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Alza & Ciba-Geigy: Making relationships work

Alza & Ciba-Geigy: Making relationships work. Professor Rebecca Henderson MIT Sloan School of Management Phone: (617) 253-6618, Email: Rhenderson@mit.edu, http://www.mit.edu/people/rhenders/home.html. ALZA/CIBA: Managing a Discontinuity Through Acquisition?. ADDS. PERFORMANCE. Ciba.

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Alza & Ciba-Geigy: Making relationships work

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  1. Alza & Ciba-Geigy:Making relationships work Professor Rebecca Henderson MIT Sloan School of Management Phone: (617) 253-6618, Email: Rhenderson@mit.edu,http://www.mit.edu/people/rhenders/home.html

  2. ALZA/CIBA: Managing a Discontinuity Through Acquisition? ADDS PERFORMANCE Ciba Alza Tight Appropriability (IP, speed to market, lead time) Creative Organization (Technical competence and culture of innovation) EFFORT • Complementary Assets (regulatory capability, sales force, distribution, size, knowledge base) • Efficient Functional Organization (designed to maximize component innovation)

  3. What are Alza and CG trying to achieve: Successful growth unites entrepreneurial insight with effective coordination Entrepreneurial Drive, Freedom from the “old ways” Alza? Ciba Geigy? Control & Coordination

  4. Alza Alza Asset Asset Ciba Ciba Great energy Great control Comparing “make” vs. “buy”

  5. Different deal structures give one different “starting positions” Entrepreneurial Energy Acquire/ Partner Joint venture/ alliance Internal venture Build inside existing unit Control & Coordination

  6. But must then be managed! Entrepreneurial Energy Acquire/ Partner ? Joint venture/ alliance Internal venture Build inside existing unit Control & Coordination

  7. Did it work?

  8. Did Ciba manage “deep structure”? Leadership Structure & Process Incentives & Politics People, Culture, Mental models

  9. Successful relationships tackle every level • Leadership and strategy • Process & structure • Incentives, politics • People, culture, mental models

  10. Did it work?

  11. Good luck!

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