How to do dynamic resource allocation in the generic pharmaceutical industry?
The research aims to create a comprehensive practical framework that can help practising CEOs, CFOs and board members to discharge their role in dynamic resource allocation more effectively – a framework that connects the source of funds to various deployment options, connects the purpose, vision and values of the organisation to its business strategy and provides a toolkit for dynamic reallocation across various business units and deployment options. The history of resource allocation decisions in Dr. Reddy’s Laboratories Ltd. over the last two decades has been used as a case study in this research.
While Dr. Reddy’s has faced problems similar to those faced by other organisations in terms of doing resource allocation well, there has been a gradual evolution in this learning organisation. For a large part of its journey, the company has been relying, with reasonable success, on the strength of intuition and entrepreneurial instinct, refined by the learnings from past experiences to wade through these questions and arrive at decisions. The principles of TOC (Theory of Constraints) and SDP (Strategy Deployment Process) have played a fundamental role at Dr. Reddy’s in guiding decisions and actions.
While the case study gives the proof-of-concept, a survey among its senior managers establishes the influence of TOC and SDP in shaping resource allocation decision in the organisation. Qualitative research, based on interviews of thirty-six prominent professionals and experts in the generic pharma industry, further validates that tools like SDP and TOC are potentially useful for defining strategic priorities and resource allocation decision making. It also validates that the dynamic resource allocation framework (developed based on the case study of Dr. Reddy’s Laboratories Ltd. and amended based on the analysis of responses from both quantitative survey and qualitative research) can be applicable to other generic pharma companies to realise their business strategy.