Upjobn Mexico: In Response to Changing Macroeconomic and Managerial Environments
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Authors
Bowen, John D.
Issue Date
1990
Type
Thesis
Language
en_US
Keywords
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Abstract
Expanding business operations to a foreign market requires
much more than merely "setting up shop" in a host nation. A firm
must first come to grips with the social, cultural, and economic policy
environment which surrounds it. Needless to say, undertaking such
a maneuver is scarcely an easy task. Alan Riding describes the
current relationship between the United States and Mexico in his
cross-cultural perspective Distant Neighbors as follows: "Perhaps
nowhere in the world do two neighbors understand each other so
little. More than levels of development, the two countries are
separated by language, religion, race, philosophy, and history" (90.
Foreword xi). Cultural traditions, extending to all sectors of society,
social and economic, public as well as private, have been entrenched
throughout Mexico's thousands of years of history. As such, they are
difficult, but not impossible to change. An example is Mexico's
historically fatalistic outlook on planning. Traditionally, Mexicans
have spurned such a concept.
But now, in a macroeconomic planning context~ the
renegotiation of Mexico's $102.7 billion foreign debt, the reduction of
inflation from 159 percent in 1988 to 19.7 percent in 1989, and the
commercial "apertura" (opening) have resulted in a turnaround from
years of stagflation and economic despair.
All of these factors have impacted Upjohn Mexico (UM).
Operating in an inflationary market is unquestionably difficult, but
with assistance and the effective management of the situation by the
Mexican government, UM has demonstrated its feasibility. The
subsidiary has directly benefited from the relaxation of import
tariffs, free importation of pharmaceutical compounds, and efforts to
equate Mexican patent laws with those internationally.
Upjohn Mexico must continually make adjustments while
operating within the ever-new framework. Approvals for price
increments to avoid declining profit margins as costs increase must
constantly be sought on the basis of UM's commitment to Mexico.
UM recently reinvested $2.4 million back into its fermentation plant,
and hundreds of thousands more in capital equipment at its main
manufacturing facility.
Perhaps the greatest changes impacting UM have occurred
within its own organization. With the arrival of the current general
manager, the subsidiary has made a turnaround to progress, profits,
and an excellent working environment for all personnel. Mexico has
grown to become Upjohn's ninth largest market, gripping a 2.64
percent market share. A brief analysis of UM's financial statements
reveals that changes to effective management have resulted in an
increase of ethical pharmaceutical sales from $19 million in 1987 to
$27.3 million in 1989, a jump of 30 percent in just two short years.
Focusing on the education, training, and care of its employees, UM
has developed its source of productivity for the future.
Description
iii, 122 p.
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