Johnson & JohnsonJoel BrinkManagement Operations 491September 5th, 2012

Company Profile Began in 1886 as a small medical products company in New Brunswick, N.J. Has grown to more than 250 operating companies in 60 countries employing approximately 128,000 people Products include Band-Aid Brand bandages, Tylenol medications, Johnson’s baby products, Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses The world’s sixth-largest consumer health company The world’s largest and most diverse medical devices and diagnostics company The world’s fifth-largest biologics company The world’s eighth-largest pharmaceuticals company

Credo“We believe our first responsibility is to the doctor’s, nurses, and patients, to mothers and fathers and all others who use our products and services.”~Robert Wood Johnson, 1943

Critical Challenges Consumer Confidence has dropped Dozens of products recalled Critics claiming attention to quality has declined In 2011, pleaded guilty to bribing European doctors and paid $70 million in fines In January, Texas settled a similar case with a subsidiary, Janssen Pharmaceuticals for $158 million. In 2011, a South Carolina judge levied civil penalties of $327 million, and in 2010, a Louisiana jury awarded nearly $258 million in damages Fined $1.19 billion for 240,000 violations of Arkansas's Medicaid fraud law In April, J&J and Janssen were ordered to pay $1.2 billion for concealing dangers associated with Risperdal. Lawsuits are pending in several other states Federal Government recently rejected a $1 billion settlement

Change in Strategic Leadership In April 2012, Alex Gorsky took over as CEO as William C. Wheldon stepped down to chairman Gorsky promises to stick to the values of the corporate credo

Strategic Management Process Plans to remove a host of potentially harmful chemicals, like formaldehyde, from consumer products, becoming the first major consumer products company to make such a widespread commitment Conceding to years of pressure from environmental and consumer groups Plans to phase out other ingredients including all parabens, a type of preservative in baby products Announced it will raise quarterly dividends by 7 percent, to 61 cents per share, marking the 50th straight annual dividend increase Wheldon received a huge salary reduction when stepping down. Emphasizing a change in leadership and a reluctance to waste on excessive management salaries Gorsky plans to expand by acquiring other companies on a very large scale

ConclusionIs Johnson & Johnson really a company with high ethical standards or just portraying to be one?