Johnson & Johnson Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Johnson & Johnson is a global firm active in the consumer healthcare, pharmaceuticals, and medical devices and diagnostics sectors with a long history dating back to 1886. At that time, the company’s founders—Robert Wood Johnson, James Wood

Johnson, and Edward Mead Johnson—developed a product based on a premise that today sounds like common logic: Doctors and nurses should use sterile sutures, dressings, and bandages to treat wounds. In 1886 they started a small medical products company in New Brunswick, New Jersey, that produced and sold the first-ever commercial sterile surgical dressings. Since then, the company has brought the world new ideas and products that have transformed human health and well-being, such as dental floss, the earliest First Aid kits, sanitary napkins for women, baby powders, and more. The firm has been publicly traded on the New York Stock Exchange since 1944.

The international expansion of Johnson & Johnson started in Canada in 1919 and then continued in England in 1924. A continuous internationalization process accelerated further growth of the firm in the pharmaceuticals and medical products sectors. This overseas growth witnessed the expansion of the firm into numerous countries in Europe, Latin America, and Africa until 1946, more in Asia, Central America, and Europe until 1966, and China in 1985. During this wave of international expansion, operating companies of the firm across the world pioneered several important medical advances and the mother firm entered new businesses (e.g., disposable contact lenses) through acquisitions. These modes, along with internally developed businesses, are the dominant tools of growth for Johnson & Johnson, which has secured a leadership position for the firm in a number of health related sub-sectors.

Of significant importance for Johnson & Johnson are the values that guide its decision making and are spelled out in the firm’s credo. The credo was crafted in 1943 by one of its founders; in a few words, it codifies the company’s practice with regard to social responsibility and ethics of business activities. The credo can be summed up as putting the needs and well-being of the people Johnson & Johnson serves first. It focuses on the needs of customers and aims to provide a strict set of rules that guide employees’ conduct. The output of this behavior should be in line with the firm’s main premise: Healthcare is the business of caring for people and the employees’ objective should be to deliver products that promote health and well-being. This aim is assisted by investing personal and corporate resources in developing new treatments through research.

The board of directors consists of 11 board members and is responsible for appointing the senior management of the company. However, local managers are in charge of the subsidiaries of the firm across the world. Each of the subsidiaries functions as its own small business, is strongly entrepreneurial in character, and works on anticipating local customers’ needs and delivering high-quality solutions. While local management operates in a small-company setting in each country, they also have access to the know-how and resources of a Fortune 50 company. Currently, Johnson & Johnson has more than 250 companies located in 57 countries globally. These companies are organized into several business segments comprised of franchisees and therapeutic categories.

The usual mode of foreign market entry for Johnson & Johnson is the establishment of a fully operating subsidiary. In smaller markets, though, costs of adapting managerial processes through setting up a wholly-owned subsidiary may be high; in such a case, a local representative is preferred. This is the reason why Johnson & Johnson’s products can be found in more than 175 countries, more countries than the ones where the mother company owns operating businesses. The firm also strives to attract and keep talented people in each country who will drive product inventions and leverage breakthroughs in human health and well-being. It currently has more than 119,000 employees.

Johnson & Johnson has recently enjoyed more than $62 billion in sales and more than $11 billion in profits. It is a well-respected firm with a long history and aspires to dominate the fields in which it operates.

Bibliography:

com, www.forbes.com (cited March 2009); Johnson & Johnson, www.jnj.com (cited March 2009);
Lawrence G. Foster, Robert Wood Johnson and His Credo: A Living Legacy (Lillian Press, 2008).

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