Business Considerations - Fundamentals of Industrial Chemistry: Pharmaceuticals, Polymers, and Business - page 68

whether to move the project into the next stage, with the ultimate stage being
commercialization. The overall goal is to pick the best projects based upon
defined objective criteria. However there is an added major benefit. Even
good projects that do not go through a similar process can sometimes be
slowed because there is not buy-in throughout the organization. R&D might
champion a good project and work with marketing to continue development
and then at the end manufacturing may balk and throw up roadblocks
preventing commercialization. The Stage-Gate™ process ensures that the
different functions are involved with the decision-making throughout. This
helps immensely with final buy-in across the organization.
6.4 ORGANIZATION
In smaller companies, the way resources are organized is less critical but
larger companies need to organize to maximize efficiencies. Two basic
options are to organize by business or by function. When organized by
business, everyone in the business group has a common direction and focus
toward the business. The terms vary from company to company and even
within a company based upon size of the business; it could be called a
business group, business department, business division, etc. However, the
business headsets the direction and everyone in the organization is held to that
direction. This has the advantage in that there is a clear focus for individuals
working within the business. Because they all work for the same business
head, there is good cooperation between R&D, manufacturing, marketing and
sales. Although organization by business may be best for that particular busi-
ness, it may not be best for the overall company. Different businesses within
a company do not have a strong motivation to help each other. In extreme
situations, it can be competitive to the point of one business trying to take
sales from another business even when they are part of the same company.
Therefore, some companies organize by function with all sales people
reporting to the same sales manager, all manufacturing personnel reporting to
the manufacturing manager, and so forth. Again the titles vary from company
to company and the head of sales may be a vice president of sales, a sales
director, a sales manager, etc. but the entire sales organization will report to
this person. This organization by function has the advantage that a unified
approach is presented by the sales force to external customers. Similarly,
manufacturing may work together to maximize capacity utilization and R&D
may work together to better share knowledge and talents across a wider
variety of projects. The pitfall is that groups can lose focus on the overall
business needs. The manufacturing group is aligned with each other and the
goals of the manufacturing manager but these may not be aligned with the