Johnson & Johnson Case Study

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Why J&J’s Headache Won’t Go Away Synopsis The second case study that we were assigned to analyze is an evaluation of the Johnson & Johnson Corporation’s recall of many, (eight to be exact) of its popular OTC drugs. The company’s most recent recall included such household names as Tylenol, Motrin and Benadryl which were produced by the McNeil Consumer Healthcare unit, a subsidiary of the Johnson & Johnson Corporation. Although J&J had faced recalls of its products in the past, most notably the 1982 Tylenol recall, the company had always handled the situations with text book crisis management helping preserve its sterling reputation. It wasn’t until the botched handling of the 2009 recalls that the company’s reputation seemed to fall into question. The underlying issues that were the cause of J&J’s 2009 recalls can be traced back to 2002 and the retirement of the company’s then CEO Ralph Larsen. During Larsen’s tenor as the CEO of J&J he insisted that business practices would be carried out properly, saying “were going to conduct business the right way, and if we can’t succeed then we’ll exit.” These business practices were demonstrated in 1996 after the FDA sent a warning letter to McNeil criticizing the company’s testing and manufacturing processes. Larsen responded to this by creating a “corporate compliance team” who was in charge of auditing the production companies and also implemented a multi-million dollar corrective action plan which would focus on fixing the quality systems that both J&J and McNeil employed. As a result of Larsen’s new changes the quality control system at McNeil began to flourish. Although the department seemed to be back on track it wasn’t long after Larsen’s retirement in 2002 that the quality control systems at McNeil began to weaken once again. This was due almost entirely to J&J’s quest to cut costs. Johnson &

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