In their classic treatise on business strategy and management, Built to Last Collins and Porras identified Johnson & Johnson ("J&J") as the premier company in the pharmaceutical industry as chosen by its peers.
One of the key points in their analysis is that the truly great companies do not -- yes, do not -- set profits as their driving value. Contrary to right-wing economic mythology, companies whose mission is to deliver value to customers, employees and community actually perform the best over time.
The J&J "Credo" -- chiseled into the wall of its New Jersey headquarters -- was written in 1943 just before the company became publicly traded. Communicating it to J&J's multiple subsidiaries, so that each company lives it, is one of the J&J Chairman's major responsibilities.
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 obligations. Employees must feel free to make suggestions and complaints. 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 thecommunities in which we live and work and to the world community as well. We must be good citizens -- support good works and charities and pay 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. [Emphasis added].
In today's sterile economic debate, several elements of the Credo stand out. First, it was written by the Chairman of a major U.S. corporation, not an academic, not a sociologist, but long-time J&J CEO Robert Wood Johnson. Thus, it is inoculated from any suggestion that it arose from some nefarious left-wing source.
Second, it is very far ahead of its time, recognizing men and women, equality of opportunity, responsibility to community, facilitating employees' care for their families, and recognizing the importance of the environment. Indeed, it is quite humble, recognizing that the employees work "with," not "for," them, and that the property they own is a sacred trust for future generations.
Third, the Credo recognizes that the company has responsibilities to its customers, to its employees, to the environment, to the community and to their shareholders. It proposes that it pay its fair share of taxes, and that shareholders are entitled to a fair profit. Note it does not advocate avoiding paying taxes or maximizing profits at the expense of its other responsibilities.
The Credo is very detailed about its responsibilities to its employees: fair compensation, facilitating their caring for their families, treated with respect, provided a safe workplace.
J&J has shown that a modern corporation can be the most successful in its industry without screwing its workers, cheating its suppliers, despoiling the environment or avoiding taxes.
The J&J Credo makes for a much better company and a much better country than the Ayn Rand brand of capitalism the right-wing espouses.
(The author does not now and has never worked for J&J).
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These drugs have been proven in numerous studies published on PubMed, a knowledge base containing the published results of studies performed by the traditional medical community, to chemically destroy the ability of the human body to synthesize and utilize collagen in every organ and tissue. Since the drug works by inhibiting the production of collagen and destroying existing collagen via matrix metalloproteinases enzymes, it has the potential to destroy any organ or tissue in the human body. This drug has also shown the ability to directly and irreversibly poison and destroy human DNA. Quinolone antibiotics have been slapped with a Black Box warning by the FDA for tendon ruptures which is only one of the myriad side effects which are nearly endless and horrific in many cases. Once a person has been afflicted with severe side effects the recovery period can require months, which is considered a mild reaction, to years or never which manifests as some of the most horrific side effects possible and many for which medical science has no explanation other than to revert back to the tried and true Hypocratic method of deny, deny, deny.
" That which cannot be seen, will be seen". People are waking up globally and there will be a new era ushered in.
Another important point you fail to understand is that in a free market, the only way for a company to achieve a monopoly is for it to produce a product or service that is of such great value that everyone chooses to buy it versus buying from a competitor. There are no coercive monopolies in a free market system: a “coercive” monopoly being where a business concern can set its prices and production policies independent of the market, with immunity from competition and the law of supply and demand. Only the act of government intervention can create a coercive monopoly, by barring entry to the market by potential competitors through prohibitive regulations or special subsidies. Another mistake you make (like many on the left) is that you fail to differentiate between economic power and political power--confusing the former for the later. As much economic power as any company may have, if they set their prices and production at a level that would yield profits to new entrants significantly above those available in other sectors, then competitors will enter the market...assuming of course that prohibitive regulations do not stifle new entrants. Only political power can kill competition and thereby create a monopoly.
Third point: profit has to be the ultimate goal for any business that’s an ongoing concern; however, it is defined “values” that provides the means to achieve that goal...profit is the end, values are the means. It is the value that a business delivers to its customers--however a business defines those values--that drives profitability. The J&J credo quoted is nothing more than the promulgation of the company’s values--e.g. “what we do, how we do it, where we do it, and for whom.” A first year MBA student would recognize J&J’s “credo” as simply a mission statement--something all businesses have (or should have). Mission statements are typically developed by upper management, if not the CEO himself, therefore it comes as no surprise that CEO Robert Johnson wrote this one. Fourth point: nothing in J&J’s mission statement contradicts laissez-faire capitalism or Ayn Rand’s philosophy. J&J has the right to run its business however it wants to (within the bounds of the law of course) and to reap the consequences of its decisions--for better or worse. So long as J&J’s credo was developed free from government coercion, us “right-wing capitalist” don’t have a problem with it--neither would Ayn Rand.
But dig a little deeper and you'll find multiple sanctions for multiple transgressions. Talk to a few employees - or visit that bastion of whining pharma reps called 'Cafepharma' - and you'll see that the Credo is generally just viewed as a marketing tactic.
It's easy to talk the Credo talk, but the focus on short-term performance still drives J&J business just like the rest. Just sounds nicer the way they say it.
It is a bit much to call it a marketing tactic. It was written in 1943. It may be abused that way now, but I doubt it was conceived for that purpose.
My purpose was not to extol the virtues of J&J:, but rather to point out that that vision is what the former chairman had for his company. It was not all profits.
The self-proclaimed 'General' was indeed the author of the Credo. I still maintain it was - and is - all about shareholder profit despite your doubts. As a shareholder and one close to the history of the company, I know for a fact that the credo has been good for business. The General may have - emphasis on 'may' - believed in the Credo, but the reality of the day is that in the US corporate profits are the driver of behaviors, not a document written in 1943.
Just so.
However, I doubt very much if you would find that J&J still lives by its principles.
Quarterly profit is the God of Wall Street.
Quarterly profit is the alter at which all other things are sacrificed by American business.
The idea that the profit motive is the only motive for starting or operating a business is relatively new, since the 1980s. When you look at some of our oldest and more successful businesses, like J&J, Ford, they always had other motives as well. Only when companies forget this do they run into problems.
The idea that profit is the only motive is the ethos of Charles Ponzi. Ayn Rand's ideas are the quickest way to create a Hobbesian state of nature and Reaganomics and the GOP/Tea Party's economic policies are the fastest way to ensure the race to the bottom and America becoming a banana republic.
I would like to think that one of the reasons they are being so quiet is that they are beginning to realize how flawed and destructive their ideas are. At least it is pretty to think that.
I guess I just answered myself.