The 1982 Tylenol Crisis
Many companies consider what they
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Many companies consider what they might do if faced with an ethical dilemma and how they might recover from some disaster, but only a few companies ever have to face doing so in the way Johnson & Johnson did with the Tylenol crisis in 1982. Johnson & Johnson weathered that crisis in a way now emulated by other companies. The issue of ethics had been important to the company before this, and it had originally marketed Tylenol in what it called an "ethical marketing program" directly to doctors before deciding that the product could also reasonably be sold over the counter to the consumer, beginning in 1975. Johnson & Johnson remains a major company not just in the United States but worldwide. Johnson & Johnson today is number 51 on the list of the Fortune 500 companies, with annual sales in 1999 of 27.47 million and an annual sales growth of 16.1 percent. The company currently employs about 93,100 people, with an annual growth in work force of 2.9 percent. Johnson & Johnson is one of the world's largest and most diversified health care products manufacturers, and the company operates in three sectors: 1) consumer products, such as Tylenol and Motrin, Reach toothbrushes, and Band-Aid bandages; 2) professional products, such as ACUVUE contact lenses, surgical instruments, and joint replacements; and 3) pharmaceuticals, including Ergamisol cancer treatment and Ortho-Novum oral contraceptives. The company expands its product line through acquisitions, of whi
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ss decisions that were inspired by the philosophy embodied in the Credo. The company's reputation was preserved and the Tylenol acetaminophen business was regained. Today the Credo lives on in Johnson & Johnson stronger than ever. Company employees now participate in a periodic survey and evaluation of just how well the company performs its Credo responsibilities. These assessments are then fed back to the senior management, and where there are shortcomings, corrective action is promptly taken (Johnson & Johnson, "Credo").
ETHICAL PRACTICES
What General Wood said about the link between the company and ethical business practices rings true and suggests how corporations should behave. Corporations do not generally have to make a choice between their responsibility to shareholders and others in society because the two are linked. For instance, corporations also have a responsibility to their customers for two reasons: 1) corporations are held responsible for the implied and actual contracts that exist between themselves and their customers; and 2) satisfying customers is one way corporations make a profit and so fulfill their responsibilities to their shareholders. Corporations have a fiduciary responsibility to sharehol
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Some common words found in the essay are:
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Approximate Pages = 13 (250 words per page)
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