Ethics in Workplace

In 1982 Johnson and Johnson, the pharmaceutical company that makes Tylenol announced a nationwide recall of Tylenol; 31 million bottles and a loss of 100 million dollars. This recall was secondary to the death of seven people in the Chicago area after using Tylenol. An investigation reveled the poisoning were found to be that of an outside source. The Tylenol was contaminated with cyanide from an outside source.

Johnson and Johnson’s response to the poisonings was to face the public, take responsibility, and attempt to regain the marketplace. Johnson and Johnson began a massive campaign, doling out coupons, and redesigning the package to be tamper-resistant. Because Johnson and Johnson took a stance and vowed to not only protect the consumer but also to protect the employees and the shareholders Johnson and Johnson has been able to rebuild their reputation and had regained the majority of the marketplace by the mid-80. (Nelson & Trevino, 2004)

Symptoms of the Problem

Johnson and Johnson took a financial hit when the tainted Tylenol was first discovered, and secondly when they decided to pull the Tylenol out of the marketplace. Before Johnson and Johnson could establish fault the company took a stance and removed the Tylenol therefore reducing the potentiality of another death. One of the problems that Johnson and Johnson faced was how to make products safe for the consumer without placing blame on the consumer, how to gain back consumer alliance’s, and how to recover financially.

After the poisoning was found to be cyanide contaminated from an outside source Johnson and Johnson had no choice but to assume that certain people in society could not be trusted and there was no way to determine who these people were. Johnson and Johnson was in an ethical quandary. Should Johnson and Johnson take responsibility and ethical accountability or should Johnson and Johnson place blame on society with the hope that the public will see that the deaths were not the fault of Johnson and Johnson? Johnson and Johnson suffered many financial losses. Should they invest more money into Tylenol and the safety of their products or just let Tylenol slip to the wayside? These are questions that top officials had to ask in the first few days after the tragic deaths of the seven Chicago residents. (Nelson & Trevino, 2004)

Root Problems

After the seven tragic deaths in Chicago, Johnson and Johnson had many questions about how they were going to handle the situation. In the beginning, a representative from Johnson and Johnson had this to say, “The Company’s strict quality control and the poisonings could not have been performed in the plants. Because the cyanide laced Tylenol had been discovered in shipments from both of the company’s plants and had only been found in the Chicago area, authorities concluded that any tampering must have occurred once the Tylenol had reached Illinois.” (Kaplan, 2006) Johnson and Johnson were faced with two major root problems. First, the safety of the consumer and employees, and secondly, how was Johnson and Johnson going to save its reputation and make sure that Tylenol was back on its feet.

“The company immediately alerted consumers across the nation, via the media, not to consume any type of Tylenol product. They told consumers not to resume using the product until the extent of the tampering could be determined.” (Kaplan, 2006) Johnson and Johnson was taking a major risk in the recall, and they were losing money fast trying to warn the public. “This was unusual for a large corporation facing a crisis. In many other similar cases, companies had put themselves first, and ended up doing more damage to their reputations than if they had immediately taken responsibility for the crisis” (Kaplan, 2006).

By taking charge of the situation, Johnson and Johnson regained their reputation through the good media they received. Getting involved from the start gave Johnson and Johnson good standing with the police, FBI, and the Food and Drug Administration. Johnson and Johnson were able to save face in the public’s eye even though the recalled all their stock and told people not to buy or open any Tylenol until the crisis had been solved. Another way that Johnson and Johnson saved faced was to offer to switch tablets for capsules. They lost millions of dollars in this transaction but the consumer felt safe and knew that Johnson and Johnson was taking care of them.

After six weeks, of good relations with the public, Johnson and Johnson announced that the capsules would be returning to the shelves. Since that time, the Food and Drug Administration made it mandatory to have tampered proof seals on all drug bottles. Tylenol was one of the first companies to follow these regulations and when the capsules returned to the shelves it had a three part tamper seal on the bottles.

Unresolved Issues

Johnson and Johnson made the right ethical decisions concerning the Tylenol crisis and through good public relations faced the problems head-on. The company does not have any unresolved issues with the Tylenol.

Roles of the Key Players

There are two key players in explaining how the Johnson and Johnson Corporation handled the incident ethically concerning the seven customers dying due to ingesting Tylenol laced with cyanide. The first key player is the Johnson and Johnson Corporation itself, and the other more specifically is CEO James Burke and the other Johnson and Johnson executives. The first key player, the Johnson and Johnson Corporation, swiftly decided to pull all Tylenol products off the shelves in all stores in the Chicago area. This decision cost the company over $100 million. In addition, the company also alerted all doctors, hospitals, and distributors of the problem in an effort to stop the product from reaching all consumer and patients in the Chicago area. Lastly, the company set up a toll free number where its customers could find out information concerning the issue and receives answers to any questions that they may have.

The second key player in the Johnson and Johnson case is CEO James Burke and the other Johnson and Johnson executives. Their role in this case is largely from the public relations side of the issue. Burke and the other Johnson and Johnson executives were able to limit the damage by willing to be open and honest about the issue with the media and the public. Trevino and Nelson (2004) state, “The background of former Johnson & Johnson CEO James Burke was critical to the company’s behavior during the Tylenol crisis. Burke was a marketing man, who knew and understood the value of timely, accurate communication” (Chap 8). Burke and the other executives did not shy away from TV and newspaper interviews, which allowed the company to remain a trusted corporation in the public’s eyes. This helped keep the door open for the corporation to heal once this incident had been corrected.

Ethical Issues Involved

There are two main ethical issues involved with the Johnson and Johnson case study. The first ethical issue was responsibility. Johnson and Johnson accepted responsibility for the Tylenol poisonings and took the blame for the tainted product. Despite the fact that the cyanide laced Tylenol was contaminated by an external source outside the corporation, Johnson and Johnson felt a responsibility to its customers to eliminate the risk of more Tylenol deaths by pulling all products from Chicago area store shelves. This effectively eliminated the risk to consumers while inflicting a huge monetary loss on the organization. So despite the risk to the corporation, Johnson and Johnson were willing to sacrifice profits to do what was right.

The second ethical issue involved in the case was honesty. Johnson and Johnson’s straightforwardness towards the media and public concerning this issue helped calm the fears of customers and the public. The organization also helped to answer many of the questions the public had. The honesty and openness displayed by the corporation also helped the public to trust in the organization again and a foundation for healing process was laid.

Strategies to resolve the Tylenol Crisis

The lack of corporate insight in preparing for a potential crisis such as the Tylenol incident may have left Johnson and Johnson accessible to unknown sabotage tactics. Historically, outside of its marketing campaigns, Johnson and Johnson had not established any broad relationships with the media. Johnson and Johnson soon realized the media plays a vital role as a one of its important stakeholders. When the Tylenol crisis struck at the core of the Johnson and Johnson Company, it had no management strategies established to defend itself against media scrutiny. In an article entitled, Crisis Communication Strategies

Negative media attention was compounded by the fact that not everyone at Johnson and Johnson knew about the Tylenol deaths until a reporter contacted Johnson and Johnson asking questions about the incident. Johnson and Johnson conceded they did not know that a medical examiner had recently announced that people were dying from Tylenol laced with Cyanide poisoning. As a result, CEO James Burke established a strategic crisis management team to find solutions to protect its customers and establish ways to bring Tylenol back to its popularity. (Cited in.Berg, 1990)

However, Johnson and Johnson could have taken other actions which may have further damaged its integrity. If Johnson and Johnson had decided to put its stockholder’s interests first and left its remaining products on shelves across the United States, it may have left itself open to other copy-cat attacks to tamper with the Tylenol product. In removing Tylenol from the shelves, Johnson and Johnson proved to the public that it was seriously committed to finding a remedy to its crisis.

Johnson and Johnson faced insurmountable odds in facing the dilemma before them. What was going to be the best strategy to handle the tampering without losing its reputation? How was Johnson and Johnson going to get the public to start using its best selling product again? Using a two phase public relations program, Johnson and Johnson would initiate steps to alleviate the crisis. Secondly, a public relations campaign was formulated to deal with the “comeback” phase using an advertising campaign much like the one that initially introduced Tylenol. (Kaplan, para.15)

According to the article entitled, The Tylenol Crisis: How effective public relations saved Johnson and Johnson, author Tamara Kaplan discusses strategic initiatives which were quickly implemented to remove Tylenol from its market shelves in an attempt to show the public that safety was its highest priority even at the cost of 100 million dollars. Johnson and Johnson had to honestly let its customers know the dangers of using Tylenol. Johnson and Johnson initiated crucial steps to handle the crisis by: (a) alerting customers across the United States to stop using Tylenol (b) stopped producing the product and told customers not to use the product until the issue of tampering was resolved (c) Johnson and Johnson withdrew all its products from shelves across the United States. (Cited in. Broom, Center & Cutlip, 59, 381)

As Kaplan further discusses during the second phase of its “comeback” campaign, Johnson and Johnson implemented a public relations program and established communication links through various types of media to promote changes made to its Tylenol product. Additionally, Johnson and Johnson networked with city, state and federal entities in its ongoing search to find the unknown source(s) responsible for seven deaths. (Cited in. Atkinson, p.2)

Both of the strategic approaches, the crisis management team and the two phase public relation programs, used to facilitate positive change during the Tylenol crisis were instrumental for Johnson and Johnson in recovering from the devastating sabotage attack on their company’s best selling product. However, the crisis management team of experts headed by CEO Burke appears to be one of the key components which provided the most beneficial assistance in retaining the company’s reputation through the use of its media communication strategies.

Recommendations

Since 2001, violent terrorist’s attacks have continued to rise in various parts of the world. In the modern age of technology, Johnson and Johnson should continue to find new and innovative ways to protect its products. Using state-of -the-art technology to determine whether any espionage has penetrated its facilities around the globe is one way to deter product tampering. Monitoring of external and internal security controls should be in place and continually checked for any weaknesses or breech of security. The Johnson and Johnson website should provide an area for customers to as questions about any concerns they may have or to report any suspicious activities. Additionally, a crisis management team should continue to train and prevent any espionage attacks in the future through ongoing evaluation of security procedures. As the world becomes more globally networked, Johnson and Johnson should continue to use innovative strategies which will continue to strengthen its relationship with various media channels.

Implementing an anonymous reward system for whistle blowers, Johnson and Johnson might prevent further attempts to undermine the corruption that continues permeate the integrity of its products. Such as in 2000, when Johnson and Johnson was fined $60,000,000 for selling defective diabetes equipment and trying to cover it up. Current CEO, Ralph S. Larsen, wrote in a statement, “Mistakes and misjudgments were made… we fully acknowledge those errors and sincerely apologize for them and are committed to learning from this experience.” (Nelson & Trevino, p.63)

Conclusion

The Johnson and Johnson Company has been recognized the world over for its astonishingly honesty and integral handling of the Tylenol crisis. Johnson and Johnson’s controversial comebacks can be attributed to its ongoing commitment to its credo, to always put the customer first. By removing over 31,000,000 bottles of Tylenol from its shelves and losing millions of dollars in revenue, Johnson and Johnson took responsibility for the crisis and used a public relations program to gain back its reluctant customers. Its primary stake holder’s understood that Johnson and Johnson was not in the business of blaming others but instead it was a business concerned with taking vital steps to put its company back on track so the consumer could once again purchase a product from a name it could trust.

References

Atkinson, Rick. “The Tylenol Nightmare: How a Corporate Giant Fought Back.”

The Kansas City Times. November 12, 1982.

Broom, Glen M., Allen H. Center, Scott M. Cutlip. Effective Public Relations, Seventh

Edition. Prentice-Hall Inc. 1994.

Department of Defense Joint Course of Communication.

Crisis Communication Strategies. Retrieved October 17, 2006 From:

www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&%20Johnson.htm

Kaplan, T. The Tylenol Crisis: How Effective public Relations Saved Johnson &

Johnson. Retrieved October 17, 2006. From:

http://www.personal.psu.edu/users/w/x/wxk116/tylenol/crisis.html

Trevino and Nelson, (2004). Managing Business Ethics: Straight Talk about How to Do

It Right. John Wiley & Sons, Inc. University of Phoenix Resource.