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Analysis: Building an organization at Johnson & Johnson - Case Study Example

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Case Analysis Customer Name Tutor Name Introduction This is a case study on Johnson & Johnson Company. This article examines the challenges that J&J has undergone and how they have been solved. Johnson & Johnson Company Johnson & Johnson (henceforth referred to as J&J) has generally been a very successful company since it was started…
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Case Analysis: Building an organization at Johnson & Johnson
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Download file to see previous pages Nevertheless, the company has been confronted with various challenges which, fortunately, it has handled well. Decentralization of decision making processes is the cornerstone of the success of J&J. It has been observed that decentralization has enabled the company to be quite dynamic and able to operate as a small company which can make decisions very quickly and at the same time as a huge company which has a vast amount of resources at its disposal. The company has given country managers the autonomy to make critical decisions in regard to the operations of units which are under them. It is viewed that the management closest to the customers and competitors is indeed best suited to make the best decisions for the company. It has also been observed that in this manner, the country managers feel being part of the company and take it as a personal responsibility to ensure that the subsidiary under them succeed. Despite decentralization being such a powerful tool for J&J, it has often run the company into trouble with this method. For instance, it was noted that decentralization has led to “inconsistent market development and duplication of efforts” (Case Study, n.d, p. 2). This was illustrated by an over-the-counter pain reliever Tylenol. This drug was launched in 1960 and availed to the local units. However, the Japanese unit only took up the drug in 2000. In this manner, global diffusion of J&J products is slowed down because of decisions such as the one that the Japanese unit made on Tylenol. Some decisions made at unit levels have been a cause of controversy and in some cases even led to early retirement of executives involved. An illustration of this is a 2007 case when the company announced that some foreign units had engaged in improper sale of medical devices. Such kind of retaliatory actions can push executives in charge J&J foreign units to avoid making some decisions which may in turn affect the efficient running of their units. The senior management of J&J has seriously taken these challenges into consideration and sought means to solve them. The main method it is applying is streamlining coordination and control of the company activities. The senior management has centralized some activities and duties which were previously under the dockets of foreign unit managers. This is seen as a move which will free country managers in charge of these units so that they concentrate on the daily running units. The move to transfer some of the duties away from the local country managers where the foreign units operate may have some negative implications on the foreign units. For instance, it is noted that the country managers are consulted on some issues when the company is making decisions but the final decision is not made by the country managers. The country managers also cannot refuse a product which has been rolled out. The risk in carrying out production in this manner is that, some important issues might be overlooked by the decision making body. This will be especially the case if an attempt is made to make products which will generally fit the world market as opposed to regional markets. Thus that ability of J&J to produce customized goods, for instance different sizes of the same product, will be lost. This insensitivity towards different local market needs may sway the market in favor of J&J competitors. On the bright side, coordination has helped to ...Download file to see next pagesRead More
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