Robert W. Campbell Award Business Case Study Series

Case Study #2: Johnson & Johnson – Social Responsibility

Large companies, particularly those whose operations affect many people around the world, are often faced with tough questions from shareholders and the general public alike. As a 120 year-old healthcare products company with over 119,000 employees around the world, Johnson & Johnson is no stranger to this concept. In 1982, the company faced serious scrutiny after outside tampering with its Tylenol® brand pain-reliever capsules resulted in the death of 7 people. Johnson & Johnson’s immediate and ethical response was not an isolated action – it was the result of a mindset of EHS excellence that had been cultivated from the beginning of the company’s existence.

The Johnson & Johnson Campbell Award Business Case Study, “Social Responsibility & Sustainable Competitive Advantage,” looks at the organization’s history, explores the creation and fostering of its culture, and examines a number of key EHS programs and initiatives. It then turns to the kinds of tough questions that continue to be posed to CEO William Weldon by those who see social responsibility as suboptimal to shareholder returns.

Johnson & Johnson consists of three-business segments with 250 operating companies in 57 countries. Despite a diverse and decentralized structure, all businesses and people at Johnson & Johnson are guided by a simple, onepage document written by the son of the organization’s founder, Robert Wood (General) Johnson. This document, called Our Credo, establishes four responsibilities. The first is to the people who use Johnson & Johnson’s products; the second, to its employees; the third, to the community and environment; and the fourth, to stockholders. By following the basic tenets of Our Credo, Johnson & Johnson has positioned itself as both a profitable and responsible business practitioner.

Johnson & Johnson -- EHS as Competitive Advantage

The Johnson & Johnson Campbell Award Business Case Study starts with the assumption that EHS is a core value -- because, for them, it is. Johnson & Johnson’s leaders, however, are aware that this belief is not shared by everyone -- including some of its own shareholders, who may be more focused on profit margin. By examining the company’s Credo-based culture and a number of its key EHS initiatives, Johnson & Johnson wanted students to come to understand the myriad ways in which social responsibility offers the company a truly sustainable competitive advantage.

Johnson & Johnson’s environmental initiatives run the gamut from waste reduction to the development of wide-ranging solar energy purchase and production, saving millions of dollars annually. A health program that began by seeking to eliminate specific unhealthy practices has become a holistic, behavioral strategy called “Healthy People.” This strategy saved $9.2 million in 2006 alone, and has had untold productivity impact. On the safety end, Johnson & Johnson’s numerous targeted programs are championed by senior-level staff and continuously assessed for improvement opportunities. One such program, SAFE Fleet, not only saves lives and avoids costs, but provides continuity during mergers and acquisitions of new businesses.

Still, there are those who question the value of such broad, long-term social responsibility endeavors.

One such person is Perry Sommers, an MBA student whose business school has named Johnson & Johnson CEO William Weldon its “Business Leader of the Year.” Sommers believes that the organization could secure more profit for its shareholders by concentrating solely on compliance. He submits a number of tough questions to Weldon in advance of his acceptance speech.

Although Weldon is secure in his belief that Johnson & Johnson is right to follow Our Credo and take the actions it does, the questions Sommers raises may be the very same ones raised by shareholders, especially in trying economic times. Intrigued and interested in spurring discussion, Weldon decides to meet with top Johnson & Johnson leaders and pose the question to them -- and to the reader: “Is there a link between being socially responsible and creating sustainable competitive advantage? If so, how is that advantage created?”

We spoke

with Joe Van Houten, Senior Director of Worldwide Environment, Health & Safety at Johnson & Johnson, about the intent and impact of their Campbell Award Business Case Study.

JVH: Johnson & Johnson has brought innovative health care products to customers for almost 125 years. The company’s continuing success is rooted in the tenets of Our Credo, which clearly articulates responsibility to customers, employees, the community, the environment and stockholders. Written in 1943 by Robert Wood Johnson, Our Credo is a forwardthinking statement of business practice predictive of sustainability principles that are popular today. The Johnson & Johnson business case demonstrates a clear connection between social responsibility and competitive advantage. Our commitment to the triple bottom line of economic, environmental and social success is captured in a simple EHS mission: “Healthy People…Healthy Planet…Healthy Business.” We meet our responsibility to stakeholders and facilitate the success of the company by conducting business in a manner that assures the health and safety of employees while protecting the environment during both profitable and challenging economic times.

Teaching materials

Video: welcome from William C. Weldon, chairman and CEO, Johnson & Johnson (1:24 min.)

Share it with students: provide this link http://blip.tv/play/AYKK9wwC, or embed the video in your course page or LMS. To embed, copy the following code and paste it into the HTML source of your web page:

Videos: Views from EHS at Johnson & Johnson (6 videos, 16:17 min. total)

Share it with students: provide this link http://blip.tv/play/hr8FAoPkDg, or embed the video in your course page or LMS. To embed, copy the following code and paste it into the HTML source of your web page:

Video: Johnson & Johnson overview (17:16 min.)

Share it with students: provide this link http://blip.tv/play/AY3NEIPkDg, or embed the video in your course page or LMS. To embed, copy the following code and paste it into the HTML source of your web page:

Video: National Safety Council overview (4:01 min.)

Preview	Download (Right-click link and choose "Save target as")
	Johnson & Johnson Business Case Study (139KB, .pdf)
	Teaching Notes (91 KB, .doc)
	Classroom Presentation (1 MB, .ppt)

Portal Home Discussion Safety News Desk Copy Request NSC Press Books Supplemental Information Student Resources Faculty Resources Contact Form/Help Request

NEW ON THE PORTAL:

Discussion area
New edition of the Accident Prevention Manual for Business & Industry: Security Management
Downloadable quizzes, case studies, answers and PowerPoints
Robert W. Campbell Award Business Case Study Series