The core competencies of Johnson and Johnson (J&J) are: innovation, extensive collaborations, and corporate culture. By understanding that investing in innovations would increase its leadership position, J&J has been spending heavily on research and development (R&D) for many years. They are now among the world’s top spenders in R&D with approximately 12 percent of its sale revenues invested in 9,000 scientists who currently work in research laboratories around the world. There are currently four J&J innovation centers located in Boston, California, London, and Shanghai. Extensive collaborations is another core competency that helps J&J dominate the health-care market. The enterprise has been involved in acquisitions of other firms to expand
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Each division operates as an independent business with their own functional specialists and departments, such as finance and human resources management departments that can help develop and execute their strategies. This organizational structure gives J&J many advantages such as the ability to quickly respond to the changes in the market environment through autonomy and by allowing divisional managers to solely concentrate on their division’s products and market segments. The structure also minimizes the problems related to sharing resources within a corporation because each division got its own resources. Weldon, former CEO of J&J, however believed there’s a lack of synergy between the three divisions. And thus, he tried to escalate J&J’s profit growth by improving the synergies between the business units across the three divisions. As a result, a corporate office got constructed and enabled business units to …show more content…
Instead, it is much decentralized. As discussed, its organizational structure grants a high degree of autonomy, and so it provides divisional managers the freedom to plan and execute strategy according to the external situations. The downside of having a decentralized culture at J&J is the high overhead expenses due to the extra spending on support process activities and the duplication of personnel, operations, and investment for each division. Nevertheless, this is not a problem to the franchise because it is generating much more in profit-margin compared to the amount it spends on profit-making
Each division operates as an independent business with their own functional specialists and departments, such as finance and human resources management departments that can help develop and execute their strategies. This organizational structure gives J&J many advantages such as the ability to quickly respond to the changes in the market environment through autonomy and by allowing divisional managers to solely concentrate on their division’s products and market segments. The structure also minimizes the problems related to sharing resources within a corporation because each division got its own resources. Weldon, former CEO of J&J, however believed there’s a lack of synergy between the three divisions. And thus, he tried to escalate J&J’s profit growth by improving the synergies between the business units across the three divisions. As a result, a corporate office got constructed and enabled business units to …show more content…
Instead, it is much decentralized. As discussed, its organizational structure grants a high degree of autonomy, and so it provides divisional managers the freedom to plan and execute strategy according to the external situations. The downside of having a decentralized culture at J&J is the high overhead expenses due to the extra spending on support process activities and the duplication of personnel, operations, and investment for each division. Nevertheless, this is not a problem to the franchise because it is generating much more in profit-margin compared to the amount it spends on profit-making