University of Southern California Dissertations and Theses

Regulatory team development in post-merger integration: a survey of views from medical product companies

(USC Thesis Other)

Regulatory team development in post-merger integration: a survey of views from medical product companies

PDF

Download a page range

Download transcript

Copy asset link

Request this asset

Transcript (if available)

Content

REGULATORY TEAM DEVELOPMENT IN POST-MERGER INTEGRATION:
A SURVEY OF VIEWS FROM MEDICAL PRODUCT COMPANIES

by

Curtis Truesdale

A Dissertation/ Presented to the
FACULTY OF THE USC SCHOOL OF PHARMACY
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF REGULATORY SCIENCE

August 2021

Copyright 2021 Curtis Truesdale
ii
Dedication
This work is dedicated to my parents, Dolores and Curtis Truesdale, who
are educators and instilled in me a passion for learning. They taught me the importance
of the pursuit of knowledge and its use for the betterment of society. I thank them very
much for setting me on the right path and encouraging me throughout my educational and
professional journey.
iii
Acknowledgements
This dissertation is a result of many years of disciplined research and study that
would not have been possible without the assistance and support of USC staff, librarians,
engaging fellow students and colleagues. I would like to particularly thank my advisor
and mentor, Dr. Frances J. Richmond, who tirelessly kept me on course during the
research and preparation of this dissertation. Her knowledge and guidance were
instrumental in my growth as a researcher and the completion of this work. I would also
like to thank my survey focus group, study participants and dissertation committee - Drs.
Eunjoo Pacifici, Daryl Davies, Susan Bain and Frances Richmond. The committee
helped guide the research to assure its usefulness to the healthcare products industry and
the professionals that serve it.

iv
TABLE OF CONTENTS
Acknowledgements ..................................................................................................... iii
List of Tables .............................................................................................................. vi
List of Figures ............................................................................................................ vii
Abstract ....................................................................................................................... ix
Chapter 1. Overview .................................................................................................... 1
1.1 Introduction ............................................................................................ 1
1.2 Statement of the Problem ....................................................................... 3
1.3 Purpose of the Study .............................................................................. 3
1.4 Importance of the Study ......................................................................... 4
1.5 Limitation, Delimitations, Assumptions ................................................ 4
1.6 Organization of Thesis ........................................................................... 5
Chapter 2. Literature Review ....................................................................................... 6
2.1 Introduction ............................................................................................ 6
2.2 Factors in M&A Success........................................................................ 7
2.3 The Post-Merger Phase ........................................................................ 16
2.4 The Value of People ............................................................................. 19
2.5 Changing Requirements for Regulatory Practitioners ......................... 24
2.6 Assessing, Deploying “Knowledge Assets” for Post-Merger
Integration ............................................................................................ 27
Chapter 3. Methodology ............................................................................................ 33
3.1 Introduction .......................................................................................... 33
3.2 Development of the Survey Instrument ............................................... 33
3.3 Validation of the Survey Instrument – Phase II ................................... 33
3.4 Dissemination of the Survey, Data Capture and Analysis – Phase III . 34
3.5 Sampling Frame and Study Boundary Conditions ............................... 35
Chapter 4. Results ...................................................................................................... 37
4.1 Analysis of Survey Responses ............................................................. 37
4.2 Demographic Profiles .......................................................................... 37
4.3 Organizational Restructuring of Leadership ........................................ 41
4.4 Decision-Making Preferences .............................................................. 43
4.5 Restructuring the Regulatory Team ..................................................... 46
4.6 Knowledge of the Regulatory Function ............................................... 50
4.7 Implementation Planning and Execution ............................................. 52
4.8 Retrospective Examination of Integration Outcomes .......................... 54
v
4.9 Alignment of Organizational Culture .................................................. 56
4.10 Recruitment, Retention, and Commitment of Staff ............................. 61
4.11 Strategies for Ensuring Staff commitment / Retention ........................ 66
4.12 Staff Turnover During or Following Post-Merger Integration............. 72
Chapter 5. Discussion ................................................................................................ 79
5.1 Overview .............................................................................................. 79
5.2 Delimitations of the Study ................................................................... 79
5.3 Limitations of the Study ....................................................................... 81
5.4 Insights from the Study ........................................................................ 84
5.4.1 Connectedness ........................................................................ 85
5.4.2 Capabilities ............................................................................. 89
5.4.3 Commitment ........................................................................... 92
5.4.4 Culture .................................................................................... 93
5.5 Conclusion and Recommendations for Future Research ..................... 96
References ................................................................................................................ 100
Appendix .................................................................................................................. 106

vi
List of Tables
Table 1: Survey Focus Group Members ...........................................................................34
Table 2: Comments Related to Prevailing Cultural Dynamics .........................................60
Table 3: Comments on the Lessons Learned from the Cultural Integration .....................63
Table 4: Comments on What to Do Differently for Effective Team Formation ..............65
Table 5: Comments Offering Explanations for the Voluntary Departure of Staff ...........73
Table 6: Comments Offering Recommendations on Optimizing Retention .....................75
Table 7: Comments Offering Recommendations for Prioritized Improvements ..............77

vii
List of Figures
Figure 1: Implementation Stages .......................................................................................30
Figure 2: Respondent’s Experience Acquisition / Merger Transaction .............................38
Figure 3: Geographical and Transactional Role Characteristics........................................38
Figure 4: Represented Company Size ...............................................................................39
Figure 5: Represented Product Sectors .............................................................................40
Figure 6: Respondent Job Level Characteristics ...............................................................40
Figure 7: Leadership Changes during Post-Merger Integration Phase .............................41
Figure 8: Affiliation of Post-merger Leadership Choices .................................................42
Figure 9: Identification of Leadership to Drive Strategic Initiatives ................................43
Figure 10: Incoming Executives’ Assessment of Decision-Making Preferences .............44
Figure 11: Decision-Making Preferences of New Management .......................................44
Figure 12: Management Preferences during Subordinate Selections ...............................45
Figure 13: Differences in Management Decision Making Preferences ............................46
Figure 14: Approaches to Regulatory Team Restructuring ..............................................47
Figure 15: Assessment of Competencies in Preparation for Restructuring ......................47
Figure 16: Identification of Specific Talents ....................................................................48
Figure 17: Utilization of Competency Assessment Tool / Metrics...................................49
Figure 18: Timing of the Assessment of Competencies ...................................................49
Figure 19: Knowledge of Existing Staffing Capabilities and Talent ................................50
Figure 20: Knowledge of Daily Activities of the Regulatory Function............................51
Figure 21: Knowledge of Resource Needs and Infrastructure ..........................................51
Figure 22: Knowledge of Performance Targets ................................................................52
Figure 23: Implementation Planning to Accomplish Strategic Goals ..............................53
Figure 24: Implementation Planning for Resource Allocation / Work Output .................53
Figure 25: Retrospective Examination of Post-Merger Integration ..................................54
Figure 26: Satisfaction with New Integrated Team Structure ..........................................55
Figure 27: Perceived Effectiveness of Integrated Regulatory Team ................................55
Figure 28: Effectiveness of Leadership at Communicating Culture .................................56
Figure 29: Effectiveness of Leadership at Communicating the Culture ...........................57
Figure 30: Evaluations of Staff for Continued Organizational Fit ...................................58
Figure 31: Discerning the Cultural Divide Between Entities ...........................................58
Figure 32: Identification of the Dominant Company Culture ...........................................59
Figure 33: Estimated Timeframe to Achieve Cultural Congruence .................................60
Figure 34: The Effects of Culture on Retention of Talent ................................................62
Figure 35: The Effects of Culture on Retention of Talent ................................................62
Figure 36: Strategy Thinking of the Leadership Ensuring Staff Retention ......................67
viii
Figure 37: Effectiveness of Management in Retaining Regulatory Staff .........................67
Figure 38: Financial Incentive Tools for the Retention of Regulatory Talent ..................68
Figure 39: Rewarding Work as an Incentive Tool for Retention ......................................69
Figure 40: Desirable Work Culture as Incentive for Retention ........................................69
Figure 41: Competitive Compensation as Incentive for Retention ...................................70
Figure 42: Optimal Benefits Packages as Incentive for Retention ...................................71
Figure 43: Professional Growth Opportunities as an Incentive for Retention ..................71
Figure 44: Strong Team Leadership as Incentive for Retention .......................................72
Figure 45: Staff Turnover During or Following Post-Merger Integration ........................73
Figure 46: Impact of Staff Departures on the Quality of Work Output ............................75

ix
Abstract
Mergers and acquisitions (M&A) frequently occur in the medical product industry to
achieve a variety of business objectives. However, the success record is variable. The
degree of success appears to be influenced by how well companies can manage the
integration process for the merging companies. Historically, companies have approached
the reorganization of the regulatory functions following an M&A transaction with
varying levels of care. The challenges are particularly great for companies in the
medical product industry, where differences can exist between the regulatory
competencies and approaches of the two companies with respect to activities as varied as
the oversight of premarket product development, regulatory agency interactions and other
activities that have regulatory compliance implications. However, little systematic
research has been directed at the industry practices associated with managing post-merger
integration applicable to the highly specialized function of regulatory affairs. Using a
survey tool and a modified implementation framework adapted from Hirsch (2019), this
study probes how companies have put into place their new leadership structures and
subordinate regulatory teams and closely examines the many influencing factors that
affect the post-merger integration of teams. Shortcomings of the integration process have
been identified and many of these appear not just due to poor strategy, but also to flawed
execution and bias toward a specific organizational model. The insights gleaned from
this study illuminate how the culture and characteristics of the work environment shape a
climate that influence organizational change and its ability to endure.

1
Chapter 1. Overview
1.1 Introduction
Mergers and acquisitions (M&A) frequently occur in the medical product industry to
achieve a variety of business objectives. These objectives include, but are not limited to,
expansion of product portfolio, market access or entry into geographic regions, addition of
capabilities or services, and enhancement of shareholder returns. All of these objectives
cumulatively promote value creation. However, the success record is variable among companies
that engage in these transactions. The degree of success is greatly influenced by how well
companies can manage the integration of the merging organizations. The challenges are
particularly great for companies in the medical product sectors, where differences in systems for
regulatory management are common between companies. Further, numerous examples exist in
which the acquiring company found itself with significant regulatory and even legal liability
when acquiring or merging with a company that had compliance issues. The integration by
Boston Scientific of Guidant Corporation’s Cardiac Rhythm Management Division in 2006 is a
sobering example. Guidant did not disclose a significant product defect that left Boston Scientific
with the burden and financial cost of correcting the deficiencies after the deal had closed. It took
the acquirer a decade to stabilize and return to profitability (Drugwatch, 2017). However, little
systematic research has been directed at the challenges and best practices associated with
managing post-merger integration as it relates to the regulatory functions in such companies.
One reason why the impact of mergers and acquisitions has not been studied to any great
extent is the typical focus on “value” creation, assessed primarily by evaluating the financial and
product portfolios of the two companies. In the first phase of such an initiative, an acquiring
company must characterize the target company, negotiate the price and associated terms of the

2
deal, conduct due diligence activities to mitigate risks and then complete the financial
transactions. It is at this phase that stock prices react and investors pay close attention. It is
therefore not surprising that much research and advice on this collection of activities are to be
found in numerous texts, journal articles and trade magazines.
The second phase is directed at assuring a successful post-merger integration with the
objective of achieving synergies. During the post-merger integration phase, considerable
planning and commitment is needed to manage the organizational change in a way that will
ensure the commercial advantage envisioned by the initial deal. Successful integration requires
the company to leverage and consolidate physical assets, operational capabilities and
competencies across numerous departments including, but not limited to, research and
development (R&D), marketing, sales, manufacturing, accounting, financial, clinical, regulatory
and quality functions. The success of this directed effort is facilitated by managerial oversight.
The research conducted here will focus on the organizational decision making that occurs in
bringing together the human resources and procedures associated with regulatory affairs in the
merging entities.
The development of a structure for regulatory governance presents issues of concern for
mergers and acquisitions during post-merger integration. These concerns commonly arise
because the push for value capture typically involves certain cost-cutting measures as the new
company attempts to eliminate redundancies. The stresses of this process for the personnel in the
two organizations inevitably leads to the departure of key individuals, including those in
executive regulatory functions.
Companies approach the reorganization of the regulatory function following a merger or
acquisition transaction with varying levels of care. Companies that dedicate significant attention

3
to the assessment of regulatory competencies tend to develop synergies that can create value over
the long term, whereas companies that do not appear to be less successful (Smith, 2000).
1.2 Statement of the Problem
Prior research offers some explanation for the uneven attention given to the assessment of
competencies that will bring about synergies in the regulatory function. It has suggested that
companies are more successful if they spend significant effort to define and develop synergies in
important company areas that can improve or impede the creation of value. Unsurprisingly, the
areas to which attention has principally been paid include marketing, sales, distribution,
manufacturing and other operational functions. In contrast, the synergies resulting from
combining the competencies of two different departments of regulatory affairs are more difficult
to identify and quantify. For this reason, many companies may forego the exercise of assessing
the effectiveness of this activity for the regulatory function. Beginning evidence suggests that
the attention to this area matters, yet companies do not take a standardized approach in this
regard (Smith, 2000).
1.3 Purpose of the Study
The present study explores the approaches that regulatory departments of medical
product companies have taken to put into place a new leadership structure and regulatory team
during post-merger integration. A survey method was used to probe the views and experiences of
senior level regulatory professionals who have participated in at least one merger or acquisition.
The medical product industry is comprised of pharmaceutical, biotechnology, and medical
device companies. They collectively provided the regulatory professional pool from which
participants were recruited, using a variety of approaches that included compiling a list of M&A
transactions that have been completed, and identifying eligible participants through professional

4
networks (e.g. LinkedIn social media platform, colleague referrals, and USC Regulatory Science
alumni). The survey was structured by reference to an implementation framework modeled from
factors described by Hirsch (2019) that identify four implementation pillars: components, roles,
phases, and context (Hirsch, 2019).
1.4 Importance of the Study
Mergers and acquisitions are used as conduits for growth and competitive standing.
Assessing how companies have determined a new leadership structure and mastered the
implementation of merged teams will shed light on common practices, and perhaps best
practices, during post-merger integration. The knowledge gained can assist companies in
establishing a comprehensive approach to post-merger integration. Understanding where hurdles
and preferences exist may help companies to pay better attention to these areas of concern so that
the new organization can realize the value that was anticipated at the outset of the merger. This
insight could potentially incentivize companies to adapt their organizational approaches to
improve performance outcomes. The insights could be beneficial to helping those working in
organizations to justify changes in their current practices related to regulatory reorganization
during post-merger integration.
1.5 Limitation, Delimitations, Assumptions
For this research, I am assuming that valuable insight can be obtained through qualitative
analyses of the responses received from the survey, and that respondents will be truthful in their
answers. I also assumed that valuable insight can be obtained through the analyses of existing
published literature. However, I also recognize that results were limited by constraints placed on
the length of the survey. Because the study involved industry professionals who have limited
time to invest in non-core activities, the survey was necessarily shorter and narrower in scope

5
than would be optimal. Additionally, many individuals in middle and senior management do not
see value in completing surveys that do not enhance their work accomplishments directly, and
this may have reduced the response rates, which at 70% was nonetheless seen to be sufficient for
such an electronic survey. Because the topic is one that might be construed to ask sensitive
information about views and decisions, participants were assured of confidentiality, but it is
unclear whether this assurance was always sufficient to allay such concerns. My ability to ask
the most insightful questions was also perhaps limited by my relative inexperience with this type
of research. The help of an expert focus group was valuable to critique the questions and suggest
revisions and improve the face validity of the survey.
The study was delimited to senior level regulatory professionals in the medical product
industry who had participated in at least one merger or acquisition. It was also delimited in time,
space and scope. The survey is a snapshot of integration activities in the few years preceding
2020. Thus, it may reflect well the current practices of industry but is not intended to predict
future trends.
1.6 Organization of Thesis
The study has been organized into five (5) chapters. Chapter 1 provides a general
overview that includes background information, purpose, relevance and importance to the
medical product industry. The limitations, delimitations and assumptions are also addressed in
the first chapter. Chapter 2 elaborates on this introduction by considering the current state of the
existing published information. Chapter 3 describes methods used in the study in more detail.
Chapter 4 presents results in detail. Chapter 5 discusses the implications and limitations of these
observations and offers insight into practices that could enhance regulatory integration and
harmonization following an M&A transaction in the medical product industry.

6
Chapter 2. Literature Review

2.1 Introduction
Mergers and acquisitions (M&A) occur frequently in the medical product industry and
have the potential to bring about corporate renewal. The intended transformations can strengthen
market position and improve competitiveness by combining assets and resources or adding
specialized capabilities. This type of corporate renewal often cannot occur with sufficient speed
through organic growth within an individual company. Mergers and acquisitions therefore
“continue to be a highly popular strategic option for a firm’s development” (Meglio & Capasso,
2012), and continue to play an integral role in corporate strategy (Haspeslagh & Jemison, 1991).
The growing importance of M&A as a strategic option is underlined by recent research involving
industry executives. For example, Ernst & Young (2016) surveyed 1700 senior executives
working in large companies across 45 countries and representing a variety of industry sectors.
Findings showed that 56% of executive respondents representing the medical product industry
intended to pursue acquisitions and 91% of surveyed respondents expected that the market for
M&A deals would “grow or hold steady” within the next twelve months (Ernst & Young, 2016).
Its importance is reflected further by the record number of M&A transactions in 2015 compared
to previous years. Overall, M&A deals in the “healthcare” sector during this period reached an
estimated $664 billion dollars; many of these transactions individually exceeded $1 billion
(Pharma Letter, 2016). M&A activity has remained strong in the biotech and drug sector in the
years that followed and market experts were “bullish” for 2019; growing available capital and
increased competition is believed to play a key role in the momentum (Shah, 2018).

7
2.2 Factors in M&A Success
M&As are useful and powerful tools
Most corporate strategists focus on the synergies that M&A might produce -
improvements in R&D capabilities; increased and more efficient operational productivity;
expansion of product portfolio; access to critical competencies or starting materials; entry into
mature and/or emerging markets; and tax benefits in different jurisdictions (Kermani, 2014). A
company can often improve its competitive standing simply by acquiring its competition rather
than doing the risky work of building a new division or operation (Bourgeois & Hoeber, 2010).
Further, some companies face an additional threat posed by the expiration of intellectual property
(IP) protections on flagship products. For example, pharmaceutical giants such as Merck,
Novartis, Bristol-Myers Squibb and Eli Lilly saw a significant portion of their most valuable
drug patents expire in 2017. Merck lost its exclusive rights over four of its cholesterol lowering
and antimicrobial drugs; those drugs had a combined revenue of $3.8 billion in 2015. Branded
biologics, such as Humira and Enbrel, marketed by AbbVie and Amgen respectively, were also
challenged by the expiration of their IP protection. These two biologic products earned $23
billion in global revenues in 2015.
Large pharmaceutical firms are aware that their sales will drop precipitously when they
lose IP protection. The income generated by a branded drug product is estimated to decrease by
an average of 90% because of generic and biosimilar competition once IP protection expires
(Mukherjee , 2017). One important way in which large companies replace those expiring patents
is by introducing new products that have been acquired from smaller companies. Madison and
Wu (2016) recently examined the drug development capabilities of 90 large pharmaceutical
companies. They found a considerable lag in their patent generation and innovation activities
compared to activities in smaller companies. Madison and Wu highlighted the option to

8
compensate for the modest investments in drug development by acquiring small companies. The
small companies, limited in their ability to pay for development activities, often welcome such
acquisition (Madsen & Wu, 2016).
Small companies have different stresses than large ones. The drug development process
is long and expensive. Small companies often look at a merger opportunity as a good exit
strategy when clinical trials become prohibitively expensive (Schweizer and Kryphausen-
Aufsess, 2008). Additionally, the smaller companies face the often insurmountable challenges of
marketing and selling their drug in a marketplace dominated by the increased purchasing power
of private and governmental insurance programs. These entities are determined to constrain
prices; such constraint requires that companies manufacture, distribute and sell their products in
a very efficient way. These external forces can make it difficult for small companies to establish
a market foothold. More generally, it provides motivation for all companies to optimize their
competitive standing by increasing efficiency. Increased efficiency can be derived from
consolidation and the leveraging of specialized capabilities resulting from the acquisition of vital
resources (Kermani, 2014).
Another vital capability in today’s global marketplace is the ability to gain access to
emerging or niche markets. To do this, larger medical product companies are acquiring business
assets in emerging regional markets such as China, Brazil and India as a means to expand access
to those often-protected markets (Hartford, 2012). For example, in 2012, GE Healthcare
completed the acquisition of the Brazilian company XPRO, which has a strong reputation for
innovative X-ray technology. Not only did the acquisition of XPRO allow GE to capitalize on
local markets and regional capabilities, but it broadened its product offerings related to
interventional X-ray technologies in the Brazilian market. These factors played a pivotal role in

9
expanding GE Healthcare’s international footprint (GE Healthcare, 2012). Other multinational
companies have also completed acquisitions for similar reasons. Medtronic and Stryker
Corporation targeted the key market of China, where increased health care spending and an
aging population are driving growth in the medical device sector (Hartford, 2012). Medtronic
and Stryker strategically acquired orthopedic and spine implant and instrument companies based
in China to capitalize on demographic projections that show that one-third of the population will
be over 60 years of age by 2050 (Hartford, 2012). These older age groups are the primary
recipients of orthopedic products.
There are challenges/impediments to successful M&A
The above descriptions of M&A activity paint a rosy picture. It seems clear why industry
has come to rely on mergers and acquisitions to achieve their strategic objectives. However,
these transactions have considerable financial cost. When companies invest millions, even
billions of dollars, they expect that their expensive acquisition will create corporate value (Smith,
2000). However, not all companies obtain the benefits that they expect from their M&A
activities.
Bain & Company, a global business consulting firm, analyzed 24,000 M&A transactions
that had taken place during the period between 1996 through 2006. They found that
approximately 50% of the mergers in the United States underperformed in their financial returns
to stakeholders relative to the industry index during the early part of the post-merger period.
Toward the end of this analysis period, the number of underperforming companies decreased to
approximately 30% (Rouse & Frame, 2009). Bain & Company offered two reasons for the
gradual improvements in performance. First, they suggested that some companies have “learned
to pursue deals closer to their core business, which increases the odds of success” and

10
“frequently pay cash; rather than stock.” This is believed to encourage better due diligence and
more realistic acquisition pricing. Second, they believed that “the long-term trend of more-
frequent acquisitions has also pushed companies to develop repeatable models for successful
integration” (Bain & Company, 2013).
Post-merger integration goes hand-in-hand with organizational restructuring. This
restructuring can have many corporate advantages but can also have the potential for negative
outcomes. The Bain &Company study suggests that three types of missteps reduce the value of
the merger. These include: (1) missed targets when companies are not clear about the primary
sources of value and risks, thereby failing to set appropriate priorities in the post-merger phase;
(2) loss of vital personnel; and (3) poor performance history of businesses being acquired. These
three elements are interrelated. Poorly coordinated or inefficient integration processes and/or
failures of previous mergers to add value can breed insecurity and lack of faith in the future
success of the enterprise. In such a situation, it is not uncommon for personnel to leave an
organization in frustration (Bain & Company, 2013). Competitors can seize the opportunities
presented by the dysfunctional merger to their advantage (Rouse & Frame, 2009).
The goal of a typical merger or acquisition seems simple - unite two entities into a
consolidated unit with a shared approach to value creation. However, the process is anything but
simple, because it involves looking into the future to suggest a plan for how the newly merged
entity can work together effectively. The activities related to consolidation have three phases.
The first is the ‘premerger’ phase. It is perhaps the most widely discussed. During the
premerger phase, data is gathered and evaluated through an approach known as ‘due diligence’
to decide whether a sufficient fit exists to produce the desired outcomes. The second is the
‘merger’ phase. It is characterized by the activities needed to rationalize the personnel and

11
facilities of the two entities. High-level decisions are made about logistical activities such as the
change or closure of sites, the elimination of duplicated job functions, and the unification of
financial, procedural and documentation methods. The final ‘post-merger’ phase is where the
consequences from prior decisions play out. Success at this stage depends on how well activities
have been structured and how people have been selected and deployed in their new roles. These
phases are closely linked. The decisions made about the nature of the fit and the way in which
entities will be restructured at the premerger phase are fundamental to a successful post-merger
phase. If wise decisions are made, the likelihood of success increases.
It is not surprising that much attention has been directed toward the conduct of due
diligence because it sets the stage for all the subsequent planning. The typical objective of due
diligence is to identify, quantify and mitigate risks. Due diligence activities are carried out by
examining documents and other indicators to assess the target organization’s capabilities and
financial status. They focus on elements that are thought to have the most impact on the current
and future potential value of the acquisition. For many companies outside the realm of medical
products, primary areas of interest center around intellectual property, finances, contracts, and
existing and future legal obligations. However, this approach may not be adequate for medical
product companies. Also important to these more specialized companies are issues such as
regulatory, compliance and reimbursement effectiveness that can impact future value for a
medical product company. An illustrative example is Boston Scientific’s 2006 acquisition of
Guidant Corporation’s Cardiac Rhythm Management (CRM) division. This division’s product
portfolio consisted of implantable cardioverter defibrillators and pacemaker devices. Guidant’s
CRM division was purchased at an inflated purchase price of $27.2 billion; the final purchase
price was driven by the bidding war that occurred with the competitor company, Johnson &

12
Johnson. Guidant executives did not make known a problematic defect with their implantable
defibrillator products that existed prior to the acquisition. Thus, Boston Scientific closed the deal
without awareness of the quality issue, which was specifically related to a faulty capacitor that
caused the batteries of these devices to drain prematurely. A defect of this nature could and did
result in patient deaths. Boston Scientific was then left with the burden and financial cost of
correcting this defect, resulting in billions of dollars in lost revenue. Boston Scientific was
forced to recall 73,000 products and saw its market value plummet 78%. The acquiring
company also pleaded guilty to federal misdemeanor charges as a result of concealing this defect
and was required to pay criminal fines to the federal government totaling approximately $254
million. These issues hurt Boston Scientific’s bottom line. It took the acquiring company a
decade to stabilize, returning to profitability in 2016. The product complaints, recalls and legal
liability damaged the ability of the newly merged organization to capture the value that was
originally estimated as a consequence (Drugwatch, 2017).
Results of this and other expensive challenges related to product safety and regulatory
compliance have led many companies to regard regulatory and quality matters as an important
part of their due diligence efforts. The fact that many companies are adding a more detailed
evaluation of regulatory and compliance issues to the due diligence process reflects their
appreciation that substantial risks may be faced when a company inherits regulatory and/or
quality problems. Regulatory and compliance risks continue to rank highest in the level of
priority that acquiring companies target for mitigation. Ernst & Young surveyed over 700
executives to develop a “risk radar”. Their results presented a snapshot of the top 10 risks across
a variety of industry sectors. Regulation and compliance risks were the most serious perceived

13
threat to global firms particularly in the banking and life sciences industries (Ernst & Young,
2011).
More specific exploration of the typical practices of medical product companies during
the premerger phase of M&A suggest that due diligence practices may be changing. However,
they still may not be optimum, as suggested by the findings of Bain in 2011. Bain’s study
focused on due diligence activities related specifically to regulatory functions in medical product
companies. In that study, regulatory personnel in the medical product industry identified that
most due diligence teams did direct attention to regulatory activities. However, these evaluations
were conducted largely by inspecting documentation, for example, by counting numbers of
submissions or inspecting the results of external audits to assure that standard quality
requirements have been met. Such approaches have been recommended elsewhere when
conducting regulatory due diligence (Sall, 2008). However, less quantitative aspects, such as
organizational structure, ethics and decision-making patterns that can also affect regulatory and
quality compliance, were less commonly explored (Bain, 2011). Bain demonstrated, for example,
that less than thirty percent of due diligence teams interviewed the midlevel management
personnel or the human resource departments in an effort to assess the capabilities and
organizational dynamics of the regulatory functions. According to Bain,
…results suggest that due diligence audits could be improved by gathering
information systematically about such elements as personnel organization,
decision-making styles, key personnel to be retained, and evidence of ethical
questions or misinformation. These additional elements would provide
information that later will be important to going forward with an acquisition
and eventually harmonizing the two organizations effectively.
Without a basic understanding of the culture and decision-making patterns of the
proposed acquisition, it would seem difficult to recraft the new organization effectively. This in

14
turn can impact post-merger integration and effectiveness of the consolidated organization going
forward (Bain, 2011).
Personnel management in regulatory areas is underappreciated
The importance of people – their actions, relationships and values – are widely believed
to affect the ability of a merged organization to accomplish its objectives (Shrivastava, 1986).
However, less clear is the degree to which those capabilities are responsible for company value,
particularly when considering job functions that are not directly linked to the income generation
of the company. It is also not clear how much the contributions of personnel to the value of an
M&A are taken into account. However, some insight into this question might come from the
work of Smith (2000).
Smith attempted to describe decision-making practices of company management in
association with mergers and acquisitions that might differentiate companies from one another in
terms of reaching their performance potential (Smith, 2000). As a starting point, he conducted
an extensive literature search with a focus on medical device and diagnostic companies, in order
to identify common themes related to certain research questions. These questions were related to
four areas of strategic decision-making, two of which are noteworthy to discuss here. The first
area concerned how merging firms effectively integrate. The second concerned the expected
performance results from the merger or acquisition. He then identified leading medical and
diagnostic companies that are considered to have track records of successful mergers and
acquisitions. These companies included Elekta, General Electric Medical Systems, Baxter, SSL
International, Axis-Shield and Lohmann-Rauscher. From this select pool of companies, either
CEOs or other senior executives were interviewed. He also interviewed middle managers who
were directly involved with mergers and acquisitions. His analysis thus included themes

15
demonstrated from his analysis of the literature, his strategic insights derived from senior
executive interviews and his assessment of tactical details obtained from middle management
(Smith, 2000).
Smith’s research suggested that companies exercise a varying level of care as they
grapple with organizational charts and succession planning. Companies considered to have
exemplary synergies appeared to put more effort into the assessments of R&D, technical and
regulatory competencies than those devoting less attention to these competencies. What was less
clear was the strength of the causal relationship that is implied by these findings. It is tempting
to draw a connecting line between the success of the merger and its attention to personnel
management. However, other explanations might also account for some of the observations. For
example, the less effective mergers might have been burdened with a mismatch between the two
entities that already complicated planning. In such a case, the companies might already have the
challenge of merging mismatched or poorly functioning teams that would take a considerable
amount of time and experience to reconstruct. They may have seen an upfront focus on team
organization and dynamics as a wasted effort at this particular stage, focusing instead on factors
that were more easily quantified and evaluated, such as those in financial and operational areas.
Smith also pointed out that efforts directed toward the assessment of regulatory and technical
staffing competencies appeared to be carried out at the preparatory due diligence phase, rather
than the post-merger integration phase in those companies that conducted such evaluations
(Smith, 2000).

16
2.3 The Post-Merger Phase
Post-merger is as important as premerger, maybe more
After a merger is announced and planning for the new enterprise begins, a flurry of
activity is typically carried out to shape the new organizational and personnel structure as
quickly as possible. Merging firms have often approached this organizational integration with a
framework that can be described in terms of procedural, physical and managerial elements
(Shrivastava, 1986), all of which have the potential to affect those working in the merging
companies. Procedural elements include the standardized systems and work procedures required
for essential operations, management control, and strategic planning. Some systems and
procedures are tailored specifically to functional areas of the organization, but they can also
include broader, company-wide systems, such as change control management or document
control systems, for example, that the regulatory, quality, engineering and manufacturing
functions all utilize. Work procedures are typically tailored to functional areas. These include,
for example, the standardized procedures related to product promotion that are intended for
marketing personnel or the procedures which regulatory affairs personnel would rely on to
perform product registrations in specific geographical regions around the globe. These elements
must be adapted during functional integration, to reconcile redundant or contradictory processes
from one company to another. More commonly, the work procedures are based on the practices
of the acquiring company, but in some instances where, for example, the acquired company has
specialized or more effective work procedures, those of the acquired company might be adopted
preferentially. All of these changes will complicate the workflow and slow activities already
under pressure from management.
Physical changes are often significant, particularly in the case of a “redesign” merger in
which the acquiring company intends to introduce wide-scale changes. Such a situation

17
commonly occurs when the acquired company is expected to adopt the practices and procedures
of the acquirer as it integrates fully into the new system (Cartwright and Cooper, 1990). Stresses
are inherent when moving functions to new buildings or closing facilities entirely. The
individuals who work in those facilities may find that these types of changes also affect their
professional standing. The human and financial costs associated with occupational stress have
been documented with the aid of merger stress-impact models; these models closely resemble
more generic occupational stress models (Cartwright and Cooper, 1990). As stated by
Cartwright et al. (1990),
Employees are likely to become concerned about a multitude of issues
following merger or acquisition, including job security, reward systems, loss of
identity and autonomy, lack of information, career prospects, new working
relationships, ambiguous working environments, job duplications, transfers,
etc.; all of which can be considered to be potential merger stressors.

Post-merger integration will also involve changes to managerial elements. The goal in
managerial integration is to ensure continuity in strategic decision-making and the transfer of
cultural norms, while at the same time reducing the costs inherent in duplicate job functions.
The merged organization may experience the appointment of a new chief executive officer
(CEO), or at the very least, the demotion or disengagement of one of the two CEOs that
represent each of the two merging companies. Changes then will cascade downward from top-
level management to middle management and then to the operational personnel.
As these changes are planned, executives seek out and use information related to
personnel in different ways. Some decision makers rely preferentially on subjective factors, such
as intuition, judgements gathered from interactions with the staff members directly or from
opinions expressed by peers. Other decision makers may prefer objective data obtained from

18
documented sources, such as personnel records and performance reviews or even analytical
techniques (Shrivastava, 1986). These strategies lay on top of a base of culture and belief
systems that can also vary and affect the value that individuals place on certain attributes. Some
executives may value individuals who challenge them and take proactive responsibility in their
jobs; others may prefer individuals who tend to carry out tasks as dictated by the supervisor
without question, for example. Added to this mix is the concern that managers who are retained
after the merger will favor those with whom they have worked previously. The resulting
decision-making process about “who will stay and who will go” is often modeled as a “causal
map”, a term used by some scholars (Shrivastava, 1986, Nadkarni and Narayanan, 2005) to
describe how actions are derived from a complicated set of belief systems and cognitive
decision-making strategies that often vary from one individual to another. As organizations
merge, managers must learn each other’s preferences and assumptions to achieve harmonized
decision-making (Shrivastava, 1986).
Post-merger integration is effected and affected by people
A recurring theme in the examinations of post-merger activities has been the important
role of people (Cannella & Hambrick, 1993), particularly people who might be considered to be
“strategically relevant resources.” Strategically relevant resources are defined as those resources
that are rare, valuable, difficult to copy or imitate by competitors and difficult to substitute
(Barney, 1991). Regulatory areas are of special interest in medical product companies because
the skills and capabilities required for the regulatory function appear to make such individuals
strategically valuable (Richmond and Church, 2020). Nevertheless, they are difficult to
characterize easily with respect to value because so many of the attributes are “intangible” and

19
because the job functions cannot be easily linked to patents, sales or other measurable outcomes
traditionally used to characterize value.
2.4 The Value of People
Assessing intellectual capital is challenging
Although many have argued that additional assessment of intellectual capital would be
useful, the tools available for such an assessment are complex and largely anecdotal or described
as case studies. As stated by Bontis (2001) in his review of the models used currently to assess
knowledge resources,
IC researchers must now move from perceptual measures in isolated cases to
large-scale studies with objective measures (Bontis, 2011).

Tools to examine the contribution of personnel to company value appear to occupy two
ends of a spectrum. At one end are quantitative, high-level models that insert factors
representing some aspect of intellectual capital into equations to calculate value. One such
model is that of Pulic. Pulic’s model assesses a “Value Added Intellectual Coefficient (VAIC)”,
contributed by three factorial coefficients: (1) a physical capital coefficient (VACA), (2) a
human capital coefficient (VAHU) and (3) a structural capital coefficient (STVA). Each of these
coefficients, in the equation VAIC = VACA + VAHU + STVA, attempts to reflect the value
added from the contributions of tangible and intangible assets. The value of each coefficient in a
particular company is seen to move up and down over time. However, the usefulness of this
model depends on the particular metrics used to assess each of the coefficients. In Pulic’s model,
the metrics are related primarily to financial indicators, such as the grouped salary costs to the
organization and changes in those costs over time, as compared to the relative increase in sales

20
volume, for example. Changes upward or downward can reflect improvements or reductions in
the company’s effectiveness in creating value based on changes in those coefficients, to the
extent that they are appropriate indicators.
A postulate that can be advanced from Pulic’s model is that companies that invest more
in intellectual capital will do better from a financial perspective over time. Others who have
applied Pulic’s VAIC model have been able to support this postulate. For example, Tan and his
colleagues (Tan, Plowman, & Hancock, 2007) examined 150 publicly listed companies on the
Singapore Exchange. They showed a positive relationship between a firm’s economic
performance and its assessed strength with regard to intellectual capital. Tan et al. noted that this
relationship will differ depending on the nature of the industry sector. For example, the mining
industry may rely less on intellectual capital than the pharmaceutical industry.
However, the model of Pulic is not a fine-grain model. It focuses on the expenditures in
the different areas of activity represented by coefficients and relates that expenditure to overall
value. It cannot account for the contributions of specific aspects of company function, such as
the importance of regulatory affairs personnel as opposed to those, for example, in marketing.
However, at the other end of the tools spectrum are more qualitative models that look at human
contributions in a broader way. One notable research scholar, Sveiby (1997), believes that the
difficult job of assessing intellectual capital or knowledge assets can be aided by using a more
coherent conceptual framework that does not see human effort simply in terms of dollars and
cents. Accordingly, he suggests that the existing conventional approach must make way for “a
system of non-financial knowledge flows and intangible assets that use new proxies”. The goal
of arriving at a new framework will depend on recognizing that a company’s “book value”
extends beyond subtracting visible debt from tangible assets. In this regard, Sveiby asserts that

21
both non-financial measurements for the intangible assets and financial measurements for visible
equity can be used jointly to offer a more complete representation of financial success and
shareholder value. He recommends replacing the conventional accounting model with a new
conceptual framework that includes three families of intangible assets. These he describes as
internal structure, external structure and individual competence.
The internal structure is made up of people and the things created by the people.
Together, they form the organization. Some examples of the internal structure are patents,
systems, and culture or spirit of the organization. The external structure consists of the
relationships with customers and suppliers. The company image, reputation or brand are also
considered elements forming the external structure. The third element, individual competence, is
defined as the capacity of employees to act in a wide variety of situations (Sveiby, 1997). The
element, internal structure, has historically been a part of existing accounting systems used by
companies and it is typically used as a conduit to achieve some degree of operational efficiency.
The other two elements, external structure and individual competence, are the recently defined
intangible assets that are believed important for inclusion in a modern conceptual framework
(Sveiby, 1997).
The implementation of the conceptual model uses a two-step approach. The first step is
to identify the target audience that would be interested in the results from the tool, and the nature
of that audience. There are two categories of audiences to consider: external and internal. The
type of audience will determine the kind of data that is provided and the frequency with which it
is reported. An external audience could include shareholders, creditors and/or customers. The
output data needed by them could take the form of an external presentation or report that would
require an organization to describe the state of those affairs considered important to that external

22
audience to demonstrate the effectiveness of management control within an organization. For
example, external parties would typically be interested in output measures that would help them
to assess a company’s position in terms of risk liability, quality of management and the
likelihood of being a dependable creditor or supplier of goods/services. In such reports, it is
seldom feasible to generate a complete balance sheet linking monetary value to each intangible
asset. Further, external parties are less likely to care about internal changes and information
flows within the company because these reports are issued at widely spaced intervals. In contrast,
the internal audience consists of a company’s management that must respond to a fluid business
cycle. They need insights obtained from more frequent internal measurements to monitor
intangible assets effectively and take corrective action accordingly.
The second step in the design and implementation of this model is to classify all
employees into one of two categories: professional and support. The professional employees
plan, produce, process or present products and solutions. They also interact with customers
and/or external networks. The support employees preserve, maintain and develop the internal
structure. In cases where employees perform a variety of functions, some of which may overlap
with the professional category, they are assigned to the professional category. The distinction
made between employee categories is not intended to imply that one group of employees is more
important or necessary than the other, but rather to align employee categories with Sveiby’s
model. When applying this model, both categories of employees are used as inputs to calculate
two out of the three intangible assets, external structure and internal structure. However, only
the professional employees are used in the calculation associated with individual competence.
In measuring each intangible asset, Sveiby recommends the use of three indices:
growth/renewal, efficiency, and stability. For each index, two or more variables should be

23
identified and assigned a weighted value; the variables selected should not be weighted equally.
The specific choice of variables will depend on the company’s strategy, but covers
growth/renewal, efficiency and stability. For the purpose of illustration, the following is an
excerpt of Sveiby’s lists of indices for measuring intangible assets:

To measure professional competence intangible assets:

Growth/renewal: Number of years in the profession, education level, training
and education costs, grading of executives, professional turnover,
competence-enhancing customers;

Efficiency: proportion of professionals in the company, the leverage effect of
professionals, value-added per professional;

Stability: average age, seniority, relative pay position, professional turnover
rate.

To measure internal structure intangible assets, the indices include:
Growth/renewal: investment in the internal structure, investment in
information processing systems, customers contributing to internal structure;

Efficiency: proportion of support staff, sales per support person, values and
attitude measurements;

Stability: age of the organization, support staff turnover, the rookie ratio.

To measure external structure intangible assets, the indices include:
Growth/renewal: profitability per customer, organic growth;

Efficiency: the satisfied customer index, win/loss index, sales per customer;

Stability: proportion of big customers, age structure, devoted customers’
ratio, frequency of repeat orders.”

The models that are described in the literature all have different objectives. Selecting a
robust model that will yield reliable results requires careful consideration, because each has

24
limitations that may reduce its usefulness as a tool. At the same time, no model is able to capture
well the dynamics of personnel selection and management during what is an unusual time of
stress. The challenges of M&A are much like the types of challenges that are seen more
generally when companies are undergoing any type of substantial change. Companies coping
during the financial crisis of 2008 offer insight into organizational dynamics under stress
conditions and the human response required to prevail. For example, Sumedrea (2013)
examined the influence of human and structural capital on the dynamics of a business during a
financial crisis. Sumedrea studied companies in the Romanian economy as they coped with the
2008 financial crisis. He looked for links between intellectual capital and the organizational
performance under conditions of financial stress. How companies utilized their innovative
potential to weather the crisis was of particular interest. He observed that companies that
survived this financial crisis did so by adapting and developing new methods of doing business.
Sumedrea had this to say about the findings,
Our findings show that human capabilities, knowledge, skills and experience
represent an explicative factor of business development in crisis time. Also,
use of new procedures, out-of-the-box thinking and reduced use of
organizational procedures seem to make the difference in the turbulent
business environment as the negative coefficient of structural capital shows.
The link between profitability and intellectual capital is confirmed once more,
because even in the time of crisis performance must rely on human ability to
adapt to changes and learn (Sumedrea, 2013).

2.5 Changing Requirements for Regulatory Practitioners
Knowledge assets demand more than a dollars and sense approach
All of the studies that attempt to quantify or characterize knowledge assets that have been
described above appear to confirm what already seems to be obvious to most. The creation of

25
value in a knowledge economy depends to a large extent on how companies recruit and deploy
talented people to create new products, services and processes that are valued financially by
others. However, tools to assess in detail the particular elements central to the optimization of
those “knowledge assets” are still considered to be “embryonic” (Bontis, 2001). When a merger
takes place, then, how are judgments made about who is to stay and who is to go? It would be
helpful to have a “best practices” methodology for assessing the regulatory competencies when
establishing the regulatory leadership team following an M&A transaction. To my knowledge,
no such methodology exists, but some recent work may help to point in the direction of assisting
that assessment.
One set of suggestions has come from Sibinga and Walsh (2009), who suggested that
resource deployment when constituting a new team after a merger would profit from attention to
three areas. These include the cultural set, the ability to develop and maintain relationships with
various agencies and the skills and know-how of the team members.
Cultural set is seen to be important because it helps to clarify and predict many behaviors
critical to workplace fit and ethical decision making. Cultural dissonance is increasingly
recognized to be a source of merger difficulties and perhaps merger failure (Cartwright and
Cooper, 1990).
The ability to foster relationships becomes important because a certain level of expertise
is required to interact effectively with regulatory agencies on a variety of issues for which
agency engagement is needed. Such engagement, as well as relationship-building externally, are
strengthened when personnel also have sufficient ability to relate to others and build rapport. The
ability to interact effectively with external stakeholders can be especially important in times of
change when an increased level of communication may be required during the transition. It is

26
also critically important when building a new internal team in which some members may be
unhappy about the transitional changes.
Skills and know-how were not explained in as much detail as the other two areas of
importance. Sibinga and Walsh did not elaborate on this element, presumably because this
collection of attributes varies with job level and seems more self-evident than the others (Sibinga
& Walsh, 2009). However, others have identified the particular competencies that are required
to be effective in a regulatory function (Drago et al., 2017). For example, a number of
competency frameworks have been developed to describe the skill sets of the regulatory
professional by different regulatory affairs professional groups, including educators of graduate
professional programs, professional societies and other stakeholders. The Organization for
Professionals in Regulatory Affairs (TOPRA), Regulatory Affairs Professionals Society (RAPS)
and the Association of Graduate Regulatory Educators (AGRE) all have developed competency
frameworks for the profession (AGRE, 2014). These analyses make clear that regulatory
professionals must be equipped with the required knowledge, skills and behaviors to be effective
in their roles. The established competencies include the ability to use an analytical thought
process to arrive at a defensible conclusion; the ability to communicate effectively with diverse
populations; a deep knowledge of business and regulatory structures and activities; technical
abilities related to regulatory oversight of healthcare product development and
commercialization; and other competencies that cut across a wide variety of domains. The
regulatory affairs competency frameworks attempt to align the desired outcomes or behaviors
with the proficiencies that regulatory professionals need. Essentially, they serve as a blueprint
for performance within the profession (Drago et al., 2017, Sibinga and Walsh, 2009).

27
Regulatory competencies are multifaceted
The knowledge required by regulatory personnel, and particularly by its leadership team,
is extensive and growing. The medical product industry is faced with an expanding library of
laws and regulations across almost every area of regulatory activity, including non-clinical and
clinical studies, marketing and promotion, product labeling, product design and manufacturing,
and regulatory reporting. Further, this knowledge now must go beyond the requirements of the
country in which the head office is located, to as many as a hundred or more other countries, all
of which have their own regulations and import-export requirements. At the same time, a
knowledge of the requirements is often insufficient. Experience with regulatory precedents and
procedures and with industry norms are generally considered important as well, as is evidence
from even entry-level job advertisements for regulatory positions that ask for “2 years of
experience” – the number of years one has worked in the profession or role is a simple way that
some use to estimate potential employee’s competence (Sveiby, 1997).
2.6 Assessing, Deploying “Knowledge Assets” for Post-Merger Integration
Little is known about the logistical approaches to managerial restructuring
The experience of those carrying out a merger or acquisition can then be an important
asset to the design of a new merged team. Companies can learn valuable lessons from past
acquisition activities and identify which factors in the management structure have impeded
successful integration in the past. However, as identified by Bain (2011), many firms appear to
have difficulties in capturing this knowledge and using it to improve subsequent decision
making. Further, regulatory management sits at the intersection of many other company
functions that affect regulatory strategy. Knowledgeable regulatory leaders are most impactful if
they can effectively blend relevant science, ethics, policies and business acumen to address

28
cross-functional needs. Any inadequacies in these areas can compromise the development of
products and the success of efficient commercialization and market sustainability (Cyr, Page, &
Williams, 2014).
To this point in the research, approaches to evaluate relationships between inputs to and
from the “black box” of restructuring has been described from many different points of view, and
several models have been examined that attempt to link various aspects of M&A activity with
the ultimate success of the merged entity. Although they attempt to describe and to some extent
to quantify the value of the teams and individuals contributing to the new organization, they do
not help us to understand what companies are in fact doing and thinking as they transition to a
new organizational structure. Further, personnel are often viewed as replaceable numbers or job
functions. However, in regulatory departments, the capabilities and level of engagement matter.
These professionals can be difficult to hire and can make decisions during a merger or
acquisition that can greatly affect the nature of the final team, no matter the intentions of
transitional planning. Thus restructuring of regulatory teams can be plagued by the loss of key
personnel and damage to cultures that reduce the effectiveness of the work environment
(Cartwright and Cooper, 1990). These more humanistic elements are not well represented by the
types of models described above. A different approach is needed to understand how these issues
are handled.
Little is really known about the approaches taken to implementation of departmental
restructuring in situations where the team is composed of highly skilled and relatively rare
professionals. It would be helpful to have a better understanding of how decisions are made
when establishing the regulatory leadership team following an M&A transaction and how those
decisions cascade into the remodeling and retention or replacement of other members of the

29
team. Only recently has this type of question attracted systematic examination, in part because it
seems to represent a ‘paradigm shift’ in thinking; it departs from the historical characterization of
financial worth which rely on a primary focus on physical structures and accounting concepts
that have evolved over five centuries (Bontis, 2001). The research that will be the subject of this
dissertation is intended to complement prior research, but with a focus on the logistics of
regulatory integration and harmonization that must take place in the post-merger period. It will
attempt to bring to the discussion some of the more humanistic elements that have been
identified as important to team building and team dynamics. Such research is intended to
provide insight into the methods and tools that are routinely used to facilitate post-M&A
integration.
How are regulatory teams developed as personnel changes are implemented?
Implementation science has its own frameworks. Perhaps the most commonly used
framework is that of Fixsen (2005), who initially conceptualized it to facilitate organizational
change. According to Fixsen and colleagues (Fixsen et al., 2005),
implementation is defined as a specified set of activities designed to put into
practice an activity or program of known dimensions. According to this
definition, implementation processes are purposeful and are described in
sufficient detail such that independent observers can detect the presence and
strength of the specific set of activities.

30
Figure 1: Implementation Stages
Modified from Fixsen et al, 2005

Other practitioners, such as Wendy Hirsch (2019), have modified the framework to move
from implementation phases to consider elements important to assuring the success of these
different stages. To this end, she has expanded the implementation framework to consider
elements that build a successful implementation, considered under the rubric of components,
roles, phases, and context (Hirsch, 2019). She expands on her view in a book titled, The
Implementer’s Starter Kit, where she defines four components as follows:
Components are the tools and techniques that you use to implement. Roles
refer to the people involved in driving and adopting the change you are
implementing. Phases reflect that change is a multi-stage and iterative
process. Context refers to the internal and external factors that can impact the
implementation – and which make every change effort unique.
Components and Phases in the implementation framework are considered by Hirsch to
rely on structural elements that necessarily support an implementation. They include, for
example, desired outcomes, innovation, training/coaching, measuring and monitoring,
infrastructure and communication (Hirsch, 2019). These aspects are not unlike those typically
viewed as stages and drivers of implementation in the framework of Fixsen (Fixsen et al., 2005),
for example. However, the other two components add in aspects of organizational behavior that
are less commonly explored. Attention is paid to people who play various roles in influencing
organizational change. They create and engage with components to drive the implementation
forward. These people will form the implementation team and will act as change agents who

31
plan and execute enabling activities that are related to implementation. Leadership will consist
of the company “executives, managers and others who inspire, explain, enable, decide and
reinforce”, as well as executive sponsors and members of governance bodies. In such leadership
roles, people can and must amplify the vision and champion its cause. Stakeholders are
interested partners who will benefit from the implementation and may also include individuals
who may want to influence it. Gathering input and feedback from stakeholders can assist in the
transformation of decisions, planning, and actions that are central to implementation activities.
End users are the adopters who will use the innovation (Hirsch, 2019).
Important also are the internal and external contextual factors that can also impact
implementation. Shifts in executive leadership, organizational changes such as movement of the
geographic location of the workplace, and trust levels within the organization are few examples
of potential internal factors. Changes in the regulatory climate, actions taken by competitors or
partners, and popular opinions about the change being implemented are examples of external
contextual factors that can impact decisions. All of these factors underline the lesson that “no
two implementations are the same and context is often the reason why” (Hirsch, 2019).
What was striking from the work of Hirsch as she tried to introduce need for
managing the more human elements was her identification of four common sets of factors that
can be regarded as key to a high-functioning team and affect the value that companies attempt to
capture wen teams are restructured. These elements include connectedness, capabilities,
commitment and culture. Each are defined accordingly: connectedness is the extent to which
members of the organization, regardless of their hierarchical level or function, are interlinked
and accessible to each other through direct personal contact (Tuncdogan et al., 2017);
capabilities encompass acquired skills and know-how (Sibinga and Walsh, 2009); commitment is

32
the state of being or feeling obligated or impelled and motivated to support the organization
(O'Malley, 2000); and culture is “an interlocking set of goals, roles, processes, values
communication practices and assumptions that fit together as a mutually reinforcing system and
combined to prevent any attempt to change it” (Heckelman et al., 2013) . In this study we want
to understand how leaders are chosen and teams are configured, so these foci appeared to define
a better framework to examine organizational behavior and team dynamics. The elements were
therefore used to construct what I call a fit-for-purpose 4C Model for Regulatory Team
Restructuring. A survey tool was developed using this foundation to explore more
systematically the nature of integration leadership and team dynamics seen as two regulatory
groups are sorted to create a new working structure.

33
Chapter 3. Methodology
3.1 Introduction
The literature review was the first part of a mixed methods approach, that relied on the
use of a survey instrument, developed and disseminated in three phases of work. In the first
phase, I developed a survey instrument with questions relevant to the problem defined in Chapter
1 and based on a framework consisting of four elements: Connectedness, Capabilities,
Commitment and Culture. In the second phase, an expert focus group critiqued the survey to
improve it and provide a measure of “face” validity. In the third phase, I disseminated the survey
and analyzed the collected data.
3.2 Development of the Survey Instrument
The survey instrument was developed using the electronic survey platform developed by
Qualtrics (www.Qualtrics.com), a private vendor of web-based survey application solutions. In
its draft form it consisted of 42 questions. The question formats included scales measuring
agreement and/or preference, multiple choice selections, order of ranking, and open-ended text
entry questions.
3.3 Validation of the Survey Instrument – Phase II
A focus group was configured to consist of 7 faculty members and experienced
regulatory professionals who were knowledgeable about M&A transactions. They were tasked
with reviewing the survey design and making recommendations for modifications and revisions
as deemed appropriate. The participants in the focus group were invited to meet for a 1.5-hour
review session at the USC Health Science Campus (HSC). Individuals who could not attend on-
site were encouraged to participate via teleconference. In preparation for that meeting,
participants were given an electronic copy of the draft survey and Chapter 1 which provided an

34
overview of the research being conducted. At the meeting, I served as the moderator who briefly
introduced the study and initiated a discussion of each question sequentially. The focus group
recommended minimal changes that improved clarity for a select few questions. The feedback
from the focus group was consolidated into a final version of the survey was developed from
those suggestions (Appendix). The focus group members are identified in the table below
(Table 1).
Table 1: Survey Focus Group Members
Name Title(s)
Frances J. Richmond, PhD Professor of Regulatory and Quality Sciences
Director, DK Kim International Center for Regulatory Science
University of Southern California

Susan Bain, DRSc Assistant Professor of Regulatory and Quality Sciences
University of Southern California

Penny Ng, DRSc Senior Director, Global Regulatory Affairs
Bristol Myers Squibb

Aimee Greco, DRSc Senior Director, Regulatory CMC, Drug Delivery
Takeda Pharmaceuticals

Duane Mauzey, DRSc Director, Regulatory Affairs
Dynavax Technologies

David Hovland, PhD Senior Vice President, Global Regulatory Affairs and Quality
Urovant Sciences

Randy Steiner, DPA Vice President, Head of Regulatory Affairs
Arrowhead Pharmaceuticals

3.4 Dissemination of the Survey, Data Capture and Analysis – Phase III
Potential participants for this survey were regulatory professionals working in the
medical products industry who had participated in one or more M&A transactions. A list of 76
potential participants was developed with these criteria in mind from my personal network,

35
recommendations of others and searches of professional networking platforms such as LinkedIn.
An email invitation to explain the study’s purpose and to request participation was then sent to
those on the list of individuals having the appropriate experience and qualifications. Potential
participants were given assurance that their identities and company affiliations would remain
anonymous. Upon receiving an expression of interest, individuals were then included in a study
cohort that was given access to the survey through a web-based interface that is supported by
Qualtrics. Respondents were allowed to skip one or more questions and still progress in the
survey. No other surveys were received after the November 30, 2020 cutoff date. The collected
data was then analyzed using simple descriptive statistics appropriate for a study with a modest
number of survey respondents. Informative trends were identified and explained using a
combination of tabulated description, graphical description and discussion of results. Comments
were reported as they were entered without corrections of spelling and grammar.
3.5 Sampling Frame and Study Boundary Conditions
The study involved the participation of a complete hierarchical range of regulatory
professionals in the medical product industry ranging from associate to vice president. They
resided in the United States and abroad. This study is restricted to regulatory professionals who
have experienced at least one merger or acquisition in the medical products industry. This
boundary condition formed the sampling frame for the study. To work within this sampling
frame, a database of regulatory professionals representing companies varying in size, geography,
and product focus was built by taking advantage of the University of Southern California’s
alumni network, my own professional networks and on-line professional platforms such as
LinkedIn. Additionally, to expand representativeness, I mined the Life Sciences and Health Care
Quarterly Update reports prepared by financial/professional services firm Deloitte Corporate

36
Financial LLC regarding recent mergers and acquisition. The professionals who met these
criteria provided a broad range of perspectives; receiving an adequate number of responses from
participants was needed for analyses.

37
Chapter 4. Results
4.1 Analysis of Survey Responses
The survey was distributed by email to 76 individuals through the electronic platform,
Qualtrics. Each personal email contained an individual link to the survey. Of the 76 emails, 6
bounced or failed to reach the intended recipient, leaving a pool of 70 individuals available to
take the survey. Forty-nine of these (70%, 49/70) initiated the survey and answered at least one
question. Eight respondents who admitted that they had not experienced a merger or acquisition
were withdrawn from the survey. One other respondent did not answer sufficient questions to
meet the inclusion criterion for the study. This respondent only indicate he/she experienced an
acquisition/merger; but declined to answer the remaining survey questions. Therefore, only the
results of 40 (57%, 40/70) respondents were included. These respondents declared that they had
experienced a corporate acquisition transaction and completed most of survey questions. The
first response was received on October 18, 2020 and the last was received on November 11,
2020. Reminder messages were sent periodically to encourage timely completion. The survey
was closed on November 30, 2020 after two consecutive weeks of respondent inactivity. An
interim analysis, conducted just prior to the closure of the survey, revealed that the survey
responses had recurring themes suggesting that data saturation had been reached.
4.2 Demographic Profiles
The forty survey respondents who had previously been involved in an acquisition fell into
two categories (Figure 2). Twenty-six (65%, 26/40) described their companies as having been
acquired and 14 (35%, 14/40) as having been the acquirers.

38
Figure 2: Respondent’s Experience Acquisition / Merger Transaction

Two-thirds of the respondents (68%, 27/40) identified that both companies involved in
the transaction were located in the US (Figure 3). Of the remainder, 4 (10%, 4/40) were
involved when a US company acquired a foreign company, 4 (10%, 4/40) when a foreign
company acquired a US company and 5 (12%, 5/40) when both entities were companies with
head offices outside of the United States.

Figure 3: Geographical and Transactional Role Characteristics

Survey respondents selected from a list containing three choices to describe the size of
their company at the time of the acquisition. Seventeen (43%, 17/40) described their company as

39
large, 17 (43%, 17/40) described their company as medium in size and 6 (14%, 6/40) described it
as a small (Figure 4).

Figure 4: Represented Company Size

Survey respondents represented a broad range of regulated sectors; 6 (15%, 6/40) dealt
with pharmaceuticals, 16 (40%, 16/40) with medical devices, 6 (15%; 6/40) with biotechnology
and 12 (30%, 12/40) with ‘other.’ No respondents described their organization as a consulting
firm (Figure 5).

40
Figure 5: Represented Product Sectors

Other: Reduced Harm Tobacco Alternatives, Combination Products, Digital Health

The level of responsibilities held by respondents covered a broad spectrum (Figure 6).
Five respondents (12%, 5/40) identified themselves as Vice Presidents / C-Suite executives, 15
(38%, 15/40) as Directors and 8 (20%, 8/40) as managers. Nine respondents (23%, 9/40)
identified themselves as Specialist or Associate. The remaining 3 respondents identified
themselves as ‘other’ but not specified further.
Figure 6: Respondent Job Level Characteristics

41
4.3 Organizational Restructuring of Leadership
Subsequent questions explored the experiences of the regulatory professionals as their
organizations were restructured during the integration phase. Individuals were asked if changes
were made to existing regulatory leadership at either the C-Suite, Vice President, Director or
Manager levels (Figure 7). At least two thirds of respondents (70%, 28/40) declared that
changes were made to existing leadership. The remaining third (30%, 12/40) declared that
existing leadership changes did not occur.
Figure 7: Leadership Changes during Post-Merger Integration Phase

When individuals were asked to clarify whether the acquiring company’s transition team
selected senior regulatory leadership (i.e. executive/senior director or above) from the network of
colleagues with whom they have worked previously, the majority declared that the transition
team did, but the extent varied (Figure 8). Nine (22%, 9/40) respondents affirmed that the whole
regulatory leadership was selected from the transition team’s ‘network of colleagues.’ Eleven
(28%, 11/40) declared that ‘most of the positions’, 4 (10%, 4/40) that about “half of the
positions”, and another 11 (28%, 11/40) that ‘only a few positions’ were selected in this manner.
Among the remaining respondents, 4 (10%, 4/40) specified that no regulatory leadership was
selected in this manner and 1 (2%. 1/40) did not know.

42
Figure 8: Affiliation of Post-merger Leadership Choices

The survey then asked respondents to rate how effectively the selected leaders were able
to drive forward the strategic regulatory initiatives of the newly merged organization (Figure 9).
About half (52%, 21/40) affirmed that their organizations were moderately effective in
identifying leadership that could drive initiatives forward. Nine (23%, 9/40) affirmed that they
were very effective and 7 (18%, 7/40) that they were slightly effective in this regard. Two
respondents (5%, 2/40) declared that the transition teams were not effective in this task and one
respondent (2%, 1/40) that they were extremely effective.

43
Figure 9: Identification of Leadership to Drive Strategic Initiatives

4.4 Decision-Making Preferences
The survey questions then explored the decision-making preferences of the newly formed
organization. Individuals were asked to what extent they agree that incoming executives took
the time to learn of each organization’s decision-making preferences or styles. Six and 14
respondents agreed and somewhat agreed (15%, 6/40 and 35%, 14/40 respectively) that
executives did take the time (Figure 10). However, 5 (12%, 5/40) respondents neither agreed nor
disagreed, and the remaining 15 (18%, 7/40 and 20%, 8/40 respectively) either disagreed or
somewhat disagreed that executives took time to conduct such assessment.

44
Figure 10: Incoming Executives’ Assessment of Decision-Making Preferences

Individuals were asked to select from a set of choices that would best describe the
decision-making preferences of the new entity’s regulatory management (Figure 11). Of the 40
individuals, 25 (63%, 25/40) respondents described management as having a preference for
objective information/data and 8 (20%, 8/40) respondents described management as having
preference for subjective information (i.e. subjective perceptions, gut instinct, peer input etc.).
The remaining 7 (18%, 7/40) respondents could not answer.
Figure 11: Decision-Making Preferences of New Management

45
Individuals were asked further about decision-making preferences when the newly
established regulatory management made decisions jointly with subordinate regulatory personnel
from a set of three choices (Figure 12). Twenty-one (53%, 21/40) respondents described
management as having “preferences for individuals who carry out task as dictated by
management with little question.” Fifteen (38%, 15/40) described them as having “preference
for individuals with whom they have worked in the past in order to promote continuity in
decision making habits.” The 4 remaining respondents (10%, 4/40) described them as having
“preference for proactive individuals who can challenge management on approaches.”
Figure 12: Management Preferences during Subordinate Selections

A-Preference for individuals who carry out tasks as dictated by management with little question.
B-Preference for individuals with whom they have worked in the past in order to promote continuity in decision
making habits.
C-Preference for proactive individuals who can challenge management on approaches

The survey explored potential differences in decision making preferences between the
newly formed regulatory management team and the team in place before the acquisition/merger
(Figure 13). Most respondents, 26 (65%, 26/40), affirmed that differences in decision making
preferences were present, but 10 (25%, 10/40) saw no differences. The remaining 4 respondents
(10%, 4/40) selected ‘cannot answer.’

46
Figure 13: Differences in Management Decision Making Preferences

4.5 Restructuring the Regulatory Team
The survey offered 4 choices to describe how the regulatory team was restructured during
the first year following the acquisition/merger (Figure 14). Eight (20%, 8/40) respondents
identified that management assembled a customized team after assessing needs of the entity.
Another 8 (20%, 8/40) identified that management left the acquired company largely intact. Ten
(25%, 10/40) identified that the existing model and structure of the parent company was left
intact and absorbed the acquisition into it. The remaining 14 (35%, 14/40) affirmed that
management assembled a team from previous individuals with whom they had worked in the
past.

47
Figure 14: Approaches to Regulatory Team Restructuring

A-Management kept the existing model and structure of the parent company largely intact and absorbed the
acquisition into it
B-Management assembled a team from previous individuals with whom they had worked in the past both in the
companies and outside of them
C-Management assembled a customized team after assessing the needs of the merged entity
D-Management left the existing structure of the acquired company largely intact

Individuals were asked if a thorough assessment of existing staff competencies was
conducted before teams were put in to place. Twice as many respondents (41%, 16/40) declared
that existing competencies were not conducted (Figure 15) than those that did (23%, 9/40).
About a third of respondents (36%, 14/40) that they did not know.
Figure 15: Assessment of Competencies in Preparation for Restructuring

48
Participants were then asked whether the transition teams were able to identify specific
talents required for regulatory team membership. Eleven (28%, 11/40) agreed that this occurred
(Figure 16) but the same number (28%, 11/40) disagreed. The remaining 18 (45%, 18/40)
respondents were unable to answer.
Figure 16: Identification of Specific Talents

Individuals were asked whether the transition team used a competency assessment tool,
which could include elements such as metrics and/or an objective measurement framework, to
identify high performing talent. The majority (58%, 23/40) identified that no such tool was used
(Figure 17). Less than 10% (8%, 3/40) affirmed that management used a competency
assessment tool and about a third (35%, 14/40) did not know.

49
Figure 17: Utilization of Competency Assessment Tool / Metrics

To gain insight into the timing of competency assessments, individuals were asked to
select from premerger, post-merger or both pre- and post-merger phases (Figure 18). Fourteen
respondents (35%, 14/40) declared that such assessments never took place, 7 (18%, 7/40) during
the premerger phase, 5 (13%, 5/40) during the post-merger integration phase and 5 (13%, 5/40)
during both pre- and post-merger phases. A quarter of respondents (23%, 9/40) were unable to
answer.
Figure 18: Timing of the Assessment of Competencies

50
4.6 Knowledge of the Regulatory Function
Subsequent questions explored the views of regulatory professionals about the degree to
which the integration/transition team understood the requirements of the regulatory function.
First, respondents were asked to rate the knowledge of the team about the weaknesses and
strengths of staffing capabilities and talent (Figure 19). About half rated the transition team as
very or moderately knowledgeable (15%, 6/40 and 38%, 15/40 respectively). The remaining half
rated them as being either slightly knowledgeable or not knowledgeable (38%, 15/40 and 10%,
4/40 respectively).
Figure 19: Knowledge of Existing Staffing Capabilities and Talent

Individuals were then asked to rate their knowledge with respect to the contributions of
regulatory managers and subordinate staff in performing day-to-day activities (Figure 20).
About half of the respondents rated them as very or moderately knowledgeable (13%, 5/40 and
40%, 16/40 respectively). The other half rated them as slightly knowledgeable or
unknowledgeable (35%, 14/40 and 13%, 5/40 respectively).

51
Figure 20: Knowledge of Daily Activities of the Regulatory Function

Respondents were also asked to rate the knowledge of the teams regarding needs for
resource allocation, infrastructure and related processes/systems for regulatory functions (Figure
21). About half rated them as being either very or moderately knowledgeable (13%, 5/40 and
33%, 13/40 respectively) and the other half as slightly knowledgeable or unknowledgeable (40%,
16/40 and 15%, 6/40 respectively).
Figure 21: Knowledge of Resource Needs and Infrastructure

52
Respondents were then asked to rate the knowledge of the team related to the
performance targets of the regulatory group (Figure 22). Slightly more than half rated them as
very or moderately knowledgeable (23%, 9/40 and 33%, 13/40 respectively) and the rest as
slightly knowledgeable or unknowledgeable (28%, 11/40 and 18%, 7/40 respectively).
Figure 22: Knowledge of Performance Targets

4.7 Implementation Planning and Execution
Survey questions then explored implementation planning. Individuals were asked
whether a robust implementation plan was developed to ensure adequate regulatory capabilities
to meet defined goals for compliance and work output (Figure 23). Four and 18 respondents
agreed and somewhat agreed (10%, 4/39 and 46%, 18/39 respectively), 6 (15%, 6/39) neither
agreed nor disagreed, and the remaining 11 strongly or somewhat disagreed (3%, 1/39 and 26%,
10/39 respectively) that a robust implementation plan was developed with these goals in mind.

53
Figure 23: Implementation Planning to Accomplish Strategic Goals

Individuals were asked whether standard operating procedures (SOP) matched the needs
of the merged regulatory function to ensure harmonized work output and ongoing compliance.
Sixteen (40%, 16/40) agreed, 18 (45%, 18/40) disagreed and the remaining 6 (15%, 6/40) were
unable to answer (Figure 24).
Figure 24: Implementation Planning for Resource Allocation / Work Output

54
4.8 Retrospective Examination of Integration Outcomes
Survey questions also examined the features and effectiveness of regulatory team
integration. Individuals were asked whether regulatory personnel were laid off during the
integration (Figure 25). Most (63%, 25/40) agreed that layoffs had occurred, about a third (33%,
13/40) that layoffs did not occur and 2 (5%, 2/40) did not know.
Figure 25: Retrospective Examination of Post-Merger Integration

Individuals were asked about their satisfaction with the regulatory team structure put into
place during integration (Figure 27). Fifteen (38%, 15/40) respondents were reasonably
satisfied, 8 (20%, 8/40) were dissatisfied and 17 (43%, 17/40) were neither satisfied nor
dissatisfied.

55
Figure 26: Satisfaction with New Integrated Team Structure

They were also asked whether the capabilities of the newly organized regulatory function
had affected, or would affect, the competitive standing of the organization based on a list of
specific performance indicators, such as compliance, speed to market, success of agency
submissions, and global expansion efficiency (Figure 27). A third of the respondents (33%,
13/39) declared that newly organized function appeared to increase
competitiveness/performance, a third (36%, 14/40) viewed it as staying the same, and 8 (21%,
8/40) that it became worse. The remaining 4 (10%, 4/10) were unable to judge.
Figure 27: Perceived Effectiveness of Integrated Regulatory Team

56
4.9 Alignment of Organizational Culture
Subsequent questions asked the respondents about organizational and team culture.
When asked if the transition team tried to establish or maintain a regulatory team culture that
would align with the overall company culture (Figure 28), 20 (50%, 20/40) disagreed, 15 (38%,
15/40) agreed and the remaining 5 (13%, 5/40) were unable to judge.
Figure 28: Effectiveness of Leadership at Communicating Culture

They were also asked if company leadership effectively communicated the culture of the
newly formed entity to personnel (Figure 29). Five and 11 respondents strongly or somewhat
agreed (13%, 5/40 and 28%, 11/40 respectively) whereas 4 and 9 strongly or somewhat
disagreed (10%, 4/40 and 23%, 9/40 respectively). The remaining (28%, 11/40) neither agreed
nor disagreed.

57
Figure 29: Effectiveness of Leadership at Communicating the Culture

Respondents were then asked how existing regulatory personnel were evaluated to
determine their organizational fit and continued membership in the regulatory function as the
team was being revised (Figure 30). Eleven (28%, 11/40) respondents identified that the
evaluation was based on objective data obtained from documented sources (e.g. personnel
records, performance reviews and analytical techniques etc.) and 11 (28%, 11/40) that it was
based on subjective intuition of regulatory management. The remaining (44%/, 17/40) identified
that the evaluation was based on the judgements or opinions expressed by peers to regulatory
management.

58
Figure 30: Evaluations of Staff for Continued Organizational Fit

Subsequent questions asked whether a cultural divide existed between the merging
entities (Figure 31). Most respondents (88%, 33/40) identified that a cultural divide existed; only
2 (5%, 2/40) identified no such divide and 5(13%, 5/40) answered “maybe”.
Figure 31: Discerning the Cultural Divide Between Entities

Subsequent questions asked individuals to identify which of the merging companies
dominated the culture in the new organization (Figure 32). Almost all (93%, 37/40) viewed the
culture of the acquiring company as dominant. Only 1 (3%, 1/40) felt that the culture of the

59
acquired company was dominant and 2 (5%/, 2/40 that the culture was a blend of both
companies.
Figure 32: Identification of the Dominant Company Culture

Individuals were asked about the time taken for the merged team to become congruent or
harmonized (Figure 33). Only 1 respondent (3%, 1/40) declared that congruence was achieved
in one month or less. Six (15%,6/40) declared that it was achieved within a six-month period
and about half (53%, 21/40) that it took more than six months. However, nearly a third (30%,
12/40) declared that the culture is still fractionated. To gain further insight, individuals were
asked to describe the prevailing cultural dynamics of the regulatory team in the merged entity.
Representative comments are presented in Table 2.

60
Figure 33: Estimated Timeframe to Achieve Cultural Congruence

Table 2: Comments Related to Prevailing Cultural Dynamics

I would describe the new culture as heavy handed from the acquiring company - "our way or the
highway."

Mismatched
Acquired entity was fit into an existing structure as a new therapeutically focused team within
regulatory and were expected to follow the policies and use the systems of the acquiring company.
The acquired company was “agile” and did not have much in the way of process/systems. There was
resistance by the acquired team members to follow policy and use systems/tools with the complaint
that it was too beurocratic and slows them down. After about 3 months of whining, I brought in a
new director and a sr associate from the ranks of the acquiring company to lead that team And be
part of that team and dispersed the 2 biggest complainers into other parts of the organization. ( s i c)
Commonly, there is a 2-year, not one-year, transition plan where most of the staff of acquired
company remains, except in areas where resources are clearly redundant. In cases of redundancy, the
acquired resources are commonly eliminated and replaced by the acquiring company.
Patch-work of dynamics - new leadership from acquiring entity brought their culture with them, but it
didn’t integrate all the way down, and thus miscommunication was common.
an acquired organization have 10-20 times more products than an acquiring organization; and clearly
workload in regulatory teams have not well balanced between two organizations. it has been an issue
in an acquired organization to adapt the culture of an acquiring organization.
The culture is still evolving, since the acquired company has locations on both coasts (and the
acquiring company is based in the Midwest). It will take some time for all staff to fully integrate into
the culture, but efforts are being made to make the regulatory team cohesive.
Plenty of uncertainty due to lack of transparency of merger process.
Overall takeover.
it is a large organization, so there are pockets of "them" and "us" with most teams being integrated.
It felt forced - the acquiring company "brute-forced" their cultural dynamic and eliminated many
systems that were in place.
The existing (merged) team feels effective but subjugated.

61
One was a bit more relaxed than the other.
Still divided - the acquired Reg team still supports their products and the acquiring Reg team supports
their legacy products and all new products. (sic)
We, the acquired, had to fit in with the culture of the acquiring company.
Mutual respect and trust in each's knowledge of their market's regulations.
No comment
Confusing question and survey. Companies being acquired have to adapt, period.
Some overly empowered, some less empowered. Losing sight of uniqueness of acquired org and how
that uniqueness led to success
more focused on financial performance and less on patients
Good rapport. But they are aware of more items than before which is good.
Improving..........
Acquiring companies are taking actions based on the national average of statistics number to "look
better."
The CEO of the acquiring company articulated the following in terms of how the new company was to
operate in the context of being a company within a company:
"Separate but not isolated".
The cultural dynamics of the regulatory teams in the merged entity was conflicting. The acquired
company was located in Florida and the acquiring company was in Japan. Leadership and regulatory
principles were always in conflict. The acquiring company in Florida could not operate on it's own
without the headquarters in Japan's approval [sic].
The acquiring company did not make very many changes to the acquired company so there was very
little change in the culture of the regulatory team.
Toxic, hostile environment, disregard for other employees’ input.

4.10 Recruitment, Retention, and Commitment of Staff
To gain insight into the effect of the culture on the retention and recruitment of talent,
respondents were asked first to describe how the merged culture affected retention (Figure 34).
Most respondents (60%, 24/40) observed that the new culture had a negative impact but 5 (13%,
5/40) declared that it had a positive impact. The remaining respondents (28%, 11/40) were
unable to answer.

62
Figure 34: The Effects of Culture on Retention of Talent

Respondents were then asked how the merged culture affected the recruitment of talent
(Figure 35). Sixteen (40%, 16/40) declared that its impact was negative and 5 (13%, 5/40) that it
was positive. However, 19 (48%, 19/40) were unable to answer. The survey also solicited
comments from individuals regarding any lessons learned from the cultural integration of the two
organizations and what could have been done differently to maximize effective formation of the
regulatory team. Representative comments are presented in Table 3 and Table 4 respectively.

Figure 35: The Effects of Culture on Retention of Talent

63
Table 3: Comments on the Lessons Learned from the Cultural Integration

Merging two completely different cultures proved detrimental to retention of employees from
both companies.
More cooperation and open-mindedness were needed on both sides rather than the attitude of
"us against them."
It is rarely a merger. Most of the acquisitions I’ve been involved with involve early stage
companies with less than 5 assets/products whose prior organization was largely informally
structured. I do not recommend retaining all of the acquired company’s talent within a
separate subgroup. I would disperse them broader in the acquiring company’s team So they
cannot retain the informal micro culture b from their prior firm.
Acquired compass are commonly much smaller organizations where the "teams" grow into
working together, much like a family. Acquiring companies are commonly larger and have a
different culture nurtured over their time together.

Small company talent is commonly different than larger company talent where the talent
groups are profoundly different. Mixing I s much like oil and water. We know this and know that
some resources will be eliminated soon, some later, but all resources of the acquired company
will most likely be eliminated in the 2-3 year window.
There was very little attempt to actually integrate changes, rather, changes were “announced”
and different teams adapted on their own pace.
when smaller organization is acquiring a larger organization, it is important to maintain equal
workload among two organizations. The feeling of unfairness affected the retention of talented
employees. especially, when some layoff was planned to be implemented.
In my example, a very large pharma and device company acquired a very small start up medical
device company. As such, there were and always will be significant differences in company
culture, regulatory structure and pretty much how day to day business operations are carried
out. It is difficult, and likely impossible, for individuals from the acquired company to change
the culture within a large company. Thus, there is a choice...stay or leave.
It is still fairly early in the integration process; COVID 19 has reduced the ability to meet with
the new staff members in person, which has presented some challenges. However, our
organization has worked diligently to make our new colleagues feel welcome and engaged in
developing a cohesive regulatory organization
Acquired company had old-fashioned family culture compared to acquirer company. The
information flow about merger was very confusing due to lack of transparency.
Hope for the best, but when it goes bad, get out and save yourself... grass is greener outside of
a merged company (minus retention bonus’s)
In a market like Bay Area, you can leave and be happier down the street or possibly in the
building across the street.
For the previous two questions, I could not answer the way I wanted to: I wanted to say in both
cases that there was no discernable difference in retention or recruitment
Regarding this question, lessons learned were:
1. Company culture is very important and difficult to change if the acquired company is
physically remote from acquiring company.
2. Company culture can continue to exist as a pocket inside a larger organization if no attempt is

64
made to place people inside the acquired company.
3. Early and frequent interaction with acquired employees is very important to allay stress and
inevitable toxic rumors.
4. It works best if there can be appreciation and integration of acquired company's procedures
and processes whenever possible. Forcing new procedures and processes on a successful
acquired company can bring about disaster and demoralization.
Each business entity is unique and, as such, each merger must be considered unique and must
be flexible in this regard.
The VP or Senior Director sets the tone for the rest of the team.
Don't be acquired if you are happy with the old company. Leave if you are acquired. If your
unhappy with the old company, then wait and see if things get better.
Integration should involve the whole team rather than be only focused on senior management.
They needed to understand what they had
Acquirer had too strong of an influence
If the acquiring company tells the employees of the acquired company that they want to learn
from their culture but don't really have any intention of changing their culture and how they
work, then it leaves a bitter pill and people leave more easily. Better to be honest.
There is always something to learn.
However the acquiring company seems to dominate.
Communication is necessary for a successful integration.
big leading companies in general influence their culture in general whether it is good.
One of the positive aspects of the "Separate but not isolated" approach for Regulatory Affairs is
that the acquired company was able to leverage the acquiring company's regulatory operations
infrastructure (ie, Regulatory Information System and Publishing/Regulatory Operations).
It is important to have stable leadership on both sides to ease employee tension or anxiety by
implementing an effective transition plan.
The acquiring company did not make very many changes to the acquired company so it seemed
like there really was very little attempt to merge the two cultures. The biggest change was that
the acquiring company put a new president in place but very few changes were made below
that level
Acquiring companies should take time to learn about the acquired company’s culture, SOPs,
overall structure before making any changes
Acquiring companies should be careful with filling leadership positions with their own people as
it makes it difficult for the two teams to synergize.

65
Table 4: Comments on What to Do Differently for Effective Team Formation

Appoint leaders based on skill and accomplishments, not on basis of politics.
Honest communication with the staff at the acquired company from the acquiring company would
definitely have been helpful. The acquiring company had stated that all acquired employees would
remain on staff, but a few months later, everyone in the acquired company found out they were to be
laid off at various times within the first year. Motivation was obliterated after the layoffs were
announced.
Assess all personnel and build strongest team regardless of which team they were on prior to
acquisition.
I would disperse them broader in the acquiring company’s team So they cannot retain the informal
micro culture b from their prior firm.

If there are minimal assets and the culture if the Acquiring company Does not seem compatible, I may
accept the assets and not take on the team members.
Regretfully, not likely.
We're dealing with people with differing needs and these needs appear to not overlap. Big company
people need structure, policies, and operational rules to function within which reduces the risk of
"bad" decisions. Small company people like the autonomy, flexibility, and opportunity to make
decisions quickly and with less information. Faster decisions, higher risk, but higher gains commonly
having a financial gain component.
Bigger companies modulate the decision process trying to reduce risk where the decisions have
greater personal consequence and less financial gain to the company.
Focus more on top to bottom integration
the acquiring company should assess the workload of the acquired company correctly and reorganize
the regulatory teams based on the needs/workload.
Again, in my situation with a very large company acquiring a very small company, there are usually
only a few regulatory affairs individuals in the smaller company. These individuals are absorbed into
the bigger company. Usually the VP or Director level individuals only stay through a transition period
while lower level RA professionals may stay. In larger companies they may also have very large RA
departments where it is separated into international and domestic, devices, versus drugs, etc. in a
small company, the RA team has broader knowledge that may apply to many of the departments in a
larger company. It is therefore often frustrating to be put into a small area to work within in the larger
company setting.
Not that I can identify
Yes, the process should been more objective rather than subjective kept to only high-level ranks for
both companies. No subordinates were involved in assessment and process and were told one day for
layoffs.
Not fire the executives VP as they walk through the door.
The acquiring company should not come in like the victor and should realize that many employees in
the acquired company will be looking for that behavior and may see it even if it does not exist.
Acquiring company should seek as much as possible ways to show that the acquired company is
valuable and that it appreciates that the procedures and processes of the acquired company may
have value and could be used. The earlier the acquired employees can feel secure and valued, the
more rapidly the work can go on.

66
The team might have shared strategic business goals, early in the process, that would impact long-
lead regulatory milestones (e.g. proposed new market/population/indication).
Cannot say.
Cross-train the team on all of the products and consider switching up assignments of the acquired
team to work on the acquirers products, and the acquirers team work on the acquired products.
Yes, but I left the company after the acquisition as it became clear that massive layoffs were coming.
My company went from 11,000 employees before to 4,000 after. I got a nice severance package and
never looked back. Almost all of my colleagues from before left when I did or not long afterwards.
Very sad..
Whilst the acquired regulatory team was left as it was, in general, there could have been greater
communication in regards to integration activities.
Yes.....look at what they had before making changes and letting all of leadership go
Listen and learn from existing personnel. Not try to recreate the org dynamics of the acquiring firm.
I am not sure a different approach would have made a difference. To me it seems like when a very
large company acquires a smaller company, the mandate is to integrate and the larger company
usually dominates with structure that will work best with the other functions.
More meetings with active and investigational agendas to learn more about the other team.
More dialog and discussion of decision during and after the acquisition
The Senior Vice President, Regulatory Affairs of the acquiring company was very collaborative with
the Vice President, Regulatory Affairs of the acquired company. In addition, the Vice President,
Regulatory Affairs of the acquired company participated as a member of the Regulatory Leadership
Team of the acquiring company This facilitated a productive and positive working relationship for
both Regulatory Teams.
Provide advice to current employers on how the culture of the company will change.
The regulatory team remained the same after the acquisition so nothing really changed on a day to
day basis. Some of the long term planning changed but that was at a very high level.
Hire seasoned leadership team
Take time to do things the right way I stead of rushing.

4.11 Strategies for Ensuring Staff commitment / Retention
The approaches that corporate leadership used to ensure the commitment and retention of
staff talent were explored in depth. Respondents were asked if the new leadership thought
strategically about the level of commitment of staff as a factor for ensuring retention (Figure 36).
About half (50%, 20/40) declared that the leadership did not and somewhat more than a third
(38%, 15/40) that it did. The remaining respondents (10%, 5/40) appeared unable to judge.

67
Figure 36: Strategy Thinking of the Leadership Ensuring Staff Retention

Survey participants were asked to rate the effectiveness of the new management in
retaining regulatory staff (Figure 37). Three (8%, 3/39) respondents declared that management
was very effective, 19 (48%, 19/39) that it was moderately effective, and 17 (43%, 17/39) that it
was not effective.
Figure 37: Effectiveness of Management in Retaining Regulatory Staff

Subsequent questions asked individuals to rate the effectiveness of incentive tools used
for the purpose of retaining talent (Figure 38). Financial bonuses were seen by about half as
being very or moderately effective (18%, 7/38 and 29%, 11/38 respectively). About a third rated

68
them as slightly effective or ineffective (16%, 6/38 and 18%, 7/38% respectively) and 7 (18%,
7/38) that financial incentives were not used.
Figure 38: Financial Incentive Tools for the Retention of Regulatory Talent

Respondents were also asked about the effectiveness of promoting rewarding work as a
retention tool (Figure 39). Five and 12 respondents rated rewarding work as either very or
moderately effective (13%, 5/39 and 31%, 12/39 respectively). Nine (23%, 9/39) rated it as
slightly effective and nine (23%, 9/39) as ineffective. Four (10%, 4/39) declared that rewarding
work was not used.

69
Figure 39: Rewarding Work as an Incentive Tool for Retention

Establishing a desirable work culture has also been identified previously as important to
assure retention. Six and eight respondents rated the effectiveness of desire work culture as very
or moderately effective (15%, 6/39 and 21%, 8/39 respectively) (Figure 40) whereas 7 and 15
rated it as slightly effective or ineffective (18%, 7/39 and 39%, 15/39 respectively). The
remaining respondents (8%, 3/3/39) identified that culture was not used as an incentive.
Figure 40: Desirable Work Culture as Incentive for Retention

The use of competitive compensation was also explored as a tool for retention (Figure
41). Eight and 15 respondents rated it as very or moderately effective (21%, 8/39 and 39%,
15/39 respectively), whereas 4 and 7 rated it as slightly effective or ineffective (10%, 4/39 and

70
18%, 7/39 respectively). The remaining 5 (13%, 5/39) declared that it was not used as an
incentive tool.
Figure 41: Competitive Compensation as Incentive for Retention

Respondents were also asked to rate the effectiveness of benefits as a retention tool
(Figure 42). Twenty respondents rated an optimized benefits package as either very or
moderately effective (26%, 10/39 and 26%, 10/39 respectively), whereas 7 and 8 respondents
rated it as slightly effective or ineffective (18%, 7/39 and 21%, 8/39). The remaining 4 (10%,
4/39) declared that benefits were not used.

71
Figure 42: Optimal Benefits Packages as Incentive for Retention

Professional growth opportunities were also explored as a retention tool (Figure 43). Six
and 10 respondents rated this incentive tool as very or moderately effective (15%, 6/39 and 26%,
10/39 respectively) and 16 as slightly effective or ineffective (21%, 8/39 and 21%, 8/39
respectively). The remaining respondents (18%, 7/39) declared that this incentive tool was not
used.
Figure 43: Professional Growth Opportunities as an Incentive for Retention

72
Finally, respondents were questioned about the impact of strong team leadership as an
retention tool (Figure 44). A minority of respondents rated strong leadership as very or
moderately effective (16%, 6/38 and 21%, 8/38 respectively), whereas half rated it as slightly
effective or ineffective (24%, 9/38 and 26%, 10/38 respectively). The remaining 5 (13%, 5/38)
declared that the company did not use this as an incentive.
Figure 44: Strong Team Leadership as Incentive for Retention

4.12 Staff Turnover During or Following Post-Merger Integration
Respondents were also asked if regulatory personnel had left the company voluntarily as
a result of the integration (Figure 45). The majority (80%, 32/40) affirmed that voluntary
departures had occurred; only 5 (13%, 5/40) declared that it had not. The remaining 3 (8%, 3/40)
did not know. The reasons given by respondents to explain voluntary staff departures are
presented in Table 5.

73
Figure 45: Staff Turnover During or Following Post-Merger Integration

Table 5: Comments Offering Explanations for the Voluntary Departure of Staff

Unequal treatment and being communicated that path to advancement was not immediately
possible.
Prior to the layoffs, some employees felt that their contributions were negated by the acquiring
company and felt no value. They gave up their retention bonuses to go somewhere else where they
felt successful and fulfilled.
Work prior to acquisition was questioned and not valued.
Found the processes and tools of the acquiring company to be cumbersome. Wanted to be in a more
agile environment.
company gets too big with too many processes (too many governance level to get internal
agreement), not as impactful as previously working for the previous company in getting decision
made and move forward with implementation.
(1) Pay raise moving to another start-up with the potential gains of a future M&A activity.
(2) Moving to an organization where flexibility, exciting changes, and a new "adventure" exists vs
migrating to a more ridged and stoic environment.
Both organizations are necessary. The people functioning within these organizations are different.
Regular layoffs and reorganization contributed to a sense of instability, and executives never created
organizational clarity. Lots of groups were redundant even after reorgs.
Unfairness of workload with less attractive benefits package.
Higher level RA left to work in another start up company as this is viewed as a more productive and
compatible environment. The goal of a start up is to get acquired so the goal was achieved. But, after
being in a start up environment, it is very difficult to work in the large company setting.
I am not personally aware if any staff left the organization
Uncertainty and lack of transparency in the merger process including pure lack of feedback from the
acquired regulatory team
Assume they left because of crappy assignments or not aligning with new management
They did not wish to be a part of big Pharma
Retirement following the acquisition.

74
not an applicable question - assumes people chose to leave, which they didn't
Loss of a familiar culture Better Opportunities elsewhere
Combative transition team
Uncertainty in the future of ENDS.
They did not align or trust the management from the acquirers company.
No confidence in the acquiring company or its CEO.
Reason for leaving was to do with career aspirations and not the merger.
Unhealthy culture
Prefer a start up environment and do not wish to be gulped by a big fish company.
Lord of the Flies culture; weak management at the top; lack of organization and strategic
prioritization of tasks
They liked the smaller company culture. Did not feel as valued in a larger company.
The acquiring company seemed to be not interested in talent from the acquired company.
Relocation issues
opportunities arise and did not want to lose. No clear vision after the merger, thus, needed to take
the next opportunity.
Many of the Regulatory leadership of the acquired company left voluntarily because they did not
want to work for a large, well-established, bureaucratic company.
Unstable leadership
None of the regulatory team left as a result of the merger
Toxic environment

Those respondents who had recognized that staff had left were asked further if those staff
losses had an impact on the quality of the work produced by the regulatory team (Figure 46).
Three (8%, 3/36) respondents declared that the work output was much better and 11 (31%,
11/36) declared that it was about the same. However, half (50%, 18/36) declared that it was
somewhat worse and the remaining 4 (11%, 4/36) that it was much worse.

75
Figure 46: Impact of Staff Departures on the Quality of Work Output

To conclude the survey, individuals were asked to share their final comments regarding
two important questions. First, they were asked for any recommendations about what could be
done differently to optimize staff retention. They were also asked to recommend improvements
that should be prioritized to establish an effective regulatory team structure during post-merger
integration. These comments are presented in Table 6 and Table 7 respectively.
Table 6: Comments Offering Recommendations on Optimizing Retention
Demonstration of unbiased appointments. Leading by example. Setting up the vision for a new
company that doesn’t differentiate between acquired and acquirer.
Leadership on both sides should communicate with the staff and split the responsibilities more
effectively, particularly for employees who had a great deal of legacy information.
Assess all personnel and build strongest team regardless of which team they were on prior to
acquisition.
Not looking to optimize retention
Don't try to retain. Migrate the knowledge, as much as possible, from the acquired organization into
the acquiring organization, and move on.
Organizational clarity is achieved when the rank and file know who is responsible for what. The
executive team never did more than release update org charts, and even that did not provide rank
and file staff with organizational clarity.
at least maintain the same level of benefits package.
I don’t see any way to optimize retention for those who prefer the start up environment. For those
who are open to the larger company, certainly financial incentives (stock, bonuses, etc.) are positive.
It's too early to tell if there has been a large impact on retention. I've been through at least 3 mergers
(on the acquiring company side), and there are many factors (other than just position and salary in

76
the new company) that potentially feed into someone's decision to stay or go (e.g., desire to remain
in geographical location, opportunities (or lack thereof) for
1. A plan to focus of objectives for near and long-term plan
2. Assessment of regulatory team expertise and knowledge based on the plan
3. Rolling out a clear transparent assessment based on the need-demand assessment to let the team
know the reality
4. Provide enough time for affected employees to transition
Not merg or make it a 100% take over. Any less makes the merger pointless
But maybe take more time to know the people and understand the existing process/ decisions that
were made.
Stronger emphasis on communication and team-building.
not an applicable question - assumes people chose to leave, which they didn't
More transparency and strong organizational structure.
Integrate management to understand the decisions and history of the products.
When the primary driver is reducing costs, quality always suffers. The emphasis should be on building
a new quality organization, not driving costs down as much as possible. A company run solely by
spreadsheet has no heart and no sole. The acquisition happened in 2015. In 2020, the acquirer was
in turn acquired, and that management is gone, replaced by a new team. What they, the original
acquirer, did was in turn done to them. Sweet justice.
Good open, honest communication in my opinion is always the key to running any successful
business.
The acquirer needs to understand the existing company
Better Reward managers who foster strong teams
a staggered retention bonus scheme for all key, critical and high performing or high potential staff,
with a first bonus paid out in 9-12 months post acquisition and another bonus 24 months out. The
second aspect is offering development opportunities to staff, so that they feel like the company cares
about their work satisfaction and have a formal 12 month check on whether they are doing the work
they want or potentially offer something different.
This acquisition had a consent decree in the background and that negatively affected everything.
Relocation was required, so some did not have a choice.
evaluate and keep talented personnel regardless the positions.
Make a decision to either completely integrate, or to completely remain independent.
Change bonus structure, stock options (if publicly traded company, better benefit package,
Diversity hiring efforts
Employee development programs

77
Table 7: Comments Offering Recommendations for Prioritized Improvements
Thorough due diligence of the talent pool followed by appointments based of skill, achievement and
cultural fit.
My recommendation is for both companies to communicate the purpose and needs for change and
have each employee's role and responsibilities CLEARLY defined within the new team at the beginning
of the merger so there are no surprises.
Assess all personnel and build strongest team regardless of which team they were on prior to
acquisition.
Clear day 1 expectations and timelines for transition.
(1) Knowledge transfer
(2) Decision process and especially the risk-decision differences.
Assignment of responsibilities should start with a conversation with those involved rather than
executives “telling” directors what their department does.
the acquiring organization should conduct thorough research on the acquired organization, number
of submission/person/year, the performance of regulatory team members, workload, etc. and make
sure that one team will not get all works not to lose talented employees.
In my experience there was no “interview” of individuals to see where they best fit into the new
organization and to assess their goals and level of interest in specific areas within the new company.
This exercise would be helpful. Instead, there were HR packets for everyone just based on seeing their
names on an org chart and no other input.
A lot depends on whether there is a significant overlap in therapeutic area/product line or not. If
there is significant duplication, then ideally the top performing senior leaders are identified
(regardless of which organization they come from) and are retained. Geography plays into the
equation as well (if the acquired company's site is to be shut down, some people may choose to look
for opportunities in their current location rather than relocate). If there is not a huge overlap, then
determining how the new product lines fit into the current structure is crucial.
Effective transition is the most crucial step
Listen to the current team and the decisions they have made for a few weeks before general
overthrow of the entire process and associated directions of current and further plans.
Providing as much info as possible from start to end to all employees will ease anxiety and rumors.
Better communicate growth opportunities.
Clear discussions on how staffing assignments were made.
Go over the near-term and long-term goals of both the team and company and assign functions to
specific individuals.
Get the team to create and align on the vision, instead of forcing the acquirers culture on everyone
and mot accepting any input.
Large layoffs destroy morale in the organization and therefore its ability to function at a high level.
The new management should exercise more care in restructuring the new organization. Cost should
not be the only driver behind the new organization.
As above but I think it also a good idea to organise integration events that are extended to the whole
team and not just senior management. I have worked at a lot of companies and those that set out to
be as inclusive as possible are always the best to work for and this usually translates into financial
success as well.
Spend time understanding the talents of the staff
Documenting existing knowledge base; effectively transitioning knowledge

78
involve all levels of supervisors and management so that the skills and development goals of each
employee is understood to ensure they feel valued and have a place in the new organization.
On-going communications: before, during and after.
Ensure SOPs and requirements are documented and aligned.
evaluate and keep talented personnel regardless the positions.
Make sure the interview team for new Regulatory Leaders include interviewers from Regulatory
Affairs of both acquired company and acquiring company.
Career development plan
Doing a better job of explaining what, if any, effect the merger was going to have on the regulatory
team and the long term goals/direction of the merged company
Ensure that the employees from the acquired company are very much part of the senior management
discussions as they often have a wealth of historical content & understand the culture.

79
Chapter 5. Discussion
5.1 Overview
Mergers and acquisitions (M&A) frequently occur in the medical product industry to
achieve a variety of business objectives. However, the success record is variable. The degree of
success appears to be influenced by how well companies can manage the integration process for
the merging companies. Historically, companies have approached the reorganization of the
regulatory functions following a M&A transaction with varying levels of care. The challenges
are particularly great for companies in the medical product industry, where differences can exist
between the regulatory competencies and approaches of the two companies with respect to
activities as varied as the oversight of premarket product development, regulatory agency
interactions and other activities that have regulatory compliance implications. However, little
systematic research has been directed at the industry practices associated with managing post-
merger integration applicable to the highly specialized function of regulatory affairs.
5.2 Delimitations of the Study
Published literature on best practices for qualitative research emphasize three important
elements that must be prioritized when developing a survey to ensure that usable data is
acquired. These are the survey design, including its scope and conceptual framework; the
sampling frame; and the logistics of its administration (Kriauciunas et al., 2011). I considered
the former two factors to be especially important in setting delimitations in this study and thus
affecting its external validity. Considerations of the administration most often become limiting
factors, discussed in section 5.3 below.
Survey scope: The scope of the survey is often defined and systematized by the use of a
conceptual framework. In this research, a survey tool was constructed using a fit-for-purpose

80
conceptual framework modified from the implementation framework described by Hirsch
(2019), to probe how companies have put into place their new leadership structures and
subordinate regulatory teams. This framework was used to adapt the design of the survey
instrument by grouping questions around four themes: connectedness, capabilities, commitment
and culture. Other frameworks, such as those focusing on implementation (Fixsen, etc), could
have been used, but these frameworks focus primarily on processes over people. Thus, they do
not capture well the dynamics of personnel selection and management, including the ways that
talent or competencies were evaluated and deployed during the preparation and execution of
organizational change. The framework derived from Hirsch (2019) appeared better suited to
evaluate systematically the key aspects of concern that have been previously identified in the
literature to capture important operational aspects of the regulatory group function.
The current focus on personnel management sets a boundary on the study scope to keep
the study from being too broad and superficial. As a consequence, however, the study does not
provide much insight into other aspects of merger effectiveness such as the extent to which
regulatory activities enhanced or detracted from corporate value or product approvals. These
types of insights would require a different form of approach that would have to be based not only
on financial and other types of proprietary information but also on considerations of other
confounding factors related to the effectiveness of multiple divisions of the new organization.
However, the current exploratory study does provide insight into areas that are problematic and
can affect company value, as discussed below. These may set the stage for studies that explore
other aspects of regulatory adaptation that also have to take place in response to other types of
corporate restructuring such as divestitures and internal divisional reorganization.

81
Sampling frame: An important further delimitation of this study was the deliberate
restriction to regulatory professionals with experience working in the medical product industry
and having experienced at least one merger or acquisition. These restrictions set boundary
conditions for the “sampling frame,” defined as “a list of all those within a population who can
be sampled” (Sarndal et al., 2003). To work within this sampling frame, a database of regulatory
professionals representing companies varying in size, geography, and product focus was built by
taking advantage of the University of Southern California’s alumni network, my own
professional networks and on-line professional platforms such as LinkedIn. To expand its
representativeness, I mined the Life Sciences and Health Care Quarterly Update reports prepared
by financial/professional services firm Deloitte Corporate Financial LLC regarding recent
mergers and acquisitions (Delotte Corporate Finance, 2019). The demographic profiles of the
industry professionals who participated in this study reflected a broad range of functions and
levels of responsibility both from large companies, typically the acquirers, and from small
companies, often the acquisition targets. The mix of company sizes and of respondents at various
levels of seniority and responsibility were felt to offer diverse perspectives adequate to paint a
picture of regulatory realignment in medical product companies.
The data collected in this study is also delimited in time. It does not attempt to capture
historical patterns or future trends although some of the data may hint at some of those
considerations. Data collection for the purpose of making future predictions about post-merger
integration practices is out of scope.
5.3 Limitations of the Study
Limitations to surveys of the type used here often relate to the ability to secure
respondents (Sivo et al., 2006) and to ask questions that capture their views effectively

82
(Draugalis et al., 2008). I was therefore concerned about the size and representativeness of the
respondent group. The number of respondents is typically quite small as befits this early stage of
exploratory study. Nevertheless, the careful selection of individuals from multiple types of
companies helped to increase my confidence that a sufficient cross-section of respondents had
been secured to reach saturation. Saturation is “the criterion for judging when to stop sampling.”
It is the basis for the commonly accepted methodical principle that, “on the basis of the data that
have been collected or analyzed hitherto, further data collection and/or analysis are
unnecessary” (Saunders et al., 2018). Basically, it is the point where “information redundancy”
has been reached and “nothing new is apparent” (Sandelowski, 2008). I felt that this group was
sufficient to give a valuable set of insights that would allow subsequent researchers to identify
areas of particular interest or importance. Nevertheless, expanding the study to a larger sample
size would improve the validity for the study and its generalizability to the target population.
An important aspect of survey administration for a small study such as this is careful
attention to managing survey development and distribution to assure a higher response rate.
There are several factors that can cause individuals to decline participation. Commonly,
potential respondents may question the legitimacy of the exercise (Kriauciunas et al., 2011)
considering that the surveys with which they are often presented are sent to increase the sales of
suppliers or to influence governmental policies through action groups. Thus, many potential
respondents may delete surveys of any kind. To reduce this type of behavior, I communicated in
advance with many of the respondents so that they would know that the survey was legitimate
and from a trusted research institution. Care was also taken to avoid questions dealing with
proprietary or sensitive information in order to strengthen the trust of the respondents
(Kriauciunas et al., 2011), which is important for assuring their cooperation (Dimaggio and

83
Powell, 1983). Building trust to encourage free exchange of viewpoints and limiting missing
data is desirable in the administration of survey-based research (Rogelberger et al., 2001). The
very large number of candid comments that were put into the offered text boxes supports the
conclusion that respondents had a sufficient comfort level to participate honestly.
As a complicating factor, this study was administered during a global pandemic related to
the Covid-19 virus. A survey already directed at busy individuals with challenging jobs may be
affected by the further need of those participants to balance competing priorities associated with
different, often remote work patterns, greater participation in schooling for children and
adolescent family members, lost employment and/or issues related to family health and wellness.
For many, reducing nonessential activities became a survival strategy. To mitigate this
challenge, it was important to limit survey length to encourage participation and reduce survey
fatigue (Dillman, 2000).
As a result of these efforts, it was possible to achieve a response rate of 57%. This
response rate exceeds the average participation rate typically associated with such studies in
published literature. In a meta-analysis of more than 1600 prior qualitative research studies
directed at organizations, Baruch and Holtom (Baruch and Holtom, 2008) found an average
response rate of 52.7%. However, prior published research suggests that target audiences and
the practices related to the administering of surveys can negatively or positively influence
response rate and can produce substantial variation in survey response rates (Nulty, 2008). For
example, another published meta-analysis comparing response rates of both online and paper-
based surveys that have been administered to students in higher education reported an overall
average response rate of 33% for on-line surveys, much lower than the 56% rate found for paper-
based surveys (Nulty, 2008). However, web-based surveys are becoming more popular for use

84
than paper-based surveys because they permit a “just in time” approach that will help bypass
administrative bottlenecks that are associated with the administration of paper-based surveys
(Watt et al., 2002).
Another factor that must always be considered in a survey such as this is the reliability of
the data. Since the study relies on data and recommendations reported by individuals, it is
difficult to verify data reported by individuals whose identities are being held confidential. Their
responses and recommendations must be accepted at face value and can in some cases be
distorted or biased by selective recall of events, attribution of responsibilities, and embellishment
or discounting of views or activities. However, the use of cross-tabulations allowed us to assess
whether certain trends were present in different subgroups. These trends appeared to be
consonant with much of the previous anecdotal literature. Further, the enthusiastic efforts of
respondents to share views and experiences in comment fields suggested that they are
comfortable to answer the questions honestly and welcome the chance to share their insights and
observations.
5.4 Insights from the Study
Implementation frameworks are often used when studying a change process, but they
typically look at process-related areas such as timeline management and milestone performance.
Most ignore how the teams are built or relegate the human resource issues to a category of
“drivers” that typically specify some form of activity to assure that timelines and milestones are
achieved (Fixsen et al., 2005). Hirsch (2019) has a somewhat different perspective that focuses
more directly on influential factors affecting effective implementation of change: connectedness,
capabilities, commitment and culture. This set of factors appeared to be more directly relevant
to the research undertaken here, related to the challenges of restructuring an integrated and high-

85
performing regulatory team with broad competencies. Further, the framework seemed to capture
different elements of concern identified in chapter 2 as important to promote the high
performance of an assembled team following integration. Thus, key findings of this study are
considered below in the context of this set of components.
5.4.1 Connectedness
As described briefly in chapter 2, connectedness is the “extent to which members of the
organizational unit, regardless of their hierarchical level or function, are accessible to and
interlinked with each other through direct personal contact” (Tuncdogan et al., 2017). This
connectedness seldom survives completely when leadership changes (Shrivastava, 1986). In this
study, most respondents reported that their regulatory teams underwent significant leadership
changes. When this happens, effects typically ripple downward from top-level management to
middle management and then to the operational personnel (Shrivastava, 1986). Unless the
acquired company is kept as a separate subsidiary, seen for only about 20% of the companies
surveyed here, the acquiring company absorbed the acquired unit into its operations or identified
a new leadership chosen from an existing network of colleagues with whom the principals had
worked previously. A selective approach in targeting already-known individuals for leadership or
team membership seems to reinforce the view that ‘connectedness’ plays a large role in staffing
regulatory departments, especially at senior levels where strong capabilities are important and
suitable professionals can be hard to find (Pire-Smerkanich and Locke, 2015). Further, prior
shared experience has been shown to have a beneficial effect because it increases trust and
organizational knowledge amongst the decision-makers (Shrivastava, 1986) and assures that they
know better the capabilities of the executive team members (Tuncdogan et al., 2017). A

86
cohesive group of leaders can assure some measure of continuity in decision-making more
quickly and easily (Shrivastava, 1986).
At the same time, however, a team that is too inbred can suffer from certain weaknesses.
One that is often highlighted in texts of organizational behavior is “groupthink.” The
“groupthink” term is used to describe a tendency for concurrence-seeking that “becomes so
dominant in a cohesive in-group that it tends to override realistic appraisal of alternative courses
of action” (Janis, 1991, Leana, 1985). Strong cohesion can cause associated members to strive
for equilibrium and consensus, creating a collection of thought that is devoid of alternative
approaches otherwise worthy of further consideration. In addition, it can stifle opportunities for
potential new blood (Behl, 2012). This can, among other things, contribute to the exodus of
valuable personnel noted in the results here and discussed in more detail below.
In an organization that has been greatly modified, the new leadership must take on many
important tasks - assuring operational and decision-making continuity; pursuing strategic
initiatives; and establishing a preferred organizational culture (Shrivastava, 1986). One might
think that assuring support for these objectives would be easier to obtain if the existing
leadership were to be kept intact or even if the new leadership was chosen from those who were
already known to the transition team. However, when the degree of leadership change was cross
tabulated with the effectiveness of that leadership, no clear pattern was seen. This may be in part
related to the relatively small numbers or respondents with leadership changes in each category.
However, it may also reflect the complexity of leadership, which can be challenging for any
executive, and which will be viewed against the baseline of what came before. For example, a
small company might have struggled prior to acquisition with an understaffed and inexperienced
regulatory team; more success might then be seen when a more experienced leader is placed at

87
the helm. Alternatively, a well-functioning team with good leadership might be derailed by a
new leader who does not yet understand the team dynamics, especially if key members of the
team maintains loyalty to a previous leader who chooses to leave or is laid off. Such a view was
well-expressed by one respondent, who when asked how companies could improve outcomes,
stated: “don’t fire executives and vice presidents as soon as they [i.e., the new company’s
transition team] walk through the door.” This observation is consonant with patterns reported in
the literature, that acquisitions are often a precursor to substantial changes in the management
cadre of the acquired firm (Shrivastava, 1986).
Previous researchers generally suggest that executive departures will have strong effects
on subsequent performance. However, these scholars vary in their views regarding the
consequences of executive departure and/or the conditions that produce a net positive or negative
effect vary (Cannella and Hambrick, 1993). Nevertheless, the individual selected to lead the
regulatory enterprise in a newly merged company will necessarily be a change agent tasked with
the responsibility to assemble a functioning regulatory team. He or she must create and
communicate the strategic vision of executive management and at the same time ensure that the
vision is operationalized by producing the key deliverables that meet organizational needs. As
Fixsen emphasized, this will require buy-in from the existing staff of the acquired business
(Fixsen et al., 2005). Leadership alone cannot assure a well-integrated and connected team, and
it can be more difficult if other members of the regulatory department also change.
It seems obvious, even without knowing the responses of the survey participants, that the
capabilities of leaders are important, but the connectivity of the team also depends on whether
the team members themselves are willing to cooperate. Thus, it is not surprising that a number
of respondents, accounting for about 20% of the sample, felt that the team was damaged by poor

88
connectivity between team personnel. One respondent likened the human dynamics to that in
“Lord of the Flies,” a novel about the failed attempts at self-governance of adolescents stranded
on an uninhabited island. However, this was not a widespread reaction of the respondents. Many
expressed opinions that could be characterized as indifferent or undecided. Perhaps this should
be expected. Regulatory departments see frequent changes in staffing even when they are not
undergoing a merger or acquisition, so regulatory professionals have no doubt seen both positive
and negative consequences from those changes. Restructuring might be viewed with a ‘wait-
and-see’ approach as more changes may yet have to be weathered or options reviewed. As a
result, the merger or acquisition can be a time when valued colleagues cash out their stock
options and seek employment elsewhere, as identified elsewhere as a common pattern (O'Malley,
2000).
The loss of regulatory team members and the relationships associated with them can
affect the degree of connectedness amongst remaining staff. The latter concern is captured in the
comment from one respondent who identified that “higher level RA [regulatory affairs
professionals] left to work in another startup company as this is viewed as a more productive and
compatible environment.” Nevertheless, such change can have positive consequences as well.
Some may appreciate the new opportunities or financially attractive retention packages in the
newly restructured and often larger organization, discussed in more detail below.
No matter how restructuring is carried out, it is undoubtedly stressful to teams in ways
that can affect the success of their identified goals (Korunka et al., 1993). Addressing the root
causes of stress and uncertainty is believed to enhance the ability to obtain ‘buy-in’ from
stakeholders (Fixsen et al., 2005). The results of this study, and particularly the many comments
from participants, underline that the psychological effects of restructuring can be serious.

89
Multiple concerns can be seen in their responses. However, most of these appear consistent with
findings of other research studies that are reviewed in great detail by Van Dam and her
colleagues (Van Dam et al., 2008). In that paper, Van Dam then described a research study that
she and her colleagues carried out using survey methods and statistical modeling at a single large
housing corporation that had been formed as the result of a merger of two smaller organizations.
Several measures relating to the concerns of employees were captured and modeled to identify
factors that were most highly related to the employees’ resistance to change. They observed that
“the relationships of leader-member exchange and perceived development climate with
employees’ resistance to a merger were fully mediated by three change process characteristics
(i.e. information, participation, and trust in management)”. They concluded that the trust of
employees in management increased when they had a “high-quality leadership exchange
relationship” and when the climate for personal development allowed for greater exchange of
information and opportunities for participation in the change process (Van Dam et al., 2008).
Aligned with this conclusion, were the leader-member exchange and climate for communication
evident in the present study:
Assignment of responsibilities should start with a conversation with those
involved rather than executives “telling” directors what their department does.
5.4.2 Capabilities
Another facet of team development often emphasized in literature relating to
organizational behavior literature is the importance of assuring that the team has the appropriate
capabilities and knowledge for the functions that they will carry out (Sibinga and Walsh, 2009).
Restructuring can provide the opportunity for transition teams to assess the capabilities of
regulatory team members to assure that the restructuring methods protect the functionality of the
team. The fact that about 40% of companies represented in this study failed to assess existing

90
competencies before assembling the new regulatory team and that most of the companies
represented here either denied or were not aware of any use of a competency assessment tool
consisting of an objective measurement framework to help assemble the integrated regulatory
team provide evidence of potential deficits when compared with best practices in the literature.
Aiman-Smith and colleagues (2006) examined using case studies the practices used in some
industrial companies where explicit knowledge and critical skills were deemed important or
valuable. They used this information to gain insight into the perceived impact on the
organization when losses in expertise were anticipated. As part of such best practices, Aiman-
Smith and colleagues described an approach that an unnamed industrial company (“Company
B”) had adopted. It featured a six-step process that consisted of 1) agreeing on the critical skills
that were needed in the organization, 2) assessing the alignment of each individual with respect
to that skill, 3) collecting and summarizing findings, 4) assigning values to its strategic
importance, 5) assessing the health of the organization and 6) having a plan of action to address
any identified gaps. This methodical approach provides insight into the degree of effort that a
company might direct when conducting a gap analysis of its knowledge assets. In such a
situation, simulation modeling can even be employed by developing a computational
representation of a complex problem of interest (Aiman-Smith et al., 2006).
However, the results from this study suggest that team member assessment and
configuration are much less systematic in regulatory departments of medical product companies.
The fact that only a quarter of respondents affirmed that existing competencies were assessed
before the regulatory team was restructured suggests that processes might be described for most
companies as ad hoc rather than systematized. Even those who did carry out assessment
appeared seldom to use any form of systematic assessment tool based on metrics and/or objective

91
measurement. One recommendation that might come from this study is that companies examine
their approaches and consider whether more systematic tools, available in the broader human
resource literature, would improve their team- building efforts.
A merger or acquisition could even be regarded as providing an opportune time to
evaluate carefully the regulatory capabilities or competencies of the company. Only with a clear
understanding or deficiencies can the restructuring team identify how to take remedial actions
that might optimize group performance. It can be particularly important to identify highly
capable individuals amongst the merging teams, because it is much less expensive and more
efficient to adopt existing assets that can bring “fresh knowledge” from an acquired organization
(Oliveira et al., 2003) rather than search for and hire new personnel.
As teams are assembled, it is critical to transfer expert knowledge about products and
procedures from one company to the personnel of the other. Bresman and colleagues (1999)
studied knowledge transfer during acquisitions by evaluating data from R&D subsidiaries of
Swedish companies that had undergone an acquisition. Their findings suggested that the
immediate post-acquisition period is often characterized by an imposed one-way transfer of
knowledge from the acquirer to the acquired, but over time may give way to reciprocal
knowledge transfer. These research scholars recognized that “organizations that understand the
value of knowledge and are able to manage it can sustain their market positioning” (Bresman et
al., 1999). However, Zhang and Stening (Zhang and Stening, 2013) make the point, from a
series of four case studies of Korean acquisitions, that the outcomes of initiatives such as those to
share knowledge depend greatly on how the post-acquisition integration is managed not only at a
strategic level, but at the level of the people involved in the transfer.

92
5.4.3 Commitment
This study also explored a third area noted to be important to organizational health, that
of commitment of its employees, both to staying with the organization and to espousing its
values and goals. It is understandable that commitment is greatly challenged and that corporate
leadership may have to offer incentives to enhance the retention of staff following an
acquisition/merger transaction. Among the incentives often used in the corporate world are
financial bonuses, competitive or enhanced compensation, optimized benefit packages,
rewarding work, professional growth opportunities, strong team leadership, and desirable work
culture, for example (O'Malley, 2000). The degree to which these incentive tools were utilized
and the effectiveness of their use appeared to vary amongst the regulatory professionals surveyed
here. It was notable, however, that as many as half of the study participants thought that the new
leadership did not think strategically about the incentives that were needed to enhance the
commitment of existing regulatory staff, and most of the others who had an opinion felt that the
effectiveness of those efforts had been marginal. Not surprisingly then, only a small proportion
of respondents felt that company leadership was very effective in achieving commitment /
retention objectives and mitigating staff turnover. The further comments in text fields also
provided useful and often pointed insights regarding the reasons underlying the voluntary
departure of regulatory staff. Several respondents expressed the opinion that some employees
felt devalued by the acquiring organizations and others had concerns about elements associated
with the work climate, such as uncertainty, lack of transparency or communication failures
associated with the integration process, cumbersome processes/tools of the acquiring company
and unequal treatment often evidences by less desirable work assignments.

93
Honest communication with the staff at the acquired company from the
acquiring company would definitely have been helpful. The acquiring
company had stated that all acquired employees would remain on staff, but a
few months later, everyone in the acquired company found out they were to be
laid off at various times within the first year. Motivation was obliterated after
the layoffs were announced [sic].
When the primary driver is reducing costs, quality always suffers. The
emphasis should be on building a new quality organization, not driving costs
down as much as possible. A company run solely by spreadsheet has no heart
and no sole [sic].

Concerns such as these regarding the management of employee commitment are certainly
not unique to these companies or job functions but are recurring theme in the broader literature.
O’Malley (2000) summarizes well these important lessons, writing that employers can create
commitment among employees by recognizing that…
…commitment is a two-way street and any one-sided relationship sooner or
later tips over from its own weight…the onus of a good start lies with the
employer who, like a good host or hostess, invites the employees inside
(O'Malley, 2000).
These observations point to the importance not only of understanding what incentives are
motivating the group under consideration. One often mentioned incentive, or in some cases,
disincentive, is the culture of the community in which the employee wants to work. Thus,
commitment can depend on culture as well as other forms of incentives, and this is discussed
further, below.
5.4.4 Culture
The culture of a company can affect the sense of belonging and enthusiasm for regulatory
teams in the work environment. In part, culture is shaped by certain factors that are hard to
change, such as the size and structure of the new merged entity. This changing nature can by
itself affect the decision of an employee to leave the newly restructured company. As stated by

94
one study participant, “after being in a startup environment, it is very difficult to work in the
large company setting.”
Beyond considerations of size, however, many factors can also make it difficult to
maintain the previous culture of a company, and particularly the acquired company, unless the
acquired company or merger partner is kept separate operationally. This approach was seen for
example, in the acquisition of Genentech by Roche (Hayden, 2009) or MicroVention, Inc. by
Terumo Corporation (Kleine and Hughes, 2006) and was also identified in some cases here.
The CEO of the acquiring company articulated the following in terms of how
the new company was to operate in the context of being a company within a
company: Separate but not isolated [sic].

More commonly, however, as the results show here, the acquired company is typically
absorbed to a large extent into the larger organization.
It felt forced – the acquiring company “brute-forced” their cultural dynamics
and eliminated many systems that were in place [sic].

Patch-work of dynamics – new leadership from acquiring entity brought their
culture with them, but it didn’t integrate all the way down, and thus
miscommunication was common [sic].

The leadership of the acquiring company typically bears a larger responsibility and
capability than the acquired company to develop a strategic approach and tactics to integrate the
two disparate cultures. The numerous comments of the participants also captured this collective
viewpoint regarding the dominant influence that acquiring companies have in terms of shaping
the culture of the combined entity and the dynamics that may be associated with its integration.

95
There were and always will be significant differences in company culture,
regulatory structure and pretty much how day to day business operations are
carried out. It is difficult, and likely impossible, for individuals from the
acquired company to change the culture within a large company. Thus, there
is a choice…stay or leave [sic].

These observations are not novel. The social and business literature talks extensively
about the overarching differences that put the acquirer “in the driver’s seat”. However, the larger
companies can easily lose sight of this imperative. It most frequently acquires the other business
not for its culture, but rather for its tangible assets, collective knowledge and capabilities
(Barney, 1991). This creates opportunity for cultural dissonance that is increasingly recognized
as a source of merger difficulties or failure; the culture helps to clarify and predict many
behaviors critical to workplace fit and ethical decision-making (Cartwright and Cooper, 1990).
Thus, the level of attention to culture may be diminished even though it is clearly core to the
success of the integration. Further, restructuring will be to some extent unique to the particular
situation because every company has its own unique culture, sculpted from “an interlocking set
of goals, roles, processes, values, communication practices and assumptions that fit together as a
mutually reinforcing system and combined to prevent any attempt to change it” (Heckelman et
al., 2013). Thus, companies have choices in their pursuit of integration, at one extreme to absorb
the new partner into their current structure and culture and at the other to grant the acquired
entity considerable autonomy. The latter approach can take the form of a partnership in which
the day-to-day decisions are left up to the acquired but are coordinated by a few key integrated
activities to maintain communication and develop high level objectives for the new entity. This
contrasts greatly with the traditional approach that integrates both core and supporting functions
by replacing top level executives. However, in either case, companies may try to avoid or
postpone efforts directed toward unifying company cultures by adopting interim solutions

96
because previous experience has shown that the problem is very challenging to tackle (Kale et
al., 2009).
Cultural dissimilarity between companies is often the reason why so many M&A
transactions achieve suboptimal results or fail (Kale et al., 2009). Commonly what makes the
cultural integration challenging is the organizational conflict that occurs during the process of
knowledge transfer, defined as the extent to which one entity’s knowledge is used by another
(Minbaeva, 2007). Knowledge transfer is an essential component of an acquisition. It has a
strong association with value creation (Junni and Sarala, 2012) and is a central resource needed
to create a competitive advantage (Spender and Grant, 1996). To maximize benefit, knowledge
transfer should flow in both directions. The acquirer may often transfer knowledge about values
and practices as well as procedures and operations. However, the acquired personnel may be
reluctant to reciprocate because they may fear downstream effects such as the potential loss of
job or status in the new organization (Cartwright and Cooper, 1990). This set of concerns may be
particularly relevant for specialized and knowledge-intensive departments such as those dealing
with regulatory affairs. Failure to ensure this transfer, however, can deny the new company of
lessons learned and corporate memory that may be important to optimize returns from the
acquisition. Kale and colleagues emphasize that cultural integration must be effectively
managed in a nonthreatening way to reduce these unintended consequences, and create an
environment in which companies can easily share knowledge and best practices (Kale et al.,
2009).
5.5 Conclusion and Recommendations for Future Research
This exploratory study focused on the many influencing factors that impact the post-
merger integration of regulatory teams. To some extent, this particular group of individuals

97
represent a microcosm of the company as a whole. The insights gleaned from this study build on
prior related published research related to integration efforts as captured by Van Dam and
colleagues, who conclude that “…characteristics of the work environment must support and
reinforce a climate that is conducive to the change in order for a change effort to be effective and
enduring” (Van Dam et al., 2008). Certain common shortcomings related to the integration
process have been identified, and many of these appear due not just to poor strategy, but also
flawed execution and bias toward a specific organizational model. This failure to establish an
efficient organization can open the door for competitors to gain advantage (Charan and Colvin,
1999).
Researchers knowledgeable about the challenges associated with change recognize that
change often involves a three-step process in which thinking must first “unfreeze” to permit the
activities needed to adapt to a new situation and then must “refreeze” to establish consistency
with the new organization’s culture and mores (Hussain et al., 2018). Some suggest that a cadre
of internal champions can help to promote and manage the transition and that ‘buy-in’ or
‘change’ readiness assessment tools can be used to gauge stakeholder acceptance or resistance to
the change (Fixsen et al., 2005). Because so many respondents felt that the transition teams did
not handle the human side of the transition effectively, it might be recommended that they
consider how better to add expertise or systems related to human resource management to their
activities throughout the life cycle of the acquisition, starting as early as due diligence, where
assessment of staffing capabilities should begin. Further, that transition team should consider the
use of more formalized readiness tools, advocated by others to produce and characterize the
problems that they might face. As noted by Rogers and colleagues, “organizations unwittingly

98
apply their resources toward installing new solutions rather than toward realizing the articulated
benefits” (Rogers et al., 2002).
Future research might focus on how companies can anticipate certain classes of problems
and use that characterization to direct situation-specific solutions. Every company and
department will come with unique characteristics that affect the level of challenge associated
with the change (Charan and Colvin, 1999). It would be helpful to understand better if readiness
assessment tools, such as templates and frameworks, would improve the reorganization process.
Of specific interest would be whether the information produced by using such tools can help to
facilitate the integration of two companies with widely different structures and cultures. Broader
adoption of tools may bring more attention to the pitfalls of poor transition practices and help to
build on success for acquisitions or mergers on which much money will have been spent.
The current research suggests that employees voluntarily leave organizations for some of
the same reasons that others have identified, including poor relationships with supervisors or
leadership; dissatisfaction with development opportunities; and lack of respect for the value of
their contributions (e.g., Rogers et al., 2002). However, regulatory professionals also seem to be
strongly affected by cultural shifts associated with the growth in the size and scope of the new
merged organization. The ideal mix of people, atmosphere, and support can be as important as
remuneration for their retention and commitment (O'Malley, 2000). Thus, integrations of
regulatory teams can be fostered not only by giving financial incentives but also by investing
time, effort and resources to develop appropriate leadership and cultural sensitivity. These
considerations may justify a measured approach in which semi-autonomous partnerships are
established and a more systematic and culturally sensitive approach is considered to facilitate
knowledge transfer, particularly from the acquisition target to the acquirer. Such attention may

99
be critical to reduce and buffer the personnel losses that appear to occur so commonly when a
small company is absorbed into a larger one.

100
References

AGRE. (2014) Core competencies for graduates of MS programs in regulatory studies.
Available at: https://www.agreglobal.org/core-competencies (Accessed: 18 August 2019)
Aiman-Smith, L., Bergey, P., Cantwell, A. and Doran, M. (2006) The coming knowledge and
capability shortage, Research-Technology Management, 49 (4), 15-23.
Bain & Company. (2013) The renaissance in mergers and acquisitions: the surprising lessons of
the 2000s. Available at: https://www.bain.com/insights/the-renaissance-in-mergers-and-
acquisitions (Accessed 22 May 2016).
Bain S. (2011) “Regulatory” due diligence: a survey investigation of best practices in the
medical products industry, ProQuest, Published online 2011.

Barney, J. (1991) Firm resources and sustained competitive advantage, Journal of Management,
17 (1), 99-120.
Baruch, Y. and Holtom, B. (2008) Survey response rate levels and trends in organizational
research, Human Relations, 61 (8), 1139-1160.
Behl, A. (2012) Groupthink: the role of leadership in enhancing and mitigating the pitfall in
team decision-making, March. Available at:
https://www.sesp.northwestern.edu//masters-learning-and-organizational-
change/knowledge-lens/stories/2012/groupthink-the-role-of-leadership-in-enhancing-and
-mitigating-the-pitfall-in-team-decision-making.html (Accessed 30 April 2021).
Bontis, N. (2001) Assessing knowledge assets: a review of the models used to measure
intellectual capital, International Journal of Management Reviews, 3 (1), 41-60
Bourgeois, J., and Hoeber, H. (2010) The integration due diligence: setting the stage for value
creation, in Gleich, R., Kierans, G. and Hasselback, T. (eds.) Value in due diligence: new
risks, new mitigation. Hants, United Kingdom: Gower Publishing. 1-27.
Bresman, H., Birkinshaw, J. and Nobel, R. (1999) Knowledge transfer in international
acquisitions, Journal of International Business, 30 (3), 439-462.
Cannella, A. and Hambrick, D. C. (1993) Effects of executive departures on the performance of
acquired firms, Strategic Management Journal, 14 (special issue), 137-152.
Cartwright, S. and Cooper, C. (1990) The impact of mergers and acquisitions on people at work:
existing research and issues, British Journal of Management, 1, 65-76.
Charan, R. and Colvin, G. (1999) Why CEOs fail. Available at:
https://www.money.com/magazines/fortune/fortune_archive/1999/06/21/261696
(Accessed 13 April 2021).

101
Cyr, D., Page, R. and Williams, K. (2014) Strategic defiance and profitability in the
pharmaceutical industry, Journal of Academic and Business Ethics, 9 (December),1-31.

Deloitte Corporate Finance LLC. (2019) Life sciences and health care M&A update: Q4 2019.
Available at: htttps://www2.deloitte.com/content/dam/Deloitte/xa/Documents/corporate-
finance/us-dcf-lshc-update-q4-2019.pdf (Accessed: 28 August 2020).
Dillman, D. (2000) Mail and internet surveys: the tailored design method. New York, NY:
Wiley and Sons.
Dimaggio, P. and Powell, W. (1983) The iron cage revisited: institutional isomorphism and
collective rationality in organizational fields, American Sociological Review, 48 (2), 147-
160.
Drago, D., Alsbury, S. and Connolly, T. (2017) Promoting excellence in the regulatory affairs
profession: a competency framework, Regulatory Rapporteur, 14 (10), 16-19.
Draugalis, J., Coons, S. and Plaza, C. (2008) Best practices for survey research reports: a
synopsis for authors and reviewers, American Journal of Pharmaceutical Education, 72
(1), 1-6.
Drugwatch. (2017) Boston Scientific - manufacturer's history, products & liability. Available at:
https://www.drugwatch.com/manufacturers/boston-scientific/ (Accessed 22 June 2019).
Ernst & Young. (2011) Turn risk and opportunities into results – how leading companies use
risk management to fuel better performance. Available at:
https://web.actuaries.ie/sites/default/files/erm-
resources/turning_risk_into_results_au1082_1_feb_2012.pdf (Accessed 1 November
2016).
Ernst & Young. (2016) Global capital confidence - does seizing competitive advantage mean
deals take center stage. Available at: https://imaa-institute.org/global-capital-confidence-
barometer-does-seizing-competitive-advantage-mean-deals-take-center-stage/ (Accessed
15 November 2016).
Fixsen, D. et al. (2005) Implementation research: a synthesis of the literature. Available at:
https://nirn.fpg.unc.edu/sites/nirm.fpg.unc.eud/files/resources/NIRN-MonographFull-01-
2005.pdf (Accessed 4 August 2019).
GE Healthcare. (2012) GE Healthcare to acquire XPRO, a Brazilian medical device company,
GE Healthcare the Pulse, 6 June. Available at: http://newsroom.gehealthcare.com/ge-
healthcare-to-acquire-xpro-a-brazilian-medical-device-company/ (Accessed 29 March
2017).

Hartford, J. (2012) Medtech mergers and acquisitions remain robust in 2012, Medical Device
and Diagnostic Industry News Products and Suppliers, 3 December. Available at:
http://sanovas.com/files/Medtech_M&A_2007-2012.pdf (Accessed 29 March 2017).

102

Haspeslagh, P. and Jemison, D. (1991) The challenge of renewal through acquisitions, Planning
Review, 19 (2), 27-30.

Hayden, E. (2009) Roche vows to keep Genentech culture, Nature, 485 (7236), 270-270.

Heckelman, W., Unger, S. and Garofano, C. (2013) Driving culture transformation during large-
scale change, OD Practitioner, 45 (3), 25-30.

Hirsch, W. (2019) The implementer's starter kit. St Petersburg, FL, Wendy Hirsch Consulting
LLC.
Hussain, S. et al. (2018) Kurt Lewin's change model: a critical review of the role of leadership
and employee involvement in organizational change, Journal of Innovation and
Knowledge, 3 (3), 123-127.

Janis, I. (1991) Groupthink, in Griffin, E. (ed.) A first look at communication theory. New York,
NY: McGraw Hill, 235-246.
Junni, P. and Sarala, R. (2012) The role of cultural learning and collective teaching initiatives in
M&A knowledge transfer, European Journal of Cross-Cultural Competence and
Management, 2 (3), 275-298.

Kale, P., Singh, H. and Raman, A. (2009) Don't integrate your acquisitions, partner with them,
Harvard Business Review, December, 109-115.

Kleine, M. and Hughes, W. (2006) MicroVention Inc to be acquired by Terumo corp, BioSpace,
28 February. Available: https://www.biospace.com/article/releases/microvention-inc-to-
be-acquired-by-terumo-corporation-/ (Accessed 24 May 2021).

Korunka, C., Weiss, A. and Kareta, B. (1993) Effects of new technologies with special regard for
the implementation process per se, Journal of Organizational Behavior, 14 (4), 331-348.
Kriauciunas, A., Parmigiani, A. and Rivera-Santos, M. (2011) Leaving our comfort zone:
integrating established practices with unique adaptations to conduct survey-based
strategy research in non-traditional contexts, Strategic Management Journal, 32 (9), 994-
1010.
Leana, C. (1985) A partial test of Janis' groupthink model: effects of group cohesiveness and
leader behavior on defective decision making, Journal of Management, 11 (1), 5-17.
Madsen, E. and Wu, Y. (2016) Restructuring of the pharmaceutical industry, SSRN Electronic
Journal. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2717081
(Accessed 18 March 2017).

103
Meglio, O. and Capasso, A. (2012) The evolving role of mergers and acquisitions in competitive
strategy research, in Battista-Dagnino, G. (ed.) Handbook of research on competitive
strategy. Northampton, MA: Edward Elgar Publishing, 237-263.

Minbaeva, D. (2007) Knowledge transfer in multinational corporations, Management
International Review, 47 (1), 567-593.
Mukherjee, S. (2017) Why some of big pharma's best-selling drugs are in trouble this year,
Fortune, 19 January 2017. Available: https://fortune.com/2017/01/19/pharma-patents-
expiration/ (Accessed 18 March 2017).
Nadkarni, S. and Narayanan, V. (2005) Validity of the structural properties of text-based causal
maps: an empirical assessment, Organizational Research Methods, 8 (1), 9-40.
Nulty, D. (2008) The adequacy of response rates to online and paper surveys: what can be done?,
Assessment & Evaluation in Higher Education, 33 (3), 301-314.
O'Malley, M. (ed.) (2000) Creating commitment: how to attract and retain talented employees
by building relationship that last. New York, NY: John Wiley & Sons, Inc.

Oliveira, P., Roth, A. and Ponte, K. (2003) Cross-border mergers and acquisitions as a tool to
transfer knowledge and foster competitive capabilities, International Journal of
Technology, Policy and Management, 3 (2), 204-223.
Pharma Letter. (2016) An all time record year for pharma/biotech M&A in 2015. Available at:
http//www.thepharmaletter.com/article/an-all-time-record-year-for-pharma-biotech-m-a
(Accessed 17 January 2017).

Pire-Smerkanich, N. and Locke, D. (2015) Options in regulatory affairs - specialties and skill
sets, Regulatory Rapporteur, 12 (3), 20-23.

Richmond, F. J. & Church, T. (2020). Graduate training capacity for us regulatory professionals:
are we facing a talent crisis?, Therapeutic Innovation & Regulatory Science, 54, 1-6.

Rogelberger, S. et al. (2001) Attitudes towards surveys: development off a measure and its
relationship to respondent behaviors, Organizational Research Methods, 4 (1), 3-25.
Rogers, R., Wellins, R. and Conner, D. (2002) The power of realization – building competitive
advantage by maximizing human resource initiatives, Development Dimensions
International. Available at: https://silo.tips/download/the-power-of-realization (Accessed
9 April 2021).
Rouse, T. and Frame, T. (2009) The 10 steps to successful M&A integration, Bain & Company,
4 November. Available at: https://www.bain.com/insights/10-steps-to-successful-ma-
integration/ (Accessed 9 Marche 2017).

104
Sall, B. (2008) Regulatory aspects of due diligence, Medical Device and Diagnostic Industry
News Products and Suppliers, 1 February. Available at:
http://www.mddionline.com/regulatory-aspects-due-diligence (Accessed 16 June 2019).
Sandelowski, M. (2008) Theoretical saturation, in Givens, L. (ed.) The sage encyclopedia of
qualitative research methods. Thousand Oaks, CA: Sage.
Sarndal, C., Swensson, B. and Wretman, J. (2003) Model assisted survey sampling. New York,
NY: Springer.
Saunders, B. et al. (2018) Saturation in qualitative research: exploring its conceptualization and
operationalization, Quality & Quantity, 52, 1893-1907.
Schweizer, L. and Kryphausen-Aufsess, D. Z. (2008) Mergers and acquisitions in the
biotechnology industry, in Patzelt, H, and Brenner, T. (eds.) Handbook of
bioentrepreneurship. New York, NY: Springer, 133-145.
Shrivastava, P. (1986) Postmerger integration, The Journal of Business Strategy, 7 (1), 65-76.
Sibinga, H. S. and Walsh, D. (2009) Regulatory risk management considerations for commercial
mergers and acquisitions, Regulatory Focus, July, 35-37.
Sivo, S., Saunders, C., Chang, Q. and Jiang, J. (2006) How low should you go? low response
rates and the validity of interference in IS questionnaire research, Journal of the
Association for Information Systems, 7 (6), 351-414.
Smith, B. (2000) Lessons for CEOs from the consolidation of the medical device and diagnostic
industries, International Journal of Medical Marketing, 1 (2), 148-160.
Spender, J. and Grant, R. (1996) Knowledge and the firm: overview, Strategic Management
Journal, 17, 5-9.
Sumedrea, S. (2013) Intellectual capital and firm performance: a dynamic relationship in crisis
time, Procedia Economics and Finance, 6, 137-144.

Sveiby, K. E. (1997) The intangible assets monitor, Journal of Human Resource Costing and
Accounting, 2 (1), 73-97.
Tan, H.P., Plowman, D. and Hancock, P. (2007) Intellectual capital and financial returns of
companies, Journal of Intellectual Capital, 8 (1), 76-95.

Tuncdogan, A., Boon, A., Mom, T. and Van Den Bosch, F. (2017) Management teams'
regulatory foci and organizational units' exploratory innovation: the mediating role of
coordination, Long Range Planning, 50 (2017), 621-365.
Van Dam, K., Oreg, S. and Schyns, B. (2008) Daily work contexts and resistance to
organizational change: the role of leader-member exchange, development climate, and
change process characteristics, Applied Psychology, 57 (2), 313-334.

105
Watt, S., Simpson, C., McKillop, C. and Nunn, V. (2002) Electronic course surveys: does
automating feedback and reporting give better results?, Assessment & Evaluation in
Higher Education, 27 (4), 325-337.
Shah, K. (2018) 5 top drug biotech merger and acquisition targets for 2019, Zacks,10 December.
Available: http://www.zacks.com/stock/news/342034/5-top-drugbiotech-merger-am-
acquisition-targets-for-2019 (Accessed 25 August 2019).
Zhang, X. and Stening, B. (2013) Post-acquisition integration: a two-level framework lessons
from integration management of cross-border acquisitions in the global automobile
industry, Advances in Mergers and Acquisitions, 12, 75-111.

106
Appendix

107
Survey Questionnaire

Default Question Block

This survey is intended to capture the views of regulatory professionals managing post-merger
integration of the regulatory affairs function. This survey will probe how companies have put
into place their regulatory leadership structures and subordinate teams. Your participation is
voluntary and your responses will be confidential.

Responses will not be identified by individual, they will be compiled and analyzed as a group.
If you do not wish to answer a question, you are allowed to skip it. Your time spent on taking
this survey is greatly appreciated.
Please focus on only one merger or acquisition transaction experience.

Which statement describes your organization's role in the Merger & Acquisition transaction?

Did the acquisition or merger involve a company outside the United States?

Which statement best describes the size of your organization prior to participating or
engaging in the transaction?

Acquirer
Acquired
I have not been part of a merger/acquisition
Yes, the acquirer
Yes, the acquired
Yes, both
No
Small (Companies with 1 - 200 employees)
Medium (Companies with 201 - 5,000 employees)
Large (Companies with greater than 5,000 employees)

108
Which statement best describes the medical product sector in which you worked at the time
of the merger or acquisition transaction?

What title would best describe your responsibilities at the time of the Merger & Acquisition
transaction?

Were changes made to existing regulatory leadership (e.g. C-Suite, VP, Director. Manager
levels) as a result of the transaction?

Did the acquiring entity's transition team select regulatory leadership (at the level of
executive/senior director or above) from their network of colleagues with whom they have
worked previously?

Pharmaceuticals
Medical Devices
Biotechnology
Consulting
Other (reduced harm tobacco alternatives, combination products, cosmetics, digital health etc.)
Vice President / C-Suite
Director
Manager
Specialist / Associate
Other

Yes
No
All of the leadership
Most of the positions
About half of the positions
Only a few of the positions
Never
I do not know

109

How effective would you rate the new organization's ability to identify leadership who could
strategically drive regulatory initiatives forward?

As the organizations merged, to what extent do you agree that incoming executives of the
newly formed entity take the time to learn about each organization's decision making
preferences or styles (i.e. reliance on objective information, subjective perceptions, gut
instinct, peer input etc)?

In your view, which of the following best describes the decision making preference of
regulatory management of the new entity?

Preference for objective information / data
Cannot answer

Extremely effective
Very effective
Moderately effective
Slightly effective
Not effective at all
Agree
Somewhat agree
Neither agree nor disagree
Somewhat disagree
Disagree
Cannot answer
Preference for subjective information (perceptions, gut instinct)

110
Which of the following best describes the preference of the new regulatory management
when decisions are made in conjunction with subordinate personnel on the regulatory
team?

Preference for proactive individuals who can challenge management on approaches
Preference for individuals who carry out tasks as dictated by management with little question
Preference for individuals with whom they have worked in the past in order to promote continuity in decision making
habits

Did decision making preferences of the newly formed regulatory management team differ
from the team before?

In your opinion, which of the following best describes the approach of management
regarding the restructuring of the regulatory team during the first year following the merger?

Management assembled a customized team after assessing the needs of the merged entity
Management kept the existing model and structure of the parent company largely intact and absorbed the acquisition
into it
Management assembled a team from previous individuals with whom they had worked in the past both in the
companies and outside of them
Management left the existing structure of the acquired company largely intact
Was a thorough assessment of existing competencies conducted for regulatory functions
before teams were put into place?

Yes
No
Cannot answer
Yes
No
I do not know

111
Did the transition team identify specific regulatory talents required for regulatory team
membership?

Was there a competency assessment tool, such as metrics or an objective measurement
framework, used to ensure that the newly merged regulatory team had high performing talent?

When was an assessment of regulatory staffing competencies carried out?

In your opinion, how would you rate the knowledge of the integration / transition team as it
relates to the following characteristics of the regulatory function of the merging companies?

Yes
No
Cannot answer
Yes
No
I do not know
During pre-merger preparation (diligence) phase
During post-merger integration phase
During both pre- and post-merger phases
Never to my knowlege
Cannot answer

112

Very knowledgeable
Moderately
knowledgeable
Slightly knowledgeable
Not knowledgeable
Weaknesses and strengths of

staffing capabilities and talent
Contributions of regulatory
managers and subordinate staff

in performing day-to-day activities
Allocation of needed resources
(including shared resources)

and infrastructure needed for
related processes / systems
Performance targets

Was a robust implementation plan developed to ensure adequate regulatory capabilities to
meet defined strategic goals with regard to compliance and work output?

Was there a plan put into place to ensure that standard operating procedures (SOP) matched
the needs of the merged regulatory function to ensure harmonized work output and continuity
of compliance state?

Did the merger result in layoff of regulatory personnel?

Strongly agree
Somewhat agree
Neither agree nor disagree
Somewhat disagree
Strongly disagree
Yes
No
Cannot Answer
Yes
No
I do not know

113
How satisfied were you with the regulatory team structure that was put into place during the
integration?

Reasonably satisfied
Neither satisfied nor dissatisfied
Dissatisfied
Do you think capabilities of the newly organized regulatory function will or has affected the
competitive standing of the organization for better or worse based on one or more of the
following performance indicators: compliance, speed to market, success of agency
submissions, global expansion efficiency etc?

In addition to skills and knowhow, an organization has a culture. Did the transition team try to
establish or maintain a regulatory team culture that would align with the overall company
culture?

To what extent do you agree that the company's leadership effectively communicated the
culture of the newly formed entity to personnel?

Better
About the same
Worse
Cannot judge
Yes
No
Cannot judge
Strongly agree
Somewhat agree
Neither agree nor disagree
Somewhat disagree
Strongly disagree

114
As the regulatory team was revised, how were existing regulatory personnel most
commonly evaluated to determine their organizational fit for continued membership in the
regulatory function of the merged entity?

Did you feel that there was a cultural divide between the merging entities?

Which of the merging companies had the dominant culture in the new organization?

Acquiring company
Acquired company
Neither, it was a blend of the two
How long did it take for the merged team to develop congruence?

Based on subjective intuition of regulatory management
Based on the judgments or opinions expressed by peers to regulatory management
Based on objective data obtained from documented sources, such as personnel records, performance reviews, and
analytical techniques
Yes
Maybe
No
Immediate-culture was already congruent
Less than a month
1-6 months
More than 6 months
Culture is still fractionated

115
How would you describe the prevailing cultural dynamics of the regulatory teams in the
merged entity?

Which of the following best describes how the merged culture of the combined entity
affected the retention of talent?

Which of the following best describes how the merged culture affected the recruitment of
talent?

Can you comment on the lessons learned from the cultural integration of the two
organizations?

Positively impacted the retention of essential regulatory talent
Negatively impacted the retention of essential regulatory talent
Cannot say
Positively impacted the recruitment of essential regulatory talent
Negatively impacted the recruitment of essential regulatory talent
Cannot say

116
Is there something that the companies could have done differently to maximize the effective
formation of the regulatory team?

As part of post-merger integration activities, did the merged entity leadership think
strategically about the level of commitment as a factor for ensuring the retention of regulatory
staff?

How would you rate the effectiveness of the merged entity in managing to retain regulatory
staff?

Yes
No
Cannot say
Very effective
Moderately effective
Not effective at all

117
How would you rate the effectiveness of the incentive tools for the retention of regulatory
talent for the merged company?

Very effective
Moderately
effective
Slightly effective Not effective Not utilized
Financial bonuses
Rewarding work
Desirable work culture
Competitive compensation
Optimal benefits package
Professional growth

opportunities
Establishment of strong team

leadership

Did some regulatory personnel leave the company without being encouraged to do so?

What do you believe are the reasons that regulatory personnel left voluntarily?

Yes
No
I do not know

118
Did those losses have a significant impact on the effectiveness of the regulatory team going
forward in terms of the quality of work output?

What would you recommend should be done differently to optimize retention?

Based on your experience with organizational restructuring that typically follows a merger or
acquisition, please provide one recommendation for improvement you believe should be made
a high priority in establishing an effective regulatory team structure during post-merger
integration.

You have reached the end of the survey. Thank you for your valuable insight. If you
are interested in receiving the results of the survey, please email Curtis Truesdale at
ctruesda@usc.edu.

Much better
Somewhat better
About the same
Somewhat worse
Much worse

Abstract (if available)

Abstract Mergers and acquisitions (M&A) frequently occur in the medical product industry to achieve a variety of business objectives. However, the success record is variable. The degree of success appears to be influenced by how well companies can manage the integration process for the merging companies. Historically, companies have approached the reorganization of the regulatory functions following an M&A transaction with varying levels of care. The challenges are particularly great for companies in the medical product industry, where differences can exist between the regulatory competencies and approaches of the two companies with respect to activities as varied as the oversight of premarket product development, regulatory agency interactions and other activities that have regulatory compliance implications. However, little systematic research has been directed at the industry practices associated with managing post-merger integration applicable to the highly specialized function of regulatory affairs. Using a survey tool and a modified implementation framework adapted from Hirsch (2019), this study probes how companies have put into place their new leadership structures and subordinate regulatory teams and closely examines the many influencing factors that affect the post-merger integration of teams. Shortcomings of the integration process have been identified and many of these appear not just due to poor strategy, but also to flawed execution and bias toward a specific organizational model. The insights gleaned from this study illuminate how the culture and characteristics of the work environment shape a climate that influence organizational change and its ability to endure.

Linked assets

University of Southern California Dissertations and Theses

Conceptually similar

PDF

The impact of FDA Patient-Focused Drug Development (PFDD) on US drug development strategies: a survey of views from pharmaceutical product companies

PDF

Regulatory CMC strategies for gene and cell therapies during mergers and acquisitions: a survey of industry views

PDF

“Regulatory” due diligence: a survey investigation of best practices in the medical products industry

PDF

Design control for software medical devices: an industry survey of views and experiences

PDF

Regulatory harmonization in a resource-limited setting: the World Health Organization Collaborative Procedure for Accelerated Registration

PDF

Implementation of tobacco regulatory science competencies in the tobacco centers of regulatory science (TCORS): stakeholder views

PDF

Regulatory agreements for drug development collaborations: practices in the medical products industry

PDF

Regulatory programs to foster medical product development: user experience in the United States and Japan

PDF

Evaluation of FDA-sponsor formal meetings on the development of cell and gene therapies: a survey of industry views

PDF

Views on global harmonization of pharmacopeial standards: a survey of key stakeholders

PDF

Regulatory dissonance in the global development of drug therapies: a case study of drug development in postmenopausal osteoporosis

PDF

Implementation of risk management in medical device companies: a survey analysis of current practices

PDF

Examining the regulatory framework for drug compounding: industry views and experiences

PDF

Organizational communication of regulatory intelligence: a survey of the medical device industry

PDF

U.S. veterinary drug shortages: industry views on potential changes to regulatory policy

PDF

Using telemetry to ensure safe and reliable medical device operation: experience with defibrillators and infusion pumps

PDF

Challenges in the implementation of Risk Evaluation Mitigation Strategies (REMS): a survey of industry views

PDF

Current practices in biocompatibility assessment of medical devices

PDF

Surveying stakeholder views on the current good laboratory practices (GLP) regulations and their proposed revisions

PDF

Implementation of unique device identification in the medical device industry: a survey of the change management experience

Asset Metadata

Creator Truesdale, Curtis Douglas (author)

Core Title Regulatory team development in post-merger integration: a survey of views from medical product companies

School School of Pharmacy

Degree Doctor of Regulatory Science

Degree Program Regulatory Science

Degree Conferral Date 2021-08

Publication Date 07/12/2021

Defense Date 06/15/2021

Tag 4C,acquisitions,affairs,Autonomous,capabilities,Change,commitment,connectedness,Creation,culture,diligence,Hirsch,Integration,Knowledge,leadership,Management,mergers,model,OAI-PMH Harvest,post-merger,readiness,regulatory,restructuring,strategy,teams,transfer,Value

Format application/pdf (imt)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Richmond, Frances J. (committee chair), Bain, Susan (committee member), Davies, Daryl (committee member), Pacifici, Eunjoo (committee member)

Creator Email ctruesda@usc.edu,curtistruesdale@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-oUC15293609

Unique identifier UC15293609

Legacy Identifier etd-TruesdaleC-9720

Document Type Dissertation

Format application/pdf (imt)

Rights Truesdale\, Curtis Douglas

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the author, as the original true and official version of the work, but does not grant the reader permission to use the work if the desired use is covered by copyright. It is the author, as rights holder, who must provide use permission if such use is covered by copyright. The original signature page accompanying the original submission of the work to the USC Libraries is retained by the USC Libraries and a copy of it may be obtained by authorized requesters contacting the repository e-mail address given.

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA

Repository Email cisadmin@lib.usc.edu