This is the case where the good guy turns out to be the worst guy.
After many scandals, I think that after this one J&J will have the hardest time in its long career.
But first, we are going to know J&J for the good company it seemed to everybody.
Johnson & Johnson is an American multinational organization established in 1886 and comprehends numerous brands related to medical aid, personal care products and medical devices. Johnson & Johnson has 250 subsidiary companies in over 57 countries, and its products are sold in 175 countries. Johnson & Johnson gives jobs to almost 118000 employees around the world.
Its credo was crafted by Robert Wood Johnson II in 1943, and it incorporates principles of Corporate Social Responsibility, even before the first theories about aim of firms have been formulated, Johnson & Johnson believes that credo is the base for a successful company strategy. It was modernized thanks to meetings in which executives challenged the values of 1943 credo and formed new values. At the same time, meetings were a tools for spreading these new values over the company.
Principal objective that Johnson & Johnson pursues is community and stakeholder well-being.
Credo states that Johnson & Johnson is responsible to its clients, “doctors, nurses, patients, suppliers, customers, employees, communities and stockholders“(Johnson & Johnson Credo). These are really noble believes which give merit to the company and to the executive board.
Furthermore, Johnson & Johnson references to sustainability in holistic term, including social, environmental and economic sustainability of operations. For this, Johnson & Johnson was ranked at number one of Corporate Social Responsibility Index, gaining a score of 82.67 out of hundred. Study (Johnson & Johnson Again Ranked Tops for CSR, 2010), conducted by Boston College Center and Reputation Institute and based on a survey conducted in January and February 2010 on 77190 American consumers, analyzed public perception of American companies and their social impact, Corporate Citizenship ( Logsdon, Wood, 2002), ethics, transparency and workplace practices. This primacy of Johnson & Johnson gives prestige to socially addressed programs and it highlights the careful eye that Johnson & Johnson reserve to society, or it was just a distraction from the dirty secrets it retained.
Environment, first of all, has been, since 1993, a principal goal for Johnson & Johnson, the organization, in fact, tries to reduce toxic emissions, reduce pollution and it tries to reach healthy planet goals. Johnson and Johnson is proud to have met the pre-established goals and sometimes even exceeding them. Moreover, Johnson and Johnson every five years set up new goals to meet in environmental protection. Environmental protection is for Johnson and Johnson a reason of good reputation among its consumers and a cause of primacy over worldwide competitors.
In the Credo, there is explicitly referenced by Johnson and Johnson its commitment to its employees. J&Johnson pursues to respect employees and to award their merits, it ensures protection at work with human and decent working conditions. Organization is constructed around employees and their responsibility towards their families, also thanks to fair and adequate compensation and to possibilities of personal and working growth. The attention toward employees as men is the aspect that Steiner describes. In his lectures, Steiner makes clear the need to stop consider workforce as mere instruments and as valueless commodities. The providing of instruments and possibilities, that allow men to evolve and develop themselves, is what Steiner predicates and what Johnson & Johnson does.
Johnson and Johnson takes responsibility also towards stockholders and the creation of value, that make possible the investment in research and fostering innovation with benefits of consumers and society. Here, Johnson & Johnson puts in place a good example of coexistence of Economics realm and Culture sphere. Thanks to economic process that creates capital, the cultural aspects of the organization, that could be research, ideation and development of an idea, are fostered and spurred. As Steiner dictates, and as Johnson & Johnson does, the two spheres coexist but they do not overwhelm one the other, maintaining independency of the spheres.
Furthermore, Johnson and Johnson is responsible toward communities where it works and where employees live. Johnson and Johnson feels responsible for supporting good citizen actions from both sides of organization and communities. So forth, Johnson and Johnson implements policies and conducts aimed at fostering ethical decisions and behaviors among its employees and neighbors.
In 1986, it came the need to withdraw Tylenol, when some deaths were assessed to be caused by this drug. The drug in 80s ruled the U.S. analgesic market with 35% of market share and it counted almost 15% of Johnson and Johnson’s profit. Although Johnson & Johnson knew they were not responsible for the tampering of the product, they assumed responsibility by ensuring public safety first and recalled all of their capsules from the market.The ready crisis management stemmed scared consumers and over 1 billion of dollar of value loss. Johnson and Johnson solved the problem by recall every package of Tylenol and promised to release new Tylenol only after having improved product protection. Johnson and Johnson, in this way, was able to contain and reestablish trust of consumers. Thank to a correct crisi management and CSR, within five months from Tylenol crisis, Johnson and Johnson recovered 70% of drug market share. Moreover, it has been showed by studies that many consumers, reassured by quick and efficient actions taken by Johnson and Johnson, switched from other painkiller drugs to Tylenol. This fostered again trust and faith in the strong sense of social responsibility of the organization; in this way, losses incurred because of withdrawal and re-packaging were recovered by future revenues. This demonstration of efficient and fast-response crisis management supported by CSR, implemented at Johnson and Johnson since then, made it one of the largest and financially strongest organization.
From 1999 through 2005, J&J and its subsidiary promoted Risperdal for unapproved uses, including controlling aggression and anxiety in elderly dementia patients and treating behavioral disturbances in children and in individuals with disabilities, according to the complaint. The off-label marketing cost U.S. government insurance programs hundreds of millions of dollars in uncovered claims (Ingram, Reuters, 2013). The company paid millions of dollars in kickbacks to Omnicare Inc, the nation's largest pharmacy specializing in dispensing drugs to nursing home patients, under various guises including "educational funding." Johnson & Johnson's conduct "recklessly put at risk" the health of children, dementia patients and others. Johnson & Johnson settled to pay $2.2 billion, without an admission of any liability or wrongdoing, and the company expressly denies the government's civil allegations.
The news of few days ago pushed J&J under the terrible light of consciously providing the market with cancerous products. A Missouri jury ordered Johnson & Johnson to pay $72 million to the family of a woman whose death by ovarian cancer was linked to her daily use of J&J products. According to the case, Johnson & Johnson knew about the cancer link but failed to warn consumers. Due to the inefficiency and old-ageing law about personal products and their ingredients, dated 1938, J&J could exploit these missing spots in order to market many products with dangerous elements, like formaldeide in baby showers.
The question is what made J&J the bad guy, when did they decide that profit is more important that safety and health of consumers, where J&J is going to end up.
And most important, will consumers still have faith and trust in J&J and their products?
"During life you make the biggest mistakes not because you prospect wrong solutions (these are generally utopias) but rather because questions are set incorrectly, not prospecting them based on true observation and knowledge of life. "
Rudolf Steiner, 1921
Until our next meeting,
Eleonora
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