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Review this scenario. Drug Company CRZ is notified that its new anti-depressant drug, “Interplay,” is causing its patients to experience hallucinations and serious heart palpitations. The FDA issues a recall and investigation. Company CRZ reviews the formula and invests $95 million in new research and development. Five of the scientists go to the department head and state that they believe the new version of the drug will actually be worse than the older version, and that the drug needs to be scrapped entirely.

The company has already announced to their shareholders they expect FDA approval in the next 6 months, so he orders them back to the drawing board, and gets authority for another $85 million in R&D. Interplay gets final approval from the FDA in 6 months, and the new medication releases to the public. The department head is promoted to Executive Vice President of the company. In 6 months, the drug is determined to have killed 6% of its users and is being called the “new LSD of the 21st Century.” In the debriefing stage, the ex-Executive VP is heard to say, “We had put so much $$ into it, I just had to see this through to fruition.”

Which of the following statements is most applicable and appropriate to use in this situation? (Points: . (TCO C) The Burke-Litwin model states that there are four transformational factors of change. Identify the answer below which contains at least three of those factors. (Points: 7)

Paper For Above instruction

The scenario involving Drug Company CRZ's development and release of the controversial anti-depressant drug "Interplay" exemplifies critical issues in organizational change, ethical decision-making, and leadership behaviors within the framework of Burke-Litwin's model of organizational change. The model identifies twelve dimensions across transformational and transactional factors that influence organizational performance and change. Focusing on the transformational factors, at least three relevant ones in this context are leadership, organizational culture, and external environment.

First, leadership plays a pivotal role in this scenario. The company's leadership, especially the department head promoted to Executive Vice President, demonstrates a fixation on the fruition of their investment, despite accumulating evidence of the drug's severe adverse effects and mounting deaths. Their decision to push forward with the drug's release, driven by the significant financial expenditures ($95 million plus another $85 million invested in R&D), reflects a leadership behavior driven by financial commitment and risk tolerance. This demonstrates how leadership influence can override ethical considerations and scientific warnings—highlighting how leaders can embody a transformational influence that shapes organizational responses to crises.

Second, organizational culture is vividly illustrated in this case. The culture appears to prioritize shareholder value and the completion of projects regardless of emerging evidence of harm. The attitude of the ex-Executive VP, who admits to fulfilling a financial goal at the expense of patient safety, exemplifies a culture that values monetary success over ethical standards and safety protocols. Such a culture fosters risky decision-making and complacency regarding scientific and ethical warnings, ultimately leading to catastrophic outcomes. This aligns with Burke-Litwin’s emphasis that organizational culture significantly impacts organizational change processes and outcomes.

Third, the external environment significantly influences this scenario. Regulatory bodies like the FDA are critical external forces that impact drug approval processes, influence organizational behaviors, and can impose sanctions or recalls based on safety data. The initial FDA warning and recall instigated a costly re-evaluation and redesign of the drug, illustrating the power of external regulatory forces to shape organizational change. Despite the external pressure, the company’s internal decision to push forward reflects a misalignment with external safety standards, highlighting the consequences of neglecting external environmental cues in strategic decision-making.

In conclusion, this scenario encapsulates the complex interplay of transformational factors outlined by Burke-Litwin's model—leadership, organizational culture, and external environment—that influence organizational change, risk management, and ethical standards. Effective change management in similar organizations requires leaders to balance financial goals with safety and ethics, cultivate a culture of integrity, and remain responsive to external regulatory cues. The failure to align these transformational factors contributed to the tragedy, underscoring the importance of integrated leadership and culture considerations in organizational development and change initiatives.

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