Codman & Shurtleff is an autonomous subsidiary of Johnson and Johnson (J&J). J&J is a decentralized company which has 3 basic doctrines to achieve success decentralized management, sense of responsibility and long term management. J&J has 155 autonomous subsidiaries in 46 countries and it employs 75,000 people worldwide. These 155 units are divided into sectors based primarily on products. Codman & Shurtleff employs 800 people in 3 manufacturing locations and competes in 12 major medical product groups.
Codman & Shurtleff s mission is similar to the building strategy, the company is focus mainly on innovation and differentiation, and its strategy is based on investing in R&D and developing new products. Building Strategy is mainly oriented to qualitative performance rather than to quantitative performance. Because of the changeable environment of the market, budget revision tends to be more frequent and management is actively involved in the formulation process.
Strengths of the System:
1.Bottom-up: because the nature of the business is constantly changing in this business unit of J&J, it is strength that middle management is highly involved in the planning process. According to Govindarajan and Shank, middle managers have more knowledge of the environment and its changes than senior or top management. 2.Strategy plans for long and short term: the planning and control system used in Johnson and Johnson, therefore in Codman & Shurtleff, involve short term planning which consist on one year Budget and second year forecast, and long term planning which consist on a 5 years plan and a 10 years plan. The short term plans are developed with more detail, and it is revised frequently. On the other hand, long term planning is critical in this kind of industry because it is important to visualize the long term benefit that should be obtained by sacrificing short term profits. 3.No punishments for bad forecasting ...