The objective of this paper is to examine the structural design of an organization and provide an analysis of the factors that affect the choice of design. In this case, the paper examines Johnson and Johnson Company Ltd to determine how the overall work is divided and organized for the completion of tasks. Organizational strategy is also monitored so as to determine the firm’s current state in relation to how it intends to achieve long and short-term objectives. The paper provides an analysis of the factors that influence the choice of a type of structural design. It also gives reasons that led to the company’s change in organizational structure and the benefits that it has accrued from doing so. The overall findings will be particularly useful in providing more details about structural design with the ultimate goal of creating a deeper understanding of the topic.
ohnson and Johnson’s company has a multidivisional organizational structure that gives the divisional management the freedom to run as well as manage the company operations independently. With well over 250 operating companies, each unit is headed by an independent executive who has responsibility for all the operations of the unit. The structure is largely based on a decentralized corporate environment cutting across countries as well as cultures.
Each of the divisions represents separate business and profit centers that are charged with the responsibility of determining the firm’s overall long-term strategic objectives. This also includes financial management and control of each unit (Senior & Fleming, 2006).
Besides division on the basis of location, the firm also has separate sections based on its three main business segments. The consumer business, medical device and diagnostics, and the pharmaceutical business are all run apart as they have different functions.
Division of labor among leadership and employees
The company has a flexible system where the leadership is charged with the responsibility of making sure that employees are encouraged and motivated to do their jobs. All the same, both parties are responsible for the achievement of the organizational objectives. The system in place encourages open communication between the management and employees so that there is coordination between the two levels (Jones, 2007). This reduces the inconveniences of a communication barrier thus saving time in dealing with issues that arise. Each member of staff also has a set of duties and responsibilities as outlined in their respective job descriptions. As a result, the leadership role also includes ensuring that other employees are performing their duties as expected.
Changes in structure over the years
Since the incorporation of the company, the structure has gradually changed from a centralized structure to what it is now. This is mainly attributed to the company’s extensive growth and expansion of business ventures. A growing need for decentralization and division of power compelled the company to adopt the new system for a somewhat more efficient management function. This has also been influenced by the global shift in management systems by most large firms towards a decentralized structure (Senior & Fleming, 2006).
As most firms are expanding their scope of operations, a relatively more flexible organizational structure has proved to be remarkably effective. Running the company from a central location requires much technical competence and detailed knowledge of all segment markets, which may turn out to be difficult (Jones, 2007).
Advantages and disadvantages of the current structure
The structure provides an opportunity to develop people as they are given the chance to work in different areas where they can sharpen their skills. In addition to this, Johnson and Johnson Ltd also benefits from the fact that the companies are run by locals of the respective regions. This translates to a better understanding of the market not to mention an enhanced capability to meet customer needs.
Another great advantage of the new system is that it helps in promoting an innovative culture. People with different skill sets and ideologies meet and come up with brilliant ideas that can be put into action. A decentralized structure facilitates diversification and growth. This is because the top management is free to focus on strategic planning and the achievement of objectives (Jones, 2007).
On the other hand, such a structure often leads to much less control of the company operations, particularly where decision-making is concerned. This presents a serious problem, particularly where there are projects or tasks that are to be jointly performed.
Lack of coordination is another issue that arises with a decentralized system.
Essentially, it somewhat becomes a difficult task to move people in the same direction so as to achieve mutual goals. This is largely attributed to the fact that such a system encourages autonomy thus creating a culture of independence.
Additional levels of hierarchy also result in problems. Information may be distorted thus creating loopholes for managers to pursue individual or selfish interests.
The firm’s response to environmental cues
The company has been very successful at dealing with environmental issues in the years it has been in operation. It has been at the forefront in the provision of services to the public ranging from corporate social responsibility all the way to promoting consumer awareness; it is also among the firms with a good reputation in this field.
Strategies used by the firm
One of the ways through which the firm encourages innovation is by setting up an internal ventures program. This is a system that is geared towards encouraging recommendations on any field from within the organization. This gives all members of staff an equal opportunity to contribute through ideas towards the achievement of organizational objectives.
There is also a mechanism where personnel are allowed to work in stem cells. This is a system where people are encouraged to work in groups. It is based on the ideology of synergy. These groups are encouraged to come up with business plans, make presentations, and put everything together to work on the respective projects. Once the venture is seen to be viable and likely to result in positive results, funding for such projects is fully provided by the firm.
Another strategy that has also been used by Johnson and Johnson is to bring all the stakeholders of the firm to share in the firm’s growth through generating new ideas. Consumers, pharmaceutical and medical personnel just to mention a few, are brought together to share and give ideas.
On account of the success of the company in efficiently managing its operations, the structural design has proved to be very fruitful. As much as the system poses a number of challenges, the firm has been a huge beneficiary by having skilled and brilliant people running the company.
The firm’s management approach that is embedded into the organization’s structure is based on a unique philosophy that has guided the company through the path of success. The doctrines of the firm’s beliefs have also played a significant role in helping the firm realize its short, as well as long-term objectives. This has also been the firm’s recipe for success. There is a reduced likelihood of the whole organization bearing the burden of the mistakes made by a single decision-maker. The fact that the company values all stakeholders also goes hand in hand with the current wave of change whereby the consumer is much more empowered. These efforts in creating value for all their clients are a strong indication of how it has been successful at capturing a large segment of the market.
In this way, Johnson and Johnson, has been able to stay in business and meet the ever-changing needs of its clients for all the years it has been in operation.
Jones, G. R. (2007). Organizational theory, design, and change (5th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Senior, B. & Fleming, J. (2006). Organizational change (3rd ed.). Harlow, England: Prentice Hall/Financial Times.