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Haisum 4/7/2011
Haisum Bhatti | 0812155 | BS-SE VI 1 Johnson & Johnson and Tylenol http://haisum.info
Contents
INTRODUCTION ..................................................................................................................... 2 Analysis................................................................................................................................... 3 Problem Statement .............................................................................................................. 3 Questions ............................................................................................................................ 3 Study Objectives .................................................................................................................. 3 Methodology ........................................................................................................................ 3 Background ............................................................................................................................. 4 The Real Story ........................................................................................................................ 5 What Happened ................................................................................................................... 5 How did Company Deal with Crisis ...................................................................................... 5 How did they Re-introduce Product...................................................................................... 6 Cost and Benefit .................................................................................................................. 6 Causes of Success .............................................................................................................. 7 Organizational Behavior Concepts in Case ............................................................................. 8 Utilitarianism ........................................................................................................................ 8 Lessons for Other Organizations for Dealing with Such Crisis ............................................. 8 Conclusion .............................................................................................................................. 9 Works Cited........................................................................................................................... 10
Haisum Bhatti | 0812155 | BS-SE VI 2 Johnson & Johnson and Tylenol http://haisum.info
INTRODUCTION
Before quantum world was discovered in second decade of 20th century by Alan Turing, Neil Bohr and other fellow scientists it was believed that everything in this world was organized and was controllable in some logical way. It was also perceived that everything is predictable if we conduct proper quantitative or mathematical analysis of current state. However discovery of world of chaos, quantum, opted humans to think differently, as if nothing was certain and not everything can be fully controlled. Same perception was linked with organizations. For decades managers have acted on the basis that organizational events can be controlled. However often situations go out of control of organizations and create chaos and crisis, forcing organization to take decisions for its survival or dominance. Crisis need not strike a company purely as a result of its own carelessness or disaster. Often, a situation is created which cannot be blamed on the company, but the company finds out pretty quickly that it takes a huge amount of blame if it does nothing or messes up in response. One of the classic tales of how a company can get it right is that of Johnson poisoning. This and document how they discusses recovered crisis from & Johnson, and the company's response to the Tylenol
Johnson & Johnson came under it,followed by suggestions and precautions for other organizations.
Haisum Bhatti | 0812155 | BS-SE VI 3 Johnson & Johnson and Tylenol http://haisum.info
Analysis
Problem Statement
To investigate what should companies do in sudden crisis caused by unusual events rather than companys own conduct
Questions
What caused Tylenol crisis to take place and how Johnson and Johnson tackled the crisis? How should other companies in same situation tackle the problems such as this?
Study Objectives
This study focuses on following main objectives: y y y To study possible causes behind sudden crisis To find out solution for recovery from such crisis To analyze what Johnsons and Johnsons did to recover from Tylenol crisis in 1982
Methodology
This case study was searched on internet and not investigated personally. Theories discussed are available in book Organizational Behavior by Stephen P. Robbins, and on internet. No further research of verifying information is done due to time and resource constraints.
Haisum Bhatti | 0812155 | BS-SE VI 4 Johnson & Johnson and Tylenol http://haisum.info
Background
Johnson & Johnson was found by three brothers, Robert Wood Johnson, James Wood Johnson and Edward Mead Johnson, found Johnson & Johnson in New Brunswick, New Jersey, U.S. in 1886. Company introduced first commercial First Aid Box, baby powder, no more tears shampoo and modern form of medicine packaging along with many useful medicines. In 1982 a drug Tylenol, sold by Johnson & Johnson was tempered with cyanide and 7 people died giving a big setback to reputation and sales of company. However company didnt give up and came back strongly from this crisis. The word crisis comes from the Greek krisis, meaning "decision." We've all been there. Move to the left, or move to the right. Fight or flee. Offer an explanation, or dummy up tight. It's a true test of what we are, either as a company or a person, how we handle ourselves in the middle of a crisis. The bad news is we never know for sure how we'll do until it is test time. The good news is we can prepare ourselves in principle. There are three smart ways to approach crisis situations:(Hook) 1) Avoid a crisis in the first place (a pinch of prevention is worth a mound of cure); 2) Quickly address and resolve crisis issues before they escalate; 3) Seek possible ways to turn your crisis into an opportunity. Johnson & Johnsons way of dealing with crisis is good model of how a crisis can be turned into an opportunity for good reputation.
Haisum Bhatti | 0812155 | BS-SE VI 5 Johnson & Johnson and Tylenol http://haisum.info
Haisum Bhatti | 0812155 | BS-SE VI 6 Johnson & Johnson and Tylenol http://haisum.info
Haisum Bhatti | 0812155 | BS-SE VI 7 Johnson & Johnson and Tylenol http://haisum.info
reputation damaged for as long as five years after an incident.(Companies in Crisis What to do when it all goes wrong) In fact, there is some evidence that it was rewarded by consumers who were so reassured by the steps taken that they switched from other painkillers to Tylenol.
Causes of Success
The features that made Johnson & Johnson's handling of the crisis a success included the following: y They acted quickly, with complete openness about what had happened, and immediately sought to remove any source of danger based on the worst case scenario not waiting for evidence to see whether the contamination might be more widespread y Having acted quickly, they then sought to ensure that measures were taken which would prevent as far as possible a recurrence of the problem. y They showed themselves to be prepared to bear the short term cost in the name of consumer safety. That more than anything else established a basis for trust with their customers.
Haisum Bhatti | 0812155 | BS-SE VI 8 Johnson & Johnson and Tylenol http://haisum.info
Haisum Bhatti | 0812155 | BS-SE VI 9 Johnson & Johnson and Tylenol http://haisum.info
leader, a spokesperson to deal with the media, team members to deal with the victims and emergency officials, and others to guide the staff and volunteers. 4. Assemble and Organize resources Make sure you have up-to-date information to be able to react immediately without having to do extensive research. Resources include: lists of contacts for team members, volunteers, staff, as well as emergency officials such as police, hospitals and the fire department. 5. Distribute an emergency procedures guide This is to ensure that volunteers, staff and team members know what to do in case of emergency. For example, how to talk to the press as well as how to deal with the safety of the people involved.
Conclusion
Coming of crisis cannot be controlled it may come at any time. However it can be controlled by proper planning and decision making. A good example of how to deal with crisis and make good use of the situation is in Johnson and Johnsons dealing with Tylenol crisis they faced in 1982. However with proper steps and decisions, they didnt only recover from crisis but came out with stronger customer relations. Other companies may also learn from this experience of company and prepare their selves for any sudden crisis.
Haisum Bhatti | 0812155 | BS-SE VI 10 Johnson & Johnson and Tylenol http://haisum.info
Works Cited
Companies in Crisis - What to do when it all goes wrong. (n.d.). Retrieved April 7, 2011, from mallenbaker.net: http://www.mallenbaker.net/csr/crisis02.html Effective Crisis Management. (n.d.). Retrieved April 7, 2011, from http://iml.jou.ufl.edu/projects/fall02/susi/tylenol.htm Hook, S. R. (n.d.). Crisis Management Moments. Retrieved April 7, 2011, from All About Public Relations with Steven R. Van Hook: http://www.aboutpublicrelations.net/aa021701a.htm McNamara, C. (n.d.). Brief Overview of Contemporary Theories in Management. Retrieved April 7, 2010, from Management Help: http://managementhelp.org/mgmnt/cntmpory.htm Utilitarianism. (n.d.). Retrieved April 7, 2011, from Wikipedia: http://en.wikipedia.org/wiki/Utilitarianism