Case Study Action Plan

RUNNING HEAD: Johnson and Johnson Case Study Action Plan Johnson and Johnson Case Study Action Plan PHL/323 ? Abstract This paper briefly summarizes the action plan case study of Johnson and Johnson. Seven people had died after ingesting Tylenol, a painkiller that was produce by McNeil Laboratories, a Johnson & Johnson division. The Tylenol was mix with cyanide poisoning. Johnson and Johnson realized that the tragic event was not the company’s fault but an external sabotage.

In addition, Learning Team C proposes an action plan that determines all the facts: symptoms of problems, root problems, unresolved issues, roles of key players, ethical issues involved, alternative, and recommendation for Johnson and Johnson. Johnson and Johnson Case Study Action Plan Business ethics is about understanding the difference between right and wrong within the workplace and doing the right thing. Organizational culture sets the tone for how employees expected to act in ethical situations.

According to Nelson and Trevino (2004), “Organizations must care about ethics because workers depend on them to help define the boundaries of acceptable and unacceptable behavior. ” (p. 23) Ethical issues can be very complex because of the many stakeholders. Organizations must determine their ethical obligations to the stakeholders before determining a response. The following paragraphs will evaluate Johnson and Johnson’s response to the Tylenol poisonings that occurred in September 1982.

The evaluation will include the symptoms of the problem, root problems, unresolved issues, roles of the key players, and ethical issues involved. The paper will also recommend an alternative action plan. Symptoms and root of problems McNeil Consumer Products are the manufacturers of Extra-Strength Tylenol capsules and its parent company is Johnson & Johnson. Tylenol is an over-the-counter drug that is a leader in the field of pain killers. In 1982, a batch of Tylenol Extra-Strength capsules laced with cyanide and resealed in their packages was put on the shelves of pharmacies and food stores in the Chicago area.

The general belief is that these acts are the work of individuals with a grudge against Johnson and Johnson and its pharmaceutical division. This nefarious activity resulted in the death of at least seven people died and the illness and hospitalization of many others. Faced with repairing the damage done to the image of the company and the popularity of the product, the company employed various mechanisms to cope with this serious problem. In situations such as this immediate and decisive action is necessary and the company must employ public relations techniques to ensure positive public acceptance of its image.

The symptoms of cyanide poisoning are low blood pressure, rapid heartbeat, headache, drowsiness, convulsions, coma, and sometimes result in the death of persons who ingest this substance. In terms of the symptoms and root causes of the Tylenol cyanide poisoning scandal, primary concerns center on the fact that, before the scandal erupted there were insufficient safeguards against product tampering and enforcement of rules and regulations with regard to packaging.

The company, by employing swift and decisive action in its handling of the situation, made tremendous headway in weathering the storm and minimizing the controversy surrounding circumstances in this case. As a result the product eventually has been able to attain some modicum of respectability. Upon discovery of the association between the deaths and the product, the company immediately went on the offensive taking steps to inform the public of the salient facts, using due diligence to find the sources of the poisoning.

Making a determination about whether the introduction of the cyanide into the product occurred as a result of internal or external factors. When the connection was made between the Tylenol capsules and the reported deaths, the main problem confronting the company was that the drug, once trusted by millions worldwide, had a negative connotation in its association with death. Before the scandal, Tylenol had captured over one-third of the painkiller market, was the most successful over-the-counter product in the United States and was one of Johnson & Johnson’s top income earning products.

Although investigation proved that the poisoning was the result of external sabotage instead of internal causes the public perception was that the drug was no longer safe for use and the problem the company faced was restoring the public confidence in the product. Compounding the matter was the fact that, in the beginning, the product tampered, and initial media reports focused that the product was responsible for death. When investigations revealed that the cause of the poisonings was external sabotage and even when that information became public knowledge, the situation proved to be a public relations nightmare.

However, officials of Johnson & Johnson rose to the occasion and were able to correct the corporate image and the public once more accept the product. The handling of this crisis by the company resulted in the company acclaimed for its positive results. They became pioneers in the area of tamper-resistant packaging, introduced the use of caplets instead of capsules and promoted triple sealed packaging. One prominent scholar states that “The Tylenol crisis is without a doubt the most exemplary case ever known in the history of crisis communications.

Any business executive, who has ever stumbled into a public relations ambush, ought to appreciate the way Johnson & Johnson responded to the Tylenol poisonings. They have effectively demonstrated how major business has to handle a disaster. ” p. 19, 1990. The film industry and book publishers use the Tylenol crisis as their reference in many of their productions as the basis for the spread of safety throughout the industry. Unresolved Issues A few issues remain unresolved with the Johnson and Johnson case.

According to Nelson and Trevino (2004), “Johnson & Johnson’s reaction to the Tylenol poisonings has been hailed as the benchmark for how organizations should react in a crisis (p. 202). ” These poisoning were found to be the result of an external sabotage. However, the perpetrator never charged and convicted for the murders. To this day, the crime remains unsolved. After the murders, Johnson and Johnson developed the tamper-resistant packaging to prevent future contamination. But is the packaging really tamper-resistant or just difficult to tamper with?

In 1986, the Wall Street Journal reported (“Tainted Tylenol,” 1986), another woman died after taking Tylenol laced with cyanide, the same drug that killed seven people in 1982. Another issue that has not been addressed publicly is internal precautions instituted during manufacturing for preventing contaminations. Roles of key players In the Johnson and Johnson case study, the key players were Johnson and Johnson, McNeil Labs (branch of Johnson and Johnson), and Johnson and Johnson CEO, James Burke. Johnson and Johnson are the largest health care firms in the world.

Even though Johnson and Johnson had encountered criticism of rising health care costs around the world in the early 90s, the company had a longstanding history of social responsibility. The diversified operation shared between three business segments such as pharmaceutical, diagnostics and medical devices, and consumer. Johnson and Johnson pharmaceutical drug product includes oncology, cardiovascular disease, gastroenterology, allergies, immunotherapy, nervous system diseases, family planning, mental illness, and pain management. McNeil Laboratories is to be the largest U.

S. consumer health care company, offering products and services, which provide professionally, endorsed benefits for self-health care (McNeil-PPC). In 1959, Johnson and Johnson obtained McNeil Laboratories, Inc. , maker of a non-aspirin acetaminophen, the best known pain reliever named Tylenol. Tylenol is not just a pain reliever, but an antipyretic (fever reducer), and produced by McNeil Consumer Healthcare. Tylenol trademark was produce by McNeil’s sales professional by using letters in acetaminophen chemical name. At that time Tylenol was only made by prescription only.

Tylenol outstanding success caught the eye of health care professional due to the undesirable effects of aspirin and started recommending their patients Tylenol. A year after the creation of Tylenol, McNeil Labs launched Tylenol as an over-the-counter product medication for millions of people to buy to relieve the suffering of pain. Tylenol was on the rise in the world number one leading pain medication. Although health care federal regulation was increasing in the 1960s, James Burke came on board Johnson and Johnson from the marketing department of the Procter and Gamble Company.

In 1966, he became the president of Johnson and Johnson Domestic Operating Company. At that time Johnson and Johnson was looking for strategies increasing its consumer products. James Burke biggest challenge in the company was Tylenol. When Johnson and Johnson had obtained McNeil Laboratories, the maker of Tylenol, the price of Tylenol had marketed as a highly priced product in the pharmaceutical industry. James Burke saw possibilities when Bristol-Myers, another pharmaceutical company had introduced Datril. Datril was advertised as another product with the same ingredients as Tylenol, but it was selling at a very low price.

Burke received the approval to take Tylenol into the mass marketing arena, reduced its price, and therefore becoming Johnson and Johnson number one pain reliever in the world. Even though there was a tragic accident of Tylenol when, it was lace with cyanide poisoning, James Burke cancelled all advertisement, and recalled all Tylenol products from local shelves immediately. He began working on different ideas on how to save its number one product and its reputation. Public service announcements were made warning consumers about the consumption of Tylenol.

Johnson and Johnson was not responsible for product tampering, but assumed full responsibility of ensuring that public safety comes first. Johnson and Johnson had spent billions on the recall of Tylenol, and re-launched Tylenol. Ethical issues McNeil Laboratories had many ethical issues they would need to consider in rectifying this problem and making sure it did not happen again. Public Safety was going to be the largest concern in dealing with incident. People died from taking this company’s product that supposed to be improving health and well being.

The company had to come forward and immediately alert the consumer whose Tylenol was no longer 100% safe to take, regardless if there was one bottle found or hundreds of bottled found. The McNeil Corporation found about this incident through a phone call from a media reporter contacting the company when the first death occurred (Susi, Reyna). McNeil was aware of the incident and need to act appropriately and quickly if they were going to survive it and Tylenol was ever-going to be the top selling over-the-counter pain killer.

Tylenol supposed to be a product that was good for the consumer so the company had a responsibility to the consumer to announce publicly that the product had been found the cause of a person’s death and the company was aware of it and would be doing everything they could to handle it and the company was doing everything they could to take care of the consumers affected and those that were not. The public needed to see that McNeil was sorry for the deaths that occurred, even though it determined that they were a victim of sabotage (Susi, Reyna).

To accomplish this company decided to stop all production of Tylenol and all advertisements linked to it. No longer did the company want to be promoting a product that was killing people. This was also key because it showed that even though it was not the company who was responsible, they were willing to take responsibility for the incident and make changes tot eh bottle to make it tamper-resistant as well as to the way the production was being done so that there were even harder and stricter procedures in place so the product would not be able to tamper within house during production.

McNeil was aware of the problem and needed to correct it and quickly in a way to show the public they commit to safety. The company called for a total recall of Tylenol, over 31 million bottles from the shelves that was the largest recall at the time ever seen (Susi, Reyna. ) They ceased all production of the product and replaced all the bottles with new tamper-resistant caps, which they did not have to nor had it ever been done before (Susi, Reyna. ) This was just one way to show the company commit to what they stood for and wanted to regain the consumer’s trust.

If the corporation ever thought, they were going to put this product back on the shelves or even continue to sell their other products without the consumer in fear of his or her safety, they needed to show their dedication and commitment as well as their sympathy to the families of those who died and make proper acts without it looking as they were only doing this to gain sympathy for themselves as victims (Susi, Reyna. ) The company later recognized for their behavior in this crisis and their programs they set in place for future crisis management (Susi, Reyna. Alternatives and Recommendations The Johnson and Johnson case is something that cannot happen again. When this mishap occurred in the 1980s and James Burke was the CEO of Tylenol, him and the follow leaders made the right decision by stepping up to the media and accepting responsibility for this horrible act, that’s the best way to go about a situation that they are at fault or accused of, Smart move on behalf of them to regain the trust of the consumer again.

When Johnson and Johnson had the other incident occur in 2000 with the product Life scan, again consumers lost big, hardly the company itself; some families lost family members due to the lack of care, false information given and the misjudgments made by the workers of the company. When the CEO Ralph Larsen made the address to the public stating that “We fully acknowledge errors and sincerely apologize from them,” Which doesn’t necessarily mean that it’s right, Other steps could have been taking and more could have been said to the buyers of the system. , Johnson & Johnson had no one to blame in this situation.

Consumers trust companies to commit to the safety that they claim to acquire and most important the brand of which the doctors or someone made a recommendation. Consumers want to believe they are buying a medicine to cure them of a minor illness that he or she or the children may have; so ensuring that of this nature do not happen in the future some recommendations and alternatives that can be made are as follows: •Maintaining a clean work environment- When dealing with the production of medications, it is important that harmful substances are not anywhere around the facility in which the medicines produced and developed.

Ensuring workers wearing uniforms and appropriate work attire will ensure that cross contamination limited, which lowers the likely hood of something of this nature happening. •Limiting production sites- When faculties limited and a few in between, it makes it easier to track back and figure out in which a contamination may have started so that authorities can investigate thoroughly, making sure a label of each facility in production implanted on the medication or product somewhere for easy tracking. Keeping data sheets- When products rented or purchased by patients or health care providers, the cooperation selling Life scan products should be held responsible for keeping a track record of the machine purchases. Running tests before and making frequent phone calls thereafter to the buyer to ensure the product is still working safely, updating the machines, and making sure everything is accurate (readings, time, etc. ) Offering discounted prices or a free check up to those in need to ensure that they can service the item. Safety seals- Although a foil cover as a security measure is a nice idea to let a buyer no it hasn’t been open, something more than that would be beneficial; Some other methods could be; a harder label (not easy to prick), and maybe a plastic like seal found on bottles are Orange Juice for instance will give a higher level of trust to prove to the buyer this is official. Conclusion This paper summarized the action plan case study of Johnson and Johnson. Seven people had died after ingesting Tylenol, a painkiller that was produce by McNeil Laboratories, a Johnson & Johnson division in 1982.

The key players involved in the scandal, the root causes of the product tampering, and ethical issues the company had to face. Unresolved issues discussed, and the team formed alternatives and recommendations for Jonson and Johnson. Learning Team C proposed an action plan that determined all the facts: symptoms of problems, root problems, unresolved issues, roles of key players, ethical issues involved, alternative, and recommendation for Johnson and Johnson. Johnson and Johnson determined that the tragic event was not the company’s fault but an act of external sabotage in one of its vendor’s stores.

McNeil Pharmaceuticals later commended on their behavior in handling the scandal, proving their ethical business practices and commitment to public safety. To this date the saboteur has never been found. REFERENCES Johnson & Johnson. (2009) Retrieved on December 3, 2009, from http://www. jnj. com/connect/about-jnj/company-history/tylenol McNeil-PPC. (2009). About Tylenol/McNeil. Retrieved: November 30, 2009 from: http://tylenolpm. com/page. jhtml? id=tylenol/about/subty. inc Nelson, K. , & Trevino, L. (2004). Managing business ethics: Straight talk about how to do it right (3rd ed. . New York: Wiley Susi, Reyna. (2002). The Tylenol Crisis, 1982. Retrieved on December 3, 2009, from http://iml. jou. ufl. edu/projects/Fall02/Susi/tylenol. htm Tainted Tylenol capsules tied to death of New Yorker from cyanide poisoning. (1986, Wall Street Journal). p. 2. Retrieved from Proquest Historical Newspapers December 5, 2009 from http://proquest. umi. com. ezproxy. apollolibrary. com/pqdlink? index=0&did=365479692&SrchMode=1&sid=1&Fmt=10&VInst=PROD&VType=PQD&RQT=309&VName=HNP&TS=1260119323&clientId=13118