Johnson & Johnson Business - Case Study Example

Evaluation Report: ‘Johnson & Johnson’ Table of Contents Executive summary 2 Company Introduction 2 Research and Development 3 Business ethics 5 Financial situation 6 References 9 Executive summary The writing that follows takes into consideration ‘Johnson & Johnson’ company for the purpose of developing a report. The choice of company is made with extreme care, keeping in mind the fact that a company of such stature and history is likely to display exemplary features that can serve as the guiding principles for many other companies. An overview of the company’s profile is followed by a discussion that takes into consideration different aspects. Prime focus is laid on Research & Development, Business Ethics and Financial Aspects of the company. The discussion is based on facts and points out the deficiencies that were noted during the process of compilation of this report. Company Introduction Johnson & Johnson originated in 1886; three brothers by the name of James Wood Johnson, Robert Wood Johnson and Edward Mead Johnson founded the company in New Jersey, U.S. Johnson & Johnson is a leading company pertaining to the manufacture of healthcare products and is well-known for its customer friendly and employee friendly approach throughout the world (Lee 142-143). Its excellent reputation relates to its extremely rich values which translate into its core objectives viz “provide scientifically sound, high quality products and services to help heal, cure disease and improve the quality of life.” Having its customer base in more than 57 countries of the world, Johnson & Johnson employs more than a hundred thousand people which contributes to the diversity that prevails in the company. The company maintains a strong social profile by keeping in close touch with the consumers especially and with masses in general by playing an active role in undertakings that relate to the welfare of humanity as a whole. Johnson & Johnson’s contribution towards HIV/AIDS related research is one such example; other contributions are in the form of educational and cultural ventures. As far as the products are concerned, the company pays special attention to the extremely high quality that is central to its objectives. Considerable amount of time and fiscal resources are invested to develop products that are in close accordance to the expectations of the customers. Since the working of the company relates closely to healthcare profession, the company makes every effort to ensure that the health of its consumers is preserved at any cost. Research and Development Since its inception, the company has been involved in the research and development of a variety of cosmetic, medical and pharmaceutical products that have been contributory towards the health of people world over. While being innovative on one hand, the products have always revolved around the well-being of the consumers of the company. The company strictly follows the highest ethical standards during product development and it is for this reason that the vast majority of its products have a worldwide acceptability. In order to deliver meaningful outcomes, the company conducts research that contains all phases and strictly adheres to the process of research that is acceptable on a worldwide level. The companies related to Johnson & Johnson are forced to follow the Helsinki Declaration and the Report of Belmont (Janssen Research & Development n.p.). Since the vast majority of products relate to health, the company conducts clinical trials before the products are approved for production and marketing. The company allows the participants of the clinical trials to utilize the latest treatments for their benefits and in doing so participate in the research process that is carried along ethical lines. This demands that the potential benefits or risks of a medical device or a pharmaceutical product are explained to the participants before the process of research starts. Additionally, the company assures the participants and takes every necessary measure to ensure that the confidentiality of the participants is maintained at any cost. No participant of the research process is bound to complete the research; this confers the participants an additional level of freedom and protection in cases where they are not comfortable with the ongoing research process due to any reason. To add to the authenticity of the research process, Johnson & Johnson employs outside investigators to conduct clinical trials or to verify the findings of their own research. The findings of such ventures ensure delivery of unbiased results that not only authenticate the original research but also eliminate the chances of health related risk that may arise otherwise. Keeping in view the above scenario, it is safe to say that R&D in the company is a highly sensitive issue that is given a lot of importance. Since the quality of a product and it success or failure in the market depends largely on its development, the company is justified in opting to invest huge financial resources in this regard. One controversial thing in this regard may be the use of human subjects/participants to authenticate the findings of the research of the company. Although, the participants of the research are free to consent to or against participation, the unpredictable nature of the outcomes of medical experiments may place the lives of such individuals at considerable risk. The company should therefore adopt the practice of compensating the participants in the unfavorable event of damage to the body or life of the participants. Additionally, a mechanism to gain feedback from the market is essential to make sure that products that cause unwanted reactions are withdrawn from the market in a timely manner. Business ethics Johnson & Johnson follows strict ethical principles in matters of business. Consumer products of the company are marketed to distributors, general masses and retail outlets; this is a norm throughout the world. In contrast to such products, the pharmaceutical products are only distributed to health care professionals, wholesalers and the concerned retailers; the general public being dependent upon these agencies to get access to the products. A similar approach is also reserved for the sale of equipment that relates to diagnostics or other medical uses; the target of marketing being nurses, physicians, hospitals and clinical laboratories etc. Marketing related messages are developed keeping in view the audiences of the product under consideration. Media used for communication of this message may range from face-to-face interactions, online promotion, print-media promotions or in some cases social media, television and radio. The Advanced Medical Technology Association (AdvaMed) Code of Ethics forms the mainstay of Johnson & Johnson’s communication when health care professionals like physicians and nurses are the target audience (Johnson & Johnson 16). Other related codes of ethics are strictly adhered to when the audience changes. Since the company practices a direct-to-consumer approach for a wide range of its products, the ethical codes followed for this range of products may differ from those that are observed for products that demand prescription or medical advice for use. The company ensures that information related to its products is available for use by the medical community. Comprehensive and up-to-date information of clinical relevance is publicly announced and all the clinical trials that are conducted follow the legal requirements. Care is practiced while publishing the results of trials that are conducted during the research phase. A dedicated team of Health Care Compliance Officers has been developed by the company for the purpose of maintaining the highest standards in the industry. The role of these teams is to conduct risk assessments and to assess the quality of ongoing activities of the company. Additionally, their role is to maintain conformity between such activities and the prevailing procedures, policies, systems and resources of the region where business activity is being carried out. Keeping in view the aforementioned scenario, it is safe to assert that Johnson & Johnson aims to follow the ethical standards to the maximum extent possible. The company has been following it “Our Credo” philosophy to maintain its integrity in ethical terms. The 1982 Tylenol Cyanide poisoning incident that resulted in the death of seven individuals proved to be a test case for the company, where it managed to demonstrate prompt actions to resolve the issue (Jaques 6). How, the subsequent happenings point towards some facts that are not in alignment to ethical norms. A number of people who are dissatisfied with the products of the company have file suits, claiming that the products are not satisfactory or in some cases they have affected their lives (Voreacos, Nussbaum & Farrell 64). A vaginal mesh, for example, was found to have violated the safety standards, which resulted in disfiguration and serious injury to the users. Keeping in view these findings, one can safely conclude that although the company claims to follow the ethical standards strictly, the reality has transformed with the passage of time and has given way to dissociation that prevails between the consumers and the company. Financial situation Johnson and Johnson is listed in the Fortune 500 and also maintains a stock with NASDAQ. Since the company has adopted the global standardization strategy, less attention is paid to customization of products; instead it is expected that the consumers accept it as a household brand with a worldwide presence. Financially speaking, the company delivered outstanding results in the year 2013, largely due to the profitability of the pharmaceutical divisions of the company. Other factors contributory towards this success include re-launch of key brands in the US and enhanced outcomes pertaining to Diagnostic systems and Medical Devices. The volume of sales of the pharmaceutical products was $28.1 billion which made Johnson & Johnson the seventh largest pharmaceutical business of the world. The sale of medication related to immune-mediated disorders, which include REMICADE and SIMPONI provided a 12% boost in the sales volume. The sales related to Diagnostics and Medical Devices was $28.5 billion for the same year. The Operational sales growth was around 6.1% due to acquiring two businesses. The infrastructure pertaining to Medical Devices & Diagnostics has a worth of about $11 billion. As far as the profitability of the consumer division of the company is concerned, the worldwide sales in 2013 were $14.7 billion which demonstrated an operational growth of about 2.8% (Johnson & Johnson n.p.). Talking in historical terms, the worldwide sales of the company dropped around the year 2008. An apparent reasoning for this may be the then prevailing financial collapse that affected nearly all countries of the world, but JNJ relates it to its expenditures that were increased for R&D, during this period. This increment in funding related to R&D proved beneficial for the company, as a sharp rise in the profitability of the company was witnessed thereafter. Keeping in view the above scenario, it is safe to declare that the company has shown rapid growth with the passage of time. Financial indicators of the company are largely supportive of the fact that innovation has largely contributed towards the success of the company. Moreover, despite the difficulties witnessed by the global economy, Johnson & Johnson has not only managed to overcome its monetary difficulties during times of financial stress, but has also managed to maintain a steady pace towards growth and success. By being able to contribute towards noble causes like research pertaining to AIDS/HIV etc. , Johnson & Johnson has also managed to maintain a close association with its consumers and public in general. It is therefore safe to assert that Johnson & Johnson’s financial strategy has been successful in overcoming the difficulties that appear from time to time – a reflection of the preparedness that is essential for the survival in the challenging conditions of the world. References Janssen Research & Development. "Clinical Trials | Janssen Research & Development, L.L.C." Welcome to Janssen R&D, LLC. Janssen Research & Development, n.d. Web. 30 Oct. 2014. Jaques, Tony. "Learning from Past Crises—Do Iconic Cases Help or Hinder."Public Relations Journal 3.1 (2009): 1-16 Johnson & Johnson. "2010 Responsibility Report." Johnson & Johnson Family of Companies. J & J, 2010. Web. 30 Oct. 2014. Johnson & Johnson. "Annual Report 2013." www.shareholder.com. J & J, 2013. Web. 30 Oct. 2014. Lee, Laura. The Names Familiar: Mr. Leotard, Barbie, and Chef Boyardee. Pelican Publishing, 1999. Voreacos, David, Alex Nussbaum, and Greg Farrell. "Johnson & Johnsons quality catastrophe." Bloomberg Businessweek, March 31 (2011): 64-71. Read More