Unfortunately, even the most respected and effective company may face having some of their decisions or operations fail. For instance, when some leaders choose to give more autonomy and freedom to the various departments of the organization, they usually see it as an innovative and efficient management decision. However, this step may result in reduced quality, communication problems, and the inability to implement control measures properly because of an already-built culture of autonomy. The purpose of this paper is to review such a situation at Johnson & Johnson, mention some recent issues it faced, and recommend a strategy to improve the situation.
Background of the Company
Founded in 1886, Johnson & Johnson is now one of the most well-known and successful pharmaceutical industry companies that uses innovation, technology, and acquisitions to achieve higher levels and expand its customer base. According to Dess et al. (2021), “the firm has raised its dividend for well over 50 years and it remains one of only two U.S. companies with an AAA credit rating from Standard and Poor’s” (p. C186). Johnson & Johnson constantly offers new products to its clients and seeks more effective approaches to winning the market. One of the company’s controversial features is the diversification of businesses (Dess et al., 2021). In other words, while being one organization, numerous departments and units under one brand are granted too much autonomy, which often harms the company.
Primary Issues Faced by Johnson & Johnson
Different case studies and news reports indicate a series of challenges and concerns faced by the organization in question. According to assumptions and analyses, one of the key causes of the lowering quality of some products offered by Johnson & Johnson is precisely the diversified management of its units (Cep, 2022). As stated by Dess et al. (2021), the firm has recently met hundreds of lawsuits that pose a threat to the company’s image and reputation. Cep (2022) indicates that “for decades, the company had known that its powders could contain asbestos, among the world’s deadliest carcinogens” (para. 10). However, now the company is trying to file bankruptcy and sees it as its way out of the negative situation without having to pay the victims of their products.
The organization’s products cause cancer in thousands of women all over the U.S., and the COVID-19 vaccine that Johnson & Johnson recently issued to save the lives of people also appeared to have harmful effects. Researchers note that “the Pharmacovigilance Risk Assessment Committee (PRAC) from the European Medicines Agency (EMA) has found a possible link between J&J’s Covid-19 vaccine and rare cases of venous thromboembolism” (GlobalData Healthcare, 2022, para. 2). Therefore, whenever the firm tries to improve its circumstances and win back the trust of customers, its lack of control and ineffective quality assurance system lead to failures.
Proposed Solution
Numerous efforts have been taken to eliminate the challenges faced by Johnson & Johnson. A recommended solution to select now is a differentiation strategy that will help the firm identify its products’ expected and demanded strengths and enhance the brand image. It is better to focus on the actual transparency of all the organization’s operations and ensure that safety and truth are valued more than profits. Managing quality and being transparent will help the company gain the community’s trust and avoid previously made mistakes.
Conclusion
To draw a conclusion, one may say that the case of Johnson & Johnson is rather insightful and can be used to create valuable business advice. Too much autonomy and value can decrease the quality and safety of offered products and make the introduction of new control measures difficult. Transparency of all operations is the needed answer to this challenging situation, which is why it is recommended that Johnson & Johnson adopts the differentiation strategy.
References
Cep, C. (2022). Johnson & Johnson and a new war on consumer protection. The New Yorker. Web.
Dess, J., McNamara, G., Eisner, A., & Lee, S. H. (2021). Strategic management: Text and cases. McGraw Hill.
GlobalData Healthcare. (2022). Johnson & Johnson’s Covid-19 vaccine problems continue. Pharmaceutical Technology. Web.