effectively. These is only
possible when the pharmaceutical industry is
sustainable; as a result of ethical management with
integrity and compliance, high control in product and
service quality (Farooq, Salam, Fayoll, Jaafar, 2018).
In order to maintain an efficient and standardized
customer management, some large pharmaceutical
companies have invested in inter-organizational shared
service centres (SSC) to promote cooperation across
their boundaries (Fenema, Keers, & Zijim, 2014). With
a standardized system such as SAP and Oracle, these
shared service centres increase intra-organizational
efficiencies as the business units are serviced by a
common centre. SSC supports in business-to-consumer
services such as orders processing, logistics
arrangement, call centres, finance, supply chain
management and the list go down. Some shared service
centres are also involved in business-to-business
services in HR, maintenance and R&D. SSC offers an
integrated service module that improves operational
efficiency, risk levels, reduces cost, and add values to
the stakeholders.
According to a report by MSC Malaysia, there are 405
active global business service companies or SSC in
Malaysia (MDEC, 2015). Based on the calculation, it
was estimated that 86thousand jobs, to both local and
foreign workers were created in this area. Utilizing the
geographical and multilingual advantages we have in
Malaysia, further emphasis is given by the Government
to develop Malaysia into a regional hub for cloud and
content services. Currently, some of the pharmaceutical
and bio-health companies that had established their
SSC in Malaysia include Lilly, Amway, and
AstraZeneca. The latest SSC launching in Malaysia
was made by Roche in year 2016. Malaysia is the first
ASEAN country selected by Roche to operate their
Global Shared Service Centre which will servicing 15
affiliates across Asia Pacific region (MIDA, 2016).
1.2 Research Problem
According to Hefner, the customer experience is
managed in 3 stages; Customer Information Points,
Customer Point of Sale and Customer Service Points
(Hefner, Eva-Maria, Mit , 2010). It starts before the
purchase, where information on the drugs is obtained
from advertisement or sales promotion. It then
continues to during the point of sales; both online and
offline. Finally, it is the after-sales-service by the
customer care (Scherpen, Draghici, Niemann, 2018).
Product and service quality provided by the
pharmaceutical during these 3 stages affects customers’
satisfaction towards the brand. Among the 10
dimensions of service quality developed by
Parasuraman (1985), reliability, responsiveness,
communication, credibility and courtesy are some of
the key dimensions measured (Farooq, Salam, Fayoll,
Jaafar, 2018). A long-term successful customer
management requires the pharmaceutical firms to
acknowledge any privacy and trust issue, and impact of
consumer privacy exploitation towards their brand
image (NguyenBang, 2012)
With patients’ health record, drug purchase history,
pharmacy wholesalers’ purchase record and other
customer information being handled and processed by
a third party system or third party vendor, it brings up
the concern about ethics and compliances in handling
this sensitive information. Digitalization brought
challenges (Scherpen, Draghici, Niemann, 2018) to
pharmaceutical industry because now pharmacy
wholesalers (direct customers of pharmaceutical
companies) maintain their account and purchase online,
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while the appointed third party vendors manage the
orders, account and finance information, supply chain
management and other transactions through their
system.
In Sweden healthcare industry, a shared Electronic
Medical Record (EMR) is used to improve
communication between patients or consumers with
primary and secondary medical care providers. Based
on the focus group discussion done by Tully and his
team on EMR (Tully, et al., 2013), since the patients’
data is created by several doctors and pharmacist, and
then shared in the electronics system, it is easily
accessed by all. Explicit consent is supposed to be
obtained from the patients before viewing this sensitive
information. However, most participants in the
discussion group admitted that consent is only obtained
occasionally (Tully, et al., 2013).
As a highly regulated industry, pharmaceutical
companies are always bind to compliances and
regulations. Unethical way of handling company
sensitive data and customers’ private information will
lead to serious legal penalties and jeopardize the image
of the pharmaceutical company. In 2014, the cost to
create and bring a new medicine to market, from
starting with a concept, experiments, R&D, to have it
market to the public, is approximately USD$2.6billion
(Pilon & Elias, 2015). New medicine molecule data,
technology-based reports, experiments records and the
like are intellectual property (IP) to pharmaceutical
firms (Ghauri & Rao, 2009). If this IP is disclosed or
stolen, the effort and resources poured in by the
company will be wasted. Also, advising incorrect
information about the drug and promoting an off-label
indication which is not approved in the country is a
serious offense. Products and services produced by
pharmaceutical companies is matter of life and death to
their consumers. Hence, integrity is a mandatory value
in healthcare industry, no matter which stage in their
value chain.
Below are some of the data mishandling cases
happened and the negative impact towards
pharmaceutical industry.
Brand reliability and credibility is crucial in
pharmaceutical industry and ethical customer
management begins even before the sales and
consumption. During the Customer Information Points
(Scherpen, Draghici, Niemann, 2018), only correct and
approved information should be advertised and
promoted to the public. Drug makers face risk in
customer retention (Farooq, Salam, Fayoll, Jaafar,
2018) if the trust and confidence on the brands is no
longer exist.
In 2012, the British pharmaceutical company
GlaxoSmithKline (GSK) was reported to plead guilty
and paid $3 billion penalty for promoting their best-
selling antidepressants for unapproved off-label
indications and failing to report safety data about a top
diabetes drug. The agreement also included civil
penalties for improper marketing of a half-dozen other
drugs manufactured by GSK. It was one of the largest
settlements ever happened in pharmaceutical industry
(The New York Times, 2012).
Another billion-dollar lawsuit was reported happened
to Pfizer in 2009 for $2.3 billion when the drug-maker
promoted some of their drugs for off-labelled usages
which was not approved by Food and Drug
Administration (FDA) (Forbes, 2009).
In 2012, Emory Healthcare Inc. in Georgia reported
that some computers and mobile devices containing
patient social security numbers for about 315,000
surgical patients were stolen (Thomson, 2017). In 2015,
there were 253 healthcare data breach cases reported to
affect more than 500 individuals and the combined loss
is estimated to be over of 112 million records. These
were either lost, stolen or inappropriately disclosed
(Forbes, 2015) (The New York Times, 2015).
In New Jersey, a former IT administrator in Medco
Health Solutions was caught in 2005 for installing a
‘logic bomb’ in the company computers before being
fired. It was a program code that could have erased
critical prescription information for 60 million
Americans. He was arrested after the programming
code was discovered by another IT analyst. According
to Christopher J. Christie, the United States attorney
for New Jersey in a statement, “A malicious program
like this can bring a company’s operations to a
grinding halt and cause millions of dollars in damage
from lost data, system downtime, recovery and repair.”
(The New York Times, 2006).
US states filed a lawsuit against Bristol-Myers Squibb
in year 2002 for fraudulent patent application and
numerous frivolous lawsuits in order to prevent low-
price generic of their best-seller cancer drug; Taxol
from entering US market (McCarthy, 2002). The
pharmaceutical giant was reported to earn nearly $1
billion in revenues in year 2000 from the sales of Taxol,
before the generic drug.
1.3 Research Question
What are the ethical customer management on
Organizational Sustainability in pharmaceutical
industry in Malaysia?
1.4 Research Significance
Over the years, data mishandling in pharmaceutical
industry has been constantly reported and each cost
billions dollars of settlement. For a more serious
scenario, this mishandling might cause a live of a
human being. In the case of GSK off-label lawsuit, the
company was penalized back in 2004 for another
similar case. According to Eliot Spitzer, the New
York’s attorney general, who sued GlaxoSmithKline in
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2004 over similar accusations involving a different
drug, “What we’re learning is that money doesn’t deter
corporate malfeasance”. She added that, “The only
thing that will work in my view is C.E.O.’s and
officials being forced to resign and individual
culpability being enforced” (The New York Times,
2012). Company cultures and policies play an
important role in making sure all employees in the
industry are aware of their responsibilities.
The findings of this study is to provide a guideline to
pharmaceutical customer service agents in Malaysia
SSCs by emphasizing the importance of ethical
customer management and its impact to organization
sustainability. This study is also to highlight the
importance of management’s roles and responsibilities
in customer management of pharmaceutical industry
operating in Malaysia.
It emphasizes the importance of ethics and
compliances in pharmaceutical industry. It is important
for management to acknowledge how violation of
compliance affects the sustainability of their
organization. Ethics and compliance should be the
priority in shaping the organization culture and
company values. By instilling ethical values and
implementing appropriate controls to ensure company
operation is compliance-always, it creates a high
compliance and integrity-based working environment
in the organizations. All employees should be trained
and educated on the meaning of customer management
ethics, how does it affect the patients and shareholders,
and what are the impacts towards the brand and
company sustainability.
Next, the finding of this research aims to serve as a
reference for future studies on pharmaceutical
organization ethics and sustainability issues.
Pharmaceutical products are more than just ordinary
commercial goods aimed for profit; it is life and death
related. With technologies evolving every day,
patients’ information management is becoming more
advance but at the same time, exposed more to security
and privacy risk. Hence, researches on ethical
customer management is essential to study and develop
a customer management system that ensure the
patients’ welfare and rights are protected. It is also
targeted that more efficient ethical customer
management theories can be developed and updated,
and to be implemented in pharmaceutical industry for
the organizational sustainability.
2. LITERATURE REVIEW
2.1 Development of Pharmaceutical Industry
History written shows that human started to make
medicine from plants, animals, or minerals during the
early Chinese, Hindu, and Mediterranean civilizations
(DaileyJohn, 2016). In 1928, the first antibiotic;
penicillin was discovered by Alexander Fleming in
London. It had successfully reduced a great number of
death from infection. Before the discovery of
penicillin, hospitals did not have effective treatments
for patients with blood poisoning, infections of
pneumonia and rheumatic fever (The Alenxander
Fleming Labortory Museum, London, UK, 1999).
After the discovery in 1928, a research team from
Oxford University continued to develop Fleming’s idea
with a serial of animal experiments and clinical trials.
After much research and testing, they managed to
produce penicillin into a life-saving drug. The Oxford
lab was turned into an antibiotic factory where the drug
production was carried out (The Alenxander Fleming
Labortory Museum, London, UK, 1999). However, it
was a difficult time for them in United Kingdom due to
the war time condition back in 1940s. The Oxford
team travelled to United States in 1941 and they
collaborated with Yale physiologists where they
continued to develop and improve penicillin
production.
In United States, pharmaceutical and chemical
companies such as Merck, Pfizer, Squibb and other
companies took part in the development of penicillin
where they were facing challenges to scale-up the
production. By the time, penicillin was a life-saving
treatment of various infections in treating the military
during war. With the effort from universities,
pharmaceutical and chemical companies, new
technologies were invented and penicillin production
increased dramatically since early 1944. The drug
production in United States increased from 1,663
billion units in 1944, to 133,229 billion units by 1949.
Thanks to the technologies, penicillin price had
decreased from 20 dollars per 100,000 units in 1943, to
less than 10 cents by 1949 (The Alenxander Fleming
Labortory Museum, London, UK, 1999).
Over the years, we witnessed various diseases
outbreaks such as SARS and H1N1. Some of these
viruses evolved and changed over the time. Hence,
pharmaceutical is one of the fast developing and most
innovative industries to cure diseases and maintain our
health. Pharmaceutical companies continuously
develop better vaccines and discover new treatments
for chronic illness such as cancers, heart disease, and
diabetes. Due to change of lifestyle in this
globalization era, mental health issues is the new focus
nowadays. Pharmaceutical companies like Lilly and
Pfizer continuously developing medicines to treat
depression, anxiety disorder, schizophrenia and so on.
Pharmaceutical industry is about improving living
quality and saving lives. Since their products are
crucial to patients, every single process in the
pharmaceutical industry must be controlled and
monitored strictly and aligned with ethics and
compliances. Pharmaceutical markets are complex in
many aspects. It involves rules and regulation,
government policies and market demand in different
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countries and regions of the world (A CBO Study,
2006).
Based on study done by National Science Foundation
(NSF), pharmaceuticals in United States invested up to
USD 5.5billion in research and development of
medicine back in year 1980. The amount had then
increased tremendously to USD 17billion in 2003 (A
CBO Study, 2006). For an innovative new drug, it
takes average USD 800million of cost and average 12
years of time to discover, experiment, research and
develop a drug molecule that might save millions of
precious lives. The cost of research and development
has increased in recent years as big pharmaceutical
companies are seen to shift their focus to more chronic
and degenerative diseases (A CBO Study, 2006).
With such expensive cost and huge impact to the
patients, ethics and compliance is important. Violation
in any process of the value chain will definitely bring
severe and expensive consequences for a
pharmaceutical company.
2.2 Organizational Sustainability
With the rapid technology invention and development,
globalization is accelerating. Obvious changes can be
observed in how corporates nowadays are operating
their economic, social and environmental processes
(Dahl, 2012). In order to survive the rapid changes,
organizations now focus on policies to sustain their
business. Several indicators were designed
internationally for measuring and reporting, mainly
emphasized on environmental issue and sustainable
development. The current environmental indicators
include Environmental Vulnerability Index,
Environmental Sustainability Index and Ecological
Footprint (Dahl, 2012). Publish of annual
environmental information was made mandatory for
some European countries like Denmark and Norway
(Moore & Julie, 2008).
In healthcare and pharmaceutical industry, organization
is sustainable when the development meets the present
needs without affecting the capability of next
generation to meet their own needs (Jamaludin,
Habidin, Shazali, Ali, & Khaidir, 2013). Besides
legislative and stakeholder pressure (Moore & Julie,
2008), pharmaceutical industry is a more sensitive
industry because its products are to improving life
quality and saving human life. Hence, in order for a
pharmaceutical firm to stay sustainable in the market,
ethics is indeed an important element in their daily
operation. Appropriate sustainability indicators on
ethical operation guide and assist the pharmaceutical
firm to stay competitive in the market and to be able to
continuously play their noble roles to human life
quality.
In a study done by Moore and Julie, majority
companies admitted that their sustainability reporting
was conducted due to external drivers; pressure by the
legislation and stakeholders (Moore & Julie, 2008).
Some European countries like Denmark, Norway and
France even mandate the publishing of corporate
environment report annually. There are urge from the
public that instead of economic goals, corporates
should put more focus on social and environmental
goals. During the 2002 World Summit on Sustainable
Development held in Johannesburg, importance of
ethics in sustainable development was emphasized
again by United Nations (Dahl, 2012). For the past
years, United Nations have launched several programs
such as the Decade of Education for Sustainable
Development (2005-2014) and indicators as an effort
towards sustainable development. However, there are
worries that these indicators and programs are still not
enough to change government decision-making and
cooperates’ behavior (Dahl, 2012).
Sustainability indicators are designed to serve as a
powerful tool and solid base for management in
decision-making with below five main purposes (Waas,
et al., 2014). First of all, it provides structured
meaningful information and data to management in
decision-making. Next, it operationalizes sustainable
development and provides clear and solid guidelines.
Thirdly, sustainbility indicators educate and facilitate
social learning by changing the society mindset in
making decisions. Also, the indicators can be utilized
to potrait the firms’ accountability and transparency to
the public. Lastly, it identifies any knowledge and data
gaps and proposes priorities for firms to tackle these
gaps internally and externally (Waas, et al., 2014).
Sustainability serves an indicator in decicion-make
strategy to ensure the rational process connects
stakeholders’ interest with company values, ideology,
knowledge and experience, considering various socio-
environmental contexts.
The International Association for Impact Asssessment
defines impact assessment as a process taken by
organizations to identify future consequences of a
current or proposed action (Waas, et al., 2014).
Sustainability assessment is widely used for
environmental impact assessment, strategic
environmental assessment, health impact assessment
and risk assessment. Objectives of these assessments
include providing a better interpretation and
understanding on sustainability in multi-criteria, and
enhance the data management transparency. It is also a
information structuring and supporting tools in
decision-making process to avoid any irreversible risks,
ensure effective communications, be responsive to
changes and uncertainties. Sustainability assessment
encourages sustainability objectives in organizations
with broad participation from all stakeholders and
experts, and stimulates continuous learning and process
improvement (Waas, et al., 2014).
Based on World Health Organization definition about
sustainability, doing the right things now lead the
organization to a long-term value creation that benefit
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the consumers and organization. Sustainability in
pharmaceutical industry involves developing economic
growth through research and innovation to achieving
competitive advantages, at the same time sustaining
corporate reputation, customer relationships, products
and services quality (Shen, Tam, Tam, Ji, 2010)
(Szekely & Knirsch, 2005). Pharmaceutical companies
like Bristol-Myers Squibb define and pledge
sustainability in conducting their business by
contributing to economic growth, social responsibilities
and a healthy environment, besides curing serious
diseases in patients (Min, Desmoulins-
LebeaultFrancois , EspositoMark , 2017). In Baxter,
sustainability is long-term approach to include social,
economic and environmental responsibilities among
their business priorities. Nova Nordisk is also aligned
with the sustainability concept where they believed that
fundamental to a long-term business achievement is a
healthy economy, environment and society (Min ,
Desmoulins-LebeaultFrancois , EspositoMark , 2017).
2.3 Ethical Customer Management
Since pharmaceutical is a highly regulated industry,
ethics and compliances are essential to ensure correct
products with the accurate information are delivered to
the patients, and directly sustain the business. DPOBE
Model for Organizational Sustainability (Santos,
Anunciação, & Svirina, 2013) is utilized to measure
pharmaceutical organizational sustainability. There are
5 dimensions or pillars emphasized in this model;
Direction, Posture, Organization, Behavior and
Environment. These dimensions fit perfectly in
determining sustainability for pharmaceutical industry.
Direction
The 1st pillar in DPOBE model is Direction. A
corporation’s sustainability and long-run prosperity are
heavily related to welfare of various stakeholders
which inclusive of employees, suppliers and customers
(Min , Desmoulins-LebeaultFrancois , EspositoMark ,
2017). It is not limited only to stakeholder groups who
own stake or have claim on the firms. To gain
sustainability through ethical customer management, it
starts from its mission and vision, what does
management facilitate and consider as a permanent
way to run the business (Santos, Anunciação, &
Svirina, 2013).
Four levels of possible industrial design into
sustainability are identified as environmental redesign,
new and sustainable products and services, new
production-consumption systems with sustainable
satisfaction of need and desires, and lastly, creating
new scenarios for sustainable lifestyles (Küçüksayraç,
2015). Pharmaceutical company strategies generally
are adopted and designed to achieve sustainability
through corporate initiatives based on external drivers;
government regulations and market demand, and
internal drivers; creating opportunities for product
innovation and improve product quality (Küçüksayraç,
2015).
Johnson & Johnson is committed to their social
contract obligations and uphold ethical values towards
the communities with sustainability practices
(Turcsanyi & Sisaye, 2013). Eli Lilly committed to
‘make medicines that help people live longer, healthier,
more active lives’, ‘make a significant contribution to
humanity’ with their core values; integrity, excellence
and respect for people (Eli Lilly, 2017). Ethical
customer management is a manner where
pharmaceutical firms handle their operation to
positively impact the society, building positive
reputation and gaining trust from their customers (Min ,
Desmoulins-LebeaultFrancois , EspositoMark , 2017).
According to Lega’s study, leadership’s characteristic
and involvement contribute to organizational culture,
values and goals. The company culture and strategy
depend on management’s decision and priority.
Managers can motivate the ethical values (Lega,
Prenestini, & Spurgeon, 2013) and continuously
building the awareness of these values as an important
aspect toward sustainability (Dahl, 2012). Strategy and
effort of a pharmaceutical firm on sustainability can
also be determined by hiring and retaining high-quality
staffs who aligned with the company mission and
vision in ethical customer management (Turcsanyi &
Sisaye, 2013).
Posture
The Posture aspect measures the customer service
agents’ understanding on the business process, their
roles and responsibilities. It is importance for the
customer service agents to understand the protocol; a
set of rules that govern the interaction of concurrent
processes in distribution systems, in every business
process they deal with every day (Huang, Huang,
Chen , 2009). In the study by Huang and the team,
order management protocol modules are classified into
four categories; order, response, confirmation and
others. It emphasized the appropriate handling of order
information to ensure accuracy in order processing,
proper response manner, efficient communication with
both upstream suppliers and customers, and other
transaction carried out daily or on ad-hoc basis.
Daily operation in pharmaceutical SSC also includes
providing customer services via call center, helpdesk
portals and emails (Harritz , 2016), for any inquiries
and complaints. In the 2nd pillar, Posture, we are
measuring the ethical principles and conduct codes
implemented to the processes (Code of Conduct, 2017)
(Esteves, Santos , & Anunciacao, 2012). This is
important to ensure the sensitive and confidential
information is handled in a proper manner without
violating any regulation. It contributes positive impact
towards the organizations accountability and reliability,
and customers feel their privacy is respected (Santos,
Anunciação, & Svirina, 2013).
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According to the Code of Conduct by Malaysia
Pharmaceutical Society, an unqualified practitioner
shall not engage himself publicly in the running of the
business of a body corporate in such a manner as to
throw doubt upon the status of the superintendent or
other pharmacists in such body corporate (Code of
Conduct, 2017). Hence, for any inquiry or complaint
related to product information; indication, dosage and
etc. should be redirected to a qualified person in charge
or escalated to Quality personnel of the pharmaceutical
firms. If the agent is not confident in handling certain
inquiry, he should consult with qualified personnel in
the organization before making high-risk decisions
which might endanger the patient’s life and affect
company reputation (Strategic Direction, 2010). Long-
term high performances and sustainability depend on
both internal and external relationship building which
should base on trust, transparency (Benn , Dunphy , &
Griffiths , 2006) and integrity.
Drug safety is a serious issue in pharmaceutical
industry and 114 cases were identified in 2005 (Sillup
& Porth, 2008). Based on research by Abud-Mendoza
in 2012, an annual cost of USD$ 1.5million incurred
due to persistence and prevalence of adverse events
reported to the Institute of Medicine (Abud-Mendoza ,
2012). Adverse events include any informed and
uninformed side effects, even death caused by the drug
consumption. Since it is a serious matter, all
pharmaceutical CS agents should be aware of the
procedure in handling such complaints and inquiries.
Organization
In pharmaceutical Shared Service Center (SSC) or the
new term used in Malaysia; Global Business Services
(GBS), there is no direct physical interaction with the
customers. Customer service agents liaise with the
customers; patients, consumers and pharmacies via
online retail environment and call centers (Perepelkin
& Zhang , 2011). In this context, trust and brand
reputation is one of the key elements to build long-term
successful customer relationship. Corporate brand
personality that promotes integrity and ethics is a
powerful corporate competitive advantage to ensure
organization sustainability in pharmaceutical industry.
Comprehensive and clear boundaries is to be defined in
the goals of reaching sustainability objectives in
pharmaceutical organization (Fenema, Keers, & Zijim,
2014). This includes clear segregation of roles and
responsibilities in GBS especially in Information
System Management. All intellectual properties and
customer information is collected and stored in cloud
platform. Since data is one of the most valuable assets
in a firm, effective enterprise customer management
system allows coordination and integration of useful
data from different channel sources, and enhance the
customer experiences (NguyenBang, 2012). Access
into different types of information is to be controlled
according to the ‘right’ and ‘authority’. It is to protect
and ensure sensitive data from mishandling and
unintentional data disclosure. If there is information
and data to be shared with external business partner, a
controlled private cloud should be operated and access
opened solely to authorized personnel in the business
partners (Laudon & Laudon, 2016).
Pharmaceutical MNC like Johnson & Johnson and
Lilly pledged to conduct their business in the most
noble and highest values. This business policy or
strategy is to be clearly conveyed and adapted across
all subsidiaries and global business service centers
(Kidger , 2002). High quality customer relationship
management in pharmaceutical contributes to high
customer satisfaction. As part of the knowledge
management system, intellectual capital such as
knowledge, information, best practices based on
previous experiences should be utilized by the local
GBS to create competitive advantage (Mehralian ,
Nazari, Akhavan, & Rasekh, 2014). Healthcare
regulation might differ in different countries and all
business partners should be trained to comply with the
headquarter mission and vision. Hence, knowledge
transfer in MNC should be multidirectional to benefit
headquarter, subsidiaries and all business partners such
as local logistic service providers (Kidger , 2002).
Managers should implement a proper method to boost
IC within the customer service department by
providing complete training and education to
strengthen employees’ professional knowledge and
skills. Employees learn to appreciate ethical customer
management and ethics code of conduct if they are
trained on the logic and impact towards organizational
sustainability (Kidger , 2002).
Behavior
Sustainability in pharmaceutical firms is strongly
connected with the organization quality control in
industry value chain; both primary and support
activities (Laudon & Laudon, 2016). Erturgut and
Soysekerci defined Total Quality Management as an
approach organizations used to meet customers’
requirement and expectations, by implementing
Quantitative methods on the organizational processes,
service and products to sustain product development
(Erturgut & Soysekerci , 2009). This measures all
activities to insure service quality with strict quality
control on efficiency and effectiveness (Ritchter &
Bruhl , 2017). Performance risk and error is to be
monitored and minimized through output and behavior
control. In pharmaceutical customer management, it
requires agents to be aware of the sensitivity of
customer information, accuracy and timeliness in order
processing to ensure customers receive the drug
delivery in time with correct products and quantity
(Santos, Anunciação, & Svirina, 2013).
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Under Johnson & Johnson policy, customers are
protected by the firm’s accountability to produce high-
quality drugs and if there is any issue where the quality
is compromised, product recall will be carried out and
Johnson & Johnson committed to their best to rectify
the issues (Turcsanyi & Sisaye, 2013). Such actions
from Johnson & Johnson encourages the customers to
have confident, knowing that the firm will always act
ethically contribute a positive impact towards their
financial performance. Professional and ethical
employee behavior; integrity, accountability and
honesty allows the firm the manage their reputation
and building a healthy and positive customer
relationship system based on trust and loyalty, that in
return enhance organizational sustainability in this
competitive and fast changing industry.
Effective and efficient implementation of operational
customer management, especially in IT-related
processing enables a pharmaceutical firm focus on
analytical customer management, strategic planning on
building positive customer relationship, generate
customer value and enhance shareholder value for the
firm (NguyenBang, 2012). It gives confidence to the
customers, and as trust increases commitment and
encourages customers to invest in a long-term
relationships with the pharmaceutical company.
Evaluation
Corporate Social Responsibility (CSR) is a concept on
how the business activities are carried out continuously
in terms of social value; ethically, responsibly and
transparently. Pharmaceutical industry is growing their
interest in CSR reporting disclosure. Based on a report
done by KPMG in 2011 (one of the Big Four
accounting firms) on the 100 largest pharmaceutical
companies in 34 countries, CSR reporting has
obviously doubled since their last survey in 2008
(Azim & Azam , 2013). In a study on managerial
perception of 100 companies in Malaysia, aspect on
products and services to customers was actively
reported in their social reporting. According to Azim
and Azam, one of the major reasons on CSR reporting
are corporate accountability to the society and in turn,
sustain the company development.
Building awareness of these social values improves
corporate image and reputation. A multilevel
sustainability indicator is a supporting tool towards
organizational sustainability (DahlLyon, 2012). Key
performance Indicator (KPI) is implemented in the
customer service agents to measure the order
processing accuracy and timeliness. It is a standard to
ensure customers’ requirement on the drug purchases
are managed and processed correctly and without delay.
Besides individual monitoring, Executive Support
System (ESS) such as performances metrics and
governance system (FenemaPaul, KeersBianca,
ZijimHenk, 2014) within the customer service
department allows management to analyze
department’s performances and evaluate customer
satisfaction level (LaudonKenneth & LaudonJane P.,
2016). Based on the data generated, it assists
management to identify any ethical gap or under
satisfaction in customer management and work out on
solutions to overcome this gap immediately. Customer
satisfaction is a concept where the business must
satisfy its customers in ensuring a long-term
relationship, which contribute in the business
sustainability and profitability (Farooq, Salam, Fayoll,
Jaafar, 2018).
It is also highly recommended that pharmaceutical
companies obtain external review on their
performances and control system. European and United
States companies obtained external review from
appointed auditors annually to analyze and evaluate the
organization performances and strategies
(MooreSharon & JulieJie Wen , 2008). Both internal
and external audit serve as a measurement tools for
Malaysia pharmaceutical SSC to evaluate
performances and monitor the organizational efficiency
and effectiveness (SantosJoão, AnunciaçãoPedro
Fernandes , SvirinaAnna, 2013).
2.5 Conceptual Framework
Figure 1: Conceptual framework of the research
These conceptual framework portraits the factors of
organizational sustainability in Malaysia
pharmaceutical industry. There is a positive impact of
company Direction, Posture, Organization, Behavior
and Evaluation system towards the organizational
sustainability.
2.6 Theoretical Framework
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ICLM 2018
Figure 2: DPOBE Model [Source: Santos et al. (2012) ;
López et al. (2010, 2011)]
In this research, level of sustainability in
pharmaceutical organization is examined and measured
with the implementation of ethical customer
management in ‘DPOBE Model for Organizational
Sustainability ‘. DPOBE was introduced by Gisbert
Lopez and his team in 2010 and is used by some major
firms in Portugal to identify major question about
sustainability in the organizations (Santos, Anunciação,
& Svirina, 2013). Five pillars were identified in this
model as the most important frames in organizational
sustainability; Direction, Posture, Organization,
Behavior and Evaluation. The five pillars analyzed and
explained on how stragetic level, operational level, top
management level and activitity reporting level play
their roles and responsibilties to maintain and sustain
the business.
In this research, level of sustainability in
pharmaceutical organization is examined and measured
with the implementation of ethical customer
management in ‘DPOBE Model for Organizational
Sustainability ‘. DPOBE was introduced by Gisbert
Lopez and his team in 2010 and is used by some major
firms in Portugal to identify major question about
sustainability in the organizations (Santos, Anunciação,
& Svirina, 2013). Five pillars were identified in this
model as the most important frames in organizational
sustainability; Direction, Posture, Organization,
Behavior and Evaluation. The five pillars analyzed and
explained on how stragetic level, operational level, top
management level and activitity reporting level play
their roles and responsibilties to maintain and sustain
the business.
Organizational sustainability in a pharmaceutical
company relies closely to the company culture that
emphasizes on ethics, control and compliance. In this
research, effective implementation of the 5 aspects;
Direction, Posture, Organization, Behavior and
Evaluation in managing customer service and
relationship contributes to the firm sustainability. It
starts from the top where integrity and ethics are set as
priority and core culture of the pharmaceutical
organization, ethical values instilled in trainings,
operations are carried out under code of conduct,
accountability in daily interaction with the patients, and
finally concludes with a systematic governance system
that ensure the pharmaceutical firms to sustain in the
industry. It is crucial to maintain the confidence in
consumers or patients, where they entrust their lives or
lives of their loved ones to a pharmaceutical company.
This is only possible when a pharmaceutical firm show
strong integrity, accountability and respecting the
privacy and putting patients’ lives as their priority.
Conclusion & Implication
The relationship between organizational sustainability
in Malaysia pharmaceutical industry ethical customer
management is studied by implementing in DPOBE
model. Based on literature review conducted on
sustainability and pharmaceutical industry, ethical
customer management is only possible when the
company has strong sense on compliance and
understand the impact of their business processes
towards the life quality of their consumers. Ethical
code of conduct and integrity is essential in every
customer service agent to ensure high quality of service
to their customers and to protect the customers’ privacy.
Organizational culture, systematic knowledge
management system and information system ensure CS
agents are equipped and well prepared to handle
sensitive information from the customers.
Organizations that strike for high service quality will
make sure their customers get efficient and effective
services from the CS agents. And lastly, organizational
sustainability also depends on KPI, multidimensional
indicator and audit to be put in place as evaluation and
measurement tools.
With more pharmaceutical multinational corporations
investing in Malaysia for global business services, it is
important that the ethical customer management policy
is implemented and emphasized locally. Mishandling
of customers’ sensitive information can be a very
serious offence and it might jeopardize the reputation
of the pharmaceutical company. In a more severe
situation, a patient’s life quality will be affected.
Comprehensive conduct code and guidelines to the
local global business services is mandatory to maintain
the service quality and sustain the pharmaceutical
shared service centers industry in Malaysia.
Pharmaceutical industry carries a noble responsibility
to improve human life quality. As highlighted in
literature review, it is believed that ethical customer
management in customer service contributes to positive
brand image and eventually leads to organizational
sustainability.
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Purpose This paper aims to illustrate the role of management devices in enacting strategy and strategic decisions, resulting in the development of a Shared Service Centre (SSC) in a Danish municipality. It shows how devices interact in defending, rejecting and reframing strategy, leading to the closure of the SSC to pave the way for new strategic ideas. Design/methodology/approach It uses a longitudinal case-based approach, which draws on actor-network theory, particularly Callon’s (1998) notions of framing and overflowing. These notions help describe strategic events and processes by highlighting the active role of non-human entities, such as management devices, in enacting and reformulating strategy. Findings Different devices have become key actants in shaping and formulating the new strategy in the municipality and the strategic decision to construct an SSC. However, different devices mobilise different localities that protest, reject and participate in the closure of the SSC through a reframing strategy. Research limitations/implications The study is subject to the general limitations of case-based research. Thus, the propositions should be further investigated to elaborate the performative role of management devices. Practical implications The findings facilitate a deeper understanding of factors triggering strategic development in the public sector. Also, it identifies aspects leading to failures by investigating how different devices allow local actors to stay connected and affect the SSC’s creation. Originality/value This study is the first to use a performative method to highlight the temporary and local nature of enacting strategic decisions to construct an SSC in the public sector.
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More than 75% of Fortune 500 companies have established models of shared services with the aim of gaining superior performance by cost savings and service enhancements. Despite scholars' complaints about scant shared service center (SSC) research, this study shows that the actual shortcoming in this stream concerns a high fragmentation of the academic literature (e.g., we found 137 works in the initial search and 83 works in a refined screen). In this first comprehensive literature review, we synthesize peer-reviewed articles and classify them into 4 perspectives according to their research questions (i.e., determinant, process, control, and outcome). We identify 17 major research areas across these perspectives. Additionally, we provide information on methodologies and theories. On the basis of the literature synthesis, we discuss opportunities and gaps and propose an agenda for future research. Specifically, we suggest 3 potential research directions (i.e., direct relationships, mediating, and outcome effects) regarding SSCs during their operational maturity phase.