Codman & Shurtleff Inc.

The company continually strives for innovation and leadership. Utilizing a decentralized management approach, it allows each of their companies to function as its own small business giving the advantages of both a small and large organization. The Executive Committee of Johnson & Johnson is the principal management group responsible for the operations of Johnson & Johnson. In addition, certain Executive Committee members serve as Worldwide Chairmen of Group Operating Committees, which are comprised of managers who represent key operations within the group, as well as management expertise in other specialized functions. These committees oversee and coordinate the activities of domestic and international companies related to each of the Consumer, Pharmaceutical and Professional segments of business. Operating management of each company is headed by a Chairman, President, General Manager or Managing Director who reports directly to, or through a line executive to, a Group Operating Committee. In line with this policy of decentralization, each international subsidiary is, with some exceptions, managed by citizens of the country where it is located.

One the impact of such functional structure is that the effective communication and synchronization among division might be limited due to organizational restriction for having several divisions that will work individually (www.business2000, 2016).

In the recommendation portion of this case analysis, I will be suggesting that the best way for J&J to become more centralized yet not completely decentralized would be to rely on clusters of companies rather than on continuously spinning off and making more and more decentralized autonomous sub-companies. My "cluster" approach would bunch together companies that are similar in nature, working on similar goals, performing similar functions and have similar customer bases.

Another strength is the bottom-up structure which allows subsidiaries’ managers to adjust quickly to a changing market. Allowing the operating management to make their own decisions helps the subsidiaries better adapt to new products and demand and leads to speedin up the decision making process.

* Management and Control - According to law, day-to-day management of a corporation rests with the officers appointed by the board of directors, who are ultimately responsible for the management of the corporation. The board of directors is elected by the votes of the shareholders.

A managing team would be split up into three groups; top-level, middle and lower. There is specialisation in this managing sector where each group can focus on their own targets so that the large firm on the whole could potentially accomplish. The top level would be responsible for strategic decisions and so they must look into future prospects and be aware of external factors like markets. This can be advantageous, for the firm is looked upon wholly in comparison to the rest of the world. The middle level would be in charge of making the tactical decisions where they are responsible for carrying out choices made by the top level. This part of the sector would be the active doers where they put the ideas into practice. Finally the lower level managing group are responsible for the operational choices. They would concentrate on making sure that the other two are carrying out their goals. They can be portrayed as the motivating unit, to make sure that there isn’t any lack of action. This organisation of the division of labour can be extremely beneficial in achieving their goals. Management has a method where they would start by planning what they will do, following with organising to make optimum use of the resources required. Then there would be some motivation and leading where there would be some exhibition of skills. Lastly some controlling to ensure the plan is being followed. The procedure of

This structural form allows for an organization to be divided into various divisions where people with diverse skills are kept together in the form of groups that focus on particular customers or services. Each division has its own finance, health services, human resources and marketing staff. Each division has its own knowledge, abilities, expertise and resources required to function properly and handle tasks on its own. Changes in the environment do not affect the HCO. With a decentralized authority, departments under the divisional form are able to monitor themselves and adjust accordingly, and make faster

Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all

The Office of the Chairman is responsible for the overall operation of the Company and implementing the policies set by the Board of Directors (Elliott 34). See Appendix B for the names and positions of top managers.

Decentralization has several advantages. Staffs are encouraged to develop decision-making skills, which help them advance in their careers. The autonomy afforded by this style of operation also increases job satisfaction and motivation. For example, if maintenance staff receives a complaint on a fault by a customer, in a decentralized organization the maintenance staff has the power to fix the problem without getting the approval from the administration. If that same front maintenance staff determines that a customer has been

Other common terms for the idea of organizational decentralization include: team self-management, self-management, shared control, distributed leadership (Lambe, Webb, & Ishida, 2009) and holacracy (Robertson, 2007). While these terms may have small differences they all describe the common theme of distributing power across organizations. Several concepts help to explain why decentralization and the encouragement of teamwork throughout an organization are often superior to traditional management structure.

Also, financial plan can be varied due to various accountabilities in different subsidiaries, which ensure the subsidiary managers have freedom with boundary set up by corporate level. In our case, Codman makes its own plan and budget, and then formalizes it after acceptance by corporate committees. For decentralized system in J&J, the complex with both levels of planning and control, provides real benefits. For example, more accurate information and fair measurements have been preferably delivered through bottom-up process. The subsidiary managers will run the business in the same direction of the whole Corporation, simultaneously deal with problems by their own ability and wisdom, rather than leave them to the corporate level.

* Lack of Information and communication across divisions Each division maintains its own marketing, manufacturing, logistics and administrative departments (Silos)

Like most multinational corporations, the shareholders own the company and they may also be the board of directors. A Chief Executive Officer (CEO) will be appointed to nominate and manage the operation of the company as a whole. A Chief Operating Officer (COO) will be managing the company’s day-to-day operations and reports them to CEO. The Chief Financial Officer (CFO) will be managing the finance and account together with the

In a centralized organizational structure one individual is responsible for making all the decisions and maintains control of the company by giving direction. While Decentralized organizational structures often rely on several persons with the authority to make final decision for the company’s well being. Some benefits associated with a centralized organization are as follows: Reduction in cost in the work environment, having a focused vision on one common goal and Reduction in conflict. A Few drawbacks of a centralized organization include, No secrecy because all ideas and decisions are conveyed to all, No special attention and Delay in work. Advantages associated with Decentralization are; Huge relief is provided off the top managers, Greater use is made of employees skills and Decision making is left up to educational and well informed people.