managerial skills

1. Critical situation & managerial solution in
an organisation
By
Shalom.v
MBA-”B”
RA1952001020067

2. Company
LOGO
Johnson and Johnson
crisis management

3. Content layout
 Introduction
 Problem
 Effects of the crisis
 Company’s move
 Cost and benefit
 Causes of success
 Smartest way to handle crisis
 Lessons from this company

4. Introduction of Johnson and
Johnson
• Founded by three brothers Robert wood
Johnson, James wood Johnson and Edward
mead Johnson.
• Company introduced first commercial first aid
box, baby powder, no more tear shampoo and
modern form of medicine packaging along with
many medicines.

5. Problem
• 1982 , Tylenol leading painkiller sold by
Johnson and Johnson was tempered with
cyanide and 7 people died in US.
• Reported that a unknown suspect put 65
milligram cyanide into Tylenol capsule and
tampering occurred when product reached
to the shelves.
• Company immediately call back the
product from the shelves and faces loss of
about 100 million .

6. Effect of this crisis
• In 1982 Tylenol was covering the 37% of market
share with revenue of 1.2 million.
• After this incidents market share reduced to 7 %.
CHALLENGE FOR COMPANY:
• To find a best way to deal with this problem
without destroying the company’s image and its
most profitable products.
• They have to provide a better product protection
before reestablishment of product.

7. COMPANY’S MOVE
• Reintroduced the product with triple seal temper
resistant packaging.
• Offered a $ 2.50 off coupon n the purchase of
their products. They were available on news
papers and toll free numbers.
• 25% off on the purchase of product to recover
the loss in stock crisis.
• 2250 sales people made presentations for the
medical community to restore trust on the
product.

8. Cost and the benefit
• Company won praise on its quick and
appropriate action.
• Within five months company had
recovered 70% of market share for the
drug.
• So there is a evidence that consumer
rewarded the company by switching from
other painkillers to the Tylenol.

9. Causes of success
• Acted quickly , remove any source of
danger and does not wait for the other
evidences.
• Showed that measured has taken which
would prevent such type of problem.
• Showed them self as to be prepare to bear
the short term cost in the name of the
consumer safety

10. SMARTEST WAY TO HANDLE CRISIS
• Avoid crisis in the first place.
• Quickly address and resolve crisis before
they escalate
• Seek possible ways to turn your crisis into
an opportunity

11. Lessons for this company
Prepare a system that will allow you to
respond to the emergency.
Develop policies to deal with emergencies.
Create a crisis management team.
Assemble an organize resources.
Distribute an emergency procedures
guide.

12. conclusion
• Crisis can come at any time you should be
prepare for it.
• A proper planning and decision making.
• Johnson and Johnson’s has set a
impressive example in Tylenol case.
• Other companies can learn a lesson from
it.