Case Study of Johnson & Johnson: Creating the Right Fit between Corporate

Communication (y) and Organizational Culture (x)

Early in Bill Nielsens tenure as the director of corporate

communication for Johnson & Johnson, Ralph S. Larsen, the CEO to whom he
reported, told him, I believe in sunlight about everything. Larsen wanted to know the
truth about company activities, whether good or bad, in an open way and without
embellishment, and offered his assistance to Nielsen. From the start, then, Nielsen
knew that the CEO would support him as long as he, Nielsen, was honest and direct.

New to the company in the late 1980s, Nielsen soon discovered that none of
the benchmarking studies about corporate communication could provide a model for
Johnson & Johnsons corporate communication function, because its culture is unique.
As he explained to us: Johnson & Johnson is a consensus management organization,
a culture of shared understanding about how to run the business, not a culture of
elaborate rules. Building consensusrather than imposing ones formal authority and
evoking rules characterizes the way that work is done even at the most senior level of
the organization.

Along with a culture of consensus building, Johnson & Johnson has

a decentralized structure on which it places a very high value. Decentralization is so
important a value that it is inscribed in one of the companys rare written statements about
the companys strategic direction and is held in high regard as a primary source of
productivity and innovative ideas. As further indication of the importance of this value, all
strategic planning occurs at the operations level where senior managers make financial
forecasts that are then rolled into an overarching corporate plan. How, then, is Nielsen
able to help craft a cohesive voice for the company while he has no control over
its parts and pieces, nearly 200 autonomous operating companies? To build
consensus, Nielsen chairs a monthly Public Affairs Advisory Group. The group is
composed of everyone at headquarters who has responsibility for
external constituencies, the heads of the public relations groups at the
major operating units and such corporate staff functions as regulatory actions, investor
relations, legal, advertising, and environmental safety and health. Discussion ranges from
whats in the news that may concern Johnson & Johnsons reputation to investor relations,
corporate philanthropy, and new legislation.

In addition, despite the large number of operating companies, Johnson &

Johnson has created a climate of understanding and cohesiveness among internal
constituencies around a set of values stated in the Credo, including the importance
of reputation. As Nielsen has described this, The key to Johnson & Johnsons global
standing is the strength of its reputation in the United States. He, then, gives this value
a central place in the work of the division he runs. The division is in charge of tracking
issues that make up corporate reputation, such as the companys core messages about
the quality and integrity of its management, products and services; its use of corporate
assets, financial soundness, and value as a long-term investment; its innovation; its
community and environmental responsibility; and its ability to attract, develop, and keep
the brightest and most talented people. Operating managers are encouraged to contact
the corporate communication group when issues arise in the operating unit that can
potentially affect how people regard the cooperation. For any issue below that on the
radar screen, Nielsens group does not have to be contacted; rather, the individual
companies decide on their own about such matters. As he explained to us, If we put out
a rule, the whole organization would come to a crawl. It comes down
to individual judgment, lots of one-on-one talk, and meetings between me and other
managers. Johnson and Johnson has taken first place in the annual reputation survey
conducted by the market research firm of Harris Interactive and the Reputation Institute
since the inception of the survey in 1999. In other words, Johnson & Johnson is the most
highly regarded company in the United States.

Building relationships with senior management also facilitates the work of Nielsens
group. Of the 100,000 employees at Johnson & Johnson, about 18,000 are managers.
When a new operating manager comes on board, Nielsen will send a note, phone, or
send an e-mail, saying Please stop by next time youre in New Brunswick. The manager
soon learns that Nielsen has the ear of the CEO and can lobby for ideas internally. In
addition to face-to-face communications with senior managers, Nielsen has revamped
the management magazine, Worldwide News Digest, to reflect senior managements
concerns with business issues of strategic importance. Rather than presenting show-
and-tell anecdotal information, he places emphasis on stories that affect business
development.

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--
Regards,

Rome Chichioco-Paje