A COMPREHENSIVE REPORT ON SUCCESSION PLANNING

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KASB INSTITUTE OF TECHNOLOGY

MBA WEEKEND

METHODS IN BUSINESS RESEARCH

RESEARCH REPORT ON

“EFFECT OF SUCCESSION PLANNING”

SUBMITTED BY: COURSE INCHARGE:

S.M.FURQAN SH. ASIM ATHAR.

I.D. # 2114

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Dedicated to,

My beloved parents,

most respected teacher Asim Athar

and all the colleagues of my class

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EMERGENCE OF SUCCESSION PLANNING INHEALTH CARE UNITS.

A CASE STUDY OF BARRETT HODGSON PAKISTAN(PVT.) LTD.

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PREFACE

I would like to express my gratitude to all those who gave me the possibility to

complete this research. I am deeply indebted to my supervisor Mr. Asim Atharwhose help, stimulating suggestions and encouragement helped me in all the time of

research for and writing of this report. My former colleagues from the class who

supported me in my research work. I want to thank them for all their help, support,

interest and valuable hints

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ACKNOWLEDGEMENT

We want to show our sincere gratitude to all those who made this study possible. First of all, we

are very thankful to the helpful staff and all the faculty of KASBIT management. One of the most

important tasks in every good study is its critical evaluation and feedback which was performed

by our supervisor Mr.Asim Athar. We are very thankful to our supervisor for investing his

precious time to discuss and criticize this study in depth, and explained the meaning of different

concepts and how to think when it comes to problem discussions and theoretical discussions.

All this, made our tasks very interesting and challenging for us, it also provided us an

opportunity to remove any flaws and weaknesses. So openly and warmly welcomed us to use

previous observations and take in-depth interviews and discussions about the work. Our sincere

thanks go to our family members, who indirectly participated in this study by encouraging and

supporting us.

S.M.FURQAN

I.D. # 2114.

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S. No Table of Content Page No

Abstract.

Acknowledgement.

CHAPTER 1: Company’s Background

1 1.1 Vision 11

2 1.2 Mission(s) 12

3 1.3 Strategy 13

5 1.4 Company History 14

6 1.5 products. 16-19

7 CHAPTER 2 : Literature Review

8 2.1 Succession Planning: A concept. 21

9 2.2Effect of Organizational Factors. 22

10 2.3Role of Succession practices. 22

11 2.4 Outcomes 22-23

12 2.5 Impact of Support and Training. 23-24

13 2.6 Impact on Strategic Activity. 24

14 2.7 Seek Transparency. 24

15 2.8 Knowledge of Executive Performance. 25

16 2.9 Succession vs. Replacement Planning. 25

17 2.10 Impact of Organizational Culture. 26

18 2.11 The successors challenge. 26

19 2.12 higher level of employer engagement. 27

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S. No Table of Content Page No

20 2.13 Effect of in group Biasing. 27

2.14 Problem Definition. 28

CHAPTER 3 :M e th o d o l ogy

22 3.1 Hypothesis. 30-31

23 3.2 Reasearch Design. 32

24 3.3 Sampling Design. 33-34

CHAPTER 4 : Data Analysis

25 4.1 Hypothesis Testing. 36-44

26 4.2 Hypothesis Observation. 45

CHAPTER 5 : Conclusion & Recommendation

27 5.1 Conclusion 47

28 5.2 Recommendation 48

References 49-50

Appendix: Questionnaire 51-56

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Abstract

Succession planning is a critical tool for ensuring lasting organizational improvement.However, the biggest challenge for most organizations is how to effect a well-designedchange of leadership without disrupting the organizational continuity. This papercontends and discusses a big issue in local organization that whether effectivesuccession planning lowers employees turnover or not as most organizations areon the verge of transition crisis. Based on the literature review, succession is a crisis inthe Local and the whole developed world. This paper suggests ways to cope with thelooming situation and gives reviews of employees working in different environment andcultures regarding what they think about succession planning, what factors areimportant for effective succession planning and how organizational problems canbe overcome by effective succession planning.

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Chapter 1

Company’s Background

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1.1 Vision

“TO MAKE BARRETT HODGSON AMONG TOP 10PHARMACEUTICAL COMPANIES OF PAKISTAN TILL 2014”

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1.2 Mission(s)

Barrett Hodgson Pakistan while maintaining itsentrepreneurial posture would remain sympathetic to ailing

humanity.

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1.3 Strategy

With dynamic leadership and strong and competentmanagement team Barrett Hodgson stands out as a highstandard, quality conscious company, which is comparableto any pharmaceutical concern in Pakistan and elsewhere.

To remain one of the fastest growing companies, BarrettHodgson is continuously introducing new and innovativeproducts along with rapid expansion in its sales force.

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1.4 Company History

Barrett Hodgson Pakistan (Private) Limited was incorporated in Pakistan on September2, 1992, and became operational on January 20, 1996.

Barrett Hodgson is a well known name in the pharmaceutical industry of Pakistan. TheCompany is also known due to its overseas partners in Pakistan. Barrett Hodgson hasmajor licensing arrangements with Astra (now Astrazeneca), Fujisawa (now Astellas)Japan, Allergan USA, Fujisawa (now Astellas) Deutschland, GmbH, Germany, andMIKA GmbH Germany.

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1.5 Quality policy

Barrett Hodgson is committed to implement and maintain the Quality ManagementSystem in order to obtain the consistent quality products and services to meet thecustomer, cGMP and the regulatory requirements.

Barrett Hodgson strives for continuous improvement through establishing and reviewingthe quality objectives, training to its employees, and adoption of latest techniques andthe implementation of documented procedures at all levels.

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1.6 Products

Barrett Hodgson has strong research based quality products to fulfill the needs ofmedical profession in quite a number of therapeutic areas such as respiratory, gastro-intestinal, cardiovascular, pain control, flu and cold, analgesics, antibiotics, ophthalmic(medical) and variety of other products. Barrett Hodgson will continue to introduceinnovative and exciting new products in the coming years not only in the existingtherapeutic segments but also in other areas such as CNS, antivirals, Metabolicdisorders and other high-tech products.

Following are some of the running products of BH,

Product Name Generic Therapeutic Class

ACICON SUSPENSION 60ml Famotidine Anti-ulcerants (H2-antagonists)

ACICON TABLET 20mg 10's Famotidine Anti-ulcerants (H2-antagonists)

ACICON TABLET 40mg 10's Famotidine Anti-ulcerants (H2-antagonists)

AEROKAST 10mgCHEWABLE TABLET 14's Montelukast sodium Leukotriene Receptor

AntogonistsAEROKAST 4mg TABLET

14's Montelukast sodium Leukotriene ReceptorAntogonists

AEROKAST 5mg TABLET14's Montelukast sodium Leukotriene Receptor

AntogonistsALPHAGAN OPHTHALMIC

SOLUTION 5ml Brimonidine tartrate Anti-glaucomas

AMPRESS 10mg TABLET20's Amlodipine besylate

Cardiovascular [CalciumAntagonists (Anti-hypertensives)]

AMPRESS 5mg TABLET 20's Amlodipine besylateCardiovascular [Calcium

Antagonists (Anti-hypertensives)]

BAMBEC TABLET 10mg 30's Bambuterol HCl Bronchodilators (long-acting)

BAMBEC TABLET 20mg 30's Bambuterol HCl Bronchodilators (long-acting)

BETAGAN LIQUIFILM 0.5% Levobunolol HCl 0.5% Anti-glaucomas

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STERILE 5ml

BETALOC ZOK 100mgTABLET 30's

Metoprolol succinate(ZOK formulation)

Cardiovascular(Betablocking agents,

plain)BINADEX OPHTHALMIC

DROPS 5ml Dexamethasone Ophthalmic Anti-inflammatory

BLEPHAMIDE LIQ. STR.OPHT SUSP 5ml

Sulphacetamide 10%,prednisolone acetate

0.2% & phenylephrine0.12%

Ophthalmic Anti-infectives& Anti-inflammatory

BLEPHAMIDE SOP STROPHT OINT 3.5gms

Sulphacetamide 10%,prednisolone acetate

0.2%


BRICANYL INHALER400doses Terbutaline sulphate Bronchodilators

BRICANYL INJECTION 5's Terbutaline sulphate BronchodilatorsBRICANYL SYRUP 60ml Terbutaline sulphate Bronchodilators

BRICANYL TABLET(BLISTER PACK) 100's Terbutaline sulphate Bronchodilators

CEFAMEZIN IV-IMINJECTION 250mg Cefazolin sodium

Cephalosporins -injectable (Systemic anti-

infectives)



infectives)



infectives)

CEFCOM INJECTION1000mg 1's Ceftazidime


infectives)

CEFCOM INJECTION 250mg1's Ceftazidime


infectives)

CEFCOM INJECTION 500mg1's Ceftazidime


infectives)

CEFIZOX IV-IM INJECTION1000mg Ceftizoxime sodium


infectives)CEFIZOX IV-IM INJECTION

500mg Ceftizoxime sodium Cephalosporins -injectable (Systemic anti-

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infectives)

CEFIZOX IV-IM INJECTION250mg Ceftizoxime sodium


infectives)CEFSPAN 400MG CAPSULE

5's Cefixime Cephalosporins - oral(Systemic anti-infectives)

CEFSPAN DS SUSPENSION30ml Cefixime Cephalosporins - oral

(Systemic anti-infectives)CEFSPAN SUSPENSION

30ml Cefixime Cephalosporins - oral(Systemic anti-infectives)

CHLOROPTIC OPHTHALMICSOLUTION 10ml Chloramphenicol Ophthalmic Anti-infectives

CIPOCAIN, STERILE EARDROPS 1's

Ciprofloxacin +Lignocaine base

Fluoroquinlones, TopicalAnti-Infective Local

AnastheticsCIPOTIC, STERILE EAR

DROPS 1's Ciprofloxacin Fluoroquinlones, TopicalAnti-Infective

CIPOTIC-D, STERILE EARDROPS 1's

Ciprofloxacin +dexamethasone

Fluoroquinlones, TopicalAnti-Infective + Steriod

CLOTNIL 75mg TABLET 10's Clopidogrel (asclopidogrel bisulphate)

ADP RECEP ANTAG PLATINH (B01C2)

DIABOLD 1mg TABLET 20's Glimepiride Anti-DiabeticsSulfonylureas




DOMEL SUSPENSION 60ml Domperidone Gastrointestinal(Gastroprokinetics)

DOMEL TABLET 50's Domperidone maleate Gastrointestinal(Gastroprokinetics)

ERADEP 20mg TABLET 14's CitalopramAnti-depressants (SSRI-Selective SerotoninReuptake Inhibitors)

ESEGROW SUSPENSION 60ml

Ossein Microcrystallinehydroxyapatite

Calcium Supplement

ESEGROW TABLET 30's Ossein Microcrystallinehydroxyapatite

Calcium Supplement

EXOCIN OPHTHALMICSOLUTION 5ml Ofloxacin Ophthalmic Anti-infectives

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EXOCIN S.O.POPHTHALMIC OINTMENT

STERILE 3.5gmOfloxacin Ophthalmic Anti-infectives

EYEBRADEX EYE DROPS5ml

Tobramycin 0.3% &Dexamethasone 0.1%


EYEBREX OPHTHALMICSOLUTION 5ml Tobramycin Ophthalmic Anti-infectives

FEBROL DS SUSPENSION60ml Paracetamol Non-Narcotic Analgesics

FEBROL SUSPENSION 60ml Paracetamol Non-Narcotic AnalgesicsFEBROL TABLET 200's Paracetamol Non-Narcotic AnalgesicsFEBROL XTRA TABLET

100'sParacetamol +

CaffeineNon-Narcotic Analgesics

FML FORTE LIQ. STR.OPHT. SUSP 5ml

Fluorometholone0.25%

Ophthalmic Anti-inflammatory

FML LIQUIFILM STR. OPHT.SUSP. 5ml Fluorometholone 0.1% Ophthalmic Anti-

inflammatoryFML NEO LIQ. STR. OPHT.

DROPS 5mlFluorometholone 0.1%

& Neomycin 0.5%Ophthalmic steroids &

Anti-infectives

GetSet 10mg Capsule 14's Sibutraminehydrochloride

Anti-obesity preparations

GetSet 15mg Capsule 14's Sibutraminehydrochloride

Anti-obesity preparations

GIXER ORAL SOLUTION60ml Cetirizine HCl Anti-Histamine Selective

H1 receptor antagonists

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Chapter 2

Literature Review

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2.1 Succession Planning: A ConceptHealthcare organizations, in particular, may stand to benefit from effective successionplanning, for several reasons. For one, healthcare organizations are complex and highlypolitical environments; as such, it can take considerable time and effort for outsiders tolearn to navigate them. Additionally, many employees are drawn to the healthcare fieldat least in part for its stability and predictability. Smooth transitions between top-levelleaders can assist in maintaining this stability, in fact and appearance, at all times.

Integrated model of succession planning process.

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2.2 Effect of Organizational factorsThe organizational environment significantly influences the succession planning process(e.g., Cannella & Lubatkin, 1993). The strongest influence on succession planning ishistorical precedent (Ocasio, 1999): quite simply, succession planning is most likely totake the form of prior approaches, or lack thereof. Assuming that succession planning istaking place, the specifics of the process will be affected by the other environmentalfactors listed in Figure

According to author, succession planning strategy varies with organization toorganization. Author believed that various factors are there in organization thatinfluences succession planning.

2.3 Role of Succession practicesAlthough succession planning practices vary considerably from organization toorganization, an underlying structure common to all can be identified.

Organizations differ in terms of the extent to which responsibility for candidateidentification rests with the CEO versus the Board Chair, or in combination with otherkey stakeholders (Schleifer & Summers, 1988; Vancil, 1987). In terms of who iseligible for consideration, hospitals may employ “first-cut” criteria for experience (e.g., acertain number of years in an executive leadership position) and education (e.g., anM.D. and/or MBA/MHA/MPH). The identification process itself may vary from highlyinformal to highly structured; the latter may include formal assessment processes usingobjective outside counsel. Candidates may be identified from within the organization, oroutsiders can be brought in to assume a temporary role (e.g., EVP or COO) inanticipation of succeeding to the CEO role. Once the successor is identified, apreparation phase begins.

According to authors, succession practices depends on the position itself, according tothem planning in hospitals (health care units) depends on leadership positions, theirprofessional experiences, qualification, number of working experience in professionaldiscipline.

2.4 OutcomesThe ultimate goals of succession planning typically involve improved organizationalperformance. Studies of succession outcomes typically sought to evaluate the utility ofsuccession practice via study of, for example, perceptions of stability and financialperformance (Kotter, 1982). Although multi-organization evaluation studies ofsuccession planning remain relatively uncommon (for exceptions see Conger & Fulmer,2003; Karaevli & Hall, 2003), these evaluation studies have yielded a number of

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important findings, particularly in relation to the implications of internal versus externalsuccessors. External succession will often be interpreted as below-expectationsperformance on the part of the incumbent (Dyl, 1985; Friedman & Singh, 1989;Lorsch & MacIver, 1989) and/or fundamental differences between the executiveleadership and the board (Faith, Higgins, & Tollison, 1984).

According to authors, the ultimate results of succession planning are to increaseorganizational productivity although it is quiet difficult to measure the outcome ofsuccession panning.They believed that external succession is more debatable in organizations as comparedto internal succession.

Inside successors

• Greater likelihood to maintain currentstrategic vision• Leads to homogeneous groups because ofsimilarity in past experience andorganization tenure—morecohesive/communicate more frequently/highlevel of integration• More likely to follow in predecessor’sfootsteps

Outside successors

• Greater likelihood to experience significantstrategic change• Leads to more heterogeneous workgroup—challenge existing viewpoints/moresolutions• Represents new power base because offew ties to the old system

2.5 Impact of Support and TrainingEven though succession planning ensures a qualified applicant of new deans, strongsupport needs to be in place to retain them. One particularly beneficial support isfeedback from the dean’s immediate supervisor. Receiving performance feedbackneeds to be a regular occurrence; expectations need to be clearly articulated. Theindividual must be apprised of how evaluation will take place and what constitutessuccess. The duties of the role are extensive; it is imperative for a new dean to knowwhat responsibilities are priorities. Since much of a dean’s work is viewed subjectivelyby different constituents, it is important that dean’s supervisor provide objectiveevaluation of the duties performed (Wolverton, Wolverton and Gmelch 1999).

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Leadership can be very lonely. Ample opportunities to establish quality relationshipswith supervisors and other deans should be provided (Johnsrud, Heck and Rosser2000). Assistance in finding a mentor that can serve as a trusted advisor, provideinsights and direction, and offer ongoing feedback advised (Wolverton, Wolverton andGmelch 1999).

According to authors, proper feed back & Training of personnel helps organization totransit the deserving candidate to the key positions. Performance feed back helpemployees to groom themselves into most responsible organizational positions.

2.6 Impact on Strategic ActivityIt is important to link succession planning to the organization’s long-term strategic plans.Strategic planning identifies the capabilities required by the organization and its staff toachieve its objectives. Strategic plans should inform future needs around staffing, and inturn identify required capabilities, career progression, promotion processes, and thestrategies being used on and off-the-job to grow talent. (Paese 2002)

According to author, right succession planning lead to right strategic activities within theorganization. It helps to identify future staffing need, career progression etc.

2.7 Seek transparencyThere is evidence from best practice, as well as from research, that the successionprocess needs to be as transparent as possible Conger and Fulmer (2003) Inparticular, this requires good communications, clear policy and numerous opportunitiesfor the succession planning process to be reviewed to assist its continued development.If an organization is not open to regular review, for example, succession planning cancome to be seen as a highly political process. One symptom is when the views ofindividual managers around the capabilities of their staff are frequently at odds withadvice from other sources.

According to authors, succession planning should be transparent, it is necessary toavoid organizational biasness that every key position should be carefully evaluated andfilled by right person with consensus.

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2.8 Knowledge of ExecutivePerformance

The actions of executives are not perfectly observable. Also, outcomes (e.g. increasesin profit) are often driven partly by executives’ efforts and partly by external factors.Performance measurement systems need to accommodate the relative weightings ofagent actions and exogenous factors that may affect outcomes.In designing appropriate performance measures, recourse to the ‘informativenessPrinciple’3 is appropriate. Essentially, the use of performance metrics should be limitedto those that improve information about the actual performance of the executive.Bonuses that are based on performance metrics that cannot be tied back tomanagement effort are not appropriate. (Gibbons and Murphy 1990)

According to author, it is difficult to quantify actual performance of key position holders.The established HR assessments are not sufficient to evaluate the performance.

2.9 Succession versus ReplacementPlanning

Replacement planning is a means of managing for risks by simply replacing personnel(Rothwell, 1994). The term “replacement ready” is commonly used interchangeablywith “succession planning,” but the two concepts differ in a very crucial way. Successionplanning focuses on strategic and systematic capability and capacity readiness.Succession planning is strategic rather than reactive, using goal setting and analysis ofCapability together to develop a plan of action to make a successful strategic transitionfrom one qualified individual to his or her replacement. Formal succession planningembraces not only crisis-response replacement actions but also emphasizes a Strategicproactive philosophy (Fairfield-Sonn, 2001).In contrast; replacement planning is mainlya maintenance process. It is characterized by having no formal plan in place becausethe replacement planning focuses on damage control in response to some unexpectedhappening (Fairfield-Sonn, 2001).

According to authors, replacement and succession planning are quiet differentconcepts. Replacement is simply throw the person out the company, succession is

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rather a upraising the desired and motivated employee to the key position after doingcritical analysis of that person or employee.

2.10 Impact of Organizational CultureThe values, mission, and vision of an organization are artifacts of the organization’sculture. The values of the organization speak to the beliefs of the organization and areinfluenced by the people who make up the organization. The mission speaks to thepurpose of the organization. The vision speaks to the future goals of the organization.Fairfield-Sonn (2001)

The impact of culture becomes a critical piece when determining successors becausesuccessors may or may not embrace the norms of the culture of the organization forwhich they will become responsible.

Authors mentioning that organizational culture for successor a critical role in upgradingthe right person, it is important that culture should be professional and no dispute of anykind must be there in the result of succession planning Corse.

2.11 The Successor’s Challenge

For the successor, the visualization of his or her own career is often hard to imaginewithout some notion of his or her future fit in the current organization. This includesknowing the climbing frame in the structure of the organization in order to conceptualizea future career path (Gunz, 1989).

According to author it is also important to categorize and evaluate himself in theorganization that in which scenario he or she is going to fit or suitable.

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2.12 Higher Levels of EmployeeEngagementEmployees whose careers are being developed are more likely to report higher levels ofengagement. In other words, they are more likely to be committed to the organization,are more likely to take pride in their work, and are more likely to work hard at what theydo. (Perrin, 2006)

According to author, it is fruitful for the organization that its employee should remainloyal to company. Succession planning in right direction helps the organization toachieve the same.

2.13 Effect of In-group Biasing

One of the main effects of the differentiation of in-groups and out groups is the creationof in group bias or ethnocentrism which is the more positive evaluation of the in groupthan the out group (Sumner, 1906). The most direct impact of the positive evaluation ofthe in group is more resources tend to be allocated to the in group thus reinforcing thisin group belief. Thus, once receiving organizational endorsement such as through asuccession plan process, there could be a cumulating process of biasness. Also, withtaking into account Social Identity Theory it is easy to see why the in-group/out groupbiasing continues. Tajfel and Turner (1986) state that social identity is the self-conceptualization derived from emotionally significant groups.

According to author, biasing is a negative factor that can ruin the efficient process withinthe organization.

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2.14 Problem Definition

What practices should follow for effectivesuccession planning?

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Chapter 3

Methodology

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3.1 Hypothesis

Ho1: Increase in efficient succession planning do not

lower employee turnover.

HA1: Increase in efficient succession planning do lower

employee turnover.

Ho2: Increase in efficient succession planning do not

increase retention of employees.

Decrease employeeturnover

Increase EfficientsuccessionPlanning

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HA2: Increase in efficient succession planning do

increase retention of employees

Ho3: Higher supervisor supports do not increasesuccession planning.

HA3: Higher supervisor supports do increase successionplanning.

Ho4: There is no significant relationship between

succession planning and career development.

HA4: There is relationship between succession planning

and career development

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3.2 Research Design

Purpose of the StudyThis article reveals a Descriptive study.

Type of Investigation

It is a Causal study based on causes of succession planning and its effect.

The Researcher Interference

This study has moderate researcher interference.

Study Settings

It is a non- contrived study based on field experiment.

The Unit of Analysis

This study based on Individual unit of analysis.

Time Horizon

Its across-sectional time horizon based study.

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3.3 Sampling Design

Population: All employees of Element: Barrett Hodgson Regional Office Karachi Unit: having salary above 30,000 Extent: in Quality Assurance department working Time: at least two years.

Sampling Frame – list of all Quality Assurancedepartment Employees.

Sampling Unit – all employees having salary above30,000 and could be successor.

Sampling Method – Disproportionate

Sampling Size – 30

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Sampling Plan- I visit individually all the employees that are under mysampling frame, describe them my purpose and nature of study then collect datathrough questionnaire (shown in appendix)

Select the sample – My sample include all executives and seniorexecutive members who could be potential successors and having knowledge aboutbasic HRM functions.

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Chapter 4

Data Analysis

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4.1 Hypothesis Testing

Question No = 06 Employee Retention.

What do you think should be the main purpose(s) of succession management inthe organization?

To easily identify replacements to fill key positions

To develop employees for future

To achieve strategic goals of organization

To retain organizational talent for longer period

TOTAL 100

CHI-SQUARE (Goodness of Fit Test)

Observed Expected

Attributes Frequency Frequency (O-E) (O-E)2 (O-E)2/E

"O" "E"

To easily identify

replacements to fill key

positions01 7.5 -6.5 42.25 5.63

To develop employees for

future10

7.5

2.5 6.25 0.833

To achieve strategic goals

of organization01

7.5

-6.5 42.25 5.633

To retain organizational

talent for longer period18

7.5

10.5 110.25 14.7

Total 30 30 26.796

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Degree of Freedom D.F = (K-1)

Degree of Freedom D.F = (4-1)

D.F Degree of Freedom (df) = (3)

Level Of Significance

∞ = 0.05 ∞ = 0.01

Χ2 Cal = 26.796 Χ2 Cal = 26.796

Χ2 Tab =7.82 Χ2 Tab =11.34

∞ = 0.05

Χ2 Cal = 26.796 Χ2 Tab =7.82

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∞ = 0.01

Χ2 Cal = 26.796 Χ2Tab =11.34

H0 REJECTED

HA ACCEPTED

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Question No = 15 Supervisor support.

Do you think supervisor support is important in succession planning?

Yes No


Observed Expected


"O" "E"

YES 26 15 11 121 8.0666

NO 04 15 -11 121 8.0666

Total 30 30 16.133





∞ = 0.05 ∞ = 0.01

Χ2 Cal = 16.133 Χ2 Cal = 16.133

Χ2 Tab =3.84 Χ2 Tab =6.63

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∞ = 0.05

Χ2 Cal = 16.133 Χ2 Tab =3.84

∞ = 0.01

Χ2 Cal = 16.133 Χ2Tab =6.63

H0 REJECTED

HA ACCEPTED

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Question No = 16 Employee Turnover.

Is succession planning a good tool to decrease employee turn over?

Yes No


Observed Expected


"O" "E"

YES 23 15 08 64 4.266

NO 07 15 -08 64 4.266

Total 30 30 8.532





∞ = 0.05 ∞ = 0.01

Χ2 Cal = 8.532 Χ2 Cal = 8.532

Χ2 Tab =3.84 Χ2 Tab =6.63

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∞ = 0.05

Χ2 Cal = 8.532 Χ2 Tab =3.84

∞ = 0.01

Χ2 Cal = 8.532 Χ2Tab =6.63

H0 REJECTED

HA ACCEPTED

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Question No = 1 Career Development.

Do you think the development period should vary according to the level of theposition?

Yes No


Observed Expected


"O" "E"

YES 28 15 13 169 11.266

NO 02 15 -13 169 11.266

Total 30 30 22.533





∞ = 0.05 ∞ = 0.01

Χ2 Cal = 22.533 Χ2 Cal = 22.533

Χ2 Tab =3.84 Χ2 Tab =6.63

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∞ = 0.05

Χ2 Cal = 22.533 Χ2 Tab =3.84

∞ = 0.01

Χ2 Cal = 22.533 Χ2Tab =6.63

H0 REJECTED

HA ACCEPTED

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4.2 Hypothesis Analysis

At 0.05 level of significance, the calculated values of the entire four establishedhypothesis appear to be greater than tabulated values. The significant variationbetween calculated and tabulated values rejected the Null Hypothesis and acceptedthe Alternate Hypothesis.

It has also been checked at 0.01 level of significance he entire four establishedhypothesis appear to be greater than tabulated values. Hence we again reject the NullHypothesis and accept the Alternate Hypothesis.

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Chapter 5

Conclusions and Recommendations

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5.1 Conclusion

Succession Planning is an emerging concept in local scenario not only in health careunits but in other corporate as well. In developing countries it is considered one of theessential tool in HUMAN RESOURCE MANAGEMENT.

Retaining Employees

From the above chapters and data analysis it is crystal clear by applying statistical toolon established hypothesis that succession planning is an efficient to retain the smartorganizational talent. It helps management to discriminate between smart and hardworkers.

Employees Turnover.

Succession Planning is also helpful to reduce the employee turnover rate. According tomodern concept, organizations now consider their employees as important assets andthey try to retain their efficient employees.

Career Development.

It is also noted in the data analysis that career development directly relates withsuccession planning i.e. greater is the succession planning higher will be the careerdevelopment.

Supervisor Support.

Supervisor support plays an important role in efficient succession planning. Theprocedure and practices of succession planning should be transparent and clear toeach employee so that biasness and other illegal barriers would be checked andremoved. Potential successor should be elected with consensus decision made bymanagement.

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5.2 Recommendations

Barrett Hodgson is renowned pharmaceutical organization in Pakistan. It has strongmanufacturing and distribution network.

As far as this research is concerned, succession planning in BH is not as efficient as itshould be. In health care units it is essential to seek and retain their efficient employeesbecause in Pakistan more than 300 pharmaceutical units existed so if any organizationdo not meet the employee expectation, it is quiet obvious that the employee will switchfrom one firm to another. In this regard I found several recommendations in order toimprove its succession planning system,

Succession Planning guidelines should be clear to all employees so that eachemployee can evaluate himself/herself by own.

Succession planning guidelines should be periodically reviewed so that itremains up to date according to the changing trends of organization.

Potential successor should be well versed and knows the strategic goals of theorganization.

Succession planning is an open discipline to research especially in the field of healthcare units. Succession management contributes to the professional development ofmanagers by exposing them to different developmental experiences such as taskforces, job rotations, line-to-staff switches, and turnaround or fixit assignments. At theleadership level, executive succession helps organizations groom and select the nextgeneration of leaders for more responsible positions

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References.

Alexander, J. A. & Lee, S. D. (1996). The effects of CEO succession and tenure onfailure of rural community hospitals. Journal of Applied Behavioral Science, 32,70-88.

Axel, H. (1994). HR executive review: Succession planning. New York: ConferenceBoard.

Beeson, J. (2000). Succession planning. Leading-edge practices: What the bestcompanies are doing. Across the Board, pp 38-41.

Beeson, J. (1999). Succession planning: building the management corps. BusinessHorizons, 61-66.

Bernthal, P, & Wellins, R.S. (2003). Leadership forecast: 2003-2004. Retrieved March15, 2004, from http://www.ddiworld.com/pdf/CPGN50.pdf

Buckner, M., & Savenski, L. (1994). Succession planning. In W.R. Tracey (Eds.) Humanresource management and development handbook. New York: AMACOM.

Cannella, A. A., & Lubatkin, M. (1993). Succession as a sociopolitical process: Internalimpediments to outsider selection. Academy of Management Journal, 36, 763-793.

Carey, D. C. & Ogden, D. (2000). CEO Succession: A window on how boards can get itright when choosing a new chief executive. New York: Oxford University Press.

Conger, J. A., & Fulmer, R. M. (2003). Developing your leadership pipeline. HarvardBusiness Review, 81, 76-85.

Dyl, E. A. (1985). Reinganum on management succession. Administrative ScienceQuarterly, 30, 373-374.

Faith, R. L., Higgins, R. S., & Tollison, R. D. (1984). Managerial rents and outsiderecruitment in the Coasian firm. American Economic Review, 74, 660-672.

Freidman, S. D., & Singh, H. (1989). CEO succession events and stockholder reaction:The influence of context and event context. Academy of Management Journal,32, 718-744.

Garman, A. N., & Glawe, J. (2004). Research update: Succession planning. ConsultingPsychology Journal: Practice & Research, 56, 119-128.

Gomez-Mejia, L.R. and D.B. Balkin, 1992, Compensation, Organizational Strategy andFirmPerformance, Cincinnati, Southwestern.Hamel, G. and C.K. Prahalad, 1994, Competing for the Future, Cambridge, HarvardBusiness School Press.Holmstrom, B., 1979, ‘Moral Hazard and Observability’, Bell Journal of Economics, 10:74-91.Hyland, A. and N. Hooper, 2005, ‘Contract Chess: Banking Kings Look to theEndgame’,

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http://www.ddiworld.com/pdf/CPGN50.pdf

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Australian Financial Review, 4 March: 1.Jensen, M. and K. Murphy, 1990, ‘Performance Pay and Top Management Incentives’,Journal of Political Economy, 98: 225-264.Kroll, M.J., L.A. Toombs and H. Leavell, 1997, ‘Form of Control: A Critical DeterminantofAcquisition Performance and CEO Rewards’, Strategic Management Journal, 18: 85-96.Lambert, R.A., D.F. Larcker and K. Weigelt, 1993, ‘The Structure of OrganizationalIncentives’, Administrative Science Quarterly, 38: 438-461.McMillan, J., 1992, Games, Strategies and Managers, New York, Oxford UniversityPress.Milgrom, P. and J. Roberts, 1992, Economics, Organization and Management, NewJersey,Prentice-Hall.Porter, M., 1985, Competitive Advantage, New York, Free Press.Schumpeter, J., 1942, Capitalism, Socialism and Democracy, New York, Harper andRow.Shapiro, C. and H. Varian, 1999, Information Rules, Cambridge, Harvard BusinessSchoolPress.Tosi, H.L., J.P. Katz and L.R. Gomez-Mejia, 1997, ‘Disaggregating the AgencyContract: TheEffcets of Monitoring, Incentive Alignment and Term in Office on Agent DecisionMaking’The Academy of Management Journal, 40: 584-602.Tirole, J., 2001, ‘Corporate Governance’, Econometrica, 69(1): 1-35.

Karaevli, A., & Hall, D. T. (2003). Growing leaders for turbulent times: Is successionplanning up to the challenge? Organizational Dynamics, 32, 62-79.Lorsch, J. W. &MacIver, E. (1989). Pawns or potentates: The reality of America’s

corporate boards. Boston: Harvard Business School Press.Metz, E. J. (1998). Designing succession systems for new competitive realities. Human

Resource Planning, 21, 31-37.Ocasio, W. (1999). Institutionalized action and corporate governance: The reliance on

rules of CEO succession. Administrative Science Quarterly, 44, 384-416.Thrall, T. H. & Hoppszallern, S. (2001). Leadership survey. Hospitals & HealthNetworks, 75,33-39.

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Appendix

QUESTIONNAIRE EMPLOYEES’ PERCEPTION OF SUCCESSION PLANNING &MANAGEMENT

This questionnaire is for business research purpose and for academic use only. Theresearcher is thankful for you participating in this process. All the information provided

would be kept confidential. Your time and effort are valued and appreciated.

Please answer the following questions by placing a check in the box which bestindicates your response & choose only single option.

PERSONAL INFORMATION.

Name__________________________________________________

Gender. ______________________________________

Age. ______________________________________

Working Experience.__________________________________________________

Employer Name. ___________________________

Mailing Address_____________________________________________

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Question 1: How long have you been employed to this organization?

0 - 5 years

6 - 10 years

11 - 15 years

16 - 21 years

21 years and more

Question 2: How important do you think it is for the organization a formal succession management

system?

Very Important

Important

Somewhat Important

Not Important

Question 4: In your opinion do you think it will be beneficial for the organization to implement a formal

succession management system?

Yes No

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Question 5: In your opinion, a succession management system would be successful at which managerial

level?

Tick Managerial level

Top Management level

Middle Management level

Lower Management level

At all Management level

Answer question 06& 07 by assigning numbers adjacent to each option so that the sumwould be exactly 100

Question 6: What do you think should be the main purpose(s) of succession management in the

organization?

To easily identify replacements to fill key positions

To develop employees for future

To achieve strategic goals of organization

To retain organizational talent for longer period

TOTAL 100

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Question 7: Please rate the following methods in terms of their effectiveness in identifying potential

successors?

Self-nomination

Performance Evaluation Ratings

Supervisor

Head of Department

TOTA L 100

Question 8: Please rank which of the following methods would be most effective in assessing

development need? (1-4, rank 1 show least preferable while 4 shows most preferable.)

Rank of Preference

Self Assessments ___________

Annual Performance Evaluation Ratings ___________

Only supervisor’s evaluation ___________

CEO evaluation ___________

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Question 9: Please rank the following activities in terms of their effectiveness in developing employees

(1-5, rank 1 show least preferable while 5 shows most preferable.)

Rank of Preference

Job Rotation ___________

Job Enlargement ___________

Job enrichment ___________

Coaching ___________

On job Training ___________

Question 10: Should personality tests be used to assess potential successors?

Yes No

Question 11: Do you think employees should be held totally responsible for their career plans?

Yes No

Question 12: Do you think the pharmaceuticals values efficiently enhanced learning and development?

Yes No

Question 13: Do you think the development period should vary according to the level of the position?

Yes No

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Question 14: Do you think the current employee promotion system is effective?

Yes No

Question 15: Do you think supervisor support is important in succession planning?

Yes No

Question 16: Is succession planning a good tool to decrease employee turn over?

Yes No

THANK YOU FOR YOUR PRECIOUS TIME.

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Documents

A COMPREHENSIVE REPORT ON SUCCESSION PLANNING