Ethical Problems and Solutions with Tylenol and Enron

The competitors of our product would be Tylenol. The product was developed by McNeil Laboratories. The major ingredient in their medication is acetaminophen. The company was bought by Johnson & Johnson in 1959. They began advertising to many health professionals. They are a company that has many different brands of drugs that serve children up to adults. Their product is said to work by being able to elevate the body’s overall pain threshold so that an individual who takes this medication will feel less pain.

In order to discuss this case, it is also important to know about McNeil Consumer Healthcare, the subsidiary of Johnson & Johnson and the producers of famous medicine "Tylenol". Tylenol was their best selling product; it was very much trusted by their consumers and they also earned huge profits from its sales in United States.

When J&J realized that their Tylenol capsules caused the deaths of four Chicagoans, they immediately initiated a recall of all Tylenol products, and spread the news by any means possible. Cars with sirens and loudspeakers drove through the city and suburbs of Chicago, urging residents to throw away any Tylenol capsules they might have. Schools were contacted, and they instructed students to bring all Tylenol products to the school nurse. News flashes were initiated to warn people of the Tylenol danger as well, and all stores were instructed to remove Tylenol products from their shelves. Removing the products was a gutsy move, not only because it was dangerous to the company by recalling so much products, but there was also a fear that the killer

Back in 1982 the well known medicine Tylenol was poisoned. The owners of the company took immediate action to the public telling about the dangers about the tylenol. “Johnson & Johnson issued a national alert warning the public. With in a few days, it had set up a hotline that people could call for information. ”(Lewis & Braun 14) With the company setting up a hotline and doing a national alert it shows how to successfully respond in a crisis because this company did everything so

In October of 1982, Tylenol, the leading pain-killer medicine in the United States at the time, faced a tremendous crisis when seven people in Chicago were reported dead after

According to Lewis (2006), crisis is “an interruption from previously normal state of functioning resulting in turmoil, instability, and a significant upheaval to a system” (p. 27). In other words, a crisis is a negative predictable or unpredictable event that affects the future trend of individuals, groups, organizations, and government. For instance, pharmaceutical company Johnson and Johnson had an unpredictable crisis in 1982 with its product Tylenol, which was laced with cyanide and led to several murders in Chicago. The events of this crisis could have changed the perception of Tylenol products. Another example of organizational crisis was the predictable 2012 Hurricane Sandy. Although companies of all sizes expected the Hurricane due to the weather forecasting, some areas in New York and New Jersey were affected worse than others. There were businesses that terminated operations for several business days. In addition to Hurricane Sandy being an organizational crisis, it was also a crisis for many families that lost power in their homes and a crisis for government departments such as FEMA (Federal Emergency Management Agency), and other agencies within local and state governments.

This happened on two occasions, the first in 1982 and the second in 1986. These episodes could have been devastating to the McNeil company by drastic decrease in consumption of the Tylenol products. The McNeil company rallied to the situation to counter this possible decrease in consumption. According to "Laurels: The National Business Hall of Fame", Tylenol's share in the one billion dollar analgesic market commanded thirty-five percent of the market before the 1982 incident. At the time of these episodes, consumer trust was damaged and market share decreased to seven percent. By February 1983, Tylenol had regained a twenty-four percent share of the market(Diary of an Amazing Comeback). In the 1990's, Tylenol again reached its thirty-five percent of the market which at this time accounted for a two billion dollar market(Laurels: The National Business Hall of Fame, Fortune). By regaining their share of the market, this demonstrated that the consumers had faith in the McNeil company's ability to produce safe and trustworthy products, i.e. Tylenol, for their comfort and happiness.

Tylenol, an over the counter prescription product from Johnson & Johnson, was one of the top brands in the analgesic market. Within the company, it was also a large income earner that commanded nearly 15% of the company’s total profits. That being the case, the 1982 crisis was not only a big blow to the brand, but also to the company as a whole. The crisis jeopardized the company’s existence; putting at risk a multi million investment which the investors had a lot of faith in. Irrespective of whether the crisis was due to malicious acts from ill motivated criminals or not, the company had to act swiftly to counter the legal issues which were ensuing and mitigate huge impending losses. It was really a trying moment for the top management of Johnson & Johnson and more so to the CEO, James Burke, who faced the toughest test of his managerial career during this time. Though the crisis was amicably solved, there were some legal issues that were imminent and some valuable lessons learnt from the episode.

The problematic issue for Bristol-Myers was to position its new aspirin drug to the potential customers and decide a good price which can not only make it acceptable by the customers, but also give a fair profit to the company. In other words, the company had to formulate an effective marketing and promotional strategy for its new drug, Datril. The company was not merely willing to establish its new brand in the analgesic market; the main issue was to establish this new brand in the presence of a strong competitor, Tylenol.

Consumers do not always evaluate prices objectively. Often a referenced price is a known and available price, like that of a competitor. Pricing Datril at par with Tylenol and advertising it as a new substitute with same features may have been a fraught tactic in a short-run test environment. Market penetration and share take time and is unknown. Additionally, a price war could have ensued with Tylenol due to cost differences especially in advertising.

In 1982, Johnson & Johnson (J&J) faced a major crisis that had the potential to send the company into financial ruin. Tylenol, the country’s most successful over-the-counter product, with over one hundred million users, was under attack.

In a competitive market to which Johnson and Johnson operates, the smallest of errors can lead to consequences which can cut revenue. When large mistakes occur, millions of dollars are lost, and even worse, there is a loss of customer confidence. Johnson and Johnson has had numerous recalls in their consumer healthcare division recently, which rocked the organization’s once sound image, and diminished its profits. These recalls have hurt Johnson and Johnson’s stocks and cost the company about $900 million in sales last year (Rockoff, 2011).

In the early ‘80s the Johnson & Johnson company was a very successful brand. So successful, that some of their most popular brands were able to corner more than a third of their market. However, all of their accomplishments were threatened when a series of unfortunate murders tarnished one their most popular names: Tylenol.

After such a horrible crisis Tylenol began to build its brand back up. After removing the

Ethics is something that is very important to have especially in the business world. Ethics is the unwritten laws or rules defined by human nature; ethics is something people encounter as a child learning the differences between right and wrong. In 2001, Enron was the fifth largest company on the Fortune 500. Enron was also the market leader in energy production, distribution, and trading. However, Enron's unethical accounting practices have left the company in joint chapter 11 bankruptcy. This bankruptcy has caused many problems among many individuals. Enron's employees and retirees are suffering because of the bankruptcy. Wall Street and investors have taken a major downturn do to the company's unethical practices. Enron's competitors