Manufacturing Company

Topics: Cost, Costs, Inventory Pages: 5 (1720 words) Published: December 3, 2012
Assignment 1 – Manufacturing company Johnson & Johnson

Johnson & Johnson is an American multinational company that was founded in Brunswick, New Jersey in 1886 by American entrepreneurs Robert Wood Johnson and Edward Mead Johnson. It manufactures pharmaceuticals, medical devices and consumer products. Johnson and Johnson and its subsidiaries have operations in over 60 countries and sell their products in over 175 countries. They are one of the world’s largest manufacturer of health care products and the largest developer and manufacturer of medical treatment and diagnostic devices. It is recognized for its corporate repute, strong customer base, brand loyalty and brand image. Johnson & Johnson has an excellent research and development base, which is its strength for surviving in the pharmaceutical sector. Johnson & Johnson has successfully employed a strategy of differentiation that helps it distinguish itself from its competitors (Johnson & Johnson Services, n.d.). The subject of managing organizational communication encompasses both formal and informal communications throughout an organization, including communications to employees and with or from employees to upper management. This discussion reviews the basics of effective cost allocation, activity-based accounting and management, inventory costing methods, and methods for measuring results within the Johnson & Johnson. Communication is a vital management component to any organization. Whether the purpose is to merely update employees on new policies, to prepare for a weather disaster, to ensure safety throughout the organization or to listen to the attitudes of employees, effective communication is an integral issue in effective management. In order to be successful, Johnson & Johnson would need comprehensive policies and strategies for communicating with its constituencies: employees, stakeholders and the community at large. Developing a communication strategy begins with linking communication with the strategic plan, including the organization’s mission, vision and values; its strategic goals and objectives; and its employment brand. A strong training component not only will equip individual leaders to communicate effectively with their teams and other organizational leaders, but also will help them understand the appropriate communication channels and protocols. In any communication strategy, identifying audience issues is a key task in ensuring effectiveness. The audience may include all of those who have some influence upon or are influenced by the information being shared. For most effective communication, audience size also must be appropriate given the information being shared, as well as the interaction that should be permitted. Activity-based costing, (ABC), by definition is an “approach to costing that focuses on individual activities as the fundamental cost objects. It uses the costs of these activities as the basis for assigning costs to other cost objects such as products or services” (Horngren, Foster, Datar, Rajan & Ittner, 2009, pg. 144). ABC recognizes the causal relationship of cost drivers to activities. Specifically, resources are assigned to activities based upon consumption rates and activities are assigned to cost objects, again based on consumption. Activity-based costing can help solve the problems and increase value to corporation through better controls and asset utilization. In addition, ABC is most useful when this product make cost diver demands in resources depends on differences in batch size or complexity. ABC can provide the accuracy data with management the products cost information, and help to improve cost management level. Activity-based management, (ABM), by definition is a “method of management decision-making that uses ABC information to improve customer satisfaction and profitability” (Horngren et al., 2009, pg. 152). Johnson & Johnson can use activity based management as a tool to...

References: Bragg, S. (2010, October 6). Accounting Tools What is variance analysis?. Retrieved from:
Horngren, C. T., Foster, G., Datar, S. M., Rajan, M., & Ittner, C. (2009). Cost accounting: 2010
custom edition (13th ed.). Upper Saddle River, NJ: Prentice Hall-Pearson.
Johnson & Johnson. (n.d.). Our History. Retrieved from:
Mcintosh, K. A. (n.d.). ehow What is an Operating Budget?. Retrieved from:
Peavler, R. (n.d.). LIFO and FIFO Inventory Accounting Methods Overview of Two Methods of
Accounting for and Tracking Inventory. Retrieved from:
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