Tylenol Crisis the Case Chicago,

¶ … Tylenol Crisis

The Case

Chicago, Illinois, was the setting for one of the greatest and most responded to consumer emergencies in the United States. In the fall of 1982, seven people died after taking Extra Strength Tylenol that they had bought over the counter (Science News, 1982). The response was rapid, and Tylenol's parent company, Johnson & Johnson, pulled all Tylenol off the shelves across the country before the eighth death could occur (Ruquet, 2004). An examination of the incident after it was recognized unveiled that someone, still unknown to this day, had tainted the capsules with cyanide.

The reaction from this tragic event was immediate and profound with the United States Food and Drug Administration. Within months, all companies selling any type of cosmetic, over the counter, or medicinal product were required by federal law to include tamper resistant packaging on all products. In addition, they were required to include a statement on the packing stating that any sign of tampering should be considered for contamination (Science News, 1982).

The cost of the crisis was monstrous for Johnson & Johnson. By the end of the year, the cost of pulling products off shelves for destruction was figured at $100 million, with another $50 million of loss figured from lost sales (Edwards, 1999). Overall the total amount of company devaluation was figured to be about $3 billion by the end of the same year. The diversity of the product line of the company allowed it to survive in the long-term, however. In the 2005 fiscal year, Johnson & Johnson reported net earnings of over $10 billion (Johnson & Johnson 2006 Annual Report, 2006).

Group Recommendations

The results of the Tylenol contamination crisis were drastic for Johnson & Johnson. Instead of simply pulling items off the shelves and destroying the products, the company could have taken many more and different measures post-incident. Since the product being sold is a medicine, the company could have heightened the urgency of the response and not put the items back on the shelves, even with the new FDA law-regulated tamper resistant packaging. Instead, the product could have been kept behind the counter, only dispensed by a physician. That way whatever standards by which pharmacists are required to abide would be followed also for Tylenol. In order to get the product to the pharmacy itself, the amount of agencies through which the products pass until the final destination could have been drastically reduced, meaning fewer distributors and retailers.

Another option that could have been considered for Johnson & Johnson was a name change. Still today, people who lived in the 1980s remember the great commotion caused by this event. However as a result of the great public relations responses of Johnson & Johnson they were able to maintain the company as well as the product's credibility (Simola, 2005, 180). Nonetheless, the scars will remain and there must be some loss still as a result.

The best way to prevent this crisis from occurring in the future is to do exactly what they are supposed to do per the Food and Drug Administration. Continuing to improve the packaging of the product and empowering the consumer to know when to return a product suspected of tampering will be the best way to show the public that the company is insistent on safety. In addition the company should be well-informed of any and all potential threats, whether competition or vicious. Maintaining responsibility and showing it will be the recommended strategy for Johnson & Johnson - keep doing what it's doing.

Grazier's Factors of Motivation

Crisis management requires a solid team to create and implement strategies to drive an organization out of a current situation and an actual clear plan for the prevention of future incidents. Peter Grazier is a professional who helps teams create purpose and cohesion, among many other factors of motivating teams (2005). The reaction to the Tylenol crisis involved several of Grazier's factors of motivation, including the presence of a real purpose and a true challenge.

After the Tylenol contamination process, the management teams at Johnson & Johnson had the advantage of a real purpose. With a true and shared goal to attain, teams have a much better chance to succeed. With each death reported from the contaminated Tylenol, the urgency for not only the entire management team became heightened but also with each individual employee. The crisis created a movement within all levels to resolve the issue, whether to save the bottom line or to save their job.