Johnson & Johnson Case Study

Joe Johnston

Management

September 18, 2015

Johnson & Johnson Case Study

Johnson & Johnson is a large organization that has the reputation worldwide as a socially responsible company—one that looks out for their stakeholders and society as a whole. However, in light of their recalls of dozens of brands, including hundreds of millions of over the counter medicines and 93,000 faulty hip implants, it would appear that management made some unethical decisions. A company that adheres to ethical behavior is a company that grows more, performs better and increases the standard of living and wellbeing for others. In this case study, J&J did not reflect those results. A factor that may have led this organization of high esteem astray, might be from distributing inequitable responsibility to its stakeholders—focusing on certain stakeholders over others. The report alluded to the previous CEO, William Weldon’s, accomplishments in pulling off the “two biggest deals in J&J’s history: the 16.6 billion purchase of Pfizer’s consumer products in 2006 and last year’s agreement to buy orthopedics maker Synthes Inc. for 21.3 billion.” However, the report mentioned that Synthes Inc. is pending regulatory reviews. It would seem that Weldon’s decision to purchase these companies to increase J&J’s product lines and hopefully sales was the wrong decision. Three years after these huge purchases, the company has had issues. As CEO It was Weldon’s responsibility to make sure that the products coming from these subsumed companies adhered to J&J’s ethical standards; unfortunately, it appears they did not. Weldon, instead of keeping to J&J’s high standards in what products they release to the public, acted with an obstructionist approach and lowered the 126 year-old company’s reputation for possible gains.

        J&J’s new CEO Alex Gorsky, unfortunately, has the responsibility of cleaning up the issues created by his predecessor, Mr. Weldon. Mr. Weldon, per mistake or self-interest, tarnished the 126 year-old company’s reputation of high ethical standards by not sticking to J&J’s Credo. The Credo is J&J’s document pledging the company’s pursuit towards ethical behavior. The Credo states that the company’s first priority is to the many people that buy and use their products. Therefore, Mr. Gorsky’s platform as the new CEO must reiterate the company’s Credo regarding its most critical stakeholder—its customers. Gorsky must make sure, moving forward, that the company is producing products that are safe and reliable. Moreover, that the company is demonstrating an organizational culture of ethics. To rebuild J&J’s credibility, Gorsky will have to make sure that all products pass high standard test trials/ results. In addition, Gorsky might want to focus more on marketing their classic product lines—that gained their high reputation—in lieu of new product lines. In terms of social responsibility, Gorsky must strive towards a proactive approach—especially after Weldon’s tenure. The proactive approach would reassure stakeholders that the company is emphasizing its duty to protect and improve the welfare of its stakeholders and society. Gorsky needs to demonstrate to the public that J&J is aware of their affect on the world and that self-interests have no part in their mission.