Risk Management at Johnson and Johnson

Risks of Counterfeiting and Gray Market

According to the article, in the contemporary world, companies are faced by a broad scope of risk; as a result, it is the principle role of the risk management officers to not only identify but also analyze and manage organizational risks. However, one of the highly complicated risks businesses face is the risk of counterfeiting as well as the gray market; these risks make it extremely difficult for managers to combat (Wald, Holleran & Jerry, 59). As a result, the volume of counterfeit products in the global market continues to rise, most often occurring in pharmaceutical products, consumer products as well as luxury items. Some of the risks brought about by counterfeit products include financial, reputational and consumer safety risks.

J&J’s Response to Counterfeit Risks

Johnson and Johnson’s Medical Device & Diagnostics Business is one of the global businesses that has encountered brand risks and in turn, taken a highly proactive stance in not only addressing current issues but also mitigating counterfeit risks. In 2001, the company became aware that it had an existing grey market problem; hence, it set out to research the causes or rather the business factors that facilitated the counterfeit products. The three primary factors identified from the study included business culture, information and reporting, and business design and practices (Wald, Holleran & Jerry, 60). To manage the risks, the company focused on organizational and policy design to protect the brand as well as market monitoring and enforcement.

Threat of Civil Actions

Another major business threat facilitated by business culture, information and reporting, and business design and practices is the threat of civil actions. In regard to business culture, lack of a business culture grounded on respect, integrity, equal and fair treatment particularly among employees and the management ultimately results in harassment, workplace violence, and discrimination which could result in civil actions against the company. Concerning business design and practices, unfair and harmful business practices on consumer products and the environment can also result in civil actions. On the other hand, information and reporting can also result in civil action, for example, lack of transparency and adequate information with regards to a company’s products particularly on the side effects can also lead to civil actions.

Work Cited

Wald, Jerry and Jack Holleran, “Counterfeit Products and Faulty Supply Chain: A Johnson & Johnson Brand Integrity Case,” Risk Management Magazine, Vol. 54, April 2007