Case Study - Cardinal Health
Case 18: Cardinal Health, Inc. (A)
By Mary B. Teagarden
As printed in Strategic Management: Formulation, Implementation, and Control
By John A. Pearce II and Richard B. Robinson
February 24, 2012
Since its inception in the early 1970s, Cardinal Health has grown into one of the leading health care service providers in the world. A Fortune 500 company, Cardinal began as a food distributor, and then transformed itself under the leadership of Robert Walter into the foremost distributor of pharmaceuticals and medical instruments. With the advent of the internet economy, coupled with dynamic changes in the health care industry, it continued to expand its offerings to customers into other areas of opportunity: manufacturing and packaging; medical supply chain logistics and data management; customer inventory management; along with a host of other services aimed at streamlining efficiency and lowering customer costs (Teagarden 18-1 - 18-16).
Social Responsibility Corporate social responsibility as an amalgam of four distinct areas: economic, legal, ethical, and discretionary (Pearce II and Robinson 49-52). Economically, Cardinal Health is clearly meetings its goals. In the period between 1983 and 2000, stock value increased 70 times. Walter’s long-term focus on strategic growth had led Cardinal to acquire over 60 firms, each of which helped Cardinal improve corporate value, efficiency, and quality in both directions of the value chain. In 2010, the company reported revenues in excess of $98 billion and a net profit of approximately $1.3 billion (Cardinal Health, Inc. Company Profile). Cardinal Health appears to meet its legal responsibilities, as well. Annual financial statements found on the corporate website are certified as per the Sarbanes-Oxley Act of 2002 (Cardinal Health 2011 Annual Report 89). Other regulatory issues, such as compliance with ISO and FDA policies, are discussed in the corporate website on the Compliance Services page
By Mary B. Teagarden
As printed in Strategic Management: Formulation, Implementation, and Control
By John A. Pearce II and Richard B. Robinson
February 24, 2012
Since its inception in the early 1970s, Cardinal Health has grown into one of the leading health care service providers in the world. A Fortune 500 company, Cardinal began as a food distributor, and then transformed itself under the leadership of Robert Walter into the foremost distributor of pharmaceuticals and medical instruments. With the advent of the internet economy, coupled with dynamic changes in the health care industry, it continued to expand its offerings to customers into other areas of opportunity: manufacturing and packaging; medical supply chain logistics and data management; customer inventory management; along with a host of other services aimed at streamlining efficiency and lowering customer costs (Teagarden 18-1 - 18-16).
Social Responsibility Corporate social responsibility as an amalgam of four distinct areas: economic, legal, ethical, and discretionary (Pearce II and Robinson 49-52). Economically, Cardinal Health is clearly meetings its goals. In the period between 1983 and 2000, stock value increased 70 times. Walter’s long-term focus on strategic growth had led Cardinal to acquire over 60 firms, each of which helped Cardinal improve corporate value, efficiency, and quality in both directions of the value chain. In 2010, the company reported revenues in excess of $98 billion and a net profit of approximately $1.3 billion (Cardinal Health, Inc. Company Profile). Cardinal Health appears to meet its legal responsibilities, as well. Annual financial statements found on the corporate website are certified as per the Sarbanes-Oxley Act of 2002 (Cardinal Health 2011 Annual Report 89). Other regulatory issues, such as compliance with ISO and FDA policies, are discussed in the corporate website on the Compliance Services page
Cited: Cardinal Health 2011 Annual Report. http://ir.cardinalhealth.com/phoenix.zhtml?c=105735&p=irol-reportsAnnual: Cardinal Health, 2011. Cardinal Health, Inc. Company Profile. New York: Datamonitor, 2011. cardinal.com. 2011. 23 February 2012 <http://www.cardinal.com>. McLaughlin, David. "Cardinal Health Hit With DEA Suspension Order Over Painkiller." 22 February 2012. Bloomburg Businessweek. 23 February 2012 <http://www.businessweek.com/news/2012-02-22/cardinal-health-hit-with-dea-suspension-order-over-painkiller.html>. Pearce II, John A. and Richard B. Robinson. Strategic Management: Formulation, Implementation, and Control. 12. New York: McGraw-Hill / Irwin, 2011. "Standards of Business Conduct." 2009. cardinal.com. 23 February 2012 <http://cardinalhealth.com/us/en/aboutus/what/ethics/attachments/SBC%20booklet%20English%202010.pdf>. Teagarden, Mary B. "Cardinal Health Inc. (A)." Pearce II, John A. and Richard B. Robinson. Strategic Management: Formulation, Implementation, and Control. 12. New York: McGraw - Hill / Irwin, 2011. 18-1 - 18-16.