Management Accounting Research for CSL Biotechnology Limited

Question: Discuss about the Management Accounting Research for CSL Limited. Answer: Introduction For this research paper, CSL Limited is selected as a research company. CSL is a biotechnology or biopharmaceutical company that was founded in 1916. The company basically develops, produces, and trades products to save people from serious medical conditions. Its headquarters is located in Parkville, Melbourne, Victoria (CSL. 2017). Along with this, this research study would be valuable to analysis the strategic development of the organization. The study will show the mission, vision, and corporate strategies of the organization that play a major role in the growth and success of the business. This paper would be helpful to represent a critical analysis of the business practices of the organization. An environmental analysis will also be conducted. Furthermore, this research study will portray outlines culture and leadership style of CSL Limited. CSL: Development and Growth CSL Limited is the biggest biopharmaceutical company in Australia. The mission of CSL is to be a fast growing company in biological products to provide health benefits and health care services to all people of the world. Along with this, the vision of the company is to be the largest provider of biopharmaceutical products all around the world. Innovation, integrity, customer focus, collaboration, and excellent performance are the ethics values that are adopted by the organization to accomplish the goals and objectives of business in an ethical manner (CSL Limited. 1999). Moreover, CSL limited take into considerations mainly four areas as its core competences. These four areas are plasma therapies, recombinant proteins, vaccines licensing, and iscomatrix adjuvant. Also, one of the core competencies that the company has developed in past years is the competence to store as well as transport pharmaceuticals products under strict temperature control circumstances. As a consequence, CSL has become a key distributor of cold chain vaccine within the territory states of nation. On the other hand, CSL adopted and implemented numerous effective corporate strategies for the growth and success of the business. For case, CSL adopted and implemented differentiation strategy (Porters Generic Strategies) to expand its business in both local and global market. With the help of this differentiation strategy, CSL limited expanded its production competence of pharmaceutical products to fulfil the increased global demand in an appropriate manner. Along with this, the organization implemented strategic partnership strategy to expand its business in the international market (Rodionova, Conzelmann, Maraskovsky, Hess, Kirsch, Giese, Ho, Zller, Dreger and Luft, 2007). CSL developed strong relationship with chemical companies and academic institution to trade its products in different areas of the nations. The organization made alliances with differ industries as well as suppliers to build the value of its products. These two are the major strategies that are deployed by CSL in the previous years. In addition to this, the organization is still using both differentiation strategy and strategic partnership strategy as the core strategies of business. Moreover, CSL knows very well that the current business era is the competitive era. It needs to adopt and implement more effective strategies to gain competitive advantages over the competitors. So, CSL adopted and implements cost leadership strategy and focus strategy as its current strategies (Barnwell and Best, 2008). Thus, it can be assumed that Michael Porters three generic strategies such as: cost leadership strategy, differentiation strategy focus strategy and strategic partnership strategy are major corporate strategies that are used by the organization to accomplish its goals and objectives in an appropriate manner. Criticisms of the Business Practices of CSL Limited CSL is doing good and making all its possible efforts to its continuous endurance in the marketplace. But, the company has pursued some strategies / tactics that have become the subject of critics. The first criticism is related to the manufacturing practices of the organization. As per the report of the US FDA (Food and Drug Administration), the manufacturing practices of CSL can be seen a multitude of manufacturing faults. The organization used obnoxious conditions as well as practices to make vaccines. The FDA further stated that, the company is engaged in inadequate analysis; and therefore does not check raw material and products in a proper manner (Hall, 2011). This can be considered the major business practice that was widely criticized by people of different nations. They were not accepting that, CSL Australia's biggest company can perform such business activities only to improve the profitability of business. Consequently, the FDA warned to the organization to fix all its con cerns related to manufacturing practices. The FDA stated that if CSL does not fix these issues then it will suspend the licence of the company. For this reason, the company would not be able to develop, produce and trade its products in the marketplace. After this warning, CSL is making all its possible efforts to fix errors in the manufacturing process and to produce high-quality products in a proper manner (CSL Limited. 2012). On the other hand, the pricing strategies or practices of CSL got lots of critics in past years. Due to the increased popularity and market share, the organization began to charge high prices for its products including vaccines and health products. Moreover, the organization started to offer cheap quality products at higher costs. In this situation, it started to decline its brand image in the eyes of its customers and business associations. The market share of the company began to decline. This is the biggest mistake that CSL made by performing its business practices. As a consequence, the customers of CSL start to move towards other companies that may provide high quality products at lower costs. By considering its decreased profitability and market share, CSL again adopted as well as implemented low cost strategies for the future growth of the business (FatProphets. 2012). At the moment, company is dealing its products at fair prices; and therefore competent to expand its brand im age in both national and international markets. CSL: Environmental Analysis Environmental analysis is one of the best strategic tools that play a major role to recognize all the external as well as internal elements/ factors that may affect the performance of business organizations. Moreover, PESTLE analysis, SWOT analysis, Competitor analysis, etc. are the major techniques that business firms commonly used to conduct environmental analysis in an effective manner. PESTLE Analysis: PESTLE analysis evaluates the macro environmental factors such as: political, economic, social, technological, legal and environmental factors that existing in the economy of the nation in which an organization operates its business (Murray-Webster, 2010). The pestle analysis of CSL is as below: Political: CSL limited operates its business in a highly regulated business environment. The government of the nation is very strict towards the healthcare industry. Economic: The economic factors such as: inflation rate, interest rate, and income level may affect the future growth of the CSL (Abdullah and Shamsher, 2011). Social/ Socio-cultural: The increasing aging population could offer various opportunities as well as threats to the pharmaceutical industry in upcoming years. It is because of due to the advanced social networking technologies, people are becoming more educated. There can be seen a continuous change in the demand of the population. Technological: The advanced technological development is the basic need of CSL limited. It is because of the innovative technological development will create new business prospects to the pharmaceutical industry in terms of therapy systems as well as service provisions (Ku?a, Mareov, Penhaker and Selamat, 2015). Legal: CSL limited is obliged to follow strict rules and regulations to protect the people from dangerous products. Environmental: CSL generates toxins at the time of the production of pharmaceutical products. These toxins are dangerous to environment of the nation. So, it is obliged to develop effective corporate social responsibility programs to protect the environment in which it survives. SWOT Analysis: SWOT analysis identifies and analyzes the internal factors (Strengths Weaknesses) and external factors (Opportunities Threats) that may influence the growth of business in either positive or negative manner. Moreover, SWOT analysis of CSL is given in the below table: Strengths Weaknesses Fastest growing industry Reliable brand Broad research development capacity Operates in the niche segment of anti-venom, vaccines, genetics, and so on (Hoq and Ahsan, 2013). Availability of rare products including anti-venom, vaccines, blood plasma, etc. Require huge money to invest Requirement of advanced technologies (Plunkett, 2008). Face ethical issues in the field of genetics Opportunities Threats Increasing knowledge about uses of enzymes, stem cells, and so on. Continuous growing industry Alliances with hospitals to promote the procedure of stem cells (Ku?a, Mareov, Penhaker and Selamat, 2015). Use of advance technologies like nanotechnology to develop and produce products Strict rules regulations Need of skilled labor Economic Collapse Lots of competitors such as: Peptech, Life Therapecutics, Pharmasynth, etc. (Bertolini, Goss and Curling, 2012). Organizational Culture Leadership Style CSL limited is a biopharmaceutical company. The company needs the support of all the people who work in the organization. CSL involve all the members in its decision making process. It deals with people of different cultures. The organization is well-known for its value-based culture (CSL Limited. 2012). Along with this, CSL mainly focuses on ethics and values within the organization. Integrity and customer focus are the major values that are considered by the organization in its decision making process. Moreover, it emphasises on CSR (Corporate Social Responsibility) to conduct its business in a more ethical manner. It performs corporate social responsibilities to fulfill its duties towards the society and environment in which it exists. The company believes that to be responsible is essential to the sustainability of the company (McShane, Olekalns, Newman and Travaglione, 2015). On the other hand, the organization provides a positive working environment to its employees. It develops a culture of mutual trust and respect to reduce the chance of conflicts among the members of different cultures. Moreover, CSL maintains the highest standards highest quality during all the stages of the PLC (product life cycle) to ensures that its products and therapies are safe. In view of that, the organizational culture of the organization is based on ethics values. It operates its business in a more responsible and in an ethical manner. Along with this, CSL adopted democratic leadership style as its core leadership style. It is because of the organization involves all its members in the decision making process (CSL Limited. 2012). Moreover, all the members are free to make direct communication with the top management of the company. The organization culture of CSL is value based; and this leadership style involves justice, competence, intellect, honesty, etc. to support the structure of the organization. Hence, it can be assumed that, CSL has adopted and implement the best culture as well as leadership style for the growth and success of the organization. Conclusion On the premises of the above analysis, CSL is doing well in todays more complex as well as competitive business environment. It focuses on its mission and vision; and performs all the business activities accordingly. Along with this, CSL adopted and implement Porters generic strategies to accomplish goals and objectives related to the business. These generic strategies play a significant role in the growth and success of the business. Furthermore, it is also examined that, CSL made use of unethical business practices; and therefore it got lots of criticisms in marketplace. But, further, it made its efforts to gain its lost market image once more. Moreover, there are numerous opportunities exist in the market that CSL cam capture for the future growth of the organization. Also, the organization structure as well as leadership style of the company is totally based on ethics values. As a consequence, CSL performs all its business activities in a fair and an ethical manner. References Abdullah, M.N. and Shamsher, R. (2011). A study on the impact of PEST analysis on the pharmaceutical sector: the Bangladesh context. Journal of Modern Accounting and Auditing, 7(12), p.1446. Barnwell, H. and Best, N. 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