Johnson and Johnson Human Resource Value and Contribution

Introduction to Johnson and Johnson For a company to be successful, it must continuously build and nurture long-term relationships with its strategic shareholders. Shareholders is anyone who has an interest in an organization ((Noe et al., 2016). They include employees, governments, competitors, suppliers, competitors and customers. One such company is Johnson and Johnson (J&J). It has emerged as one of the most successful company globally because of its values dubbed "Our Credo” (Team, Directors and Governance, 2019).J&J is also among the Fortune 500 companies.

This paper will focus on various dimensions of the J&J Company. It is divided into three distinct sections. That is organizational structure, organizational strategy and human resource management. So, J&J organization structure will be explored, the various strategies that the company has pursed over the years will be elaborated and finally J&J human resource management practices will be discussed. Other sections in the paper include organizational design theory and emerging issues in HR management.

Organizational Design Theory Organizational design (OD) theory is “the study of how organizations function and how they affect and are affected by the environment in which they operate” (Stanford, 2015). An organization is defined as the deliberate arrangement of people to accomplish some specific purpose. There are three definitions of OD. First, OD “is the process by which managers select and manage aspects of structure and culture so that an organization can control the activities necessary to achieve its goals” (Stanford, 2015).

Secondly, OD can be defined as” a systems approach of arranging how to do the work required to effectively and efficiently accomplish a business purpose and strategy while delivering high-quality customer and employee experience” (Stanford, 2015). Third, OD according to Jay Galbraith (star model) is the alignment of an enterprise vision, values, strategies, objectives (Hayes, 2014). The Star model further states that aligning all the elements of enterprise results in high performance and achievement of business strategies.

Overall, Galbraith star model is the most conclusive definition of organizational design since it helps managers to view an organization holistically. Organization design is a combination of organization structure and strategy (Stanford, 2015). OD give rise to models which results in the different organization structure. The common organization design models were created by individuals, or it originated from consultancy firms like McKinsey. Models created by individuals include Burke-Litwin model, Jay Galbraith, David Nadler, and Marvin Weisbord.

For example, Jay Galbraith model leads to the creation of either divisional or matrix organization structure depending on organizational objectives (Stanford, 2015). Once the organization structure is in place, the managers then formulate organizational strategies. Strategies are policies being undertaken by an organization to improve its competitive advantage (Hayes, 2014). So, OD is linked to organization structure, and organization structure is connected with organizational strategies.

J&J is guided by “Our Credo” which emphasizes on the company responsibility towards its shareholders, communities, employees, doctors, nurses, patients and all users of Johnson and Johnson products (Team, Directors and Governance, 2019). The goals being clear, the company settled on a decentralized structure which classify each subsidiary as independent company. So, organizational design is linked to organization structure. The decentralized structure lead to the formulation of globalization strategy. This strategy emphasizes that each subsidiary is autonomous. Overall, organization design consist of organizational structure and organizational strategy.

Organization Design Theories OD theories include systems theory, complexity theory, and classical organization theory. The theories are explained as follows: Systems Theory This theory describes and demonstrates how organizations work, and the various ways on how goals can be accomplished. It was proposed in the 1960s by Ludwig Von Bertalannffy and J.G.Miller (Stanford, 2015). It provides a framework that views organizations as systems made up of inputs, process, and outputs. Inputs are resources and information needed to supply an organizational system.

“Processes are activities within the organizational system that gets work done” (Hayes, 2014). Outputs are outcomes, products, services delivered by the organization. This theory is critical because it helps managers view an organization as a system and not separate units. All the groups of an organization are related, and any change in one unit will most certainly affect other units. Complexity Theory This theory states that an organization order, pattern, and structure are derived from complex systems (Stanford, 2015).

Since the systems are complex, an organization cannot be treated as separate units but as a whole. This theory is essential in explaining the complex nature of real-world organizations hence manages have to put more effort to ensure an organization achieve its objectives. This theory also explains why it is impossible for two or more organizations to be similar. Complexity theory is important because it outlines the basic principles of organizational design.

Classical Organization Theory This theory is based on the Principles of Scientific Management which was published by Fredrick W. Taylor in 1911 (Hayes, 2014). The theory views organizations as machines. He proposed for scientific job analysis, selection of personnel, management cooperation and functional supervising. Scientific job analysis provides the most appropriate way to perform a task in an organization. This theory is important because in any organization, a manager should specify the roles of each worker because it improves efficiency.

However, this theory is not common today because it treats a human being as machines. Research studies have shown that organizations are not machines that can be controlled. Organizational Structure Definition All organizations are bound to have some form of structure. There are three possible definitions of organizational structure. First, organization structure is the formal system of tasks and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals.

Secondly, organization structure is an enterprise formal configuration of roles, governance, authority, and decision making channels. It is generally shown in the form of an organization chart. An organization chart is made up of three components. Namely: job roles/responsibilities, vertical reporting relationships (Hierarchy) and cross-organizational communication paths (Stanford, 2015). Third, organizational structure means a framework within which management and operational tasks is performed. It specifies the relationship between people, work, resources, and managers.

The second definition of organization structure is conclusive because organization structure is usually shown in the form of a chart which is made up of three components. Figure 1 displays a simple divisional organization structure. The boxes represent roles or responsibilities, the vertical lines represent hierarchy (chain of command), and horizontal lines represent communication paths. Vice president Employee 1 Employee 3 Employee 2 Figure 1. Example of Organizational Structure Organization structure is also linked to organization design. OD consists of organization structure and strategy.

Organizational design theory gives rise to different organizational models which result in different organization structures. Organizational design specifies the model that best suits an organization while and organizational structure is the actual implementation of the model. For example, Systems theory gives rise to Galbraith’s star model. The star model leads to product or matrix organization structure (Stanford, 2015) Importance of Organization Structure The structure of an organization can be equated to the skeleton of a human body. If an organization has no structure, it ceases to exist.

Three reasons explain why organization structure is important. First, organization structure gives shape to an organization hence it helps in improving efficiency of a business. Secondly, the organization structure describes the roles and functions of each worker. Clear definition of tasks in an organization reduces employee conflicts and boost organizational performance. Third, the organization structure clearly states the chain of command or hierarchy in any organization. So, it helps in lowering communication breakdown between managers and subordinates or between manager and manager.

Organization structure strengthens both vertical and horizontal communication in any organization. Organization structure of Johnson and Johnson Johnson and Johnson (J&J) is a multinational healthcare organization with its headquarters in New Brunswick, New Jersey, USA. It was founded in 1886 by Robert Wood Johnson, Edward Mead Johnson and James Wood Johnson (They are all brothers). It comprises of more than 260 operating companies in almost all countries of the world and employs approximately 134,000 people globally (J&J 2017 Annual Report).

Some of its subsidiaries include Baby center L.L.C; Johnson &Johnson Health Care Systems Inc; Johnson & Johnson group of consumer companies Inc; ALZA Corporation; Pfizer Consumer. J&J is organized into three product divisions: Consumer product, Medical Devices and Diagnostics, and Pharmaceuticals (J&J 2017 Annual Report). So, J&J has a product division structure. This structure is most appropriate when there are low synergies between products. Also, when the products have different purchasing procedures and are distributed separately (Stanford, 2015).

The divisions are explained follows: Consumer Products J&J consumer products include oral care, baby care, wound care, beauty and women health, and over-the-counter pharmaceuticals. Baby care includes Johnson powder and lotion. Oral care include Listerine. Beauty products include Aveeno and Clean & Clear. Over-the-counter medicines include Tylenol, Sudafed, and Benadryl. Women health products include Stayfree and Carefree. Wound care products include Band-Aid. All these products are sold throughout the world (J&J 2017 Annual Report).

Medical Devices J&J medical devices are used in surgery, eye health, orthopedic, cardiovascular, and diabetes care. Eye health products include temporary contact lenses. Surgery care products include sterilization and disinfection products. Diabetes care products include blood glucose monitor. These products are mainly used by doctors and nurses and are sold to hospitals, retailers and wholesalers (J&J 2017 Annual Report). Pharmaceuticals J&J pharmaceuticals have six product lines. Namely, Neuroscience, Infectious Diseases and Vaccines, Immunology, Oncology, Cardiovascular and Metabolic, and Pulmonary Hypertension.

Leading products in the pharmaceutical division include REMICADE, SIMPONI, STELARA, PREZISTA, and ARIA. These products are sold directly to health care professionals, hospitals, pharmacies for prescription purposes (J&J 2017 Annual Report). J&J have product division structure because the company manufactures multiple products for different users. This structure suits the company because of three reasons. First, it enables the company to focus on specific product lines. Secondly, product division allows J&J to diversify its products.

Third, the products marketed by J&J have a short life cycle. Product division structure has limitations. The disadvantages include; high production and distribution costs, reduced economies of scale, and poor coordination between different geographic areas (Stanford, 2015). J&J is a multinational with its headquarters in Brunswick, New Jersey. So, apart from having a product division structure, it also has a decentralized structure. The company headquarters coordinates the activities of all its subsidiaries (Team, Directors and Governance, 2019).

The parent company also provides advice to its subsidiaries on critical issues such as human resource management, law, product development, advertising, and financial management. On the other hand, each of the subsidiaries is independent. Each subsidiary has a chairman, president, and Managing director. They both report to the Group Operating Committee based in the J&J headquarters (Team, Directors and Governance, 2019). So, J&J has a decentralized structure that facilitates coordination across all the subsidiaries. It advantageous because it facilitates quick decision making.

The chairman of any of the J&J subsidiaries can make independent decisions without consulting the headquarters. Also, this structure allows J&J to grow efficiently. The disadvantages of a decentralized structure is that the parent company loses control over the subsidiaries day-to-day operations. If J&J did not have product division structure or decentralized organization structure, the company would collapse. Organization structure is critical to any organization and J&J is no exception.

The structure defines the roles of each employee at J&J and creates order in a company by identifying the chain of command and hierarchy. J&J would be amorphous if it had not structure. My recommendation is that other companies with different product lines should to adopt a product division structure. The structure will help the management focus on products. Organizational Strategy Definition An organizational strategy can be defined in three ways.

First, organizational strategy is the determination of primary long term goals and objectiveness, and the adoption of courses of action and the allocation of resources necessary for carrying out this goal (Hayes, 2014). Secondly, organizational strategy refers to “ongoing decision-making process in which a firm’s manager select and implement activities and investments under conditions of competition and constrained resources in pursuit of superior organizational performance” (Stanford, 2015). Thirdly, organizational strategy refers to methods an organization employs to gain an advantage over its competitors.

The second definition is most conclusive because managers take into consideration the limited nature of resources when formulating business strategies. Organizational strategy at Johnson and Johnson In the recent past, J&J has undertaken several strategies to boost its performance. The policies are diversification, market power, Globalization, divesting business and internal development. Each of the strategies is evaluated as follows: Diversification Strategy J&J has diversified its business into three segments. That is consumer products, medical devices, and pharmaceutical.

From 2009 to date, they have also acquired more than seventy subsidiaries globally making it a family of over 260 companies. The most notable being $20 billion purchase of Synthes, a leading player in trauma surgery and $1.75 billion acquisition of Alios Biopharma, which produced therapeutics for viral infections (Team, Directors and Governance, 2019). Diversification strategy is important in that it helps a company diversify its risks. If J&J had not pursued a diversification strategy, the company would have had limited products in the market.

The advantage of diversification stagey is that it helps a company increase its market share and at the same time it is mitigating against risks. However, diversification is very costly. A company that pursues diversification aggressively risks overstretching its resources. I would recommend J&J to pursue internal growth strategy instead of diversification. Market Power Strategy To boost its market power, J&J is investing in other markets. In 2008, J&J acquired Dabao, a leading cosmetic company based in China.

By purchasing Dabao, J&J hoped that the new products in its pipeline would improve its market power. J&J is also banking on synergy to enhance its market power. For example, Liquid Band-Aid was developed by using two different products both manufactured J&J subsidiaries. Market power is crucial because it helps a company achieve its economies of scope. That is, a company can manufacture different products at a lower cost. By pursuing market power, a company can stabilize the prices of its products.

The disadvantage of market power is that a company can sets higher prices of its products hence they exploit customers. Overall, this strategy can make customers resent the company. So, I would recommend J&J to pursue diversification strategy instead of market power. Globalization Strategy Globalization strategy will give J&J maximum business advantage. J&J researches emerging markets to develop consumer and pharmaceutical products, and medical devices based on local needs.

The company is continuously expanding into new markets and that explains why 55% of annual revenue is from its subsidiaries throughout the world. By the end of 2017, the company had managed to venture into 60 countries and sells its products to over 200 countries of the world (J&J 2017 Annual Report). This strategy is crucial because it will help J&J standardize and reduce the cost of its products. If J&J had not pursued the global strategy, the company would not have expanded outside its U.S. market.

The main advantage of the global strategy is that a company grows its customer's base. However, the cultural differences in the international market pose a challenge to J&J when marketing its products. To reduce the costs involved in marketing products in new geographical areas, I would recommend J&J to pursue an internal growth strategy. Divesting Businesses Strategy Divesting is the opposite of investment. It is an optimization strategy. J&J continuously divests underperforming subsidiaries.

For example, in 2014, J&J sold Ortho-Clinical Diagnostics (blood testing unit) to Carlyle Group, a private equity firm (Team, Directors and Governance, 2019). Divesting business is important because it drives the growth of a company. However, divesting businesses is very costly because an organization has to re-allocate personnel. I would recommend J&J to implement internal development strategy instead of divesting poor performing subsidiaries. Internal development despite being slow and time-consuming will result in better performance.

Internal Development Strategy J&J is progressively improving the capacity of its business units. To achieve internal development strategy, the company allows each subsidiary to make independent decisions and it has created room for creativity and innovation. This strategy is important because it establishes an entrepreneurial culture among the employees. The advantage of internal development is that it improves employee knowledge of the company's products. However, internal development strategy has limitations. It is costly, time-consuming and risky.

I would recommend J&J to carry out SWOT analysis SWOT Analysis Strategy A SWOT analysis is one of organizational strategy theory (Hayes, 2014). It is an acronym that stands for strengths, weakness, opportunities, and threats. When formulating strategies a company should take into account both external and internal factors that might affect the company operations. Internal factors are company strengths and weakness while external factors are the company's threats and opportunities.

In the case of J&J, competitors such as Abbott Laboratories and 3M Health Care are a threat to J&J competitive advantage. A SWOT analysis is essential because it helps an organization reduce its risks and improve its performance. Its benefits include: it helps an organization get a sense of how it is performing in the industry; it helps an organization to identify its opportunities and strengths; it helps an organization chart a vision and direction (Hayes, 2014).

Human Resource Management at Johnson and Johnson Recruitment and selection at J&J A good strategic management plan should include recruitment and selection techniques (Noe et al., 2016). Recruitment and selection are closely related terms but have different meanings. There are three possible definitions of recruitment and selection. First, Recruitment “is the process by which a firm seeks applicants to fill a job vacancy” (Noe et al, 2016, 8).

Selection is the process of identifying applicants with the right qualifications, skills, abilities, and experience that will help the organization achieve its goals (Noe et al, 2016). Secondly, recruitment and selection refer to the chain and sequence of activities about recruitment and selection of employable candidates and job seekers for an organization (Hayes, 2014). Thirdly, recruitment selection is the process by which a company makes its choices for new hires. The first definition is most conclusive because selection cannot take place without recruitment. Each of the processes is handled separately.

J&J Recruitment Techniques and Practices College Recruiting. J&J directly recruits students on colleges and universities to fill their entry-level vacancies. They also have internship programs. Internships allow J&J early access to potential applicants and they can assess the capabilities on interns directly (Noe et al., 2016). The main advantage of college recruiting is that graduates generally have lower salary expectations compared to an experienced worker. The disadvantage of college recruiting is that a company incurs high training costs because they have to train graduates.

College recruiting will build a dedicated and skilled workforce at J&J because graduates strive to succeed. The limitation of college recruiting is that new employees have a longer learning curve. I would recommend J&J to post job ads on their website or Job boards like www.monste.com or www.CareerBuilder.com. Job Adverts on J&J Careers Website J&J places job adverts on their website to address people interested in the company. This method reduces the time spent on recruitment.

However, it can be costly. This technique creates a skilled and dedicated workforce at J&J because it attracts new blood into the company who happen to have fresh ideas. The biggest flaw with this technique is that ads on a company website generate little attention unlike paid ads on job boards like www.monster.com or www.CareerBuilder.Com (Noe et al., 2016). I recommend that J&J should place paid adverts on jobs boards to attract people who are looking for jobs.

J&J would have a large pool of applicants to select with relevant qualifications, skills and experience. J&J selection techniques and practices Interview J&J conducts an extensive interview on all selected applicants (Content Lab - U.S., 2019). This method allows the company to assess candidates' ability for the role. The interviewer also gets a glimpse of the candidates' personalities and interpersonal styles. Despite being the most common method of selection, interviews are very costly (Noe et al., 2016).

At least one representative of J&J should allocate time for interviewing each candidate. Also, interviews are done on one central location. Interviews builds a skilled and dedicated workforce at J&J because it ensures the company picks a hire with the right skills for a given job. The biggest flaw in this technique is that it is subjective. A good candidate may end up not being selected because of the interviewer personal bias.

Because of this reason, I recommend computerized interviewing process because it eliminates personal bias in the selection process. Psychometric tests Online recruiting generates thousands of applicants, the majority of who are not qualified for the job (Noe et al., 2016). J&J administers psychometric tests online for two reasons. First, is to weed out unqualified candidates. Secondly, it's to “determine the extent to which the applicant's natural personality matches with the disposition deemed to be most appropriate for the job” (Noe et al., 2016).

The main advantage of psychometric tests is that results are objective and free from personal bias. The disadvantage of this tests is that it makes candidates nervous reducing their chances of succeeding. The biggest flaw of this technique is the lack of correlation between psychometric tests performance and job performance. I would recommend J&J carry out computerized interviews instead of psychometric tests. Staff Retention/ Low Labor Turnover at J&J Retention is the opposite of turnover.

Employee retention refers to the ability of an organization to retain its employees. Staff retention can be defined in three ways. First, staff retention refers to the degree to which current employees of an organization remain with the organization (Noe et al, 2016). Secondly, staff retention is a policy strategy undertaken by HR department and it aims to reduce the number of employees leaving an organization by improving core processes and conditions.

Thirdly, staff retention is “the overall strategy or ability of an organization to retain its best employees and hence maintain a lower turnover” (Hayes, 2014). The third definition of staff retention is most conclusive because an organization only aims to retain its best employees.

Importance of staff retention at J&J Boosts Employee Morale Research has shown that employees with high job satisfaction are most likely to stay in an organization for a longer period of time unlike employees who do not love their work environment and the jobs they do. Retention strategies are important because they help create positive work environment and strengthen employee commitment to the organization (Noe et al., 2016) Reduces Turnover Costs Companies formulate policies that will lower staff turnover because high staff turnover is costly to an organization.

For example, a productive unit can perform poorly because of high turnover. J&J staff retention techniques Work Relationships Work relationships that affect employee retention include supervisory –management support and co-worker relations. A supervisor builds positive relationships and aids retention by being fair, allowing flexibility, giving feedback that recognizes performance and supporting career planning and development (Noe et al., 2016). Positive work relationships improves an employee morale so J&J will have dedicated employees. The advantage of work relationships is that it builds and improves teamwork.

The disadvantage of work relationships is that it causes clashes and conflicts. To reduce conflicts at the work place, I recommend J&J to offer its employees career advancement opportunities. Work-life Balance Programs J&J have programs and services such as flexible work arrangements, child care, adoption, education, elder care which nurture work life balance. These programs support employee effectiveness both at home and work.

Work-life balance programs create a skilled and dedicated workforce at J&J because it boosts employee job satisfaction and creates a tension-free work environment hence increasing employee morale. This technique has no known disadvantages. So, I would recommend J&J to continue carrying out work-life balance programs. Tangible Rewards Tangible rewards refers to rewards that can be easily translated into cash. The advantage of tangible rewards is that they motivate employees to perform better. The disadvantage of tangible rewards is that they are short-term motivators.

Tangible rewards creates a dedicated workforce at J&J because it improves employee morale. I will recommend J&J to mix both tangible and intangible rewards. Career advancement Opportunities J&J offers its employees numerous career advancement opportunities. Career advancement opportunities create a pool of dedicated and skilled employees at J&J resulting in high productivity. The main advantage of this method is that employees advance their careers by focus on paths that provide experience across a range of functions hence improving productivity.

The disadvantage of career advancement opportunities is that the outcome is uncertain. Because of the uncertainty of career advancement opportunities, I would recommend J&J to carry out work-life programs. Learning and Development at J&J Learning and development is commonly referred to as training and development. After successfully hiring an employee, companies should build their capacities. Learning and development is one of the components of a good strategic management plan (Hayes, 2014). There are three different definitions of learning and development.

First, training is “a planned effort to enable employees to learn job-related knowledge, skills, and behavior” (Noe et al., 2016). On the other hand, development "involves acquiring knowledge, skills, and behaviors that improve employees’ ability to meet the challenges of a variety of new or existing jobs, including the client and customer demands of those jobs" (Noe et al, 2016). Secondly, Learning and development, a subset of HR, aims to improve group and individual performance by increasing and honing skills and knowledge (Hayes, 2014).

Thirdly, Employee training and development implies a program in which specific knowledge, skills, and abilities are imparted to the employees, to raise their performance level, in their existing roles, as well as providing them learning opportunities, to further their growth. The first definition is the most conclusive because it treats learning and development separately. Overall, learning and development aim to make employees better.

Importance of learning and development at J&J Higher Productivity Learning increases the efficiency of employees which helps in improving the production, not only in quantity but in quality. Economy in Operation Trained employees are able to make better and economical use materials and machinery which helps in reducing costs of production, Reduce Supervision Trained employees are more professional and disciplined. So, less supervision cost is required.

Higher Morale Trained employees can work efficiently and sometimes get a reward for their work .in this way training helps motivate employees and boost up their morale Better Safety Training helps reduce unnecessary accidents at the workplace. Stability and Growth. Trained employees help the organization to diversify and expand its activities which sustains the growth and stability of J&J. J&J learning and development techniques Structured Training J&J offers its employees on-the-job training.

Training is a planned effort to enable employees to learn job-related knowledge, skills, and behavior. For example, many organizations offer safety training to teach employees safe work habits (Noe et al., 2016). J&J supplements on-job training by providing online training in their platforms such as e-University, Global Leadership Profile, School of Personal and Professional Development, Management Education and Development and leadership development program (Team, Directors and Governance, 2019). The advantage of structured training is that it focuses on employee weakness.

Structured training creates a skilled workforce at J&J because employees learn job-related knowledge. I would recommend J&J consider Organizational University. Organizational University An organizational University is a model that J&J is using to deliver organizational learning. They are internal organizational entities designed to brand and execute learning and development initiatives.

J&J School of Personal and Professional Development and their e-University are made available online to all employees and provide both e-Learning and classroom courses (Team, Directors and Governance, 2019) It is the best method because J&J can easily track and document subsidiaries that have conducted training. Organizational University creates a skilled and dedicated workforce at J&J because employees are taught job-related skills. The biggest flaw of organizational university especially the e-learning method is that they do not allow employee to ask questions (one-way communication systems).

I would recommend J&J to conduct structured trainings. Development programs J&J have development programs such as Workplace Health programs, Proactive Health Assessments & Health Counselling, Wellness and Fitness Services, Employee Assistance, and Work-Life Resource and Referral Service that promote work-life balance among employees (Team, Directors and Governance, 2019). Workplace health programs creates health and safety awareness among J&J employees. Wellness and Fitness Services focuses on employee health and in some subsidiaries they have fitness centres.

Reward Management at J&J Reward management describes all the tools available to an employer that may be used to attract, motivate and retain employees (Noe et al, 2016). Reward management as an HR function can be defined in three ways. First, Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.

Secondly, reward management is the term used to reward employees based on how valuable they are to the company. Third, a reward management plan is a comprehensive plan to compensate and reward employees fairly and consistently to attract and retain top talent. It includes direct monetary compensation and other types of employee benefits. The third definition is the most conclusive because it includes monetary and non-monetary compensation.

Importance of reward Management at J&J Rewards ensure that the employees of J&J are satisfied, engaged, motivated and productive. Rewards also help J&J retain the best employees. Employees with the right skills will ensure that the goals of a company are realized. J&J reward management techniques and practices Compensation Programs J&J have competitive compensation programs to support the movement of talent within and across the company's subsidiaries. J&J employees also have performance-based bonuses and salary plans.

J&J also have incentive programs which allow for flexibility, so every employee takes advantage of the company's offerings. Flexible bonus option that can either be cash.