Johnson And Johnson: A Report On Company’s Internal Concept And Strategies

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In the wide landscape of global competition, companies have gone an extra mile to stand out as an entity and provide the best customer satisfaction not only by research and market analysis of the external environment, but also a deeper study into the company’s internal concept and strategies. This report describes three major elements: (i) Competitive advantages, (ii) HR strategies and corporate culture (iii) External Challenges.

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Johnson & Johnson is the world’s largest and most broadly-based healthcare company. It offers a wide range of consumer healthcare products trusted by consumer professionals worldwide. J&J helps people live healthy by anticipating their needs and creating solutions for a vibrant lifestyle. This brings us to the highly important section of Johnson and Johnson that is its competitive advantage. Johnson and Johnson practice a sustainable competitive advantage that neutralize market customer. Their major concept of gaining an edge over their competitors is through creating cost advantage to customers by increasing returns rather than economies of scale.

The first competitive advantage being the product itself with the formula patent “NO MORE TEARS”. Safety, comfort and gentleness has always taken a priority stand to ensure highest standards of baby care through vigorous clinical testing. It has a history of 120years of operations across 57 countries, trusted by doctors, nurses and parents which has helped them achieve highest number of patented products. They have created the brand image by supporting CSR activities like International Youth Foundation for HIV/AIDS prevention program in Africa and Child centre in India.

The major HR tool for competitive advantage is the diversification policy of J&J. It is the core part of their corporate culture in order to merge skills, thoughts, ideas and collaborate them to develop products and technologies that enhance the business intersections.

The rapid growth of digitalization through cognitive artificial intelligence, robotics, increase of millennials to 50% creating a wide pool of generational change has increased the necessity of attracting global talent and creating new & broad networks to collaborate and create a new environment for work. 

Regarding every aspect and well-being of the company and its employees Johnson and Johnson implemented an evolution of its HR strategies to improve their operations and efficiency. J&J lays emphasis on the main areas of human resource management which is diversifying workforce. This is the core element of J&J’s corporate culture which helps develop an escalated strategy tool for HR, that is the “HR NEXT”.

“HR NEXT” paves way for HR Strategy agile refresh, anchoring an outside-in approach to gather necessary inputs for developing and sustaining strategic priorities. J&J has 3 Human Capital Platforms of focus: (i) Future world of work, (ii) Employee experience and engagement, (iii) Digital HR (iv) Cost, growth and Agility.

In order to create a healthy business environment for the employees, J&J plans to rethink the management of work ecosystem and network, analysis of appropriate job design and responsibilities and redefining their workforce by involving new breed of leaders from across the world. They also shape the cost, growth and agility through business solutions and provide talent and change management. They lay emphasis on better cultural management within the organisation thereby, aligning and improving employee engagement and communication. HR is playing a prominent role in leading digital transformation into organisational framework. 

It involves HR engagement, immersion and exploration through which it focuses on regional challenges around the globe and sharing knowledgeable insights by industry leaders. Therefore, J&J had a successful journey through diversity and inclusion strategy where it has a cultural blend towards generation of ideas and creating a global workforce and tackling problems in an organized framework. They also believe in providing employees with incentives for a productive and efficient output. For instance, providing flexible and open-minded working arrangements, paid parental leave and paid volunteered leave and supporting work and home life balance for increased employee satisfaction. They thrive towards learning and development of the employees through developing business skills in eUniversity portal. There are awards for every hierarchy level to boost employee confidence and recognizing their talent. It also provides on-site gym, cafeterias, health check-up and wellness programs for employees and their families. The additional benefits include free confidential counselling sessions and holiday school program for children. (Johnson&Johnson , 2019)

Nonetheless, J&J faced challenges in the process of its HR tool evolution. The major potential threats faced by J&J in the recent years:

  1. It was fined $572m for causing the opioid crisis in the south-central US. It fuelled an epidemic by deceptively marketing addictive painkillers. Rumours had it that 400,000 were killed in between 1999-2017 due to Opioid. The burning topic was a degradation to the company’s brand image and reputation which raised questions on the values and commitment it guaranteed through the decades. (Weili, 2019)
  2. J&J also faced a US criminal probe for hiding the fact that there were traces of asbestos (carcinogen) found in the baby powders which caused symptoms of cancer. The shares of the company 5%. The whole issue concerning the well-being of people’s health raised questions on the trustworthiness of J&J making it difficult for the company to attract talent into the company and thereby causing discrepancies in the employee wages and salary pattern therefore, limiting their chances of diversifying strategy. 
  3. In addition, Johnson&Johnson (NYSE:JNJ) stock prices have fallen 8.2% year-to-date and shows R&D expenditure year-over-year which does not thrill investors. The Trump government has declared reduction in drug prices which could affect pharmaceuticals like J&J. According to a company spokesperson, J&J drug prices are already decreasing and the Net prices have fallen by 4.6% in 2017. This could be a downturn for J&J in the global market creating a niche for multinationals like Amazon to take over the market in areas of medicines and healthcare products. (Hahn, 2018)

Based on the hurdles that J&J has faced, getting HR strategies to work in terms of earning back the employee and customer loyalty will be extensively challenging. However, it can still stand out as the biggest healthcare company and get back to its track due to detailed analysis of the Opioid crisis as well as the cancer-causing carcinogen in the talc baby powder which cannot be a complete Johnson and Johnson fault because every drug is tested and approved by FDA(Food & Drug Association). (Hahn, 2018)

In matters of shareholding and investors interest J&J has a competitive advantage for the segments of products like ‘Neutrogena’ and ‘Band-Aid’ still have an increasing and revenue through the years. Below are a few recommendations that could help improve the position of Johnson and Johnson in the market.

Johnson and Johnson, has adapted to new digitalized recruitment methodology trends to compete for talent and drive economic growth. They can diversify the skills of employees via extra multi-job training, overseas opportunities and learning, incentive programs and talent cultivation. Alexandros Kopitsas, head of human resources at J&J China, said they could hire employees with the use of video resumes and artificial intelligence enabled interviews hence, making placement processes simple and less time consuming.

It attracts the fresh graduate students from the universities studying overseas with escalated knowledge and experience, which could assist the company’s millennial group, remake and reshape the strategies and implementing problem solving tools via vigorous brainstorming through dynamism and creativity.

Johnson and Johnson can launch a framework of plans, a flexible benefit program which provides employees with better choices in matters of personal and family needs as they move through various stages of life. They can introduce this scheme by offering an enhanced medical coverage, a long-term retirement plan and new savings solutions for more immediate needs housing, healthcare and educational expense bearing.

Creating Employee Stock Option Plans – Employee incentives where high dynamic performers are entitled for shares from profits of the company is another way to attract candidates and improve employee conditions in the business.

Having placement opportunities for the disabled people who could work to the best potential. This could increase the brand image and help develop trust in the employees towards the core values of the company like the diverse platform wherein they keep up with the non-discrimination policy of Johnson and Johnson. It ensures the ethics of Johnson and Johnson company and involves more ideas and structure into creating innovative products and services.

Recreational areas with child care centre if possible for working mothers or single mothers which would increase the value that is given to the employees.

Transparent transactions and tests where all the products are approved openly by the FDA and the government which is safer and trusted for the well being of the customers and save the dignity of the company and the employees. Ensuring a transparent policy of operations in the business increases the credit worthiness of the company and its performance therefore, building good image in the eyes of the stakeholders and the investors are attracted to invest as well. 

In conclusion, it is important for a company to have congruence with the core values of the individuals and the corporate culture of the organization to create a strategic direction and outcome for the company. Researchers agree on the significance of correlation of culture and other elements in organizations such as planning, recruitment, infrastructure, work processes, compensation systems, digital technologies and robust performance management system. For example, retention, training and development of highly qualified staff adds value in the employees which in turn installs a sense of belongingness due to the recognition and acknowledgement factor. Therefore, conceptualizing culture as a system in an organization facilitates professionals in communicating in an increased rate through a systematic process. This helps maintain, reinforce and assess the cultural values of the company.

Johnson and Johnson, being a pharmaceutical and medical company, it always makes decisions to ensure safety in the best interest of their employees as well as their customers. Johnson and Johnson often scored quite high in terms of reputation, and strong ethical values. It was recognized to have a good employer reputation and also recognized with Psychologically Healthy Workplace Award in 2001. It has been acknowledged for having best corporate reputation in the four consecutive years.

The involvement of Johnson and Johnson in the community is a great example of its credo-based decision. The credo value of the company highlights the Corporate Social Responsibility which is the key driver of the success of the company. It has taken up strong community initiatives to keep up with its mission of making world a healthier and a safer place.   

16 December 2021

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