Principles of Management

Submitted By:
Mahad Shahbaz Danial Mehdi Sadiq Huzefa Mansoor

Class:
Section H

Submitted To:
Fauzia Kawnal

Date:
9th December, 2010

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PLANNING
PLANNING PROCESS: Planning is The systematic development of action programs aimed at reaching agreed business objectives by the process of analyzing, evaluating, and selecting among the opportunities which are foreseen. It is crucial for any organization to reach success thus J&J follows a proper planning process to ensure achievement of goals.

OBJECTIVES OF JOHNSON AND JOHNSON: The fundamental objective of Johnson & Johnson is to provide scientifically sound, high quality products and services to help heal, cure disease and improve the quality of life The Company believes that their credo laid by their founder Robert Wood Johnson is their guiding force to business success. J&Js credo:
We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers' orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit. We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints.

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There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical. We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources. Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.

Johnson & Johnson strives for higher quality of life, decreasing cost, employee satisfaction and product innovation which can be derived clearly from their credo. To achieve these objectives they exercise honest environmental friendly processes and legal responsibilities, reward employee & distributional achievements, maintaining superior cost cutting technology and introduce new products through highly focus research and development. After every company year the progress is evaluated by top management and new short term goals are announced for the next year. This completes the planning process at J&J.

HIERARCHY OF OBJECTIVES OF JOHNSON AND JOHNSON MANAGEMENT: Top Level Management: The top level management facilitates lower level/middle level management by creating a vision, mission statement, goals, objectives and strategies. It sets up a path for middle and lower level management to achieve goals.

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Middle Level Management: The middle level management gives execution derived strategies. Lower Level Management: The lower level management implements or executes strategies made by the top level managements. The companys current long term goals are to invest in promising new businesses while maintaining
leadership positions in high growth businesses.

REQUIRED QUALITIES OF A PLANNER AT J&J: 1) They should have considerable practical experience within their organization; preferably, they should have been executives in one or more of the organizations major departments. This experience will help them develop plans that are both practical and tailor-made for the organization. 2) Planners should be capable of replacing any narrow view of the organization they may have acquired while holding their organizational positions with an understanding of the organization as a whole. They must know how all parts of the organization function and interrelate. In other words, they must possess an abundance of the conceptual skills. 3) Planners should have some knowledge of the interest in the social, political, technical, and economic trends that could affect the future of the organization. They must be skillful in defining those trends and possess the expertise to determine how the organization should react to the trends to maximize its success. This qualification cannot be overemphasized. 4) Last qualification for planners is that they be able to work well with others. Their position will inevitably require them to work closely with several key members of the organization, so it is essential that they possess the personal characteristics necessary to collaborate and advise effectively. The ability to communicate clearly, both orally and in writing is one of the most important of these characteristics.

JOHNSON AND JOHNSON PLANNER: The planning process at J&J is performed by its top management who develops strategies and objectives which are to be followed and met. Due to its decentralized management approach departments are given ample room of freedom to plan their functions which needs to be inline with the overall company objective. Depending on the department, a good planner at J&J is visionary, flexible, adapt to changes, can forecast future situations, support employees and always makes quick backup/alternate plans in case the previous plans fail.

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TYPES OF DECISIONS ACCORDING TO JOHNSON AND JOHNSON:

J&J mentions its programmed (routine) decision making in the form of Standards of Procedure (SoP) while major one time plans are designed usually by top level management (eg: launching a new product which requires large amount of money for launching and marketing that product)

JOHNSON AND JOHNSON DECISION MAKING CONDITIONS: J&J believe that there exists 30 to 40 percent chances of risk and the only way to progress is by making risk decisions. Complete uncertainty conditions are inevitable and need to be faced. Example of complete uncertainty condition is world economic crisis.

J&J DECISION MAKING PROCESS: J&J frequently uses groups to make decisions. This is found very common in most MNCs as it provides diverse and numerous amount of solutions/alternatives. J&J relies more on brainstorming than the other two techniques (Nominal and Delphi) mainly because it is fast and less time consuming with more positive responses.

SCHEDULING TECHNIQUES: J&J uses PERT as its main scheduling tool. The PERT is a scheduling tool that does emphasize the interrelationship of task, a technique that evolved partly from the Gantt chart. It mentions the steps of process or tasks to be completed by operational employees to reach objectives along with using management by objective principle.

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ORGANIZING
The below figure is the Johnson and Johnsons organization chart

DIVIDING JOB ACTIVITIES: Division of Labor into various portions of a particular task is followed at J&J for low level processes and procedures (separate guard and watchman; separate line checker of all production lines). This is to ensure efficiency and minimization of errors.

BEING RESPONSIBLE AT JOHNSON AND JOHNSON: Managers at J&J can be described as responsible if they perform the activities they are obligated to perform. It is essential to carefully choose responsible managers to ensure achievement of organizational goals as without proper implementation of plans achieving organizational goals is impossible. Because managers have more impact on an organization than clerical or low level labor staff, responsible mangers are a prerequisite for the success of management system. Responsibility given to the managers at J&J is judged on the following:

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1. 2. 3. 4. 5. 6.

Attitude toward and conduct with subordinates Behavior with upper management Behavior with other groups Personal attitudes and value Past experience Posses necessary skills

AUTHORITY: Once a task has been prescribed to a manager, respectable amount of authority is delegated to him in order to assist him complete the task. SPAN OF MANAGEMENT: Span of management at J&J is generally small with one superior overlooking 1-3 manger. This may also be due to the reason that managers at J&J have large amounts of responsibilities in comparison to other companies operating in the same industry (eg: one manager responsible for entire province rather industry standard where one manager looks at one district only).

SCALAR RELATIONSHIP: At J&J unity of command is observed where one employee has to report to only one boss. This is to generate clarity of task and responsibility.

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INFLUENCING
INFLUENCING: It is the process of guiding the activities of organization members in appropriate directions. Appropriate directions are those that lead to the attainment of management system objectives. It involves focusing on organization members as people are dealing with such issues as morale, arbitration of conflicts and the development of good working relationships. It is a critical part of a managers job. In fact, the ability to influence others is a primary determinant of how successful a manager will be.

INFLUENCING AT JOHNSON & JOHNSON: Influencing at Johnson & Johnson is more like the top management leading, motivating, considering groups, communicating, understanding people and encouraging creativity and innovation in the all subordinates and employees. They mostly try to influence employees by communicating with them.

LEADERS AT JOHNSON AND JOHNSON: Johnson and Johnson believe in the situational approach to leadership. The leader plays an important role at J&J. They believe in the concept of leader flexibility that successful leaders must change their leadership styles as they encounter different situations and of Transformational Leadership that is to inspire employees beliefs of organizational values, justice and integrity. Leaders at J&J raise employees awareness of organizational issues and their consequences. They create a vision of what the organization should be, built commitment to that vision and facilitate changes that support the vision.

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MOTIVATION AT JOHNSON AND JOHNSON: Management at J&J believes that motivating organization members always leads to more productivity. The management tries to minimize inappropriate behavior and maximize appropriate behavior. They use motivating strategies such as communicating well with all employees, job design and job rotations. They also provide their employees with monetary and non monetary incentives such as a pay increase, bonuses, and insurance.

GROUPS AT JOHNSON AND JOHNSON: At J and J, both formal and informal groups are used to solve different kind of problems. But they consider their groups to be team of members who also influence each other. Each member has mutual trust with each other and cooperate to deal effectively with threats toward and within the team. The management also promotes this by providing secure jobs, demonstrating interest in team progress and rewarding and recognizing accomplishments. Team members communicate often with each other, show respect for each other and demonstrate competence.

CORPORATE CULTURES AT JOHNSON AND JOHNSON: Employees to be treated fairly, given a state of security, clean environment and many other concessions as written in the J and J credo.

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CONTROLLING
CONTROLLING: Controlling the business and production environment in J&J is crucial to its business planning and drives the company closer towards achieving organizational objectives.

CONTROLLING PROCESS: There are three main steps in the controlling process: 1. Measuring Performance 2. Comparing Measured Performance to Standards 3. Taking Corrective Action

CONTROLLER: The controller (also sometimes called the comptroller) is the staff person who gathers information that helps managers control. From the preceding discussion, it is clear that managers are responsible for comparing planned and actual performance and for taking corrective action when necessary. In smaller organizations, managers may also be completely responsible for gathering information about various aspects of the organization and developing necessary reports based on this information. In medium sized or large companies however the controller handles much of this work. The controllers basic responsibility is to assist line managers with the controlling function by gathering appropriate information and generating reports that reflect this information. The controller usually works with information about the following financial dimensions of the organization: 1. 2. 3. 4. 5. Profits Revenues Costs Investments Discretionary Expenses

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THE CONTROLLER AT JOHNSON AND JOHNSON: The controller in J&J is referred to as Department Head with varying responsibilities compared to other controller within the organization.

AUTOMATION: Automation is defined as the replacement of human effort by electromechanical devices in such operations as welding, material handling, design, drafting, and decision making. It includes robots mechanical devices built to perform repetitive tasks efficiently and robotics the study of the development and use of robots.

AUTOMATION AT JOHNSON AND JOHNSON: All the production is done by machineries and plants. However all the production is supervised by production manager i.e human task force.

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Below is the questionnaire which was used during our meeting with the Johnson and Johnsons Marketing Manager.

Johnson and Johnson (Questionnaire)

Planning
1) What are the organizations main objectives (top-level management, middle level management, lower-level management))? 2) What do you think should be the qualities of a good planner, especially when planning for an MNC such as J&J? 3) There are two types of decisions to be made for an organization; programmed (routine) and non-programmed (new, different). What are the programmed and non-programmed decisions made in everyday work? Are decisions in J&J usually made by just one top level manager or through a common consensus using a group? 4) How is an MNC like J&J affected by the conditions like complete certainty, complete uncertainty or risk during decision making? 5) When making decisions using a group, which technique is mostly used and why do you think the technique selected will benefit more than the others? (Brainstorming, Nominal Group Technique, Delphi Technique)? 6) Does the organization rely on a Gantt chart (bar graph showing time against resources) or PERT (Program Evaluation and Review Technique)?

Organizing
1) Outline the companys organization chart showing the all levels of management. 2) How do you delegate responsibility to managers? 3) Have you ever faced any difficulties in delegating responsibilities at J&J? When and how? How did you solve it? 4) What is the general span of management at J&J? Why? 5) Is there a strict unity of command?

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Influencing
1) How much importance does the organization give to each of its employees needs and personal requirements? 2) How do manager communicate with your employees? 3) What channel of communication is more popular within your organization (verbal, non verbal)? 4) What role does a leader play in J&J? 5) How does J&J motivate its employees to perform better? 6) Which of these strategies like monetary incentives, managerial communication, job design or proper behavior helped motivate J&J employees reasonably? 7) How do formal and informal groups work at J&J? 8) Does J&J believe in the use of groups and teams? 9) How do corporate cultures exist in J&J?

Controlling
1) Does J&J have a person referred to as a controller? What are his job responsibilities? 2) How does J&J follow the controlling process (Measuring performance, comparing with standards and taking action)? If yes, how is it helping J&J progress? 3) Does J&J rely more on human resources (labor) or machinery (capital) during the production phase? 4) How much do you support automation (replacing humans with electric devices, such as robots)?

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