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Video: From Belief to Reality: The Living Johnson & Johnson Credo Time: 9:07 Summary: From the small campus in New Jersey, the leaders of Johnson & Johnson (JNJ) manage the worldwide empire of over 200 operating units mostly in the healthcare and personal care industry. JNJ operates manufacturing facilities in 62 countries and sells its products in virtually every country in the world. JNJ is highly decentralized and is known for its customer based values. Central to the JNJ culture is its credo developed by Robert W. Johnson, the General, in 1938 and till today continues to be the source of competitive advantage for the company. The credo is not simply a document on the wall. Rather it is incorporated into every level of training for managers and therefore becomes a living document at JNJ. Everyone personalizes the documents and the values it advocates. It offers the managers the longterm perspective as to what is important and what should be done to do right. For JNJ, this credo is the glue that holds the 200+ units together. Topics Covered: Understand the importance of corporate credos Discuss the strengths and weaknesses of cultural strength

Discussion Questions: 1. JNJs credo is incorporated into every level of training for managers and has become a true living document at JNJ. What type of cultural component is this credo? Is it more effective than other cultural components? A credo represents an espoused value of a culture. This type of cultural component is the beliefs, philosophies, and norms that a company explicitly states. Student answers may vary on whether espoused values, observable artifacts, or basic underlying assumptions are the most effective. 2. JNJs credo is the glue that holds the organization together. What are the advantages and disadvantages of a strong culture, such as at JNJ? There are several advantages and disadvantages of a strong corporate culture. A strong culture differentiates the organization from others, creates stability within the organization, facilitates desired behaviors among employees, and allows employees to identify themselves with the organization. Disadvantages of a strong

2 culture includes the following: making merging with another organization more difficult, makes adapting to the environment more difficult, it attracts and retains similar kinds of employees, and can be too much of a good thing if it creates extreme behaviors among employees. 3. Can you identify any examples where the credo has been put to test? Well publicized example of the Tylenol case can be brought in here where the decision to recall the bottle resulted in the loss of millions of dollars that year, yet the company did the right thing based on its responsibilities to the customers, employees and the society. That is the only year JNJ has been in red in its bottomline but the responsibilities from the credo were put before the short-term profits.