Johnson & Johnson’s 1982 Tylenol recall was huge in both scope and cost. Adjusted for inflation, the recall cost roughly $250 million. But, as the seminal event in the history of recalls, arguably none other has had a bigger impact. Known as “the recall that started them all,” J&J set the standard for the way corporations are supposed to handle such events. In a case of product tampering, seven people in the Chicago area died after ingesting Extra-Strength Tylenol laced with cyanide. J&J spent more than $100 million to recall 31 million bottles of its best-selling product. J&J’s swift and decisive action is credited with saving the Tylenol brand, which at the time accounted for 17% of the company’s profits. Although the stock priced swooned initially, it recovered within two months. a) Based on the above situation, was it a wise decision on part of J and J to recall the product? Give reasons for the same
Johnson & Johnson’s 1982 Tylenol recall was huge in both scope and cost. Adjusted for inflation, the recall cost roughly $250 million. But, as the seminal event in the history of recalls, arguably none other has had a bigger impact. Known as “the recall that started them all,” J&J set the standard for the way corporations are supposed to handle such events. In a case of product tampering, seven people in the Chicago area died after ingesting Extra-Strength Tylenol laced with cyanide. J&J spent more than $100 million to recall 31 million bottles of its best-selling product. J&J’s swift and decisive action is credited with saving the Tylenol brand, which at the time accounted for 17% of the company’s profits. Although the stock priced swooned initially, it recovered within two months.
a) Based on the above situation, was it a wise decision on part of J and J to recall the product? Give reasons for the same
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