Johnson And Johnson Orginzation

Organizational Structure/Control Mechanisms

Most companies evolve into a particular structure. As the company grows it is important to ensure that every function is managed. As time goes on the company reviews the structure and changes to meet the needs of the organization.

Johnson & Johnson is deeply committed to the heritage of decentralized management. The decentralized operating companies, affiliates and business segments are brought together in an organization structure that ensures that their activities align with overall strategic objectives This approach sets J&J apart from many other companies their size and enables them to proudly serve as the world's most comprehensive and broadly based manufacturer of health care products. Through their decentralized structure they combine the advantages of being big with the agility and focus of smaller organizations. Many of their small-company environments provide more effective focus on the needs of customers and patients, as well as a more inviting and engaging business setting (Johnson & Johnson 2007).

J&J is comprised of three business segments --Consumer, Pharmaceutical and Medical Devices and Diagnostics, which reflects the way products and services, are delivered to their customers. Across the three business segments are 38 principal global businesses, each having its own area of focus within its business segment. Many affiliates develop, produce and market the products and services which consumers and health care professionals have come to know and trust. Over 250 highly autonomous operating companies extend the geographic reach of J&J's affiliates around the world and provide still greater marketplace and product focus. The operating companies serve as the foundation of each business segment with responsibility for helping grow profitable brands. This is where the people are closest to the customers and to the business. Through the operating companies, employees can have a direct impact on their business, which gives them a greater sense of ownership in driving and continually refreshing it. This process has proven to be effective with the customers and for the company.

The employees are empowered to drive their business to meet the changing needs of customers within their regions. To ensure that the management approach continues to work successfully, leaders within and across the business segments continually challenge the optimum deployment of the decentralized structure. As the company grows, the structure evolves, ensuring that they respond effectively to the dynamics of the business portfolio, the evolution of worldwide markets and the management of talent on a global basis (Johnson & Johnson 2007).

In recent years, J&J's business segments have established shared service groups that enhance and support the capabilities of their individual companies in the primary areas of responsibility. These shared service groups help the company's better focus on the needs of the customers and the nuances of the specific product markets. J&J policy on ethics and business conduct establishes guidelines for overseeing polices and procedures and ensuring that integrity is the focal point for all company and customer relations. All managers are responsible for the enforcement of and compliance with this Policy on Business Conduct including necessary distribution to ensure employee knowledge and compliance. To ensure that each J&J operating unit throughout the world follows consistent principles relative to Labor and Employment practices, a set of global guidelines have been established. In every instance, J&J will first ensure that the policies and actions are in full compliance with the laws and regulations of the respective countries in which they operate. Under Section 404 of The Sarbanes-Oxley Act of 2002, management is required to assess the effectiveness of the Company's internal control over financial reporting.

Internal controls over financial reporting are limited and can provide only reasonable assurance with respect to financial statement preparation. Therefore, it may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures