Paper Summary:

In this article, the writer covers four mechanisms of control used by Johnson & Johnson (J&J) and how these mechanisms reinforce desired behavior at the division President level. The writer examines the positive and negative aspects of these control mechanisms and explains how these control mechanisms impact the organization in its four key functions, which are planning, organizing, leading and controlling. The writer concludes that J&J joins a few other Fortune 100 companies in being able to encourage strong financial and ethical performance while continuing to grow and strengthen.

Outline:
Budgetary Controls
Market Controls
Clan Control: Culture and Empowerment
Drawbacks
Conclusion

From the Paper:

"As demonstrated above, J&J allows a great deal of operating freedom to its division Presidents. It is similar to the best practices in industry, such as those at Baxter, Abbott and GE, in identifying and encouraging managers to develop. J&J states that one of the advantages of its independent division structure is its ability to give a lot of responsibility to top operating managers quickly. Although the managers have a lot of operating freedom, they must nevertheless respond to corporate cultural values; this is a central condition for promotion of division executives."

Sample of Sources Used:

• Atherton, E. a. (1998). Practices of the best companies in the medical industry. International Journal of Health Care Quality Assurance , 173-176.
• J&J. (2007). Governance. Retrieved October 22, 2007, from J&J: http://www.jnj.com/community/governance/index.htm
• Snell, S. (1995). Human resource management and firm performance: testing a contingency model of executive controls. Journal of Management , n.p.

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