Introduction
Johnson & Johnson is a holding company with more than 250 operating companies in 60 countries, with approximately 129,000 employees. It was incorporated in the State of New Jersey in 1887. Its headquarters is in New Brunswick, New Jersey, USA. The company’s primary focus is on products related to human health and well-being. For several decades, the company has built a strong brand with sterling reputation for the quality of its products and its concern about the society. Today, the company’s reputation has been jeopardized, especially by its Consumer Product Division, due to its slow and unsuccessful response to series of problems. This paper focuses on the reputational threats facing the company. It highlights how the company has responded, the effectiveness of the response, and the damages caused.
The reputational threats
Consumer Product Division of Johnson and Johnson has put the company and its reputation in jeopardy. This is due to its slow and ineffective response to series of problems such as inadequate quality control in some manufacturing plants, and slow and ineffective corrective measures in response to the growing complaints by consumers and FDA (Stewart and Paine 2012). This has broken the trust of consumers and has thwarted the reputation of the company.
The company has had multiple recalls on its Tylenol and other McNeil consumer products because of quality-control problems across product lines (Singer and Abelson 2011). The company significantly failed to protect the consumers and other stakeholders from defective products and misleading marketing. According to Singer and Abelson (2011), the McNeil Consumer Healthcare unit of Johnson and Johnson recalled about 288 million items in 2010. The recalled items included adult and children's pill medications and about 136 million bottles of liquid Tylenol, Motrin, Zyrtec and Benadryl for infants and children (Stewart and Paine 2012). The Food and Drug Administration (FDA) highlighted that some of the recalled products contained higher concentration of active ingredients; others contained inactive ingredients that could not meet the internal testing requirements; while others contained bacteria or tiny particles of wood, glass, or metal (Stewart and Paine 2012). In February 2011, the company recalled 70,000 syringes preloaded with its injectable anti-psychotic drug, Invega, because of cracked syringes and possibilities of infection risks (Stewart and Paine 2012). J&J also recalled 395 injection pens which were preloaded with rheumatoid arthritis drug, Simponi, because of possible dosage errors; and Securestrap Hernia product because of non-sterile packaging.
Johnson and Johnson has continuously made efforts to position itself as a market leader in the supply of medications to infants and children despite the ongoing manufacturing and quality control problems in most of the McNeil manufacturing plants. This is quit unethical and deceiving. It’s reported that the defects and recalls accounted for about 6% of the news reports in 2010. No one can imagine how negatively the news impacted on the company’s reputation. The company has been accused of failing to address the quality control issues in a timely manner. It has also been accused of inadequate responsiveness to the complaints consumers and patients resulting from the product problems. It’s also alleged that the company continuously engages in aggressive marketing in order to boost the sale of its “substandard” products with little or no regard for the well-being of the consumers and patients. These accusations seriously destroy the reputation and the trust that the stakeholders had on the company.
The company’s response
The company has responded by allocating $100 million to upgrade the McNeil’s plants and equipment (Singer and Abelson 2011). It has also appointed new manufacturing executives; hired a third-party consulting firm to improve the procedures and systems and shore up quality control throughout the company. The company also agreed to face out all the potentially harmful chemicals from the baby products, including the Baby Shampoo line (Diamond 2011). The Fort Washington factory was closed in 2010 for complete renovation (Childree 2011). The company, through its CEO, promised that the Pennsylvania plant would represent the state of the art in medicine production when it reopened (Singer and Abelson 2011). Besides, the CEO has repeatedly reassured consumers that the company’s major concern is to provide parents with the highest quality products for their children (Singer and Abelson 2011).
Effectiveness of the response
These responses have not been effective. Despite all the assurances, more recalls are still witnessed. The management has failed to solve, and explain satisfactorily, the manufacturing problems of the company. Federal regulators continue to fault the company for failing to identify and solve the problems at the plants. The consumers have also remained dissatisfied, and have lost trust in the company’s products. The damages that resulted in 2010 alone amounted to $900 million. This was as a result of revenue lost, legal proceeding expenses, and the upgrading costs for factories.
The company could have responded by investigating and correcting the problems. It could have informed the doctors, nurses, and others in the medical field earlier enough, and notified the media, the consumers, and the public at large about the problems, instead of continuing to deceive everyone about the quality of its products. The company also had a moral and legal responsibility to respond appropriately to the warnings of FDA and to recall the affected products voluntarily.
Works Cited
Childree, L. Johnson and Johnson recalls Mortin pain relievers. Helium, December 23, 2011. Web. November 20, 2012. http://www.helium.com/items/2271216-mortin-ib-recall
Diamond, M. L. Woes for Johnson & Johnson. USA Today, 11/20/2011. Web. November 20, 2012. http://usatoday30.usatoday.com/money/companies/story/2011-11-20/johnson-and-johnson/51314960/1
Singer, N., and Abelson, R. Can Johnson & Johnson get its act together? The New York Times, January 15, 2011. Web. November 20, 2012. http://www.nytimes.com/2011/01/16/business/16johnson-and-johnson.html?pagewanted=all
Stewart, K. L., and Paine, W. S. Johnson & Johnson: An ethical analysis of broken trust. Journal of Academic and Business Ethics, 2012. Web. November 20, 2012. www.aabri.com/manuscripts/11921.pdf
