The growth in Pharmaceutical industry in the Philippines has started to slow down to a crawl. The pharmaceutical industry has been quite radically reshaped for the past years, and now struggling with the challenges made by Maximum Drug Retail Price (MDRP) scheme or the Cheaper Medicines Law. Reinier Gloor (2010), president and executive director of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), points out that the MDRP scheme, with the recognition of the Department of Health (DOH), has taken out PHP 12 billion or approximately USD 270 million of the pharmaceutical market.
In the report presented by IMS Philippines, the total Philippine pharmaceutical market is now growing at only 2. 87% annually as of the first quarter of 2010 compared to 6% to 9% growth between 2007 and 2009. As a solution to deal with this unpredictable scenario, creating the best strategic HR practices can be the key drivers to the success and growth of an organization. The purpose of this study is to create a different approach in strategic HR practices which focuses on the Network-building HR practice that could sustain organizations’ competitive advantage during this fast changing environment.
The foundation of any successful organization is having good sets of relationships with other people in their own company as well as with people outside of their organization. Identifying the people who has potential value to the company is essential. The structure and strength of ties to the people needed by the company to increase its performance is also important. Research on strategic human resource management suggests that firms can create and support employee-based competencies through HR practices (Wright et al. , 2001).
Similarly, research on SHRM also suggests that HR practices can enhance firm performance when they are internally aligned with one another to manage employees in a manner that leads to competitive advantage (Delery & Doty, 1996). Further, the appropriateness of a set of HR practices may depend on the competency that a firm is trying to develop (Snell et al. , 1996). Thus, the researcher wants to develop a system of strategic human resource practices that support the sustainability of the competitive advantage by means of network-building HR Practice.
In this study, network-building HR practice refers to a system of expanding personal connections and sets of relationships with individuals within and outside the organization. Networks can vary on the strength of ties between individuals. If social networks are idiosyncratic because they are created through firm-specific-practices, then they can lead to sustainable competitive advantage (Barney, 1991). In general, networking has three distinct types of key players, each of which plays a big role in the society.
In the book, The Tipping Point by Malcolm Gladwell (2000), it shows how dissemination of information can be easily spread out, not with large numbers of people randomly interacting with one another, rather, information can spread by a very few key people with exactly three roles — the connector, the maven, and the salesman. The Connectors are people who are well connected. They know a lot of people within and beyond their industry. Mavens are individuals who have an expansive knowledge base about their particular industry. Salesmen are individuals with good persuasion skills.
In this study, the researcher would want to determine and further enhance the use of network-building HR practice in a pharmaceutical setting. The researcher is primarily interested in determining whether or not the strategic network-building HR practice is beneficial to sustain competitive advantage in pharmaceutical industries. At the beginning of the design phase, the researcher will contact the HR Head / Manager of the chosen pharmaceutical companies to check if they are amenable to the idea of the study. The researcher will conduct a self-constructed questionnaire and gather data using Google Documents.
Through this data, the researcher will determine that an in-depth study of the three archetypes – Connector, Maven, and Salesman – is feasible. The researcher will also apply additional selection criteria so that both the Office-based employees and Field-forced employees are represented in the study in order to examine whether FF employees (the sales team) can benefit more from this network-building HR practice. The researcher considers multiple sources of data for this study such as examining organizational documents and interviews as well.
In line with this, the researcher will conduct focus group discussion with the HR Heads / Training Managers of each organization using a checklist that will serve as the guide during the process so that uniformity and consistency can be assured in the data. Data from the fgd are expected to include facts, opinions, and unexpected insights. In this study, the researcher cannot employ direct observation as a tool because some of the FF employees are deployed in different areas in the Philippines.
The researcher instead decides to conduct the survey through Google documents as a third tool since all of the participants have an access in the internet. The researcher prepares to collect data by first contacting each pharmaceutical company (Sandoz, Novartis, Getz Pharma, Zuellig Pharma, Abbott Labs, Unilab, Pfizer, Xeno Pharma, Metrodrug, Pascual Labs) to be studied to gain their cooperation, explain the purpose of the study, request for at least 30 employees from their company who can be the participant of the study and lastly, to schedule a meeting for the focus group discussion ith the HR Head / Training Manager. Since data to be collected and examined includes organizational documents, the researcher will also state her intent to request copies of the employee’s data file including his / her job performance for the past 12 months, contact details (e-mail address to be particular), gender, age, years in the company and other details needed in the study. Focus group discussion from the 10 HR Heads / Training Managers includes company performance and variety of strategic HR practices previously used by the company.
This approach is vital to know how they direct and monitor the performance of the employees. The researcher will also develop a training program to be executed by the Training Managers of each Company. This includes topics on identifying the employee’s primary “Tipping Point Archetype” — a connector, maven, and salesman type, knowing how to leverage their strength, identifying the archetypes they lack in and work on the weak sides in order for them to prosper.
The training program will also include practice sessions in recognizing these types in the real world, identifying the people who have connections, knowledge, and skills and connecting with them to achieve their desired goals. The expected outcome of this study is that network-building HR practice suits a unique influence on the performance of the employees.
The expected findings on the significance of the strategic HR practices are consistent on the study reported by Shipton, Fay, Way, Patterson, and Birdi (2005) which prove that there is a positive linkage between strategic HRM practices and product / service performance. Although previous studies have used different measures of firm performance (Hartog & Verburg, 2004), this study is beneficial in the pharmaceutical industry because it can contribute to the identification of people with the qualities essential for the overall direction towards the growth of the organization.
The significant impact of training on the employees can be used to sustain the superior performance of the company. Thus, this strategic HR practice can closely reflect HRM trends in advanced economies. The researcher believes that in a decade or two, with some local adaptations, network-building HR practice will prevail in the corporate world.