Tylenol Exigencies: Business Perspective on Ethical Grounds - Case Study Example

Tylenol Exigencies Business Perspective on Ethical Grounds College Tylenol Exigencies: Business Perspective on Ethical Grounds A century, a score and six years after its foundation, Johnson & Johnson remains as one of the leading names in the commercial industry, providing daily consumer commodities and pharmaceutical products for the whole family. The company’s name Johnson & Johnson stemmed from its founding brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson who then live in New Brunswick, New Jersey. Its humble beginning was marked by the company’s release of first aid kits for railroad workers, which was followed by the release of maternity kits including baby powder. This in turn, marked the beginning of the company’s integrity in baby business (“Our Timeline”, n.d., para.3). The company’s efforts to help through provision of relief goods in the aftermath of disasters in the 1900 and 1906 also did a lot to carve its name in the industry. At present times, Johnson & Johnson is in partnership with 250 companies and holds offices in 57 countries distributing their goods in over 175 nations (Johnson & Johnson Corporate, n.d., para.3). In the year 2011, the company’s pharmaceutical sales approximated to $65 billion. Tylenol, McNeil Laboratories & Johnson & Johnson Acetaminophen is the active ingredient in Tylenol. It is widely used for relieving pain and reduction of body temperature for fever. The sales team of McNeil Laboratories came with the term Tylenol by choosing letters from its chemical form N-aceTYL-p-aminophENOL (West, 2009). McNeil Laboratories founded by Robert McNeil was the first to manufacture Tylenol in 1955 as a prescription drug elixir for children. There was an ongoing issue during that time about the harmful effects of then widely used drug, aspirin. McNeil Laboratories marketed Tylenol as the benign alternative to aspirin (West, 2009). It was in 1959 when Johnson & Johnson acquired McNeil Laboratories and the same year marked Tylenol as a prescription-free drug. From then on, Tylenol has been one of Johnson & Johnson’s most widely sold and most profitable product, bringing an average year to year profit share of 33% (Griese, 2001). The 1982 Tylenol Tampering Widespread scare enveloped the nation when seven deaths have been attributed to Tylenol ingestion in September of 1982. Two off-duty firemen unintentionally hypothesized the connection of Tylenol while listening to police radios and talking about the supposedly mysterious deaths (Kaplan, 2005). Among the victims were a 12 year old student Mary Kellerman; three family members Adam Janus, his brother Stanley and Stanley’s wife, Theresa, aged 27, 25 and 19 respectively; 27 years old mother of four, Mary Reiner; stewardess Paula Prince, 35 years of age; and 31 years old Mary McFarland. These victims have died within hours after taking Tylenol due to the cyanide content of the capsules, which was stronger by 10,000 times to the cyanide dose the human body can take (Kaplan, 2005). Johnson & Johnson acted promptly. At that time, nobody thought of such tragedy. These murders became the first of its kind. It was revealed in the investigations, that the capsules were tainted by cyanide through the act of an intent person because no specific evidence can link that the Tylenol capsules were laced by cyanide during manufacture (Kaplan, 2005). At the turn of events, Johnson & Johnson decided to put out a major recall for all the Tylenol capsules in the country. The manner in which Johnson & Johnson handled the controversy is regarded by professionals “to be one of the best in the history of public relations” (Kaplan, 2005). In Griese’s book (2001), she cited the Tylenol tragedy as a befitting example on making the right decisions during time of crisis. Griese enumerated eight steps as guidelines in decision-making. The first step after the identification of the situation is to conduct research. The company McNeil Consumer Healthcare under Johnson & Johnson, which is responsible for manufacture of Tylenol, performed unending research throughout and even after the crisis. Next step is the determination of campaign objectives. Griese (2001) cited the company’s interest in putting the public first through provision of facts to the public. Following the steps are the identification of key publics, key media, and key messages. Griese (2001) pertained to these keys as the act of tapping of “mass media” for information dissemination, then to the significant sectors such as the health teams, “…Food and Drug Administration, Federal Bureau of Investigation and consumers”. The sixth step is to plan the campaign wherein, Griese (2001) mentioned that a critical team, composed of seven persons, was established by then Johnson & Johnson’s chairman James E. Burke. It was followed by acting in the public interest and communicating. Johnson & Johnson set up toll free hotlines, paid advertising, and offered Tylenol tablets as exchange to the capsules. One and a half month following the crisis, Johnson & Johnson came up with the new Tylenol, taking pride and confidence on its “tamper-proof” packaging (Griese, 2001). Last step on the process as framework for decision making is evaluating the campaign results. The company’s efforts can be concluded as successful due to the fact that three months after the victims’ deaths, Tylenol tablets “recaptured” 80% of its previous market (Griese, 2001). Kaplan (2005) mentioned an article written by Johnson & Johnson’s Corporate Vice President Lawrence Foster. Foster’s article published in the year 1983 on New Jersey Bell Journal, roughly a year after the crisis, admitted having no crisis management guidelines that seem applicable to the situation at that time. According to him, it was their business philosophy, which they called “Our Credo” that guided them throughout the painstakingly decision-making process. This business philosophy is personally written by Johnson & Johnson’s founder Robert Wood Johnson in 1943. To this day, the company still takes its values and action with great anchor to the “credo” (Our credo values, n.d. para.1). When summed up, the “credo” puts an emphasis on providing quality products and services to the public, especially their consumers. The company’s moral guide also cited the significance of valuing their employees and their business partners. In the 1982 Tylenol murders, the company could have chosen an escape on the link of their products and deaths just like the denial of other companies of their time facing a parallel controversy (Kaplan, 2005). Instead of this, Johnson & Johnson opted to bring truthful information and risked losing an estimated amount of $100 million (McAfee, 2002) by recalling some 31 million bottles of Tylenol capsules (McAfee, 2002). All these measures did not go unnoticed on the eyes of the public. Most of the books on business and innumerable articles to this date regarded the Tylenol Tragedy of Johnson & Johnson as the benchmark of crisis management strategy. In fact, upon the conduct of this research, the author has not been able to come up with a negative writing about the path taken by the company in 1982. Surely, they have lost millions of dollars by the recall and spent thousands of dollars to reflect information to the public transparently, but all these were never wasted. Roughly years after its pullout, J&J bounced back in the market regaining 100% of its sales (McAfee, 2002). The key ingredient to this tasty success is that the public never lose their confidence in the company (Shaw, 2010). The 2010 Recall The start of the year 2010 marked another one of Tylenol’s most controversial years as a string of complaints were filed against the makers of the drug. According to an article by the New York Times (Singer, 2010), the Food and Drug Administration has been forced to send a warning letter to Johnson & Johnson’s McNeil Laboratories due to its “seemingly slow” response to the filed complaints regarding the packaging of Tylenol and other drugs namely, Motrin, Zyrtec and Benadryl. These complaints have been made approximately a year before, regarding the presence of an unusually foul smell in the bottles of the drugs. Further investigations revealed the presence of tribromoanisole (TBA) which is used in platforms necessary for “transport and storage of packaging materials” (Kavilanz, 2010). FDA’s letter of concern to the company is a sign of the company’s obvious negligence on the issue. Latest Tylenol Controversy From the death of seven people in 1982, to the foul smelling bottles of 2010, it seem like McNeil Company under Johnson & Johnson developed a tradition of recalls for Tylenol. To add in its history of Tylenol recalls is the latest news that surrounded the public in the early months of 2012. The New York Times (Reuters, 2012) published an article covering the series of complaints about Tylenol’s renewed bottle design. The new look of Tylenol’s bottles was designed to avoid giving wrong doses and spillage. It did a good job on keeping up its anti-spill purpose, but ironically, there are some mechanical problems that ruin the accuracy of the dosage of the drug upon measurement. Grape-flavored Infant Tylenol amounting to 574, 000 in total has been recalled from the markets and consumers (Reuters, 2012). From a Different Perspective Agreeing with what most writers said I clearly believe that the steps Johnson & Johnson’s company took were the necessary steps any company should have taken when faced with parallel circumstances. The decision to recall all bottles of Tylenol during the 1982 murders was the most ethical of all. According to McAfee (2000), the company’s decision took some time due to the fear that the culprit behind these killings may poison other products. But in the long run, the founding person’s philosophy, alongside with the company’s top executives saved Tylenol from its extinction by choosing what is best for the public - and that is to recall and replace all Tylenol capsules. This is what separated Johnson & Johnson from other companies of their time. The company ought to protect the public safety first as soon as the planning for restoration began. They have also shown sincerity when they made a full scale effort to win the public’s trust by coordinating with the important branches of the society namely media, medical, investigative and public communities. In my own point of view, media coverage during that time made a humungous impact on the people. The media can make or break a company, and J&J must have known this. The company’s first step upon the discovery of the event was to inform the public through informing the media. Instead of going against the wave, Johnson & Johnson surfed with it. Johnson & Johnson’s commendable actions on the 1982 incident have been in almost complete contradiction with the Tylenol issues of 2010. I cannot dismiss the act of comparing how the company reacted in these two major setbacks. The latter is an absolute example of the company’s lack of interest in the general public because of their inaction as soon as the complaints were file. McNeil has attempted a “phantom recall” on some of their products by hiring people to anonymously buy the products, thus gradual elimination of the affected products. These employees should have known better than to ‘just follow orders’. The company did a public recall and information dissemination as a response to the warning letter sent by the FDA. As a consequence, the question running through everybody’s minds were ‘if not for the warning letter, would the company attempt to cover their flaws?’ Although the foul smelling complaint on the packaging of the drugs (including Tylenol) did not result to any death and serious illness, the company still has the moral obligation to make the information known. The company should be responsible on informing first the FDA, then the public of the issues surrounding the incident and of the actions they are implementing to lessen the effects. History indeed repeated itself in the 2012 recall of the Tylenol products. As with any story, I think the most dominant moral story that every company must have learned from this succession of sporadic controversies is the importance of fulfilment of duty to serve the public. The public has the right to gain access to adequate and accurate information. By letting consumers to be exposed to such a risk is tarnish in the company’s reputation. Thus, it is highly recommended that companies invest in the public’s trust through maintaining a good reputation. For the company to be deemed respectable, it must perform its moral obligation of protecting their consumers. Profits may seem attractive and may look like as a first priority, but without the consumers’ support, any company’s profits are doomed to dwindle alongside the company’s existence. References Griese, N. (2001). How to manage organizational communications during crisis. Tucker GA: Anvil. Johnson & Johnson. (n.d.). Retrieved June 5, 2012, from Wikipedia Website, http://en.wikipedia.org/wiki/Johnson_%26_Johnson Johnson, L. (2012, February 17). Infant Tylenol recall: Johnson & Johnson recalls medicine over bottle design problem. The Huffington Post. Retrieved from http://www.huffingtonpost.com/2012/02/17/infant-tylenol-recall-joh_n_128545.html Kaplan, T. (2005). The Tylenol crisis: how effective public relations saved Johnson & Johnson. Crisis Management in Public Relations, 1(3) ,1-2. Retrieved from http://hdl.handle.net/123456789/111 Kavilanz, P. (2010, October 19). Tylenol recall, FDA slams company. CNN Money. Retrieved from http://money.cnn.com/2010/01/15/news/companies/over_the_counter_medicine_recall /index.htm McAfee, R. (2002). Competitive solutions: The strategist’s tool kit. Woodstock, OX: Princeton Our Credo Values. (n.d.). Retrieved June 5, 2012, from Johnson & Johnson Website, http://www.jnj.com/connect/about-jnj/jnj-credo/ Our Timeline. (n.d.). Retrieved June 5, 2012, from Johnson & Johnson Website, http://www.jnj.com/connect/about-jnj/company-history/ Reuters (2012, February 17). Johnson & Johnson recalls infants’ Tylenol. The New York Times. Retrieved from http://www.nytimes.com/2012/02/18/health/johnson-johnson-recalls-infants-tylenol.html Shaw, W. (2010). Business ethics: A textbook with cases. Boston, MA: Cengage. Singer, N. (2010, January 17). In recall, a role model stumbles. The New York Times. Retrieved from http://www.nytimes.com/2010/01/18/business/18drug.html West, N. (2009). History of Tylenol. McNeil consumer healthcare company, 3(1), 3-4 Retrieved from http://www.worldpharmaceuticals.net/editorials/21/Top%20ten%20global %20pharma.pdf 1 Read More