System Thinking is one such holistic approach that promotes exploration of inter-relationships, boundaries, and perspective to resolve the complex issue an organisation faces. It is important to note that system thinking provides more than one perspective to assess the business problem. In this assessment, the operational issue related to Johnson & Johnson is discussed. For that purpose, two system thinking tools, namely rich picture and CATWOE are used. These provide an insight into stakeholders and consequences of the management system’s decision to solve the operation issue. In addition to this, some recommendations are provided for the company.
Johnson and Johnson is one of the major American MNC that deals in medical device, consumer packaged goods, healthcare, and pharmaceutical products. The company is facing issue related to its operations and formulae of the products. Johnson baby powder as asbestos is detected in it. This issue had also occurred many a time earlier. For instance, in 1970, the researcher detected the traces of asbestos in the powder. However, in 1976, some researchers in Mount Sinai Hospital declared it asbestos free. Again, in 1993, the company was sued by a Virginian woman under consumer protection act as the asbestos was detected again in the powder. Many renowned news agencies have supported the fact that Johnson Talcum powder was causing asbestos cancer. Apart from this, tiny particles of plastics were also detected in liquid Motrin. As a consequence of which, the company had to recalled its 200,000 bottles of Motrin.
Apart from this, the company faces challenges related to macro and micro business environment, such as rising competition, political influence in local as well as international market, legal obligation and changing government policies, taxation system, issues from supplier and distributors, and ever-changing customer demands. All these issues are not only affecting operations but also revenue of the company (Sikka, 2011). So they are required to be managed.
Out of numerous system thinking tools, Rich picture and CATWOE have been selected to add some value to problem analysis process. These also help in determining various stakeholders and their concerns for the problem (Nemoto, et.al, 2014).
Johnson and Johnson’s issues are directly and indirectly affecting the stakeholders of the company. They might be having their own concerns and solutions. Rich picture would help in creating a pictorial representation for better understanding of the problems and their likely consequences. The tool helps in creating a shared understanding. Before proceeding to create the rich picture, it is important to determine the stakeholders of J&J. These include employees, customers, government, board of directors of Johnson & Johnson, media, and customer’s attorneys.
CATWOE is the tool that assists businesses in identifying their targets, understand their challenges & issues and gaining an insight into the perspectives of various stakeholders in case of complex situations and their likely consequences. In the case of Johnson& Johnson, CATWOE can be useful in exploring the processes and operations of J&J by highlighting their roots and modus operandi. Each element of the CATWOE has its own purpose and goals. The CATWOE representation in context of Johnson & Johnson is presented below
The major customer of the Johnson & Johnson comprise retailers, wholesalers, end-users (parents of babies), pharmacies, and patients. The issue of asbestos, plastic particles, and other carcinogenic compounds in the products affect the health of the end-users. They may not be satisfied with the products and their impacts on the health. They may stop purchasing the J&J products. Retailers, pharmacies, and wholesalers may also stop keeping the stock of J&J products due to poor customer satisfaction and low demand (Terra&Passador,2018).
The R&D team of J&J, sales team, operation team, and board of directors are considered to be the prime actors of the company and would be affected severely by the issues identified. The effectiveness and skills may be questioned and this may demotivate them. The implementation of the solution would be done by the board of directors in association with the R&D team and operation team (Somerville, 2015). The rising sales and market share along with the customer satisfaction can be considered the success parameter for the them
The marketing and sales operation would be highly affected by the issues. Apart from this, the Research & Development and operation management team would require to carry out some changes in their modus operandi (Somerville, 2015). Also, some minor changes are required to done in current strategies of the company.
If the issues are not resolved, then the company might lose its competitive position, its customer base along with brand image. This might cost a fortune to Johnson & Johnson as legal suits may make J&J liable to pay large sum of money as compensation to the customer (Terra&Passador, 2018). In the worst case, J&J can also be banned in a particular country if it does not take care of the quality and standards.
The CEO and the board of directors are the major owner of issues and their likely impacts on the company’s revenue and reputation. The owners would have reduced profits and earnings from the current operations.
The constraints may be related to R&D capabilities, operational viability of the solutions, and budgetary constraints
Root Definition Report
What: From the analysis, it is found that operational issue and business environment issues will affect the profitability and reputation of the company in a negative way.
How: the company is required to opt a sustainable corporate strategies to invent safe products, modify the old products, and maintain the stock in the inventory in the right amount.
Why:the health hazards associated with products of J&J can put the company in jeopardy and company may have to bear some serious losses due to them.
From the complete evaluation done by making use of Rich Picture and CATWOE tools, the issues and their consequences are discussed. To mitigate the issues, the recommendations are provided for Johnson & Johnson. These are:-
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