Project on

CSR of J&J
Submitted to Prof. Arshi
 A C K N O W L E D G E M E N T

On the completion of this Project, I wish to great fully

acknowledge, by taking this opportunity to express my sincere

gratitude to Prof. Arshi for giving me kind support and co-operation

and her guidance and useful suggestions that proved very useful in

this Project. Once again thank all the people who have directly or

indirectly help in this Project.

Lastly, I sincerely thank all my friends who have always given

their encouraging support and been a great help all the time at

various stage of development of this Project.

Submitted By

Dhaval Shah 49

Sohil Jewani 41

Murtuza Bhanpurawala 37

Aamir Ansari 36

2
Index
 INTRODUCTION TO CSR 4

 INTRODUCTION TO JOHNSON & JOHNSON 5

 CSR IN JOHNSON & JOHNSON 6

 Measurable Difference 8
 RECOGNITIONS 12

 PROTECTION OF EMPLOYEES 14
 Healthy working environment 15

 Johnson & Johnson and Tylenol 20

 Bibliography 22

3
INTRODUCTION
TO CSR
Defining the concept.
Corporate Social Responsibility is a
management concept whereby companies
integrate social and environmental
concerns in their business operations and
interactions with their stakeholders. CSR
is generally understood as being the way through which a company achieves a balance of
economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while
at the same time addressing the expectations of shareholders and stakeholders. In this sense it
is important to draw a distinction between CSR, which can be a strategic business
management concept, and charity, sponsorships or philanthropy. Even though the latter can
also make a valuable contribution to poverty reduction, will directly enhance the reputation of
a company and strengthen its brand, the concept of CSR clearly goes beyond that.

Key CSR issues: environmental management, eco-efficiency, responsible sourcing,

stakeholder engagement, labour standards and working conditions, employee and community
relations, social equity, gender balance, human rights, good governance, and anti-corruption
measures.

A properly implemented CSR concept can bring along a variety of competitive

advantages, such as enhanced access to capital and markets, increased sales and profits,
operational cost savings, improved productivity and quality, efficient human resource base,
improved brand image and reputation, enhanced customer loyalty, better decision making and
risk management processes.

4
JOHNSON
& JOHNSON

INTRODUCTION TO JOHNSON & JOHNSON

Operating in over 50 countries with more than 100,000 people, Johnson & Johnson USA has
been ranked 4 times in the “Fortune Top 10” list of the most admired companies in the US.

Johnson & Johnson (J&J) India, a subsidiary of Johnson & Johnson USA, is one of the
leading players in the Indian pharmaceuticals and consumer products business. It has
employee strength of over 1,800. It started business in India in 1947 in Bombay with
Johnson’s Baby Powder, and, over time, introduced other products like toothbrushes,
Johnson’s Baby Cream and Prickly Heat Powder. In the 50 years since its establishment as a
modest 12 employee outfit, Johnson & Johnson India has gained a reputation for delivering
high-quality products at competitive prices. Today J&J is a household name with several
popular brands like Band-Aid, J&J Baby Powder and Prickly Heat Powder. Stayfree Secure
has become the leading sanitary napkin in the country with a volume market share of 46 per
cent. Ethicon, a franchise of J&J Medical India, is a leading manufacturer of surgical
material. Eprex launched in 1995 was one of the first successful biotech brands to be
marketed in India. J&J also has a strong presence in the contact lenses market in the country.

J&J India is considered one of the best places to work and has many firsts to its credit:

• J&J became the first company in India to successfully eliminate CFCs from its
manufacturing operations. This required the company to modify the sterilization processes at
its Ethicon suture finishing plant.

• Six Sigma Awarded to Johnson & Johnson Consumer Products by the Indian Statistical
Institute and the National Institute of Quality & Reliability.
5
CSR IN JOHNSON & JOHNSON
GIVINGS OF J&J
Johnson & Johnson and its many operating companies support community-based programs
that improve health and well-being. Our community partners show us where our giving can
help the most. We listen to them and we learn from them so that the programs we support
make a meaningful difference in people’s lives.

Together with our partners, we are helping mothers and infants survive childbirth. We are
supporting doctors, nurses and local leaders as they work to provide the best medical care to
their people. And we are educating communities on how to reduce their risk of infection from
preventable diseases.

The desire to make people healthier and safer is at the heart of our Company’s giving.

Some of them are listed below:

 SAVING MOTHERS’ AND BABIES’ LIVES

One quarter of all women who die from complications of pregnancy or childbirth around the
globe are in India — an estimated 136,000 women. In two states, Madhya Pradesh and
Rajasthan, the Maternal Mortality Ratio (MMR) is 379 deaths per 100,000 live births and 445
deaths per 100,000, respectively. Both numbers are significantly higher than India’s already
high national average of 305 deaths per 100,000 live births. About half of all maternal deaths
are attributed to hemorrhage and anemia, both of which can be prevented. And unfortunately,
poor maternal health care and inadequate emergency obstetric care put babies at risk, too.

 A Safe Motherhood Partnership

To address these issues, J&J partner with UNICEF/Safe Motherhood Initiative to increase
access to good health care, giving mothers better care early and infants a healthy start in life.
The UNICEF/Safe Motherhood Initiative provides extensive technical support, leadership
and training programs to midwives, female health workers and staff nurses in Madhya
Pradesh and Rajasthan. The initiative also ensures that skilled caregivers are available for the
community 24 hours a day at nine health care facilities where the staff has received birth
attendant training; seven more centers are to follow. Additionally, UNICEF helped initiate an
emergency transport program to take pregnant women to the hospital.

 Hundreds of Lives Impacted

6
AS a result of to the UNICEF/Safe Motherhood Initiative, the percentage of institutional
deliveries in the Guna district of Madhya Pradesh has risen from 35 percent in 2004-2005 to
76 percent in 2006-2007, meaning that many more mothers are being cared for by skilled
birth attendants. The Fatehegarh Health Center, for example, handled 230 deliveries, up from
zero in 2006. As part of UNICEF’s overall efforts, in Madhya Pradesh 22 government
agencies are part of a 24-hour emergency transport initiative, and in Rajasthan more than 100
vehicles are available for this service. More than 300 women have received emergency
obstetric care through this transport service.

 MICRO-CREDIT THAT BRIDGES THE SOCIAL GAP

In Honduras, the Afro-Latino Garífuna are a unique population of non-Spanish speakers
estranged from the general population because of their cultural differences. They suffer from
poverty, lack of political and economic power, social invisibility, minimal education, and
unemployment, and have inadequate access to basic necessities such as drinking water,
education and medical care. The Instituto de Desarollo Hondureño (IDH) helps to bridge the
social gap.

 A Partnership with Instituto de Desarollo Hondureño

To improve their livelihoods, the IDH helps the Garífuna population gain access to business
training and credit opportunities so they can create sustainable micro-enterprises. In the past
year, J&J partnered with IDH to help 950 struggling Garífuna people, primarily women,
support their families by establishing small businesses. The IDH program targets people who
earn $2 to $4 (U.S.) a day using grassroots methodology to provide training opportunities for
young families.

 Tomasa’s Bread-Baking Business

Tomasa Petrona, a single mother of five, was struggling to care for her family before working
with IDH. But with training and credit, she grew her business of making coconut bread and
has become more financially stable. “Now my family eats better, and I can buy medicine
when we get sick,” she says. “I have changed our home’s dirt floor to concrete, and one by
one I am installing cement block walls. I’m very proud that my oldest son finished high
school, and I want to keep all my children in school until they graduate.”

 A HEALING PRESENCE
In 1989, Sister Gill Horsfield of Medical Mission Sisters (MMS) began training health
workers in Nairobi, Kenya, to provide home-based care to individuals suffering from

7
HIV/AIDS-related illnesses. Her program offered medical and pastoral counseling, and social
services in the Korogocho slums, one of Nairobi’s poorest areas.

A Measurable Difference
J&J first began setting environmental goals in 1990. Since then, they have reduced waste,
water and energy use, raw material and packaging. Nearly all of their manufacturing sites and
research and development facilities have ISO 14001 certification, a standard for strong
environmental management systems.

All their environmental accomplishments reinforce their commitment to their Credo, which
states that they must “maintain in good order the property they are privileged to use,
protecting the environment and natural resources.”

In addition, their environmental improvement projects consistently result in more efficient

manufacturing processes, increased product yields and cost savings.

Our Environmental Performance

They monitor and measure their environmental performance across every category within
their Healthy Planet 2010 goals.

A summary of their performance against these goals is presented below.

Transparency
Goal: 100 percent of manufacturing and research and development facilities will provide
facility- or company-specific environmental sustainability information to the public.

Actual: 66 percent of facilities submitted information by year-end 2007 for posting on

jnj.com during 2008.

Energy Use – Carbon Dioxide Reduction

Goal: Absolute reduction in CO2 emissions of seven percent from 1990–2010.

Actual: 12.7 percent decrease from 1990–2007.

Goal: Reduce fleet total CO2 emissions per mile driven by 30 percent

8
Actual: Minimum fuel efficiency requirements for our fleet were established by vehicle
category. In addition, the U.S. fleet had 978 hybrid vehicles at March, 2008. As yet, we have
not seen an overall improvement in emissions per distance driven.

Water Use
Goal: Absolute reduction of 10 percent compared to 2005 baseline.

Actual: Absolute water use decreased six percent from 2005–2007.

Paper and Packaging

Goal: Eliminate PVC in primary, secondary and tertiary packaging in the Consumer segment
by year-end 2007. Eliminate PVC in secondary and tertiary packaging in the Medical Devices
& Diagnostics (MD&D) and Pharmaceutical segments by year-end 2007.

Actual:.We have eliminated 84 percent of our secondary and tertiary PVC packaging across
the company.

Goal: To have 90 percent of office paper and 75 percent of paper-based packaging containing
more than 30 percent post-consumer recycled (PCR) content or containing fiber from
certified forests by 2010.

Actual: 93 percent of packaging and 83 percent of office paper contain more than 30 percent
PCR or fiber from certified forests.

Waste Reduction
Goal: Absolute reduction of hazardous and non-hazardous waste of 10 percent from 2005–
2010.

Actual: 4 percent decrease in hazardous waste and 10 percent reduction in non-hazardous

waste from 2005–2007.

Product Stewardship
Goal: All operating companies to have a plan to improve their product and process
environmental profiles and eliminate high-priority materials.

Actual: 90% of operating companies have a plan. Some have already removed hazardous
substances from their products.

9
Goal: Implement an electronics take-back program in all regions to ensure that 100 percent of
waste electronic-based products are offered to be taken back for remanufacturing/reuse.

Actual: 21 percent of our regions have implemented take-back programs. In addition, the
weight of products taken back increased by 6.7 percent when compared to 2006, and by more
than 1,500-fold when compared to the baseline year, 2005.

Environmental Literacy
Goal: Increase employee awareness and understanding of global environmental issues. 100
percent of facilities have a five-year literacy plan and implement one environmental
education campaign each year from 2006–2010.

Actual: 92 percent of facilities deployed a literacy campaign in 2007. More than 60 percent
focused on climate change.

Biodiversity
Goal: Enhance biodiversity conservation in areas over which we have control or influence.
100 percent of our facilities or companies have a biodiversity conservation plan.

Actual: As of the end of 2007, approximately 95 percent of our operating companies have a
biodiversity plan that is endorsed by leadership. More than 50 conservation projects are
underway around the world; 55 percent of these projects are to improve the biodiversity on
our own work campuses; the remainder are offsite projects.

Compliance
Goal: Zero accidental releases; zero government-issued violations.

Actual: Nine accidental releases; thirteen government-issued violations.

External Manufacturing
Goal: 100 percent of external manufacturers in conformance with Johnson & Johnson
Standards for Responsible External Manufacturing by 2010.

Actual: Shared our Standards and/or integrated these standards into formal contracts with
more than 80 percent of our external manufacturers by year-end 2007.

10
RECOGNITIONS
Their efforts to protect the environment are frequently recognized by environmental
organizations and governments around the world.

Johnson & Johnson Ranked Third on Newsweek's Green

Rankings List, 2009
Newsweek listed Johnson & Johnson as #3 among America's 500 largest corporations. This
was the first year Newsweek published environmental rankings.

National Environmental Performance Track Corporate Leader

The U.S. EPA National Environmental Performance Track (PT) program has designated
Johnson & Johnson as a PT Corporate Leader. This three-year designation recognizes
companies that show a corporate-level commitment to environmental excellence and
Performance Track.

100 Best Corporate Citizens

Published in CRO Magazine, this list selects the 100 best companies that are proving good
corporate citizenship and good business go hand-in-hand.

Dow Jones Sustainability Index, North America and Global Index

Johnson & Johnson stock has been included in this index since 2000 and is now included in
the Global Index as well. The DJSI family follows a best-in-class approach to identify
industry leaders.

FTSE4Good Index
Johnson & Johnson has been independently assessed according to FTSE4Good criteria and
has met requirements to be part of the index. The designation identifies companies that meet
globally recognized corporate responsibility standards.

Best in Class Environmental & Social Performance

11
Storebrands, a Norwegian life insurance company, gave best-in-class status to Johnson &
Johnson for leading environmental and social performance.

Climate Protection Award, 2006

The U.S. Environmental Protection Agency granted this award to Johnson & Johnson for our
efforts to reduce greenhouse gas emissions through energy conservation and the use of
cleaner energy sources.

New Jersey Governors Environmental Excellence Award

The Clear Air Category award was presented to our Global Pharmaceutical Sourcing Group
for greenhouse gas reductions at facilities in New Jersey in 2005.

Pennsylvania Governors Award, Environmental Excellence

Presented to the Johnson & Johnson Pharmaceutical Research & Development, L.L.C.
Springhouse, Pennsylvania, facility, this award recognized the facility’s five-year water
conservation program.

Shanghai Best Performer Water Conservation Corporation

Presented to Johnson & Johnson (China) Ltd. following a joint audit by the Shanghai
Economics Committee, Shanghai Construction Committee and Water Shanghai
Administration.

One of the Best ISO 14001 Certified Companies

The Brazil Mexico Chamber of Commerce, Industry and Tourism recognized our
commitment to environmental protection and named Johnson & Johnson Brazil as one of the
best ISO 14001 certified companies.

Waste Minimization and Environmental Management Awards

Groundwork UK honored the Leeds, United Kingdom, facility with two awards, one for
waste minimization projects and one for excellence in environmental management.
Groundwork is a federation of local environmental trusts in England, Wales and Northern
Ireland.

Robert W. Campbell Award

Johnson & Johnson was selected as the 2005 winner of this award in recognition of
excellence in environmental, health and safety (EHS) management. This international award
was established in 2003 by the National Safety Council. The award recognizes companies
12
that invest in EHS and integrate EHS management into business operations. Another goal of
the award is to develop business cases from the experience of winning companies that can be
used by business and engineering schools.

PROTECTION OF EMPLOYEES
When you feel your best, you do your best. But when something is
troubling or hurting you, it’s difficult to set those concerns aside and
focus on work.

At Johnson & Johnson, we provide support programs and services to help our employees live
healthier and safer lives – at work, home and on the road. This is good for our people and
good for our business.

Our programs extend to employees’ loved ones, too. We understand that when loved ones are
in harm's way, employees can’t help but be preoccupied and worried about them.

Our employees innovate, create, develop and improve our products every day. We strive to
do what’s right for them.

Our Credo guides us to be “responsible to our employees, the men and women who work
with us throughout the world.” This responsibility means providing a safe, fair and clean
work environment. It also holds us accountable to the mental well-being of employees. To
support this directive, we offer a variety of programs that help employees and their loved
ones deal with stress, manage through personal struggles and achieve a healthy work-life
balance.

Employee Assistance Programs

Since 1978, when Johnson & Johnson launched its first employee assistance program (EAP),
we have understood that employees’ personal challenges are inextricably linked to their work
lives. Issues related to relationships, child rearing, substance abuse or other sources of stress
can have an impact on the health, happiness and quality of life of our employees and their
families.

Our EAPs are designed to give employees access to counseling, assessment, intervention and
training. To ensure that all employees interested in reaching out to our EAPs feel comfortable

13
doing so, services can be accessed electronically, via a toll-free phone number, by visiting an
onsite EAP counselor or representative, or by contacting an offsite service.

Our EAPs will continue to evolve as new issues surface and programs are needed to support
the mental well-being of employees. For example, we have conducted multigenerational
training to help younger employees and older employees (baby boomers) improve the way
they communicate and collaborate with each other. We also work closely with our worldwide
security group to ensure that if a tragedy or emergency occurs at one of our facilities, we are
prepared to support employees.

In 2006, we expanded our EAPs to have greater global reach across 466 locations and 57
countries. The programs were designed in a customized and culturally sensitive way.
Currently,

our EAP services are provided to 88 percent of our workforce, up from 75 percent in 2006,
and 30 percent in 2005.

Resiliency Training
Employee assistance programs are both reactive and pro-active. Johnson & Johnson is now

Mental Well-Being
The well-being of employees and the success of a company go hand in
hand.

Offering services to help employees learn to manage stress before it manifests in physical or
emotional illness. Resiliency training gives employees stress management skills and provides
techniques that increase personal ability to quickly bounce back from the ups and downs of
life. In 2007, approximately 15 percent of our global workforce participated in this training.

Work-life Programs
Johnson & Johnson has offered flexible work arrangements for many years. In 2006, we
surveyed 4,400 Johnson & Johnson employees in the U.S. to understand the importance of
flexibility. We found that 65 percent of respondents who joined the company in the previous
three years said flexibility was important in their decision to take the job, and 78 percent of
respondents said flexibility is an important aspect when considering whether to stay with the
company. In 2007, senior management committed to increasing opportunities for flexibility
in recognition that the sustainability of our business depends on our ability to attract and
retain talented employees. Flexible arrangements include telecommuting, flextime hours,
remote work, occasional flexibility, a compressed work week, summer hours and part-time
work or job sharing.

14
In 2007, Working Mother magazine listed Johnson & Johnson as among the 100 Best
Companies for Working Mothers. Johnson & Johnson has made the list every year since the
launch of the Hall of Fame designation 20 years ago.

Healthy People
Promoting employee health and wellness makes good business sense and provides personal
benefits to our workforce.

As a health care company, enhancing health and wellness wherever we can is simply a logical
extension of our corporate mission. Johnson & Johnson has a long-standing commitment to
improve and sustain the health of its workforce. Our Healthy People program provides
employee assistance, occupational health and health promotion, and wellness services. Our
efforts in these areas have expanded globally over the past several years with the goal of
creating a “Global Culture of Health” for our employees.

Health Goals and Performance

For many years, we have used a voluntary employee health profile to give us an indication of
employee health and the impact of our health programs. The profile is a confidential
questionnaire that identifies health and lifestyle risks including tobacco use, blood pressure,
cholesterol and inactivity. At the end of 2008, for our U.S. population, we continued to make
health improvement progress and avoided an estimated $15.9 million in health care costs.
During 2008, additional health targets were successfully achieved: 2

New Global Health 2012 goals have been created for health and wellness service offerings,
voluntary health profiles, employee health risk level, and on-time completion of medical
surveillance.

Goal 2008 target -2008 Result -2012 Goal

Create and Sustain Culture of Health
75% of companies have at least 5 Health Program Offerings (3 core) - 85% of companies -
All 13 Program Offerings

Reduce Employee Health Risk Factors

66% of participants definded as “Low Health Risk” US - 85% OUS - 63% - ≥70%
Employees have “Low Health Risk” Globally

Manage Occupational Health Risks Identified via Medical

Surveillance

15
87% completion of planned surveillance program - 100% of surveillance programs completed
- ≥ 90% on-target

Healthy Working Environment

Every day, we strive to provide products and services that help people lead healthier lives.
This commitment to human health extends to our employees, too.

The materials we use to research, develop and manufacture our products include chemicals
and active pharmaceutical ingredients. In some cases, manufacturing processes within
operations generate high levels of noise. These factors can pose potential health hazards to
employees if exposure remains uncontrolled.

 Toxicology
Through our occupational toxicology program, we measure, evaluate and generate data
related to potential health hazards in the workplace. The toxicology team establishes
exposure standards that serve as an important step in protecting employees from potential
risks. These standards come from several sources: regulatory agencies such as the U.S.
Occupational Safety and Health Administration (OSHA), recognized international experts
such as the American Conference of Governmental Industrial Hygienists (ACGIH), or from
our internal toxicology team. The internal team gets involved when the material is a Johnson
& Johnson proprietary compound, such as a new medicine. We use data from clinical trials
and additional tests to establish a safe air and surface level known as an Occupational
Exposure Limit.

 Industrial Hygiene

16
Members of our industrial hygiene staff regularly monitor the workplace for the presence of
chemical and physical hazards. Techniques include using special equipment to measure
noise, radiation and heat stress; using air sampling pumps and sample media to collect
breathable dust, vapors and gases; and wipe testing work surfaces. Chemical analysis is
conducted in an accredited laboratory, and the results are compared to the standards
mentioned above. If levels exceed these standards, employees are equipped with personal
protective equipment, such as gloves, gowns and breathing devices, to shield them from
exposure.

 Occupational Health
Our occupational health team monitors employees on an ongoing basis. Staff members are
trained to address any health issue related to an employee’s work. Frequent observation 2

of workers ensures that potential health problems are identified and addressed as early as
possible.

We also provide on-site occupational health clinics, which give employees immediate access
to specially trained medical personnel. Physicians and nurses who evaluate our employees are
specialists in occupational medicine, with many of them holding certification in their
respective fields.

Our employees work in many different settings. Some research new cures in our
laboratories.

Others manufacture, package and distribute our products. And many work in offices or out in
the field. In all of these environments, workplace safety is a value.

 Reducing Ergonomics Injuries

Ergonomics injuries, such as strains from doing repetitive work or overexertion, account for a
significant portion of injuries in the workplace. Johnson & Johnson began to recognize
ergonomics factors as an employee safety hazard in the late 1970s. At that time, many jobs in
our facilities required repetitive motion, lifting and other movements now known to cause
musculoskeletal injury.

When the use of computers became widespread in the 1990s, ergonomics injuries accounted
for 48 percent of lost workday cases within Johnson & Johnson. To address this issue, we
introduced ERGO in 1995. The global program was refined in 2001 to further reduce
ergonomics injuries and set ergonomics standards for operating companies worldwide. We
evaluated all manufacturing tasks and classified them as high, moderate or low risk.

Johnson & Johnson senior management endorsed an aggressive strategy to eliminate or

modify the high risk tasks. As a result of this effort, approximately 50 percent of the high
ergonomics risks in manufacturing were reduced to low risk.

17
Ergonomics initiatives continue today, and ergonomics-related injuries continue to decline.
At the end of 2006, ergonomics injuries made up 28 percent of lost workday cases.

 Preventing Workplace Accidents and Illnesses

Zero injuries. Zero illnesses. This is our goal. The design of our safety and industrial hygiene
programs helps attract and retain a talented, productive workforce, ensures the uninterrupted
delivery of our products and protects the communities in which we operate.

We have implemented many preventive programs, and these are embedded in the work
activities in which we engage each day. For example, our safety programs cover:

 Workplace Safety
Approximately 115,000 employees make up the Johnson & Johnson Family of Companies.
Our goal is to provideevery single one of them with a safe place to work.

 machine safety;
 electrical safety;
 hazardous processes;
 contractor safety;
 warehouse safety;
 fall prevention; and
 office safety.

These programs are effective, but we never stop looking for additional ways to improve.

For example, when our employee accident rate began to come down, we began to engage our
employees’ families through off-the-job safety programs. When our manufacturing based
safety programs were too cumbersome for our R&D environments, we customized a program
for the laboratory environment. When the use of computers became associated with
ergonomics injuries, we took what we knew about ergonomics on our manufacturing floor
and applied the same principles to our offices.

One of our more successful tactics has been the implementation of a series of Safe Decisions
for Life modules. Topics for these awareness campaigns are selected from an analysis of our
injury/illness experience. When we focused on hand safety in 2003, we reduced hand injuries
9 percent in one year. Our campaign around fall prevention resulted in a one-year 28 percent
drop in these injuries.

18
We continue to monitor and seek ways to improve our lost workday case rate. In the past 10
years, we have reduced our rate of lost workday cases by 61 percent, but we know we can do
more. Our operating companies evaluate their safety and industrial hygiene compliance on a
regular basis and make improvements where necessary, often using Six Sigma tools to guide
the process. In addition, employees have regular opportunities to report unsafe conditions and
discuss safety with their supervisors.

 Protecting Our Drivers

SAFE Fleet is our way of protecting employees, families and customers from injury on the
road and provides services to more than 35,000 employees worldwide. For many of these
employees, the company vehicle is a workplace. Field representatives spend 40 to 60 percent
of their working time driving their vehicles on company business.

For more than 10 years, the Johnson & Johnson SAFE Fleet program has helped keep our
field representatives safe on the road. Since 1995, our rate of accidents per million miles
(APMM) driven has decreased 39 percent; at the same time, the size of our fleet has
increased by 153 percent.

In 2007, we finished the year at 5.30 APMM, just slightly below our 2006 APMM of 5.32.
We believe our opportunity for on-going improvement lies in the continuing engagement of
business managers who set the expectation for safety and addressing the difficult challenge of
driver distraction. We are conducting pilots with cognitive and risk-based tools to improve
driving behavior and planning to launch behavior-focused communications in 2008.

 History and Progress

In the 1970s, Johnson & Johnson recognized ergonomics factors as an employee safety
hazard. In 1995, ergonomics injuries accounted for 48 percent of our lost workday cases. At
the end of 2006, ergonomics injuries were just 28 percent of our lost workday cases. This is a
remarkable improvement when one considers that during this same period, the proliferation
of computers increased the opportunity for ergonomics injury, and many of our
manufacturing processes today still require repetitive motion, lifting and other movements
that can cause ergonomics injuries.

 Continuous Improvement

19
Our success has come from internally developed risk analysis tools and a cultural approach
where ergonomics factors are integrated into business risk assessment. The Johnson &
Johnson ergonomics approach is standardized and consistent across the Company. We
evaluated all manufacturing tasks and classified them as high, moderate or low risk. We then
adopted an aggressive strategy to eliminate or modify the high-risk tasks. This work
continues today. Further improvement via engineering solutions is our challenge; in some
cases, technical solutions are not currently feasible. Where this is the case, we continue to
apply other administrative controls and watch for new technologies.

Companies in Crisis - What to do when it

all goes wrong
Johnson & Johnson and Tylenol
Crisis need not strike a company purely as a result of its own negligence or misadventure.
Often, a situation is created which cannot be blamed on the company - but the company finds
out pretty quickly that it takes a huge amount of blame if it fumbles the ball in its response.

One of the classic tales of how a company can get it right is that of Johnson & Johnson, and
the company's response to the Tylenol poisoning.

What happened
In 1982, Johnson & Johnson's Tylenol medication commanded 35 per cent of the US over-
the-counter analgesic market - representing something like 15 per cent of the company's
profits.

20
Unfortunately, at that point one individual succeeded in lacing the drug with cyanide. Seven
people died as a result, and a widespread panic ensued about how widespread the
contamination might be.

By the end of the episode, everyone knew that Tylenol was associated with the scare. The
company's market value fell by $1bn as a result.

When the same situation happened in 1986, the company had learned its lessons well. It acted
quickly - ordering that Tylenol should be recalled from every outlet - not just those in the
state where it had been tampered with. Not only that, but the company decided the product
would not be re-established on the shelves until something had been done to provide better
product protection.

As a result, Johnson & Johnson developed the tamperproof packaging that would make it
much more difficult for a similar incident to occur in future.

Cost and benefit

The cost was a high one. In addition to the impact on the company's share price when the
crisis first hit, the lost production and destroyed goods as a result of the recall were
considerable.

However, the company won praise for its quick and appropriate action. Having sidestepped
the position others have found themselves in - of having been slow to act in the face of
consumer concern - they achieved the status of consumer champion.

Within five months of the disaster, the company had recovered 70% of its market share for
the drug - and the fact this went on to improve over time showed that the company had
succeeded in preserving the long term value of the brand. Companies such as Perrier, who
had been criticised for less adept handling of a crisis, found their reputation damaged for as
long as five years after an incident.

In fact, there is some evidence that it was rewarded by consumers who were so reassured by
the steps taken that they switched from other painkillers to Tylenol.

Conclusion

21
The features that made Johnson & Johnson's handling of the crisis a success included the
following:

• They acted quickly, with complete openness about what had happened, and
immediately sought to remove any source of danger based on the worst case scenario - not
waiting for evidence to see whether the contamination might be more widespread

• Having acted quickly, they then sought to ensure that measures were taken which
would prevent as far as possible a recurrence of the problem

• They showed themselves to be prepared to bear the short term cost in the name of
consumer safety. That more than anything else established a basis for trust with their
customers

Links:

Johnson & Johnson website

News stories

Coca-Cola learns what's untouchable - Alex Brummer, June 19 1999 Guardian (refers to
Johnson & Johnson case)

Websites:

www.J&J.com

Companies in Crisis - What to do when it all goes wrong - Data sourced from Burson-
Marsteller; additional content by Warc staff, 31 March 2010

www.wikipedia.com

www.scribd.com (various authors)

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