One of the privileges of working in a business school is that you occasionally get to meet/have a meal with really remarkable and impressive business leaders. One of the advantages of being a business historian is that you get to learn about similarly remarkable business leaders who lived ago. Let me tell you about Robert Wood Johnson II, a business visionary, patriot, and, in my view, war hero. If you’re trying to understand how ideational commitments can persist inside firms for generations, Robert Wood Johnson II is a useful figure to consider. He didn’t found Johnson & Johnson, but he arguably left a deeper and more enduring imprint on the organization than its original founders. Thinking about Johnson’s impact is useful because management academics who use the theory of organizational imprinting focus on firm founders—the leaders who control companies during their infancies. The underlying idea is that for an individual to leave a lasting impact on a company, they have to be there at the earliest stage. (Check out this new paper in ASQ that applies and develops imprinting theory). I suppose that this management theory is analogous to the personality theory that says that high quality parenting matters the most when the child is under five—the child’s destiny is basically set up the lessons they absorb from their parents before they go to school. Well the case of Johnson is a bit of a problem for imprinting theory as it currently exists because he wasn’t a firm founder—he sort of inherited a rather unremarkable company and turned into something very distinctive whose distinctive features endure to this day. Johnson became president of J&J in 1932 and led it until the early 1960s. Over those three decades, he embedded a managerial philosophy that combined decentralised authority with superior organisational performance by the main metrics. What Johnson did was a sort of second founding—he wasn’t the George Washington of this company, he was its Abraham Lincoln.
Johnson (1883 to 1968) spent nearly his entire adult life inside Johnson & Johnson. He joined the company as a young man, having grown up in the orbit of its founders, and was steeped early in both its operational details and its moral rhetoric. By the time he became president, he was already well-versed in the business and carried the authority of both experience and lineage. He was also a reservist in the U.S. Army before joining the federal wartime administration, where he took on a prominent role overseeing small manufacturers who were contributing the war effort and protecting these SMEs from an unholy alliance of bureaucrats, Big Business, and Big Government. His career blended private enterprise with public service, and that dual exposure shaped many of his views on decentralisation, corporate legitimacy, and leadership.
Image from J&J Corporate History Website.
Johnson took control during the Great Depression. He didn’t cut jobs. In fact, in 1933 he gave everyone a 5% raise and opened a new factory. While other firms were retrenching, he was arguing publicly for higher wages, shorter hours, and corporate social responsibility, voicing ideas similar to those articulated by Herbert Hoover. “It is in the interest of modern industry,” he wrote, “that service to customers comes first; service to its employees and management second, and service to its stockholders last.” He outlined these views in a short pamphlet he distributed to other industrialists, called Try Reality.
What made Johnson interesting was not just that he held these views about putting the stockholders last, which were pretty widespread among American executives in the era of total war, but that he institutionalised them. His most famous contribution was the writing of Our Credo in 1943. This document lays out J&J’s responsibilities in a strict moral order: customers first, then employees, then communities, then shareholders. He had the text literally carved in stone in the company headquarters. It remains there today. Unlike many corporate value statements, the Credo wasn’t a marketing exercise for the website. J&J leaders were expected to take it seriously. In 1982, for example, the Credo was explicitly invoked by CEO James Burke as the basis for recalling Tylenol nationwide in response to the poisoning crisis.
The middle years of the twentieth century were the peak of the high modernist belief in centralisation. Sadly, even the Western democracies were affected by this worldwide trend: in federal nations, central governments sucked power in from state/provincial governments and some analogous happened in many companies, notwithstanding the popularity in other companies of the M-Form discussed by Al Chandler. Johnson believed in decentralisation, not just as an efficiency measure but as a philosophy of life. He turned J&J into what he called a “family of companies”: a group of semi-autonomous business units, each with its own leadership, decision rights, and accountability. He thought mistakes were inevitable, and that decentralised firms made them smaller and less systemic. He believed in developing leaders by giving them room to run their own operations. He once said that in a centralised firm, “one big mistake can cripple the whole organization.”
The model wasn’t imposed arbitrarily. Johnson had seen decentralisation work in practice. His early experiments with overseas subsidiaries gave local managers a high degree of autonomy, and he was impressed with the results. During WWII, when he ran the Smaller War Plants Corporation, he also saw that distributed production by smaller firms could outperform centralised control. These experiences reinforced his conviction that responsiveness, not control, was the key to both efficiency and resilience.
While the mid-century Johnson & Johnson is sometimes cited as an exemplar of the M-form structure, its approach between the 1930s and the 1960s diverged in important respects from the canonical model articulated by Alfred Chandler. Structurally, the firm did resemble the archetypical M-form: it was organised into semi-autonomous operating units, each focused on distinct product categories or geographic markets. In a classic M-form, the divisions have responsibility for their own manufacturing and marketing, but not strategic decisions, which are made at the headquarters. From a purely formal standpoint, this places J&J within the broad tent of M-form adopters.
However, at J&J strategic decisions were also downloaded to the divisions. Functionally—and philosophically—it operated according to a radically different logic than in the classic M-form. Whereas Chandler’s M-form emphasized strategic centralization at headquarters, J&J espoused what might be called a doctrine of principled decentralization. Influenced by the managerial philosophy of Robert Wood Johnson, the company saw local autonomy not just as an efficiency mechanism but as a moral imperative. Decision rights were not merely delegated—they were embedded in the very design of the enterprise. The corporate center was relatively passive, providing capital and articulating broad values, but largely refraining from strategic coordination or intervention.
In this sense, J&J’s model was less a hierarchical allocator and more a federated network of entrepreneurial units. Where General Motors centralized planning functions and optimized across business lines, J&J tolerated—indeed, cultivated—a more pluralistic and loosely coupled structure. It is perhaps more accurate to think of J&J in this era not as a typical M-form firm but as an early prototype of post-M-form decentralization: structurally divisional, but governed through norms, local accountability, and minimal central orchestration.
Johnson viewed corporate power as a form of stewardship. He believed businesses needed to earn their legitimacy by serving others. He was also, in some sense, a Cold War liberal: convinced that capitalism needed to reform itself in order to survive the ideological battles of the mid-20th century. Corporate paternalism, in his hands, was not just a managerial strategy; it was a political response to the threat of social unrest and citizens drifting into supporting the totalitarian ideologies at the two ends of the political spectrum.
What makes Johnson’s case instructive is not just what he did, but how successfully it endured. By the time he retired in the 1960s, J&J was a global company, operating with over 100 semi-autonomous subsidiaries. That structure remains intact today. The Credo is still cited in internal deliberations. And the basic logic of his stakeholder-first philosophy continues to shape the firm’s governance. It is difficult to find many examples where the imprint of a mid-century CEO has lasted this long, especially when it runs so visibly counter to the shareholder primacy model that dominated American business thought in the decades after his retirement.
Robert Wood Johnson II was not flawless. He could be paternalistic, and his approach to moral authority might grate in a different institutional context. But in an era dominated by central planners and consolidators, he was making a different bet: that legitimacy and longevity come not from tight control, but from principled decentralisation. And eight decades on, his wager still looks pretty sound.
In some respects, Johnson and his ideas were totally representative of his generation. He was influenced by the ideas of Adolf Berle and Gardiner Means, whose 1932 book The Modern Corporation and Private Property helped shift elite thinking away from the idea that corporations should be run primarily for the benefit of shareholders. Berle and Means argued that large corporations had come to dominate American economic life and should be seen as social institutions. Their work was widely read and debated among business and policy elites in the interwar years, and Johnson’s rejection of shareholder primacy placed him firmly within that intellectual milieu.
But in other ways, Johnson was quite unrepresentative of his time. In an era increasingly captivated by high modernist visions of centralised planning and control (whether in government agencies, conglomerates, or business schools) he was actively decentralising power inside his firm. While many of his contemporaries were building central headquarters stuffed with analysts and long-range planners intent on micromanaging distant managers, Johnson was pushing authority outwards. He did this not out of ideological contrarianism, but because he believed decentralisation made firms more responsive, more resilient, and more moral.
This commitment to decentralisation is especially striking given Johnson’s own background in the U.S. military. He served in a leadership role during World War II and was socialised in a system that, at that time, embraced centralised command and rigid hierarchy. The modern doctrine of mission command, which means delegating authority and empowering subordinates, was decades away from being adopted by the U.S. armed forces. In fact, during the Second World War the U.S. military practiced the polar opposite of mission command, as their German opponents noted.
The concept of mission command has its origins in 19th-century Prussia, where military thinkers developed the idea of Auftragstaktik. This doctrine was built around giving subordinates clear objectives but leaving the means of execution to their discretion. The idea was to encourage flexibility, speed, and initiative at the tactical level while still maintaining coherence at the strategic level. Although it had long been admired by a few dissenting voices within the U.S. military, the U.S. military did not embrace mission command until the soul searching in the post-Vietnam period. The failures of top-down military, Robert McNamara-style planning in Southeast Asia, combined with a changing operational environment and the professionalisation of the officer corps, pushed U.S. military doctrine toward greater decentralisation. By the late 20th century, mission command had become a core principle in U.S. Army leadership manuals—a sharp departure from the centralised command culture that had prevailed during Johnson’s own time in uniform.
That Johnson, a mid-20th century military man, ended up building one of the most decentralised corporate structures in postwar America is testament to how deeply he believed in pushing decision-making down to those closest to the action.
The Past Speaks 
