Case Study : Johnson And Johnson Essay

Case Study : Johnson And Johnson Essay

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Karishma Patel
Karishma Patel

Johnson & Johnson comprised 155 autonomous subsidiaries operating in three healthcare markets: consumer product, pharmaceutical products, and professional products. Each operating company is responsible for preparing its own plans and strategies. Johnson and Johnson have no corporate strategic plan; their strategic plan is the sum of the strategic plans of each of the 155 business units. The company is organized on principle of decentralized management. Direct responsibilities of each company lies with its operating management, headed by the president.
Roy Black is the president of the Cordis, who directly reports to H.G.Stolzer, who is an executive committee member, who reports to David Clair, president of Johnson and Johnson.


1. When does the long range planning start and what input goes into planning?

Cordis, Inc. prepares a five and ten year plan annually. Financial estimates are based on four numbers: estimated unit sales volume, estimated sales revenue, estimated net income, and estimated return on investment.

Long range planning starts at manager level, to get manager’s buy-in in the budget. At Cordis annual, five and ten year plan commenced each January and takes approximately six months to complete. The marketing plan included an estimated pro forma income statement (volume, sales, and profit) as well as a one-page narrative description of th...


... middle of paper ...


...hat’s how innovation and organization learning ties together

8. Where the rewards are in this system and what do the rewards imply about achieving the corporate goals? How do the rewards conflict with (or support) innovation?

Cordis’s philosophy is to manage for the company for a long term. The company does have any short term bonus plans. Salary and bonus reviews are entirely subjective and qualitative and are intended to reward effort and give special recognition to those who have performed uniquely. Knowing the importance the company gives to the budget process, the evaluation of the manager in budget process help executive led to the employees to reward for their performance. Cordis rewards employee for their accuracy but if employee push hard to meet the budget and they will never be able to innovate a product in the stressful financial environment.





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