Johnson & johnson and ethics
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Johnson & johnson and ethics

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Johnson & johnson and ethics Johnson & johnson and ethics Presentation Transcript

  • November 14, 2011
  • Case facts
    • Extra strength analgesic and sedative drug which relieve pain and reduce of irritability
    • popular substitute for aspirin for such conditions as flu and chicken pox, since aspirin was related to Reyes Syndrome (liver degeneration, brain edema, 20-30% fatality)
    • Holds 35% of the $1 billion analgesic market
    • 7 % to the company’s worldwide sales and almost 20% to its profits
    • Millions of users with good profits and sales growth
  • The Crisis begins…
    • September 1982 Extra Strength A&S capsules loaded with deadly cyanide
    • 65 milligrams 10,000 more than what is necessary to kill a human
    • 7 people died in the Chicago area
    • RC recalled an entire lot of 93000 bottles of extra strength A&S
    • Exchange of A&S Capsules for tablets
  • … and snowballs!
    • Police drove through streets with loudspeaker warnings
    • Chicago hospital receiving calls in one day
    • Immediate stories in major magazines and newspapers
    • Americans had heard of the Chicago deaths
    • Copycat tampering
    RC, killer or cure? -- Washington Post The RC Scare --Newsweek Poison Madness in the Midwest --Time Magazine
    • RC’s stock fell
    • Market share dropped from 37% of pain-reliever market to 7%;
  • Crisis Response
    • People first and property second
    • Alert to consumers not to use the product until extent determined
    • Live TV satellite feed of press conferences, media exposure
    • Withdrew bottles from Chicago area
    • It temporarily ceased all production of capsules
    • High public profile and repeated reassurance by Burke
    • Working relationship with law enforcement agencies
    • Notification of health professionals nationwide
  • RC Effectively used the Four C Strategy….
  • Lesson Learned and Recommended Solution
    • RC showed that they were not willing to risk public safety even at excessive cost
    • Stakeholder involvement and relationships is essential
    • One must anticipate and prepared for crises; expect the unexpected
    • Be aware that 75% of people don’t believe companies take responsibility for crises or tell the truth
    • “ No matter what you do in the beginning, in the end you will have to tell the truth”
    • React fast, openly and decisively
    • Report your own bad news– don’t wait for reporters to root it out
    • Be accessible to the media so they won’t go to other sources
    • Provide evidence for your statements
    • Record events via video and documents so you can later present your side of the story
    • Four responsibilities:
    • To the customers
    • To the employees
    • To the communities they serve
    • To the stockholders
      • Recovery strategies
      • Forgiveness
      • Sympathy
      • Remediation
      • Rectification
      • Effective leadership
  •