Friday, May 23, 2008

J&J Credo - more trouble than its worth?

An assignment for class this past week involved dissecting the intricacies of Johnson & Johnson's credo.  J&J is the esteemed health care company that has proven to be not only one of the best investments over the past five decades, but also the leader of its industry in developing pharmaceuticals and health care products.  The one page J&J Credo summarizes the four major stakeholders of the company and their responsibilities to each one.  

At first glance I was a little annoyed by all of the lofty goals stated in this document.  I found it unrealistic, cocky, and overbearing that a company could realistically think that they had the ability to please all of these stakeholders.  I always thought that being excellent at one thing was always better than being OK at many things.  But after further examination, I learned that their credo was created prior to the company going public and becoming the behemoth it is today.  Furthermore, the fact that their stock is up 6,000%+ over the past 4 decades compared to the S&P's measly 1,000+% over the same period, goes to show that they do deserve some credit.   I think it is difficult for every company to start out aiming to please every single aspect of their business.  Because businesses are run by people and people are imperfect, there will always be shortcomings.   However, without this credo in place, who knows how the Tylenol scandal would've transpired.  Maybe if more companies created credos like JNJ's at the beginning of existence, they will not struggle as frequently when deciding to make the right decision.

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