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Rowe, Cases in Leadership 5e
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Case Note
Case 6.2: Goran Kapicic at Actavis China
Professor Lowe Joo Yong wrote this teaching note as an aid to instructors in the classroom use
of the case Goran Kapicic at Actavis China, No. 9B13C001. This teaching note should not be
used in any way that would prejudice the future use of the case.
Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or
transmission without its written permission. Reproduction of this material is not covered under
Teaching Note
Synopsis
As the managing director of Actavis China, Goran Kapicic turns a loss-making company into a
profitable one.
Swiss-based generic drug manufacturer Actavis entered the Chinese market through the
acquisition of U.S.-based Alphapharma’s operations in China. These factories had previously
been owned by the Australian firm Faulding, which bought them from Foshan Pharmaceutical, a
Instructor Resource
Rowe, Cases in Leadership 5e
SAGE Publications, Inc., 2019
Through his leadership, Kapicic changed the organizational culture at Actavis and
developed in his people a responsible and proactive attitude towards work. During this time of
flux, Kapicic had to make many difficult personnel decisions, including the removal of certain
senior employees who resisted the necessary changes.
Teaching Objectives
This case enables students to learn about leadership and, in particular, about leading and
managing change. Substantial opportunities exist for students to learn about international and
global management—specifically about doing business in China. This case also raises the
Instructor Resource
Rowe, Cases in Leadership 5e
SAGE Publications, Inc., 2019
Positioning of This Case
This case is suitable for undergraduate or MBA classes on leadership, change management,
organizational culture, human resources management, international and China business, and
cross-cultural competencies.
Suggested Readings
• China’s pharmaceutical industry—Poised for the Giant Leap. (2011). Retrieved February,
15, 2013 from www.kpmg.com/cn/en/issuesandinsights/articlespublications/pages/china-
pharmaceutical-201106.aspx.
• Watkins, M. D. (2009). The international move challenge: A leader’s guide to navigating
this important career transition. Boston, MA: Harvard Business Publishing.
• Kotter, J. (2007). Leading change: Why transformation efforts fail, Boston, MA: Harvard
Business Publishing.
Assignment Questions
1. Identify the factors that contributed to Kapicic’s successful turn-around of the company.
2. Critically discuss Kapicic’s leadership style.
3. Kapicic obviously places much emphasis on staff development. How should he manage
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Rowe, Cases in Leadership 5e
SAGE Publications, Inc., 2019
Suggested Teaching Plan
The class can begin with some general warm-up questions wherein the students can be asked
about their own cross-cultural experiences, either from their work experiences or from non-work
activities, such as student exchange programs. They should be encouraged to talk about the
Analysis
1. Identify the factors that contributed to Kapicic’s successful turnaround of the company.
This question can be analyzed from a few angles.
Kapicic’s Career History and Experiences
Kapicic has spent his entire career in the pharmaceutical industry, and thus he has developed
critical experiences and depth of knowledge of the industry. He rose through the ranks and
gained a keen understanding of the business. He has also worked for some of the biggest names
in the industry, namely, Pliva, Barr Labs and Teva. Kapicic has spent most of his career in
Instructor Resource
Rowe, Cases in Leadership 5e
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Management of People
Kapicic’s personal leadership style won over his staff at all levels. His approach was non-
directive and empowering, informal and personable, which offered a refreshing change to his
employees who were used to the more traditional, formal and directive leadership style typical in
most Chinese firms. Kapicic was also able to change the way his people worked—from being
Establishing a Strong Leadership Team
It would be fair to say that Kapicic’s efforts could not have succeeded without the support of a
very strong leadership team. Recognizing this fact, Kapicic was quick to establish a capable
leadership team in a short time. Further, credit must be given to Kapicic for his ability to identify
and attract talented people. Having a core team whose members were not only capable but who
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Rowe, Cases in Leadership 5e
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2. Critically discuss Kapicic’s leadership style.
Kapicic’s informal and personal leadership style was welcomed by his employees, who were
more familiar with the typical Chinese style of leadership, which was characterized by a high
level of power distance. Even Kapicic’s personal driver called him by his first name.
3. Kapicic obviously places much emphasis on staff development. How should he manage
this effort when the company operates in a highly competitive environment with low
margins?
Many corporate leaders face the issue of trying to decide how much of the firm’s hard-earned
profits should be used for staff development. Prior to Kapicic’s arrival, Actavis China’s HR
4. How will news of the acquisition by Watson affect the employees of Actavis China? Is
there anything Kapicic can do in advance so his people will be better prepared?
As with most acquisitions, the biggest fear in employees’ minds concerns the loss of their jobs.
News of mergers and acquisitions (M&As) can affect employee morale very quickly. Adding to
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What Happened
The case writer worked on this case from February 2012 to April 2012, when the announcement
of Watson’s takeover of Actavis was announced. While waiting for the takeover to be formally
completed, Watson issued an embargo on information-sharing. Although Kapicic was privy to
some information pertaining to the future of Actavis and Watson in China, he was unable to
release the details to his employees or to the case writer.
