Johnson & Johnson Corporation as a Global American Medical Device - Case Study Example

Johnson and Johnson (J&J) is a global American pharmaceutical, medical device, and consumer packaged goods company which is currently listed among the Fortune 500 companies. The company is headquartered in New Brunswick, New Jersey, USA. They have operations on over 57 countries and their products are sold in over 175 countries (Wikipedia). The company serves the consumer, pharmaceutical, and Medical Devices and Diagnostics markets with a focus on research-based technology-driven products. The company is listed on the New York Stock Exchange since 1944 under the symbol JNJ. Well known consumer products like Band Aid and Acuvue contact lenses are now household names. Johnson & Johnson (J&J) came into existence in response to the needs of the society (Kilmer House, 2007). The first ready-made, ready-to-use surgical dressing was launched by J&J in mid-1880s. This launch not only marked the birth of the company but was also the first practical application of the theory of the antiseptic wound treatment (J&J, 2008). This was introduced based on the antisepsis theory of Sir Joseph Lister who realized that the postoperative mortality was high due to the unhygienic conditions within the operating theatres and the conditions under which the operations were carried out. What happened thereafter is history. Robert Wood Johnson was convinced of the discovery of Sir Lister and along with his brothers James Wood and Edward Mead Johnson formed the company Johnson & Johnson in 1987. With this they entered the surgical dressings industry and today it is a globally renowned company with a wide range of products in different fields. The first products that they introduced were sterile surgical dressings and sutures, the First Aid Kits and an antibacterial soap and in 1897 they introduced sanitary napkins in the market. The company continued to expand and it went international in 1919. The first overseas affiliate was created in 1924 in Great Britain. The group is established in Latin America, Africa, Europe and Australia for more than 70 years and in Asia for nearly 50 years. Gradually they started diversifying into different range of products and introduced the BAND AID and BABY OIL. Robert Wood Johnson brought a vigorous new approach and philosophy of business to the organization. Decentralization helped the company to grow further. As products and business grew, different divisions or departments were formed to take care of a particular division or a range of products. They now have a Personal Products Company, an Ortho Pharmaceutical Corporation and Ethicon which manufactures surgical sutures and related ethical surgical products. As they grew the acquired a lot of existing companies thereby diversifying into different fields. Hence they have a contact lens company and they also acquired a company that develops, manufactures and markets glucose monitoring products for people with diabetes. Thus they made 45 acquisitions of companies and product lines. They also divested 18 companies that were not in alignment with their products or growth strategies. They have a wide range of biopharmaceutical and surgical products. Today J&J is a worldwide group of 250 companies marketing health care products through out the world. They have more than 119,000 employees engaged in producing the products that serve a wide range of medical needs. Their products range from baby care, first aid and hospital products to prescription pharmaceuticals, diagnostics and products relating to family planning, dermatology and feminine hygiene. Currently William C. Weldon is the Chairman and Chief Executive Officer of the company and is the sixth in the history of the company. The Board of Directors consists of 12 members. J&J has a socially responsible approach to conducting business. The values were set forth in Our Credo and are followed till date. Their first responsibility is to the people who use their products and services and the second to its employees. They are then responsible to the community and the environment and finally to the stockholders. They believe that if they are able to meet their responsibilities to the first three groups, the fourth is automatically taken care of. They maintain ethical financial and accounting reporting system and they have trained internal auditors who travel around the world. Their system of internal accounting controls ensures that assets are well managed and that transactions and events are recorded properly. They have their unique advertising policy. In addition to brand advertising, they have introduced advertising campaigns and original family programming. All their advertising reflects their commitment to the values specified in Our Credo. To market their baby products their advertising reflects that J&J understands how a parent’s universe changes and the company can enhance the bind between the parents and the child. J&J registered worldwide sales of $50.5 billion in 2005 and figured sixth in the Fortune Magazine’s Most Admired Companies list in 2006 (Prodomain, 2008). In 2006 the investments in research and development were $7.1 billion. The company has been issuing dividends issued to shareholders every quarter since 1944. Dividend has been raised each year for 45 consecutive years and sales have increased each year for 74 consecutive years. J&J had record sales of $16.0 billion for the fourth quarter of 2007, an increase of 16.6% as compared to the fourth quarter of 2006 (Prodomain, 2007). Since they follow the policy of long-term profitable growth, despite challenges in certain markets, they could achieve solid results. J&J is an employer of choice in the dynamic global environment. Diversity is a part of their culture where they recognize the value that differences in age, race, gender, nationality, sexual orientation, physical disability, thinking style and background add diversity and richness to the work environment. The company further supports wide range of programs based on three key principles – saving and improving the lives of women and children, building the skills of people who serve community health needs and preventing diseases and reducing stigma and disability in underserved communities where J&J has a high potential for impact. Because of its approach towards diversity, J&J ranked 17th on 2007 Diversity Inc. amongst the top 50 companies for Diversity listing (Fact Book, 2007). Having an earned a reputation for employer by choice, J&J was named one of the top 100 places to work for mothers by Working Mother magazine for 21 consecutive years. J&J has also been named as one of the Best Places to Work for its commitment to equality in the workplace by the Human Rights Campaign Foundation. J&J has collaborated with the International Olympic Committee as the Official Health Care Products Sponsor. They have also been appointed as Official Partner of the Beijing 2008 Olympic and Paralympic Games. Following a decentralized approach to management, the 8-member executive committee is the principal management group responsible for the operations and allocation of the resources of the company. This committee oversees and coordinates the activities of all the divisions. Apart from this, there are Worldwide Chairmen of Group Operating Committees which comprises of managers who represent key operations within the groups. They are responsible to oversee and coordinate the activities of US and international companies related to each of the divisions or business segments. Each company is headed by a chairman, president, general manager or managing director who reports directly, or through a line executive to the Group Operating Committee. The international subsidiary is managed by the citizens of the country where it is located although there are certain exceptions. Because of its decentralized approach, it is able to utilize extensive resources and it also has the ability to respond or react quickly to market changes and challenges. In the consumer products division the principal products are baby and kids care, skin care, oral care, wound care, and also connected with women’s health acre field. They also sell nutritional and over-the-counter pharmaceutical products. They sell the products both through the wholesalers as well as directly to independent and chain retail outlets through out the world. J&J family of companies develop, market and sell more medical devices than any other company in the world. The range of products in this group include suture and mechanical wound closure products, surgical equipment and devices, wound management and infection prevention products, interventional and diagnostic cardiology products, diagnostic equipment and supplies, joint replacements and disposable contact lenses. These products are mainly used by physicians, nurses, therapists, hospitals, diagnostic laboratories and clinics. In the pharmaceutical segment the products that are include are used in the following therapeutic areas - anti-fungal, anti-infective, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, psychotropic (central nervous system), urology and virology. Apart from discharging its social responsibility, J&J is also conscious of its responsibility towards the environment. In fact this is also included in Our Credo. They formulate long-term environmental goals every five years. These goals bring about improvement in environmental performance, promote integration of environmental considerations into business decisions and help the company to among the most environmentally responsible companies in the world. The Healthy Planet 2010 goals would minimize the environmental impact in energy and water use and waste generation as well as sustainable sourcing of paper and packaging and take-back programs for electronic equipment. J&J has also taken the responsibility to address the issue of greenhouse gases emitted from its operating companies. The carbon dioxide emissions have been reduced by 16 percent between 1990 and 2006 on an absolute basis. This has been achieved sue to improvement in energy efficiency in their operations, by installing on-site co-generation and renewable energy projects. In 2006 they were also the largest corporate user of on-site photovoltaic solar energy in the U.S. J&J has been recognized for taking a beyond compliance approach to environmental management and create strong systems. Water consumption and total waste generation have both increased considerably over the years. J&J is committed to improve and sustain the health of their workers. They offer a comprehensive program covering employee assistance, occupational health, absence and disability management, and health promotion and wellness. Planning and programs may vary depending on various factors like health care systems, disease state, culture and access to services. The company follows a culture of collaboration, innovation and leadership. Thus, having started with surgical dressing as their first product in mid-80s, the company has come a long way. Nevertheless, they have not compromised on their basic principles of long-term strategy, decentralization, collaboration, stakeholder interest where the customers and workforce have priority over the shareholders. Today it is a socially responsible company, ethical in their approach and believes in a diversity workforce. Its products and brand are well known household name. It is environmentally conscious and is an employer of choice by diverse group of people. Its products range from personal to medical and pharmaceutical. They take care of their workforce through health care programs and rewards. Their presence in over 50 nations has made them a truly global company. They adapt to changes and local culture wherever necessary. They have been able to enjoy sustained growth over all these years. References: Fact Book (2007), Johnson & Johnson, 14 Feb 2008 Kilmer House (2007), The story behind Johnson and Johnson and its people, 14 Feb 2008 J&J (2008), Growth & Expansion, 14 Feb 2008 Prodomain (2007), Johnson & Johnson reports fourth-quarter and year-end 2007 financial results, 14 Feb 2008 Prodomain (2008), Johnson & Johnson (NYSE: JNJ), 14 Feb 2008 Wikipedia, Johnson & Johnson, 14 Feb 2008 Read More