Overview of Organizational Strategy and Design of Johnson and Johnson

Johnson & Johnson (J&J) is a 133 years old company. J&J was founded by three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson in 1886 in New Brunswick, New Jersey, U.S. J&J is a multinational company and in 2018 ranked 37th in fortune 500 companies and had a revenue of $81.5 billion in 2018. J&J initially started manufacturing of sutures, dressings and bandages and then grew into manufacturing of many healthcare products. Johnson & Johnson is into three major segments; pharmaceuticals, consumers, medical devices.

Johnson and Johnson pharmaceuticals organization goes under the name of Janssen Pharmaceuticals. It endeavors to utilize the best exclusive and external logical discoveries to help forestall, stop, treat and recuperate diseases. A pledge to patients is the thing that drives Janssen to furnish individuals around the globe with innovative products are services. The pharma business of J&J is focused in 6 areas: Cardiovascular and metabolic diseases, Immunology, Infectious diseases and vaccines, Neurology, Oncology and Pulmonary arterial hypertension (Johnson & Johnson Business Areas, 2019).

Johnson and Johnson Consumer organization has 18 brands under its umbrella. Some of very famous brands are Johnson’s baby products, Neutrogena, Regaine, Carefree, Listerine, etc. Also, the J&J consumer business has significantly improved their standards of manufacturing to reduce waste and make the best quality products (Investopedia, 2018).

When someone says, Johnson and Johnson, the first thing that comes to everyone’s mind is baby products. But J&J has a huge medical device segment that a lot of people are not aware of. J&J’s medical device segment is divided in to 3 major umbrellas. DePuy Synthes, Ethicon and Cardiovascular & specialty solutions group (CSS) and Vision. DePuy Synthes specializes in orthopedic and neurosurgery products. Ethicon majorly specializes in surgical sutures and wound closure products and CSS specializes in infection prevention products, aesthetic medicine products (Breast Implants) and neurovascular products (Johnson & Johnson Business Areas, 2019).

To stay creative, Johnson and Johnson utilize the best from science and innovation to discover answers for the most significant unfulfilled needs within recent period. A wide scope of advancements is furnished with help at an opportune time in their life cycle so they can be formed into items that broaden lives and improve the personal satisfaction for individuals around the globe. J&J’s vision segment has innovation at its heart. The world-famous brand for contact lenses ‘Acunue’ is part of Johnson & Johnsons’ vision care (Johnson & Johnson Business Areas, 2019).

Johnson & Johnson overall has 265 manufacturing units in 60 countries. It is the 6th largest consumer health company and 5th largest pharmaceutical company worldwide. Johnson & Johnson truly believes in diversity and inclusion and thus it has a very diverse employee population which is also one of the major factors for J&J growth and success (Johnson & Johnson Business Areas, 2019).

Organizational Strategy

Johnson and Johnson accept that nothing could really compare to the wellbeing and prosperity of those they adore. Their progressing achievement is based on their Credo and a novel arrangement of vital standards and development drivers, with their kin and qualities being taking care of their customers, it all blends together well. Working for Johnson and Johnson for the past three years, it has been very clear that each employee truly believes in the Credo and the company really takes decisions keeping Credo in mind. The Credo was developed by former chairman, Robert Wood Johnson. J&J’s Credo is also considered one of the reasons for the company’s success. The forth paragraph from Credo is the heart of company’s organizational strategy. It talks about the company’s responsibility towards their stakeholders.

The Credo also mentions that to keep the company growing, investments should be made in research & development, new equipment’s, new facilities etc. The only way a company grows if it makes a mistake and J&J truly believes in paying for their mistakes. And overall, the company should make profits and provide good return on investment to its stakeholders. So, with this philosophy in mind, they have developed four pillars, around which they have designed their organizational strategies. The four pillars are creating value through innovation, Global Reach/Local Focus, Leading with Purpose and Excellence in Execution (J&J Careers, 2019). Along with four pillars, J&J has also developed growth drivers which help them in achieving their results. The growth drivers are Connect, Shape, Lead and Deliver (J&J Careers, 2019).

As Johnson & Johnson is into three major segments; pharmaceuticals, consumers and medical devices, comparing J&J’s business with Porter’s model strategies. Approximately 75% of J&J’s business follows Differentiation Strategy and 25% follows Cost Leadership Strategy (Lindquist, Begin, Kylie, Perez and Young, 2015). A business will apply differentiation strategy approach when they have their products and services unique than their competitors. In Johnson & Johnson’s case, they have four areas where they were leading than their competitors. J&J’s advertisements about their products was very unique that a customer would connect with it.

A lot of thought is put into advertisement before making them and when an advertisement displays a product that the customer is looking for and is truly going to make a difference, it sells. The consumer marketing strategy line was “Johnson & Johnson: More than a century of caring” (Lindquist, Begin, Kylie, Perez and Young, 2015). This line gave the customer more confidence in buying the products as the company has been selling products for 100 years and all the advertisements will put a lot of stress on quality product. The second area where J&J leads is brand loyalty. Since J&J’s products are high quality products, customer do not tend to try other brand products. The third area where J&J leads is the product mix. To beat the rivals in any business, you need have a variety of products. J&J has a huge range in products in all it’s three segments. J&J as many other multinational companies keeps acquiring other companies to increase their product portfolio.

For example, recently, Johnson and Johnson obtained Auris Health, Inc., extending J&J's digital medical procedure portfolio. This was a key move by Johnson and Johnson as they didn't have any organizations in their portfolio that had the skill in robotic medical procedure. Auris Health Inc. frameworks claims to have good reputation is in lung diagnostic and remedial techniques. This will drive an information driven biological system and improve patient care. And finally, J&J leads in human resource area. Johnson and Johnson truly believe in diversity and inclusion. Johnson and Johnson have a very diverse population of employees which has helped J&J grow very much. People from different culture bring different values and opinions to the organization which helps to look at a problem from a different perspective and eventually leads in out of box thinking and problem-solving techniques.

Johnson and Johnson follow cost leadership strategy in when it comes to sourcing raw materials and clinical evaluations (Lindquist, Begin, Kylie, Perez and Young, 2015). Due to Johnson and Johnson size of the company and scope of business a supplier will receive teaming up with J&J, J&J ends up getting a good deal in buying raw materials. They also team up with supplier to perform toxicology assessments in the segments where is requires testing all the toxicity of the materials.

Organizational Design

Historically, Johnson and Johnson dealt with its working organizations as individual organizations. Corporate officials held onto working organization independence as a way to expanded adaptability, responsibility and innovativeness. Autonomous expert additionally credited the decentralized structure of Johnson and Johnson organization as generally in charge of the enterprise's reliably solid financial execution. The autonomy of the individual units, in any case, implied that the J&J workers would in general view themselves as representatives of a specific J&J working organization instead of the company.

There was once in a while any development of the employees between working organizations and the working organization employees was compensated based on the growth of that particular organization and not in overall growth of J&J as a cooperation. In any case, by the mid 1990's, the top officials noticed that the self-governing working organizations were not all around situated for generally speaking customer service (Ross, 1995).

However, corporate leadership established different structures to mitigate the disadvantages of the decentralized administration approach and incremented movement of employees between different organizations within same segment and/or different segments. For example, I work for Mentor Worldwide LLC, it is a Johnson & Johnson medical device company. This unit is one of the smallest units under medical device family and has an overall revenue of $300 million. The organizational structure that this organization follows is matrix structure. The company has a plant manager and under him there are different departmental managers like business unit, engineering, quality operations, facilities, microbiology, IT, safety and R&D.

But all the departmental managers except business unit managers directly report to another manager outside this organization. So, the departmental managers report to two managers and this sometimes causes issues in smooth functioning of the organization. It has been observed that the goals and objectives for each departmental manager is not always aligned to the goals and objectives of this particular organization. And the biggest drawback of matrix structure is establishing the priority of projects that needs to be implemented. But the matrix structure also helps to connect with other organizations resources and expedites the decentralized decision-making process. It also helps to learn and adapt new technology which has been implemented at other organizations.

Organizational Culture

The culture of Johnson & Johnson is majorly driven by the company’s Credo. Johnson & Johnson is focused on making a solid working environment where individuals can fortify their bodies while growing their brains. Perceiving that everybody has individual lives, Johnson and Johnson is likewise steady of work-life balance, which empowers associates to manufacture their very own ways of working and enhance their effect on the overall organization.

“Caring for the world, one person at a time...” (J&J Corporate Culture, 2019). This phrase portrays the day to day work culture at J&J. On this ground the corporations are bound together by an enthusiasm for their clients, patients and for society. Johnson & Johnson values the commitment of each person and are continually searching for creative minds with the capacity to think ahead and kick off something new.

Notwithstanding a definitive objective of giving top quality, frequently lifesaving, products to people in general, Johnson and Johnson likewise bolster various volunteer activities and associations. Johnson & Johnson consistently provides donations and backing to specialists going to needy areas of the world, to perform basic free medical procedures. Johnson and Johnson feel unequivocally that going directly to the source is probably the surest ways to improve the world.

Conclusion and Recommendation

The arrangement of Johnson and Johnson's plan of action and working model has been critical to organization's 133 years of accomplishment. J&J's working model centered around decentralized administration enables the organization to adequately convey on its plan of action. As an ongoing model, decentralization has been basic to J&J's achievement in worldwide development.

The organization's R&D department is focusing on to create items dependent on customers’ needs in that particular region, and in this manner, are growing J&J's present services to meet the interesting needs of the customers. With a firmly adjusted working model and plan of action, Johnson and Johnson will keep on improving the wellbeing and prosperity of lots of individuals around the globe through their enhanced products.

To beat the industry-made hazard, J&J has as of late featured new improvements in pharma items with few regulatory pending decisions which gives the chance to develop their product range. This should proceed, and improvement into new elements of wearable gadgets should be preferred. The wearable gadget industry has boomed in the last 5 years and this will be a perfect opportunity of Johnson & Johnson to enter this market.

For some small businesses owned by J&J, they should look into the business or operating model. They should truly revamp the organization structure to meet the business needs. Also, in North America, J&J should revisit the immigration policies they have. J&J has a policy against hiring employees on student visa. The number of students coming to the United States to pursue their post-graduation is increasing day by day, Johnson & Johnson is losing out on hiring some good talent. Furthermore, Johnson & Johnson should open an Innovation Centre in India as India has a lot of talent which can help to improve and innovate some new products. And J&J can do better marketing of their medical devices in India as it lacks currently.