Johnson & Johnson Tylenol Controversies - Case Study Example

Johnson & Johnson Tylenol Controversies Johnson & Johnson Tylenol Controversies Case Explanation Johnson & Johnson used to enjoy great sales of its over the counter medication. However, that was jeopardised by the 1982 Tylenol cyanide poisoning incident. The company’s products have had a low reputation among their target customers and that has led to low response in purchases. The document will show how an unethical issue can harm or make good the reputation of a company. Johnson & Johnson was affected negatively by one unethical occurrence in its operations (Paine, 2011).The case below will show the way in which the crisis was managed by J&J and the steps taken in restoring the good reputation of the company. The case study also gives alternatives that can be considered to ensure that ethical behaviour is adhered to by a business. Background Information Ethical behaviour in a business is the manner in which a business conducts its operations in the normal running of the business. Ethics should be observed in all relevant departments of a company. A business owes a duty of care to its related stakeholders. The stakeholder’s to a business include customers, the government, staff, shareholders, and competitors. J&J breached the duty of care it owed to its customers. This is because a drug was wrongly sold to patients and that lead to multiple deaths. The business was accused of not been able to address concerns about quality control, and responsiveness that is inadequate to complains of their customers. The company continued with aggressive marketing efforts for the medications that were under scrutiny. The business should have investigated the issue first before continuing with the sale of the drugs. There have been numerous issues of unethical behaviour among companies and that has resulted in huge losses among the involved companies. Identified Stakeholders The issue affects the customers, the government, the shareholders, and the staff of the company. Each stakeholder is affected in a different manner as explained next. The mistake arose from a staff of the company. That means that the reputation of the employees of the company reduced. That makes it hard for employees of the company to get a job in a different organization. The reputation of the employees can only be increased if the individual who was concerned taking up the blame and suffering the consequences of his/ her actions. The other employees who are affected by the issue are the people who are in a supervisory position and the people who are responsible for dealing with complain from customers. The supervisors will be blamed for not taking a keen concentration in the course of their duties. The other affected stakeholder is the government. The government has a responsibility of ensuring that all the drugs that are in circulation to the public are good for human consumption. The government failed in its supervisory role and the issue makes the involved department in the government to be perceived as a failure. The shareholders are the other affected stakeholders. The shareholders will lose value for their wealth. This is because the sales of the company will reduce and that means that the share price of the company’s stocks will reduce. The profit that is attributable to the company will also reduce because the sales of the company will reduce drastically. The issue will cause potential investors not to invest in the company and the current investors may prefer to invest in other companies where they will gain value for their money. The other affected stakeholders of the company are the customers. The customers should receive quality products that will not harm them. The consumption of the harmful drug caused loss of life and that is a negative thing for the company. The company lost customers because of the incidence. The company was also faced by legal suites because of the unethical behaviour. Analysis of the Case Tylenol was the most successful OTC product in the United States before the crisis. The drug accounted for more than 19% of profits for J&J. The drug accounted for 37% of the market share. The crisis occurred in during the fall of 1982 (Brenkert, 2008). A person who was malevolent replaced Tylenol capsules with cyanide laced capsules, resealed them and put them in dozens of shelves. The drug was purchased and that lead to the death of seven people. J&J was the company that manufactured the Tylenol and the company was forced to offer an explanation to the world. The director of public relations in the company states that they learnt about the incidence from a call that stated that there was a press conference that was made regarding the deaths. The chairman of the company reacted to the negative media by forming a strategy team. The team was tasked with determining the way in which the company could protect its customers and how the product of the company could be saved. The company issued a warning to customers not to consume any Tylenol product. The crisis was defined as an act of terrorism because the intention of the distribution was to cause deaths. The company used PR and the media as a crisis response strategy. The crisis management strategy that was laid in place has turned out to be among the most successful crisis management approaches that have been effective in history. The company employed sympathy and forgiveness strategies. The company aimed at receiving forgiveness from the public and acceptance for the crisis that had arisen from the company (Murphy, Laczniak, Bowie, & Klein,2005). Alternative Action for the Crisis Management The management of J&J Company managed the crisis in a good way. The crisis management team has been given credited for been among the best effective team in crisis management for a long time. The use of media in asking for forgiveness and sympathy was effective. The other way that the company would have faced the alternative is by compensating the families of the affected families. The company should also have compensated any customers who had used their money to purchase the wrong drug. The company had an option of giving some form of training to members of public about the best drugs in the stores and how a customer can differentiate it from any counterfeit. The company should also have informed the public if they had identified where the problem originated from. That will help in restoring public trust in the company. The company can offer a public apology explaining what happened and promising that the incidence will not occur again. Evaluation of Alternatives The alternative of the company compensating the affected families would have shown that the company is concerned and did not hope for the misfortune. That will show the customers that the company is concerned and is apologetic about the misfortune. The alternative of public training about drugs would have ensured that the company gained some reputation from the social responsibility action of the company. That will equip the public with enough knowledge about the use of drugs. Offering a public apology show that the business realised its mistake and it hopes to restore the trust from its customers by becoming more ethical in their practices. Strategic Goals The goal of ethical behaviour is to ensure that the concerned stakeholders in a business are happy about the operations of a business. Ethical behaviour ensures that there is fair competition and it regulates the actions that a business can take and the actions that are forbidden. Ethical behaviour will ensure that the public is safe because the products released to the public are safe for human consumption. Ethical behaviour also ensures that the environment is safe for human survival. That implies that a business should not pollute the environment and it should come up with environmentally friendly processes. Recommended Action Plan In the future, J&J should introduce a quality assurance department. The department will ensure that all the drugs that are released to the public are safe for human consumption. The government should also ensure that all drugs that are been introduced into the market are safe for public use. The shareholders of the companies should emphasis the fact that the business products should be perfect so that their wealth can increase because of increased reputation of the company’s products. The employees if the companies should ensure that all products they manufacture are safe. If all the involved stakeholders in a company ensure safety and security of human life, then ethical behaviour will accrue to a better society. References Brenkert, G. G. (2008). Marketing Ethics.Blackwell, Malden, MA Murphy, P. E., Laczniak, G. R., Bowie, N. & Klein G. R., (2005). EthicalMarketing. Pearson/Prentice Hall, Upper Saddle River, NJ. Paine, W. S. (2011, June 5). Tylenol 21stCentury Controversies. Poster at the Marketing and Public Policy Conference. Washington, D.C Read More