Decentralisation : A Strength
The McNeil name has been associated with the manufacturing and sale of pharmaceutical products since 1879, when Robert McNeil opened his first retail drug outlet in Pennsylvania. Growing as a producer of prescription pharmaceuticals, McNeil Laboratories, Inc. was incorporated in the U.S. in 1933, and became a member of the Johnson & Johnson family of companies in 1959. Mcneil Consumer Healthcare began operations in Canada in an existing administrative Johnson & Johnson facility in Guelph, Ontario in 1980. McNeil Consumer Healthcare (nonprescription pharmaceutical products) in Guelph, Ontario is member of the Johnson & Johnson family of companies in Canada. An important difference between Johnson & Johnson and most other companies—is the concept of decentralised management. Instead of operating as one large multi-billion dollar corporation, Johnson & Johnson is operated as 190 smaller companies, each focused on a specific medical or product franchise and/or geographic area, with each affiliate generating multiple options for growth. Through decentralisation we combine the advantages of being big with the agility and focus of smaller firms. Decentralisation enables each company to stay close to its customers, maintain short lines of communication with customers and employees, and accelerate the development of talent. The Johnson & Johnson - Merck Consumer Pharmaceuticals company also operates from our Woodlawn Road facility in Guelph.
What was the important difference between Johnson & Johnson and most other companies?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Concept of Decentralised Management
Option (1) Concept of Centralized Management — Incorrect. Under centralisation, decisions are kept at the top. Johnson & Johnson does the reverse and lets its 190 companies decide for themselves.
Option (2) Concept of Delegation — Incorrect. Delegation is the passing of authority from one manager to his subordinate, and every organisation uses it. Decentralisation is wider: it is delegation spread to all levels as a policy of the whole organisation. The passage names the wider one.
Option (3) Concept of Decentralised Management — Correct. The passage says the important difference between Johnson & Johnson and most other companies is the concept of decentralised management: it runs as 190 smaller companies, each taking its own decisions.
Option (4) Concept of Autocratic Leadership — Incorrect. An autocratic leader keeps all decisions with himself. That is the opposite of spreading decisions to 190 units.
Note: The passage is the NCERT case study ‘Decentralisation : A Strength’, which has been reproduced by NTA in the exam. NCERT (2026-27 Edition): “Decentralisation : A Strength … An important difference between Johnson & Johnson and most other companies — is the concept of decentralised management. Instead of operating as one large multi-billion dollar corporation, Johnson & Johnson is operated as 190 smaller companies, each focused on a specific medical or product franchise and/or geographic area, with each affiliate generating multiple options for growth. Through decentralisation we combine the advantages of being big with the agility and focus of smaller firms. Decentralisation enables each company to sty close to its customer, maintain short lines of communication with customers and employees, and accelerate the development of talent. …” |