Structure and Analysis of Johnson & Johnson

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Johnson & Johnson
Agency Problem at Johnson & Johnson
Job Dimensions at Johnson & Johnson
Conclusion
References

Introduction

Companies and organizations often realign their tasks in order to achieve better coordination of the various activities aimed at executing the tasks as well as supervision of these activities in a systematic way so as to optimally attain their objectives and goals with limited use of resources.

The choice of structure that an organization eventually adopts is always determined by the company objectives, its market, as well as its geographical location and cover.

This paper will provide an extensive analysis of the type of structure adopted by Johnson & Johnson, a multinational company that manufactures a wide range of health care products and offer job dimensions of the firm as well as analyse the agency problem faced by the company.

Johnson & Johnson

Johnson & Johnson operates internationally, targeting global markets for its renowned health care products. Currently, the company has presence in up to 57 different countries.

Operations of the company have been divided into 3 main divisions of consumer health care, pharmaceuticals and medical devices & diagnostics. The consumer health care division comprises of 7 major business franchises that produces specific care products for babies, skin & hair, oral, women’s health, nutritional products and topical health care.

The pharmaceutical division mainly concerns with carrying out research and development in order to invent effective drugs and medicines to treat diseases. These include dermatology, immunology, virology, contraceptives and pain management products and medicine.

Medical devices and diagnostics division target solutions, services, and technologies for diabetes, vision care, aesthetics, orthopaedics, cardiovascular and infection prevention. Other areas of concern for this division are minimally invasive surgery, sports medicine, diagnostics, and aesthetics.

The main companies grouped under this division are Animas Corporation, Advanced Sterilization Products, DePuy Inc., Ethicon Inc., Johnson & Johnson Vision Care Inc., Virco BVBA and Ortho-Clinical Diagnostics, Inc. Others are Cordis Corporation, Ethicon Endo-Surgery, Inc. and LifeScan, Inc.

With more than 250 companies operating under the tag name Johnson & Johnson, the parent company has adopted a divisional type of structure to effectively manage its operations.

With each of the three divisions manufacturing their range of products, the company has further adopted a product structure such that all the employees and their tasks have been grouped together basing on the products they deal in (Johnson & Johnson, n.d., para 3).

Agency Problem at Johnson & Johnson

The management at Johnson & Johnson has been at loggerheads with both the shareholders and company creditors over what has been described as incompetence on the part of management.

The recent recalling of drugs manufactured by the company over serious after effects on users has prompted unsavoury reactions from shareholders who are demanding that the top management at the firm take up full responsibility for the unfortunate turn of events.

There are fears that the company could soon be entangled in endless court cases that could attract huge sums in compensation suits filed by patients. Shareholders are worried of the fact that the company reputation has badly been damaged by the slow pace at which the company reacted to recall the drugs. This could have a ripple effect on the company shares at the stock market which would transfer into losses.

On the other hand, creditors are ruing the fact that the management at Johnson & Johnson failed to act with speed in order to salvage the situation from turning into worse.

Their worry is informed by the fact that these could slow business for the firm as the public take precaution when it comes to purchasing the company’s products. Losses to Johnson & Johnson will also mean losses to the creditors as there will be little funds to pay back what they are owed.

The agency problem at the company can effectively be solved through the formation of a representative committee that should draw its membership from all the three parties involved, that is, the management, shareholders and the creditors.

The root cause of the problem should be discussed and the management given time to explain what corrective measures they are putting in place in order to protect the company from facing similar dilemma in the future.

Equally, shareholders and creditors should be allowed to give their suggestions and contributions for considerations by the management. The target should be to harmonize the objectives of all the players and address all areas of deviation.

Job Dimensions at Johnson & Johnson

Sales Manager

Sales manager positions cover particular geographical locations and their main responsibility is to heighten awareness amongst existing and potential customers and transform these results into sales revenues. They are expected to develop plans that will be used to ensure financial targets are achieved all through.

As managers, they are expected to control, coordinate and monitor actual performance in comparison to the set targets. They should also be capable of studying trends and detect early where problems exist. Coordination should involve distributors who will directly be responsible for ensuring consumers of the products get them when they need them.

Staff requirements for all personnel working in the sales department such as motivation, skill development, recruiting and structuring of compensation packages are the responsibilities of the sales manager.

A sales manager needs to integrate with customers such that they are able to get feedback about product performance. Handling of information flow is important both from the consumers and within the company and should keep consumers up to date about developments and plans intended by the company.

Candidates for this position are required to have attained at least a bachelor’s degree with a bias in either Business Administration or Economics. Previous experience in the same field is required in order to have a competent person.

The rightful candidate should be an easy-to-work with person because his role will mainly be to coordinate. Additionally, individuals charged with this responsibility should be capable of working within time constraints to deliver timely results so as to salvage as many business opportunities as possible.

The current design of the company is appropriate and effective in enabling the company to attain its target. The personality traits have been carefully aligned to the job requirement in order to enable the holder execute his duties with ease.

Sales jobs are demanding and can hardly be performed well unless whoever has been charged with that responsibility posses the right skill. The Business Administration syllabus has been expertly packaged to mould scholars into being people who can analyze given scenarios and quickly come up with strategies that can address the issue.

Alternatives of improving job design

Job designs can be improved by comparing and analyzing actual results with target results. The requirements of given tasks can be deduced from the market expectations, performance of other rival players in the same industry, as well as expert analysis carried out by qualified personnel (Snell & Bohlander, 2012, p. 157). Once these indicators have been studied closely, the specifications of the job can be drawn.

To fully accomplish the task to come up with a workable solution, it is important that personality traits marching these requirements are established. This will require the input of psychologists who can come up with a perfect realignment to march traits and tasks (McKenna, 2000, p. 122).

Grouping Johnson & Johnson

Johnson & Johnson can be grouped on the basis of products it manufactures. Although the company manufactures quite a wide range of products, it is prudent to note the fact that all these products address healthcare issues. Consequently, Johnson and Johnson is a healthcare company.

This organization is effective because it enables companies to strictly concentrate on a particular product or range of products without dividing the attention to begin thinking about other products that lie outside the range (Schmalensee, Armstrong & Porter, 1989, p. 1791).

The main advantage of this organization is that it enhances quality in the services and goods dealt in. It is also easier for a product organization to compete effectively in the market owing to the level of concentration witnessed in such companies (Murphy & Willmott, 2010, p. 284).

Compensation package

There is a wide gap between the compensation packages that the executive at Johnson & Johnson take home as compared to other members of staff at the same company. There is lack of equity on the ratios particularly considering the level of input that employees contribute.

This is unhealthy to the firm as it demoralizes the workers from doing their best. It creates a feeling among the workers that their efforts are not being equitably rewarded and therefore there is no need for them to continue putting in more effort.

There is need for the company to revisit its compensation package and come up with an acceptable formula that will be agreed upon by the majority. The package can effectively be improved by analyzing the various responsibilities of tasks and determining an equivalent compensation value. This should be carefully done while putting in mind the company’s annual revenue value (Graham, Roth & Dugan, 2008, p. 149).

Conclusion

Organisational structures are helpful to companies as they enable them to organize their complex day to day activities into simplified sequences that make it easy to attain goals. There are varied types of structures, each of which are suitable to companies depending on their activities. Although structures are designed with the idea of helping organizations to optimize their performance, not all structures can be suitable to any organization.

It is therefore important that while choosing an organizational structure extra care be given to the duties and tasks of the organization and a plan that will enable systematic flow of work adopted. Organizations also device their own job designs in alignment with their overall objective and goals.

These job designs aim at giving a comprehensive description of tasks and duties to be executed, key competencies expected of the successful candidates, as well as the personality traits that will perfectly match the requirements.

During their operations, organizations sometimes run into problems sparked up by conflicting interests between the stakeholders. This brings about agency problem, which is a potentially harmful issue that needs to be rectified if at all the objective of the firm is to be met.

References

Graham, M. D., Roth, T. A. & Dugan, D. (2008). Effective executive compensation: creating a total rewards strategy for executives. New York, NY: Amacom.

Johnson & Johnson (n.d). Johnson & Johnson. Web.

McKenna, E. F. (2000). Business psychology and organizational behaviour. New York, NY: Psychology Press.

Murphy, D. J. & Willmott, H. (2010). Organization theory and design. Mason, OH: South-Western Cengage Learning.

Schmalensee, R., Armstrong, M. & Porter, R. H. (1989). Handbook of industrial organization, volume 3. England: Elsevier.

Snell, S. A. & Bohlander, G. W. (2012). Managing human resources. Mason, OH: Cengage.

Click Here To Order Now!