Running header: Johnson & Johnson

Johnson & Johnson: The Tylenol Crisis
Renita Edwards
Virginia College
MGT3410
Mike Aday
3/20/2008

Outline
I) Brief history of Tylenol crisis
II) Recalling the product from points of view a) Economic point of view b) Legal point of view c) Moral point of view
III) Benefit from the company’s credo and mission statements a) Johnson & Johnson b) Bristol- Myers Squibb c) Merck Corporation d) Bridgestone Tires
IV) Conclusion

Johnson & Johnson: The Tylenol Crisis
Brief History During the fall of 1982, on September 30, Johnson & Johnson CEO James Burke received the horrible information that several deaths had occurred. The deaths of seven people were a result of them taking cyanide-laced capsules of Extra Strength Tylenol. This information captivated the nation’s attention. Before this happen Johnson& Johnson “had captured over 35 percent of the $ 1 billion analgesic market- over three times the market share of it’s nearest competitor.” (Boatright, 2007) Tylenol was actually dominating the analgesic market; this product was making a lot of money for Johnson & Johnson. The cyanide was placed into the capsules of the Extra Strength Tylenol, the capsules were easy to lace because they could be pulled apart and put back together again and no one not know it. James Burke and staff found out that “the tampering had not occurred at a McNeil production facility, and was not responsible for the cyanide contamination itself.” (Boatright, 2007) The cyanide deaths occurred in one area and within the bottle of Extra Strength Tylenol only a few of the capsules were contaminated. The person or person that did this was never caught. The problem was that Tylenol was associated with the cyanide deaths, and this had consequence for the company. How would a recall affect a company such as Johnson & Johnson?

Analyze the question of recalling the product from the economic, legal, and moral points of view.
Economic Point of View The economic point of view of a recall will indeed cause a hardship on any company. “McNeil Consumer Products, a subsidiary of Johnson & Johnson, conducted an immediate product recall from the entire country which amounted to about 31 million bottles and a loss of more than $100 million dollars.” (Lazare, Chicago Sun-Times 2002) All advertisement for the product was stopped. Economically the Tylenol crisis was large; the company lost so much money by recalling nationwide. Johnson & Johnson could have just done a recall in Chicago or even in the whole state of Illinois, but it was not about the money with this company. The company was going to lose money anyway you look at it, but by choosing to recall on a larger scale, it was showing the public that Johnson & Johnson had their customer’s best interest at hand.
Legal Point of View The legal point of view of the Tylenol recall was that it had to come of the shelves. This could be done voluntary or involuntary, if done involuntary that was when the Food and Drug Administration (FDA) would have stepped in. The FDA would have evaluated the health hazard to the community, but the facts were already known, death had occurred as a result of the product. The FDA breaks down the recalls into three classes, Class I, II and III. A Class I recall involves a situation in which there is reasonable probability that the use of or exposure to the product will cause serious health problems or death. A Class II recall means that the use of or exposure to the product may cause temporary or medically reversible health problems or that the probability of serious health problems is remote. A Class III recall is the least serious and indicates that exposure to the product is not likely to cause health problems. (Meadows, 2006) A Class I would have been what Tylenol would have been classified as in 1982. The next step would be to notify the public, a Class I recalls almost always warrant a release to the media. "When a recalled product has been widely distributed, the media is a very effective way to reach large numbers of consumers." (Meadows, 2006) Companies must report to the FDA whether the recall will be posted on the company's Web site, what customers are being instructed to do, and how products should be returned, if applicable. Key information should be communicated clearly to consumers, including the name of the product being recalled, the lot numbers, serial numbers, or other identifying information, and the reason for the recall. (Meadow, 2006) The FDA goes by these rules to keep order in this system. Legally, a company has to recall a product, especially if it is a Class I.
Moral Point of View A recall of a product can leave a moral dilemma. Moral points of view have two important features. The first feature is a willingness to seek out and act on reasons. The best action, according to one writer, is “the course of action which is supported by the best reason.” (Boatright, 2007) A course of action that is going to be beneficial to all involved in the situation would be done for the best reasons. The second feature of the moral point of view is to be impartial. By being impartial we will consider everyone in the same manner of importance. This would basically mean weighing every possible interest in an equal and fair way. One of the best ways to test your own moral point of view as stated by Boatright “Is whether we would feel comfortable if our colleagues, friends, and family were to know about a moral decision we had made.”

What benefit did Johnson & Johnson derive from the company's credo? Could any other company with such a credo respond in the same way?
Johnson & Johnson Credo The Johnson & Johnson Company does not have a mission statement like most companies, it has credo that the company has lived by for the last 60 years. I think that the first part of the credo is the most important in regards to the users of their product. “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality.” (Johnson & Johnson) The benefit was that the company was going to provide the highest quality of service to the public. Johnson & Johnson has made it perfectly clear that whatever the company does it has to be of the highest quality, this lets you know that their first responsibility is to the people who use their products. We have seen that they will put us first; the credo is just a testament to that.
Bristol –Myers Squibb Mission Statement The Bristol- Myers Squibb mission statement states “We pledge excellence in everything we make and market, providing the safest, most effective and highest-quality medicines and health care products. We promise to continually improve our products through innovation, diligent research and development, and an unyielding commitment to be the very best.” This was specifically written for the customers of their products. Bristol- Myers mission statement is stating that they will provide the highest quality medicines. Their statement has as much significance as Johnson & Johnson credo. Their products should always be safe and effective. The mission statement should provide a quick reaction also.
Merck Corporation Mission Statement “The mission of Merck is to provide society with superior products and services by developing innovations and solutions that improve the quality of life and satisfy customer needs, and to provide employees with meaningful work and advancement opportunities, and investors with a superior rate of return.” Merck’s mission statement says that they will improve the quality of life and to satisfy the customers needs. This statement is not as profound as Johnson & Johnson’s. Merck’s statement does not emphasis how important the customers well being is. In a crisis situation, the response should be the same to react quickly.
Bridgestone Tires Mission Statement Bridgestone Tire Company’s mission statement is “Serving society with superior quality.” Bridgestone’s mission statement is pretty simple and to the point. This company will give superior quality to their customers. Johnson & Johnson also stated that they would do everything for their customers in the highest quality. Bridgestone would act in a quick manner to provide superior quality, if the public was in danger.
Conclusion
Johnson & Johnson were given a test of the company’s credo. The company had to deal with a crisis that would shakeup the company in a way that no one thought they would ever be able to recover. The company provided the highest quality to the consumers, by removing the products from the shelf. This came after the death of the seven individuals that were poisoned by someone lacing Extra Strength Tylenol Capsules with cyanide. The company was able to make a comeback even after economic, legal and moral issues were handed to them. The greatest thing that can be said is that Johnson & Johnson reacted in such a quick fashion that they were able to restore the faith that many had in them.

Bibliography
Boatright, John R. (2007) Ethics and the Conduct of Business, New Jersey: Pearson, Prentice Hall.
Bridgestone Tires. Mission, Vision and Value. Retrieved on March 5, 2008 http://www.firestone.com/about_index.asp?id=about/mvv
Johnson & Johnson, Our Credo, retrieved on Mar 4, 2008. Website: http://www.jnj.com/our_company/our_credo/index.htm
Lazare, Lewis, Chicago Sun-Times, Inc: Crisis triggered brilliant PR response Retrieved on March 4, 2008 Website: http://iml.jou.ufl.edu/projects/Fall02/Susi/sources.htm
Meadows, Michelle. The FDA and Product Recalls. FDA Consumer magazine
May-June 2006 Retrieved March7, 2008: Website: http://www.fda.gov/fdac/features/2006/306_recalls.html#Anchor-Types-3800
Merck & Co. Mission Statement. Retrieved March 5, 2008.Website: http://www.merck.com/about/mission.html