The Emergence and Change of Pharmacia Biotech

Transcription

1 The Emergence and Change of Pharmacia Biotech

2 L'~~~ STOCKHOLM SCHOOL ('Sra5~ OF ECONOMICS ~.~*,,-." THE ECONOMIC RESEARCH INSTITUTE ~~~4t Address: Sveavagen 65, Box 6501, S Stockholm. Tel Basic Orientation The Economic Reserarch Institute, at the Stockholm School of Economics (EFI) is devoted to the scientific study of problems in management science and economics. It provides research facilities for scholars belonging to these disciplines, training advanced students in scientific research. The studies to be carried out by the Institute are chosen on the basis of their expected scientific value and their relevance to the research programs outlined by the different sections of the Institute. Research Divisions A B C CEE CFR CHE D ES FI F leg I p S T Management and Organization Accounting and Managerial Finance Managerial Economics Center for Ethics and Economics Center for Risk Research Center for Health Economics Marketing, Distribution, and Industry Dynamics Economic Statistics Finance Public Management International Economics and Geography Information Management Economic Psychology Economics Industrial Production Research Programs: Man and Organization The Foundation for Distribution Research Policy Sciences Additional information about research in progress and published reports is described in our project catalogue. The catalogue can be ordered directly from the Economic Research Institute, Box 6501, S Stockholm, Sweden.

3 The Emergence and Change of Pharmacia Biotech The Power of the Slow Flow and the Drama of Great Events Per Andersson... STOCKHOLM SCHOOL \-';1 OF ECONOMICS 'f.' TIlE ECONOMIC RESEARCH INSTITIJrE

4 A Dissertation for the Doctor's Degree in Philosophy Stockholm School of Economics 1996 EFI and the author 1996 ISBN Key Words: Pharmacia Biotech: Business History Marketing Organization Company Transformation Biotechnology Industry Printed by Graphic Systems in Stockholm 1996 Distributed by: The Economic Research Institute at the Stockholm School of Economics, Box 65.01, S Stockholm, Sweden

5 Foreword This book is very much the result of a collective process, like all studies that claim to be part of social science. In one way, it could be said to be the outcome of research carried out within Pharmacia Biotech AB from 1991 to 1994 but in a wider sense, the process started long before that and has continued long after the draft manuscript was finished. Just as the story of Pharmacia Biotech AB is based on a network view of reality, so has the procedure of writing the story been a network process. During different phases of the process, the contacts and relations with people within Pharmacia, in the research community, and elsewhere, have constituted the research context. Some of these people have providedthe all important stability and continuity throughoutthe whole process. The importance of this continuity and stable support can never be overstated. And it is specially important during those moments - which recur so often - when the whole process seems to be drifting in every possible direction. These stable contacts have contributed and shared in the evolution of the ideas, descriptions and contents, and their enthusiasm, knowledge and insight has proved a constant source of energy and inspiration, and also of fruitful tensions. The stable contacts have also been important in that they have indirectly linked me to important new contacts, within Pharmacia and in networks of academic researchers. Although my role throughout the process has first and foremost been that of researcher, the different roles one has in the different contexts are not always easy to separate. In a study of the long-term development of the British company lei one of the many important inspirations for this book, Andrew Pettigrew, describes his dilemma: 1 The mixed role that I have played in the company as a researcher, consultant, and trainer may also have helped me to gain access to people and appreciate situations and dilemmas in a wider fashion than if I had defined my role just as researcher, or a consultant, or a trainer. Effective, or merely adequate, research on any sphere of life has surely to be a mutual process where the need to balance involvement and distance is a critical part of the process. 1Pettigrew, A., The Awakening Giant - Continuity and Change in ICI, Oxford: Basil Blackwell, 1985, p.xiv

6 vi Contents My role in Pharmacia Biotech has first and foremost been that of researcher. On some occasions, for example when attending and participating in internal seminars and conferences, I have extended this role by providing ideas and suggestions based on my general experiences from prior research studies. Thus research of this kind, for obvious reasons, has to be a mutual process. The opensidedness of the company's character has been invaluable in gaining access to the organization and its complex and sometimes problematic processes of organizational change. The study had not been possible to make without it. Like any long-term business relationship, my involvement in the organization has been based, I dare say, on mutual trust and confidence. However, all network processes, including those social processes connected to doing long-term, organizational case studies, are not always so easy to predict. In this study of Pharmacia Biotech, important people who have been stable contacts for me and for the study, have left the organization for other jobs during the course of the process sometimes before introducing me to successors or to other important persons in the company who could assist. Thus, the case study process has comprised many of the elements and characteristics of longitudinal organizational change processes: unforeseen problems and solutions appearing unexpectedly, progress and retrogression evolving side by side, tensions and lost opportunities, inertia, and rare moments when nothing seems able to hinder or stop the advancing work process. Recognizing the unequivocal fact that these would be the enabling and constraining circumstances of a study of this kind, I realized that stable contacts and relations were necessary both for the study, as such, as well as for giving me the introduction to people who were able to help me complete the story of Pharmacia Biotech. I gained access to Pharmacia Biotech through Seppo Nilsen, who was my first link into the organization and who was a great help in enabling me to start and to continue the study. He introduced me to Arne Forsell whose support has been invaluable. Without Arne's support the study would not have been possible. Arne also read the manuscript in the later stages and provided detailed comments on the whole story. Others have read portions of it and have helped me refine certain parts of the story. The most important among these were Per Idberg, Christer Ullin, Jan Ehrneberg and Lars-Erik Utterman. Kjell Hedlof was very helpful for the archival work and Marie Almquist has been important in providing me with names and contacts. Special thanks are due to my team of advisers. Professor Lars-Gunnar Mattsson at the Stockholm School of Economics has given me support, confidence and inspiration before and throughout the study. Claes-Robert Julander at the Stockholm School of Economics

7 Contents vii and Professor Lars-Erik Gadde at Chalmers University of Technology in Gothenburg have also given me valuable support and advice, especially during the final stages when everything is put together into one whole. I am also greatly indebted to my research colleagues at the Department of Marketing, Distribution and Industry Dynamics at the StockholmSchool ofeconomics. Theircomments and critiques have been very important in the process of completing the story of Pharmacia Biotech. A special thanks also to Alexandra Waluszewski at Uppsala University for her valuable comments on the case study during the later phases. Thanks also go to Ann-Charlotte Edgren at the Stockholm School of Economics for her help on practical matters and to Rune Castenas for his help in organizing economic and administrative matters. George Cook and Patrick Sweet have played a very important role in correcting my English and also in giving me advice on the narrative form and structure of the text. I am also greatly indebted for the support and indispensable research funding which has been provided throughout the study by Torsten and Ragnar Soderbergs Stiftelser. The economic support from this Foundation has enabled me to continue and to complement this study. Important initial support and funding was provided by Mekanforbundet through the Marketing Technology Center in Stockholm. During this process research funding has also been provided by the International Motor Vehicle Program (Massachusetts Institute oftechnology) and by Saab-Scania AB. This case study is the empirical part of a study of industrial marketing change processes. It complements a separate analysis volume entitled "Concurrence, Transition and Evolution - Perspectives of Industrial Marketing Change Processes". Stockholm in December, 1995 Per Andersson

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9 Contents Foreword PROLOGUE A Strategic Reorganization and Reorientation 1989 Three Major Periods of Development Structure ofcase Narrative THE MOVING INDUSTRIAL CONTEXT Technological and Network Changes in the Pharmaceutical-Biotech Industry Network The State of Biotechnology around 1989 A Changing Industrial Network Emerging Technological Changes in the Biotech Supply Sector Technological Shifts in the Pharmaceutical-Health Care Sector Meanwhile: Long-Term Structural Changes in the Pharmaceutical Industry - Mergers, Concentration and Internationalization RADICAL REORGANIZATION AND REORIENTATION : FOUR CONCURRENT CHANGE EPISODES 37 I. The Creation and Dismantling of Pharmacia Biosystems AB Re-organizing Procordia 39 Merging Procordia, Provendor and Pharmacia 41 Cross-linking Processes ofchange in Procordia and Volvo 42 Cross-linking Processes of Change in Kabi and Pharmacia 45 The Merger Process 49 Background: Forming Pharmacia's Strategy around "The New Biology" Procordia in June 1990: The Merger and Reorganization Processes Take off 53 Meanwhile: Trying to Implement the Biosystems Group of Procordia 55 Health Care Dispersals and Divestments Effects on Ongoing BTG Change Processes 64 Meanwhile in the Biotechnology Group: Ongoing Processes of Marketing Change... 67

10 x Contents II. Regionalization - Entering a New Phase of Internationalization 69 Prelude and Forerunners to the Regionalization Project of Accumulating Problems ofefficiency in the New Biotechnology Group 71 The Biosystems Organization Begins to Take Shape Summer 1991: Strategic Plans for a Regionalization and a New Division of Work 78 Fall 1991: A New Brussels Office, Sub-Regionalization and Reshuffling of 81 Internal Resources Dismantling of Pharmacia Biosystems AB and New Ambiguities : The Regionalization Project is Given a New Chance 87 Remaining Links to Former Biosystems Companies 88 A Radical Break with Established Marketing Traditions: A Comprehensive Analysis 90 of the Customers Driving the Reformulated Regionalization Process: A New View of Customer 93 Relations From Brussels to Freiburg - the European Reorganization Process Continues III. A New Motor for the Industrialization of the Biotech Operations the Capital Rationalization and Distribution Project 1989: Accumulating Problems from the LKB-Pharmacia Merger 103 The Situation Analysis The Change Process Takes off 110 A New Organizational Structure Emerging; the Creation of Biosystems and 112 Region Europe Links to Other Change Processes; the After Sales Service Project 115 Choosing a New Transportation and Logistics Structure 116 Applying New Reports on Customer Requirements to the Logistics Project : Summing up the Past and Heading for a New Start of the Logistics Project : A Rapid Take-Off of the Logistics Change Process and Synergies with 123 Other Ongoing Changes IV. Striving to Implant a New View of Technical Services and Long-Ternl Customer 126 Relations - the After Sales Service Project : A Stream of Disturbances in the Instrument Service Operations : A New After Sales Service Division is Born 127 The Focal Change Areas Emerge; Defining Areas of Concern 130 Planning for a Subsidiary Meeting 131 The Copenhagen Meeting 136 Visiting the Subsidiaries 139 Breaks and Ambiguities in the After Sales Project; the New Biosystems 146 Organization and the Regionalization Project The Capital Rationalization Project; Planning for Changed Spare Part Distribution 147 The Legitimization Process Continues; Meeting with Central Support Units in 148 Uppsala The Dismantling of Pharmacia Biosystems AB and an Overview of the After Sales 150 Service Project Making Plans for Two New International Meetings 152 Revision of Meeting Plans PRECEDING THE RADICAL REORGANIZATION: A MERGER PROCESS The Objective of the Merger at the Outset: Creating anew, Dominating International Biotech Supplier Initial Merger Strategy LKB Background Ongoing Processes of Change in LKB at the Time of the Merger

11 Contents xi The Merger Process; Immediate Revisions of Merger Plans 167 Presenting a New Organizational Structure 167 The Subsidiaries Start to Merge 169 Merging the Production Units 174 Merging R&D Units, Product Portfolios, Stocks and Administrative Routines 180 Focus: Merging the Service Support Operations Merging the Subsidiaries' After Sales Units 188 Creating a New Central Instrument Service Division : A New Integrated Pharmacia-LKB Biotechnology Organization Takes Shape 194 Notes: Summary oflkb's Major Alliances, Acquisitions and Organizational Changes NEW CHANGES AND A NEW EMERGING CONTINUITY From Three Product Companies to Four Integrated Product Divisions - Internal Adaptation to Customer Demands New Directions in the Regionalization Program A Revival for Strategic Cooperation Alliances? Towards New Technological Areas Stable Processes of Change 1993; Making the New Changes Stick 1994: Continuity, Change and New Tensions to Deal with Launching BioDirect CHANGE EPISODES AND MARKETING SYSTEM EVOLUTION: IN A CONTEXT OF GREAT EVENTS (1941) Marketing Change Episodes and Marketing System Evolution: Building 227 on and Breaking with a Chain of Great Events Fonning the Foundations for a New BiotechCompany (1941) : 229 Prologue : The Scientific Discovery of Dextran and Gel Filtration : Emergence and Product Group Formation : Divisionalization, Organizational Expansion and Five Important 251 Change Events : Subsidiary Company Formation and Technological Unification 265 around the New Biotechnology External Expansion, Merger and Creation ofa Multinational Corporation : : External i..xpansion and Subdivisionalization 288 The Biotech Group : Sales Growth, Technological Changes and the Start 290 of the External Expansion

12 xii Contents 6 IN THE SLOW FLOW OF A MOVING ORGANIZATIONAL CONTEXT: THE PHARMACIA CORPORATION Long-Tenn Technological Shifts: Transition and Tensions 307 Long-Tenn Change and Continuity in Positions, Roles and Internal Organization 310 Pharmacia : Emergence and Stable Growth of a Phannaceutical 311 Manufacturer Phannacia : Emergence of a United, Biotechnological Corporation 316 Phannacia : Emergence of a Multinational and Diversified 320 PhannaceuticallHealthcarelBiotech Corporation EPILOGUE 332 The Power of the Slow Flow 332 The Drama ofgreat Events 333 Sources 335 Appendices 342 I.Major Pharmacia alliances and acquisitions Major biotech suppliers emerging

13 Contents xiii Figures Figure Page Prologue 1. Changes in customer orientation II. Focus and steps in the case narrative Chapter The diffusion ofbiotechnology in different application areas 1.2. The biotechnological production process 1.3. Concentration ofthe Swedish pharmaceutical industry: the formation of Kabi-Vitrum Chapter The Pharmacia organization Pharmaciain the Procordia Group The Procordia organization Pharmacia Biotech customers, Europe 2.5. Organizational position of the After Sales Service Division Chapter New BTG-LKB functional organization structure Towards a new integrated information system 3.3. Overlapping product portfolios Chapter The planned Transition Organization Strategic development process Chapter A chain ofgreat events 5.2. The first glass column 5.3. The "cross-fertilization" strategy 5.4. Extending the number ofproduct system components 5.5. Integrating product systems 5.6. Analysis preceding the creation ofbiolink 5.7. Overall division ofroles between Pharmacia, Alfa-Laval and Biolink Chapter Internal product development links between Pharmacia Divisions Organization of the new Biotechnology Group

14 xiv Contents Tables Table I Summary ofthe original linear case study structure Movements in the industrial biotechnology context The overlapping BTG-LKB subsidiary nets R&D overlaps Page

15 Prologue As a result of long-term cooperation between researchers at the Institute of Biochemistry at Uppsala University and researchers at the Research Laboratories of Pharmacia, the well-established Swedish pharmaceutical company publishes a completely new m.ethod for laboratory separation called gel filtration in June The introduction of the new separation method is coupled with the launching of a new chemical product, Sephadex, and this marks the start of a radical shift in the history of the company. The company leaves the well-known terrains of pharmaceuticals and medical products and associated health care customers. Complementing the pharmaceutical and medical business, the launching of Sephadex directs Pharmacia into the laboratory product business and close contacts with academic researchers, initially biochemists, and research organizations all over the world. The start of production and sales of this chen1ical substance - a seemingly simple lump of gel - will result some thirty years later in a multinational company with an established position in the network of coitlpanies and organizations engaged in the new biotechnology. After a whole row of successive name changes,l and building on the 1959 invention, Pharmacia Biotech AB is established in 1992 as a self-contained company within Pharmacia, specialized in the supply of equipment for the biotech industrial network. The event takes place in 1992, at the height of change in the marketing history of the emerging company. A multitude of interacting processes and events transform and radically change the established marketing and distribution structures, operations, norms and ideas. The combination and interconnectedness of multiple changes produce an organizational transformation whose outcome is difficult to comprehend and predict for any single change agent, even by those responsible for the change. 1E.g."The Sephadex Group" (1959), "Pharmacia Fine Chemicals" (1967), "Separation Products Division" (1982), "Pharmacia LKB Biotechnology" (1986), "Pharmacia Biotech" (1992)

16 2 Prologue With a focus on four of Pharmacia Biotech AB's marketing and distribution change processes during the turbulent period , a period of transformation and radical change is spotlighted, when intersecting events point the biotech supply company's longterm processes of marketing change in new directions. 2 A STRATEGIC REORGANIZATION AND REORIENTATION 1989 In a wider perspective, Pharmacia Biotech AB in the early 1990s becomes involved in the organizational context of the whole Pharmacia Group. This includes being allied to a major deal between Volvo and state-owned Procordia and the long-term restructuring of the Swedish pharmaceutical industry. Concurrently, the marketing changes evolve in the midst of the dynamic development of the global biotechnology industry.3 In the closer perspective, the rapid, and in parts unexpected, decrease in the demand for biotech supplies during 1989, contributes in prolonging a difficult merger process with LKB Produkter AB, started in 1986 and preceding the radical marketing reorganizations a few years later. In 1989, Pharmacia's Biotechnology Group (BTG) needs organizational stability. The merger continues, but faced with a maturing market and increasing competition, there is also a need to direct attention to customers, sales and the rapidly changing market situation. While the need for an overall organizational stability increases, the cumulative effects of the merger and a general lack of attention to internal efficiency matters - the control and use of resources - put pressures on the BTG organization to make further, and for the involved individuals, groups and divisions, radical changes in the internal organization. The company goes through a painful awakening, and to some in BTG the biotech supply company's rapidly changing role comes as a surprise. From being an R&D driven manufacturer, BTG is becoming an industrialized supplier among many. The role as one of the dominant, R&D driven biotech suppliers in the center of the global biotechnology sector is no longer as clear and evident as it once used to be. Cost oriented and cost driven customers in laboratories as well as in industries demand "industrial" efficiency in the provision of services and equipment by suppliers. This is coupled with demands for more exact product outputs. The pressure to make radical efficiency improvements in marketing, distribution, production and product policies, and capital management increases while the pressure on effectiveness remains or is 2Here, like in the complementary analytical discussion, "radical change" is only defined from the points of view of the involved marketing change agents and their counterparts. For these actors, the changes described become a considerable break with prior, historical marketing traditions; the organizational and operational marketing traditions. 3Described in chapter 1

17 Prologue 3 accentuated as customers' needs for exact and adapted solutions to their biotech related problems come in focus. During this time, and as a consequence of the Volvo-Procordia deal, Pharmacia Biotech AB becomes part of a newly formed holding company, Pharmacia Biosystems AB. In addition, an after sales service project, a distribution project, and a regionalization project to radically reorganize the global net of marketing subsidiaries are started. As part of the regionalization project - partly leaving aside the old country based net of marketing subsidiaries - a new customer orientation focus results in the first attempts to implement a differentiated key account system. Against the historical background of the company's customer relations from 1959 and onwards, three concurrent, interacting processes summarize the strategic changes, changes in the company's customer orientation at the end of the 1980s: I.Emerging relationships with new types of customers and new user situations 2.Changing relationships with existing customers 3.Internal differentiation and polarization of customer relations Emerging relationships with new types of customers and new user situations The genesis and expansion of the company in 1959 is reflected in a changing set of customer counterparts. The first relationships with academic biochemical research departments and laboratories is complemented at an early stage with relationships with a handful of production organizations in the food and pharmaceutical industries. Successively, the set of customer relations is extended to include pharmaceutical companies' R&D departments and laboratories, government control laboratories and clinical laboratories. 4 In the 1970s, the number of relations with pharmaceutical production departments starts to rise. With the take-off of molecular biology research and the spin-off of private R&D companies from the industry and universities in the 1980s, a new set of customers are included. The number of customer relations rises steadily, but differ between Pharmacia Biotech AB's three main divisions.s The complexity increases when more departments within the industrial pharmaceutical companies are added to the customer portfolio; despite the fact that the formal counterparts - the industrial companies - are the same, the lack of coordination between several customer contacts in different departments still in the late 80s often qualify them as "new". 6 In the 1990s, the emerging 4For a detailed typology of the emerging set of customer relations during the late 1980s, and 90s, see Section IV in chapter 2 and the customer analysis made by the new After Sales Service Division. SIn Europe in 1991, the number of customers for the three company divisions were: BioProcess 900, Pharmacia LKB Biotechnology , Molecular Biology Group In the early 90s, these "account overlaps" are acknowledged in internal analyses of the present customer situation.(described in Section II, chapter 2)

18 4 Prologue focus on industrial customers in the pharmaceutical industry, for both process and analyticallaboratory products, is accentuated. Changing relationships with existing customers Concurrent with this process, the customer orientation process also encompasses successively changing relations with existing customers in the early 90s. Firstly, many laboratory customers require more intense and shifting contacts with the company as the use of the separation technology and the separation problems become more sophisticated and demands for higher speed and efficiency increase. Some of the laboratory customers also become increasingly involved in new types of research, e.g molecular biology research in the 1980s. In some cases, Pharmacia Biotech AB starts to supply supplies also for these activities. Secondly, among the pharmaceutical industry customers, the company is able to supply supplies for several of the purification steps, sometimes requiring coordinated interaction with several internal departments; R&D laboratories, preparative, pilot plant departments, and process production departments. Internal differentiation and polarization of customer relations Internally, the changing customer relations lead to processes of differentiation and polarization of the contacts. Firstly, there emerges a group of customer relations with a higher degree of direct contacts between the customer and both the local and the central Pharmacia Biotech AB units. These are above all the industrial process departments which require more intense support. Customer relations with laboratories are only initially handled by support from the central production units; most contacts are decentralized to the local sales organizations. Secondly, in the 1990s, Pharmacia Biotech AB moves towards a polarization, a differentiation between key accounts and non key accounts. Among the key accounts which require frequent contacts are collected both industrial process customers and laboratory customers. Anew, special division is established to support local telemarketing units with standardized contacts and limited technical support. Two additional customer orientation processes emerging in the 1990s are deserving of attention. Firstly, the acknowledgement of considerable account overlaps between the three sub-divisions/product companies of Pharmacia Biotech AB results in internal discussions and attempts to coordinate the parallel relationships with departments in the same pharmaceutical company better. The process is driven by increased internal coordination in the customer organizations. 7 Secondly, the global pharmaceutical company customers' moves towards coordinated global sourcing strategies is a matter of 7As stated in Pharmacia Biotech's Annual Review 1995: "...The continuum between the biotech analytical lab and the process development lab is not always an unbroken arrow: communication between these groups varies widely. This means that analytical media sales do not always signify the first step toward building a bioprocess media relationship. "(p.30)

19 Prologue 5 increasing concern. In the 1990s, discussions start within the Company concerning coordination of parallel contacts with different, geographically dispersed production departments, all part ofthe same global corporation. Focusing only on Pharmacia Biotech AB's customer relations in its strategic positioning process , the early 1990s see a significant change in customer orientation (Figure I) Increasing the number of customer relations Extension of customer categories: academy, food industry, pharmaceutical process departments, pharmaceutical labs, governmental control labs, clinical labs, private R&D companies... Internal differentiation and separation of customer relations for laboratory, process and molecular biology products Differentiation and focus on existing key accounts vs non-key accounts Stabilization of customer categories, focus on industrial, pharmaceutical customers... Internal differentiation of customer relations into key accounts and non key accounts Developing parallel relations with several departments in the same company, i.e non-coordinated account overlaps Developing parallel contacts with different, globally dispersed production departments of the same industrial company Towards improved coordination of several parallel relations with departments in the same company Towards adaptation to global industrial manufacturers' coordinated, global sourcing and purchasing strategies. Figure I. Changes in customer orientation The marketing changes started towards the end of the 1980s become strategic reorganizations and reorientations; Pharmacia Biotech AB partly introduces completely new modes of orienting the organization towards the customers. THREE MAJOR PERIODS OF DEVELOPMENT As this study of the company proceded and the story about Pharmacia Biotech AB took i shape a certain logic began to emerge. When exploring the history of the company there indeed began to emerge - with the marketing change episodes of 1989 and onwards, and

20 6 Prologue with the marketing and distribution organization in focus - "a drama of great events". The radical reorganization and reorientation in the early 90s was in many ways exceptional. However, when looking back, there proved to be a whole series of important events which each time had modified the marketing system structure, laying the foundation for coming changes. Change events can be associated with certain years or periods and coincide with organizational and/or technological changes. In a historical, linear time perspective, the story of the emerging new biotech supplier can be divided into three major periods: 1. Fonning the Foundations for a new Biotech Company (1941-) External Expansion, Merger and Creation of a Multinational Corporation Radical Reorganization and Reorientation The title of each of the three periods signals where most of the company's efforts and attentions are directed during certain periods of time. The changes connected to the three phases not only affect the marketing and distribution operations but most aspects of the company's activities. The period up to 1982 is characterized by the efforts to establish a new business venture within the formal boundaries of the Pharmacia Corporation. During the next period, , Pharmacia's and the biotech company's external expansion process with acquistions, mergers and the formation of strategic alliances, reaches its peak, influencing every part of the company's operations. The last period, , Pharmacia Biotech AB enters a period of radical reorientation and organizational change. Most activities and organizational units are affected by the many efforts to transform the company. Depending on the dominating trends and characteristics, and on the type of change event that is introduced, each chapter generates its own logic and mode of description. 8 The connecting thought that runs through the case is that different tensions and breaks with established marketing and distribution traditions appear during all periods, laying the foundations for subsequent changes. 9 For example, three years of the second period ( ) are devoted entirely to the problems of a company merger, compiling the 8There are by no means any clearcut boundaries between the dominating change forces and the three periods. For example, the biotech supply company's external orientation and expansion efforts reaches a peak between 1982 and 1989, but the internationalization process starts much earlier and the external expansion continues also during the subsequent period. 9In accordance with Pettigrew (1985) the aim is "to develop a process theory which links together the periods of high levels of change activity and low levels of change activity and thus begin to explain the timing and relative intensity of those periods". In line with this, the identification of "great events" becomes an important first step in the study process. (In: Pettigrew, A., The Awakening Giant - Continuity and Change in ICI, Oxford: Blackwell, 1985, p.446).