Pharmaceutical manufacturers require the following functions to operate successfully.  First, adequate chemists are required to actually mix product.  Only certified chemists can perform this job only.  Joe Formulary qualifies, and he plans to mix each batch of product himself with the help of an assistant chemist.  He  will be responsible for supervising the mixing of raw materials and overseeing the measuring of the raw materials inputs.  His assistant will perform the actual measuring and mixing responsibilities.  In addition, the assistant chemist will  keep a log of all activities related to the mixing process.  He also plans to give the assistant chemist the responsibility for placing orders for necessary raw materials.

Mr. Formulary plans to hire one of his former students for a job as assistant chemist.  There are several potential candidates and all have adequate qualifications.  Each has been notified of his or her candidacy and all have agreed to interview for the position.  He has a close relationship with all of these former students, as many were his teaching assistants at various times.  He plans to compensate this employee in the $35,000.00 - $50,000.00 ranges.

He also plans to hire one salesperson.  He has contacted one of his former students for information about the responsibilities and compensation levels for such a person.  Although that student was not interested in the position, he was able to refer several persons to the company.  He has determined that the sales person will be compensated at $35,000.00 per year, plus commission.  Based on sales estimates, the total budgeted amount for this person’s wage is $60,000.00.

He plans to hire one administrative assistant to maintain computer records regarding inventory, accounting, and correspondence.  This person will also be responsible for answering phones, reception work and clerical duties.  This administrative assistant will receive an annual salary of $40,000.00.

Finally, the company needs five people to handle the bottling, packaging, and shipping responsibilities for the product.  These positions can be filled by unskilled manual labor.  Plans are to pay these individuals $7.80 per hour or $15,000.00 per year.  For this, he has budgeted an annual total of $75,000.00.

He has budgeted a total of $365,000.00 for gross wages, leaving $85,000.00 as his salary for the first year.

He has a management background from his work at Pharmico, where he supervised a staff of 15, and from the university where he maintained a staff of three student assistants.  Because most of the people he plans to hire have industry experience, each will be helpful from a management perspective, especially as the Value Drugs business grows and expands it’s scope.