Johnson & Johnson: An ethical analysis of broken trust t
Karen L. Stewart The Richard Stockton College of New Jersey Whiton S. Paine The Richard Stockton College of New Jersey ABSTRACT For several decades, Johnson & Johnson has been the exemplar of superb ethical behavior in light of the prompt actions it undertook during the 1982 Tylenol cyanide poisoning incident. Now several decades later, J&J’s Consumer Product Division has put the company and . its reputation in jeopardy by its slow and ineffective response to a series of ongoing problems. ineffective This article provides an ethical analysis of those events and addresses the negative impact on Johnson and Johnson’s once sterling reputation. Business, ethics, recalls, Johnson & Johnson, reputation, FDA
J&J: An ethical analysis, Page 1 analysis
Journal of Academic and Business Ethics c
For several decades, Johnson & Johnson has been the exemplar of superb ethical behavior in light of the prompt actions it undertook during the 1982 Tylenol cyanide poisoning incident that left seven dead in the Chicago area. After the 1982 incident, Tylenol quickly even returned to category dominance. A few years later when yet another cyanide-laced Tylenol laced capsule resulted in the death of a New York woman, Johnson & Johnson and its McNeil subsidiary once again took quick action by only making a compressed and easier-to-detectnce easier tampering version of a Tylenol pill available i the marketplace. The 1986 incident had little in impact on sales or J&J’s corporate reputation (Davidson & Samghab di, 1986). Consumer Samghabadi, safety and trust were of paramount importance to J&J. The firm validated the utility of their Our the Credo philosophy in managerial decision decision-making during these crisis situations. For several decades thereafter, Johnson & Johnson has consistently and publicly expressed their continuing commitment to this credo. Now several decades later, J&J’s Consumer Product Division has put the company and its reputation in jeopardy by its slow and ineffective response to a series of ongoing proble problems that center on inadequate quality control inside some of the manufacturing plants and slow, reluctant, and ineffective corrective action in response to consumer complaints and growing FDA concerns. The end result is broken t . trust with consumers and growing damage to J&J’s J&J once pristine reputation. The issues arising from recent multiple J&J recalls of Tylenol and other McNeil consumer products are fairly clear (Kimes, 2010, September 6 & 7; Singer & Abelson, 2011, January 15). Here the famous Our Credo oriented corporate culture significantly failed to protect te consumers and other stakeholders from both defective products and questionable marketing. d marketing Moreover, the more recent problems with Tylenol have raised the broader issue of whether the McNeil problems are, as J&J maintains, unique to that division or are symptomatic of a broader aintains, breakdown in J&J’s ethical culture. This article will examine what occurred in terms of modern s ethical business theory using a framework outlined by Trevino and Nelson (2011) in the 5th edition of Managing Business Ethics (Straight Talk About How to do it Right). Their work is a tion major resource for organizational analysis of ethical and unethical corporate behavior. STEP ONE: GATHER THE FACTS ATHER
On December 17, 2010 a Verified Amended Shareholder Derivative Complaint against nominal defendant Johnson and Johnson was filed at the United States District Court of New Jersey (Civil Action No. 10-2033). This complaint was filed on behalf of individuals, relief 2033). individual associations and pension fund common stock shareholders who originate from several U.S. states and believe that the corporation and its culture had been harmed by mismanagement at J&J’s consumer division, and in particular, by operations affiliated...