Who Are The Stakeholders And Johnson Credo

Johnson and Johnson was founded by George E. Johnson, Sr. in 1886. Over the years, the name has become a household fixture. The company manufactures and sells products from hair care to surgical technology. Someone you know may even rely on a drug made by Johnson & Johnson to treat a serious illness or condition. In their credo they recognize four stakeholder groups that are crucial to their business: users of their products, employees, communities, including where they work and live and also the world community, and stockholders. Each group has its own importance to the company and the order in which they appear in the credo indicate their order of importance.
As a primary stakeholder, the first group, users of their products, is considered the most important by Johnson & Johnson since it is listed first in the credo. Johnson & Johnson recognizes
that the company would not be in business without people who utilize their products. In order to recognize the importance of the users of their products, Johnson & Johnson puts a great deal of effort into making sure their products are not only high quality, but priced correctly so not only are they affordable but their “suppliers and distributors make a profit” (Johnson & Johnson). Johnson & Johnson Innovation is continually researching ways to improve their beauty products, their baby care, their health related products, etc. They even provide an Idea Portal on their Innovation website where a user can submit ideas for improvements or new products.
The next important primary stakeholder are the employees.
Without employees, Johnson & Johnson would not be able to conduct business. There would not be anyone to discover new technologies or merchandise, to create marketing strategies, to sell the technology or merchandise, or to ship the merchandise. Johnson & Johnson also would not be able to track financial transactions or even pay their bills. According to the website, “Our employees innovate, create, develop and improve our products every day. We strive to do what’s right for them” (People). Employees are provided with an extensive benefits package that can be tailored to each employee’s specific needs including medical, dental, vision, flexible spending accounts, life insurance, auto and home insurance and a commuter benefits program. Further attesting to how much Johnson & Johnson values their employees, they offer their employees a concierge service that offers services from returning books to the library to making sure the dry cleaning is picked up. In 2013, they were rated number 18 of the 50 best companies to work for in America (Giang, Stanger and
Lubin).
Johnson & Johnson is dedicated to supporting not only local communities where their employees live and work, but also the world community. In 1997, Johnson & Johnson established the Patient Assistance Foundation which is a non-profit organization that assists patients without adequate financial resources and prescription coverage in obtaining free products donated by the operating companies of Johnson & Johnson. (Johnson & Johnson Patient Assistance Foundation, Inc. ). In 2014, Ebola was front and center in the news. There was fear that the disease would spread throughout the world. This was a strain never seen before and was proving to be resistant to current treatments. On October 22, 2014, Johnson & Johnson announced a “commitment of up to $200 million to accelerate and significantly expand the production of an Ebola vaccine program” (Johnson & Johnson). Both of these examples demonstrate how Johnson & Johnson is responsible to the community.
Finally, the credo lists shareholders as the final primary stakeholder that they are responsible to. Johnson & Johnson operates with the concept that all that they do not only benefits the user, the employee, and the community, but also provides an acceptable profit to their shareholders. The most current dividend payout was August 25, 2015, at $0.75 per share for a total in 2015 of $2.20 per share. In 2014, the payout total was $2.76 per share and in 2013 the total payout was $2.59 per share. Clearly, when fourth quarter dividends are declared, the company will have paid out progressively more per year since 2013. In addition, the company offers a program called Dividend Reinvestment Program , also known as DRIP. Shareholders are permitted to “reinvest all or a portion of dividends into additional shares of common stock without any fees or commissions” (FAQs). Since the shareholder can take their profits and reinvest in a company that continues to make money without paying additional fees, there is incentive to use the DRIP program.