Case Study: Johnson & Johnson

Case Study: Johnson & Johnson

Company Overview

Johnson & Johnson Company (J&J) may be best known for their consumer products, such as Johnson’s Baby Shampoo, Neutrogena cosmetics, or Band-Aids, but this healthcare conglomerate generates the majority of its profits from the manufacture and sale of medical devices and, to a lesser extent, pharmaceuticals. Composed of over 250 different businesses, Johnson & Johnson has, over the years, spent billions to acquire leading companies in the medical supply and pharmaceutical industry to form their mega-corporation (Dess, Lumpkin, Eisner, & McNamara, 2014). J&J enjoyed a sparkling clean brand image for many years, and the flexible entrepreneurial business model made J&J a great company to work for.

Johnson & Johnson’s entrepreneurial culture allowed autonomy, which encouraged the various units to develop, control, and acquire their own resources, causing J&J to reconsider such empowerment to their units (Dess, Lumpkin, Eisner, & McNamara, 2014). Therefore, while the company has had great success with a number of products, over the last ten years or so, the company has run into quality problems serious enough to tarnish their sparkling image.

Problems

Quality

Johnson & Johnson claims that their customers are their top priority, but this vision was not shared by some of the company’s recent CEOs. Concerned with meeting performance goals, cuts were made in key areas that impacted the quality of the products the company and its affiliates produce. Sources claim that the company had prior knowledge that there were inherent design flaws in a hip-replacement prosthetic that caused the device to shed metallic debris after it was implanted in patients (Dess et al, 2014). It wasn’t until nearly five years later that the device was recalled, and the company claimed this was a business decision rather than a necessary action. Over 10,000 lawsuits resulted from this device failure, and cases are still being brought forth today....