Journal of Academic and Business Ethics c
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...
References: Brenkert, G. G. (2008). Marketing Ethics Blackwell, Malden, MA. Ethics. Civil Action No. 10-2033(FLW).Case 3:10 2033(FLW).Case 3:10-cv-02033-FLW-DEA Document 94 Filed 12/17/10, DEA pp. 1-111. CSCS Motrin purchase project (2009, June 12). Committee on Oversight and Government eform website. http://oversight.house.gov/images/stories/Hearings/Committee_on_Oversight/2010/0527 10_J&J_Recall/Document_1.pdf 10_J&J_Recall/Document_1.pdf. Davidson, S. & Samghabadi, R. (1986, February 24). A replay of the Tylenol scare. habadi, Fortune (2010, March 22). World’s most admired companies. Retrieved from http://money.cnn.com/magazines/fortune/mostadmire http://money.cnn.com/magazines/fortune/mostadmired/2010/. Fortune (2011, March 21). World’s most admired companies. Retrieved from http://money.cnn.com/magazines/fortune/mostadmired/2011/index.html. Hartley, R. F. (2005). Business Ethics: Mistakes and Successes, 1st ed., Wiley. Hensley, S. (2010, May 27). FDA: Johnson & Johnson concealed Motrin recall. NPR, ). http://www.npr.org/blogs/health/201 http://www.npr.org/blogs/health/2010/05/27/127209969/johnson-johnson johnson. Institute for Crisis Management (2005, May). Annual ICM crisis report: News coverage of business crises during 2004 20( Retrieved from 20(1). http://crisisconsultant.com/images/2005CrisisReportICM.pdf http://crisisconsultant.com/images/2005CrisisReportICM.pdf. Institute for Crisis Management (2011 May). Annual ICM crisis report: News coverage of (2011, ews business crises during 2010 14(1). Retrieved from uring 2010. http://crisisconsultant.com/images/2010CrisisReportICM.pdf Johns Hopkins (2011, June). The Johns Hopkins medical letter: Health after 50, 23(4). Johnson & Johnson (n.d.). Our Credo Values. Retrieved from http://www.jnj.com/connect/about http://www.jnj.com/connect/about-jnj/jnj-credo/?flash=true, paragraph 1. , Kimes, M. (2010, September 6). Why J&J’s headache won’t go away. Fortune, 162(4), pp. 100eptember 104, 106, 108. Also on CNNMoney.com and retrieved from http://money.cnn.com/2010/08/18/news/companies/jnj_drug_recalls.fortune/index.htm. http://money.cnn.com/2010/08/18/news/companies/jnj_drug_recalls.fortune/index.htm Kimes, M. (2010, September 7). Johnson & Johnson CEO Bill Weldon’s painful year. , CNNMoney.com. Retrieved from http://money.cnn.com/2010/09/06/news/companies/J_and_J_Bill_Weldon_Bad_Year.fort une/index.htm. Litigation and Settlement News (2011, February 3). Johnson & Johnson to set aside almost $1 Johnson billion for DuPuy hip replacement litigation. Retrieved from http://litigationandsettlementnews.com/?p=164 http://litigationandsettlementnews.com/?p=164. Loftus, P.(2011, February 16). J&J recalls 70,000 Invega Syringes. Retrieved at J&J http://online.wsj.com/article/SB10001424052748704409004576146652674475800.html. http://online.wsj.com/article/SB10001424052748704409004576146652674475800.html Meier, B. (2010, December 17). The i implants loophole, p. B1. The New York Times. Retrieved from www.nytimes.com/2010/12/17/vusiness/17hip.html www.nytimes.com/2010/12/17/vusiness/17hip.html.
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Journal of Academic and Business Ethics c Murphy, P. E., Laczniak, G. R., Bowie, N. & Klein T. A. (2005). Ethical Marketing. Klein. Marketing Pearson/Prentice Hall, Upper Saddle River, NJ NJ. Paine, W. S.(2011, June 5). Tylenol 21st Century Controversies. Poster at the Marketing and Public Policy Conference, Washington, D D.C. Pellek, A. (2011, February 3). Pharm TechTalk PharmTech poll shows readers favor expanding TechTalk. FDA’s recall power. Retrieved from http://blog.pharmtech.com/2011/02/03/pharmtechetrieved http://blog.pharmtech.com/2011/02/03/pharmtech poll-shows-readers-favor-expanding-fdas-recall-power/. Priporas, C., & Vangelinos, G. (2008). Crisis management in pharmaceuticals: Evidence from Greece. International Journal of Pharmaceutical and Healthcare Marketing 2(2), pp.88Marketing, 102. Reuters (2008, November 10). J&J, Merck recall Mylicon infant anti-gas drops. Retrieved from gas http://www.reuters.com/article/2008/11/10/us http://www.reuters.com/article/2008/11/10/us-johnsonandjohnson-recallidUSTRE4A97D520081110 idUSTRE4A97D520081110. Sharfstein, J. M., (2010, September 10). J Johnson and Johnson’s recall of children’ Tylenol and hildren’s other children’s medicines and the phantom recall of Motrin (Part 2), FDA testimony. edicines Retrieved at http://www.fda.gov/NewsEvents/Testimony/ucm227852.htm http://www.fda.gov/NewsEvents/Testimony/ucm227852.htm. Singer, N., & Abelson, R. (2011, January 16). Can Johnson & Johnson get its act together? p. . together?, BU1. Retrieved at http://www.nytimes.com/2011/01/16/business/16johnson http://www.nytimes.com/2011/01/16/business/16johnson-andjohnson.html?r=2&ref=bus johnson.html?r=2&ref=bus. Trevino, L. & Nelson, K. (2011). Managing business ethics (Straight talk about how to do it right), 5th ed., Wiley, Danvers, MA. U.S. Food & Drug Administration (2010). Motrin recall: Delay in reporting material information, http://oversight.house.gov/images/stories/Hearings/Committee_on_Oversight/2010/0527 http://oversight.house.gov/images/stories/Hearings/Committee_on_Oversight/2010/0527 10_JandJ_Recall/2-19-10_Meeting.pdf, p.7, accessed via Scott Hensley, FDA: Johnson 10_Meeting.pdf, & Johnson concealed Motrin recall.
J&J: An ethical analysis, Page 11 analysis
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