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Johnson & Johnson - Critical Implication for an MNC from

Reading the lecture series of Ralph S. Larsen which is on Leadership in a ValueBased Organization we understand the value base in Johnson & Johnson is the
form of Credo which is guiding the organization from last 72 years. This Credo is a
single page write up on principle values which its fonder Mr. General Robert Wood
Johnson has laid for the company as a vision for future operation locally and
globally. Johnson and Johnson dont have mission statement like all other
companies but they follow this Credo as a guiding force in all their decisions of
long and short term goals and in corporate dilemma.
First and most important think for an MNC is to build company on strong
foundation on Deontological Ethics which says the value should be good and it
derive notion of right and wrong from that values. These values can be visible in
their mission and vision statement highlighting the working principles of the
company. If a company is does not want any mission and vision statement then
they can formulate certain goal for the company and the road which they are
going to follow which will be the philosophy of the companys operation like Credo
for Johnson and Johnson.
Also the company value system should have certain boundaries on places, where
industries well-accepted malpractices just wont work, every decision and change
should be measured on the ethical and value systems of the company. Also the
company have to create such a standard in their decision making that in future
this past will guide them and help them not to take any wrong decisions.
While defining companys mission and vision or Credo, they have to clearly
mention the responsibilities of the company in a top down manner. Giving first
preference to the customers who are going to use the product and services of the
company. When we are mentioning our responsibility towards our customers we
should mentions the parameters on which will we are going to provide our
services. It could be in terms of cost, quality, service or any other criteria.
The second responsibility of the company is towards the employees of the
company which also called the internal customer. Since these employees are the
face of the company which directly dealing with customers on day to day basic,
we should make sure that the compensation should be fair and adequate. Every
men, women and any other global employee should get equal opportunity to grow
and company should recognize their merit on timely basic. Also company should
be sensitive towards the family member of the employees and try to fulfill their
family responsibility.
Every MNC should understand there responsibility towards the community in
which the company is operating. They have to be good corporate citizen and pay
taxes in a fair manner. Also company should involve in the corporate social
responsibility (CSR) to encourage civic improvement and better health and
education. Since now it became a mandatory for all the companies they should try

invest this money in best possible manner and install proper mechanism to have
proper control.
Every business have a clear goal of making profits for his shareholders and if the
company fulfill above responsibilities towards its customer, employees and
community, it would be visible in their sales. Since customer trust the company,
employees are happy and satisfied and community praise this company its will
reflect in their positive business.
When company have to take tough decisions it should follow Utilitarianism
theory that brings the greatest benefit to the greatest number of people. It
should take decisions which are in the favor of customers, majority of employees
and other stockholders in a very sensitive and thoughtful manner. The companys
responsibility is to take care of shareholders benefits and to keep the company
growing and healthy for future operations.
The company should not hire people and then impart its values to them. Company
has to follow Virtue Ethics which assumes that good persons will make good
decisions. It is wise to take employees with good values and give them an
environment where they can flourish. This will help to create good ethical and
value base managerial structure in the company.
The value system of the company is helpful in holding the global operations of the
company. Every single employee throughout the globe has one mission and vision
or credo to follow which will help company to achieve its target and customer
satisfaction.
The company have to be result oriented but they have to take out some tome to work
with their employees to explain the challenge and then let them come up with some
solutions and options. Company should not create a threatening and fearful environment,
but try to create a safe harbor where people can experiment and innovate and take
intelligent risks. Company should understand that failure will be their when they try and
they have to accept this. The important part for the company is that its employee should
keep trying, striving to improve.
Johnson and Johnson is known for its best practices in the industry and the way they had
handled the Tylenol incident in a very ethical manner. But from November 20, 2011
article in USA today has revealed that the J&J had been found liable or reached to a
settlement of $750Mn in taxpayer health care fraud claims, paid $70Mn to settle the
foreign bribery charges, company was sued by the customers of hip replacements which
got failed in the body because of bad quality and also they had to shut down some major
plants because it failed to meet the federal safety standards. It is clear than in recent
past there were several decisions taken by Johnson & Johnson that have deemed them
unethical.
Conclusion
For the MNCs to deal with such situations is to have a risk management plan. The
company should identify all the risk attached and then locate the source of the risk. After
knowing from where the risks are coming from will help in eliminating some risk or atleast better handle them. Once looking at the risk they can decide how they want to

handle it and develop a risk management process aligned to company value system. This
will help the company to formulate effective risk responses.

Reference - Ethical Issues In American Business: Johnson & Johnson by Martin D.


Carrigan, University of Findlay, USA in Orlando, Florida, USA 2014