Corporate Crisis Management Essay Example

Identify and critically evaluate the issues in both the 1982 and 2009-2010 Tylenol recalls from the perspective of Business

The company faced a massive crisis by October the year 1982 when about seven individuals were announced dead in Chicago after consuming extra-strength Tylenol capsules leading to the random death of untargeted individuals. This incidence brought a massive decline in the market share of the company Schmitt & Majchrzak, 2013). The company assumed responsibility even if they are not the ones responsible for the product interference, the issue was not the fault of the product but product vandalism. Johnson and Johnson did this by ensuring the safety of public recalling all of their capsules from the market realm. This made Johnson and Johnson be an exemplar of excellent ethical conduct due to the prompt undertakings they took during 1982 Tylenol cyanide poisoning eventuality (Ryakhovskaya, 2014).

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The nature of 1982 recall helped the customers to have confidence with the company due to their swift response to handle a series of challenges. However, 2009-2010 recalls placed the company's reputation in jeopardy that led to a reduced amount of sales due to their ineffective and slow response to numerous problems with their products (Helm & Tolsdorf, 2013). Since the credibility of the company was involved in these two events, Johnson and Johnson had to act speedily to show up populace assurance. This was done to prevent the destruction of the corporate credibility, thereby, regaining lost market share after all the two incidences (Fleming, 2017).

Identify and critically evaluate the issues in both the 1982 and 2009-2010 Tylenol recalls from the perspective of Government

The death of about seven individuals in the city of Chicago after consuming extra-strength Tylenol capsules raised an alarm to the government. It is the government's obligation to protect its citizens from the enemy and those tampering with manufactured products as they target general civilian. Immediately after the incidence, the government launched an investigation to find out was the root cause of the deaths (Zhang & Borden, 2016). The government discovered that Johnson and Johnson faced major challenges in their entire three business category, the pharmaceutical, consumer products and medical devices presenting potential harm to all company's consumers. The government put in place regulation that ensures that all firms engage in activities such as putting seal resistant to tampering that ensures citizens well being (Helm & Tolsdorf, 2013).

Identify and critically evaluate the issues in both the 1982 and 2009-2010 Tylenol recalls from the perspective of Society

Both the 1982 and 2009-2010 Tylenol recalls occurrence had a direct impact on the society at large. The society did not expect such a large corporation product to cause any harm to the innocent citizens. However, Johnson and Johnson were committed to the safety to the society. According to Fleming (2017), this is evident when they pulled out all their products from the market worldwide and urged their consumers not to use their products until the issue was resolved. They developed tamper-resistant, new safer packaging bottles for their products. Their direct involvement showed that they were committed and concerned about public safety in a perfect fashion re-assuring customer's safety thereby gaining their loyalty (Helm & Tolsdorf, 2013).

How the issues inter-related

Both 1982 and 2009-2010 Tylenol recalls were meant to reassure customers that the company was very concerned about their health. In both cases, the company pulled out their products from the market to customers' problems were resolved. Additionally, both 1982 and 2009-2010 Tylenol recalls were majorly about product issues that led to the reduction of the company's product market share. These events were some of biggest blows a company can experience, and for the safety of the public, both the government and the company responded with the main aim of clearing the air and to do whatever possible to prevent the future replica of the event across the country.

Possible future implications and why

There is always aggressive market competition and therefore, any company may do anything to destroy another company's credibility by tampering with their products thereby lowering their reputations (Schmitt & Majchrzak, 2013). To prevent such occurrences, every company should have in place systems that that are very swift in responding to emergencies and strategies of dealing with emergencies. Additionally, every company should put in place crisis management group to handle all crises without delay as the crisis can knock anytime when the company is not prepared. This is to ensure customers trust and confidences are fully gained (Ryakhovskaya, 2014).

What effects the political and regulatory environment enabled and/or constrained on how Tylenol reacted? Identify the key ethical questions which emerge in each scenario. For the 2009-2010 response, analyze and comment on the effects of social media. And state how you would have handled the situation if you were to advise Tylenol and why?

Political and regulation on business environment is a sensitive issue to create stability in the business realm (Ryakhovskaya, 2014). After the 1982 incident, both Johnson & Johnson was the level of social responses in the cases of product tampering and recall. They were initially very responsive. However, during the year 2009 recall, there were so many surprises as they did not maintain their standards. Customer's interest was not their first priority and it took them about five years to address customer's complaints (Helm & Tolsdorf, 2013). Until the federal agencies got involved in these complaints, customer's responses were not issues to the company.

Company's new codes of ethics were to make sure that all products from the company are not just for profit purposes but safe for human consumption in whatever situation they may be in. However, Johnson & Johnson did not show any concern after their products were accused to make their customers sick. Additionally, they also failed to address all the complaints that were presented to them by their customers in the year 2009-2010 (Schmitt & Majchrzak, 2013). Deborah Autor director of the FDA compliance office responded to these events saying that, the company ought to have acted very fast since its main responsibility is to ensure high-quality products, effectiveness, and safety of their products. Additionally, they are mandated to protect all consumers. Schmitt & Majchrzak argued that failure to correct all violations may lead to legal actions together with injunction and seizure of any pharmaceutical company (2013).

It was clear that FDA agency would withhold approval exportation certificates request until the violations are resolved. This forced the company to come forward to address these challenges faced by their consumers as one of the ways of ensuring that the crisis is managed (Ushanov, 2015). In such situation, and if working together with them, I would have advised them to address the issues that arose at the time of complaints to prevent further actions that would be taken against the company by consumers or the federal agencies. Finding and resolving issue and customer's complaints aids in establishing goodwill of the company with investors and consumers.

In addition, after the recalls, I would have advised them to revisit their roots, and be upfront with their society concerning their faults in such a way that conveys their information to provide a solution to right then issues and in a positive manner. Similarly, they should be very fast in immediate implementation of all the suggested solutions (Zhang & Borden, 2016). After such events, gaining community and consumers respect as the company's image spreads through social media is always very traumatizing. Once the problem lands in social media platforms such as Twitter and Facebook, the public now becomes the press.

According to Ryakhovskaya (2014), reviews of the company products will be written and spread to other potential customers, giving warnings and reasons why they should not buy the product, and this happened in the latter recall. Consumers have become reporters and the press in this era of social media. This adversely affects the business in case of similar circumstances as the above. Therefore companies should strive to reach social media in advance and give them new stories and how the company is dealing with the situation ensuring their safety (Fleming, 2017).

Conclusion

According to Fleming (2017), consumers are very sensitive if their interest and are not the companies first priority, especially in a company they are taking their capital into. Consumers in today's market are only concerned with some of the big pharmaceutical companies and their concerns to the general population. However, when customers are affected, losing their lives or maybe getting ill as a result of using the company's drug, it would still cause a drop in the company's profit. Yet, consumers will again begin spending once goodwill is rebuilt (Helm & Tolsdorf, 2013).

Reference

Fleming, R. (2017). The Role of Corporate Management in an Effective Crisis Management Program. Archives Of Business Research, 5(6). doi: 10.14738/abr.56.3316

Helm, S., & Tolsdorf, J. (2013). How Does Corporate Reputation Affect Customer Loyalty in a Corporate Crisis?. Journal Of Contingencies And Crisis Management, 21(3), 144-152. doi: 10.1111/1468-5973.12020

Ryakhovskaya, A. (2014). TRANSFORMATION OF CRISIS MANAGEMENT IN CRISIS-MANAGEMENT BUSINESS. Effective Crisis Management, (2), 102. doi: 10.17747/2078-8886-2011-2-102-107

Schmitt, O., & Majchrzak, T. (2013). Document-Based Databases for Medical Information Systems and Crisis Management. International Journal of Information Systems for Crisis Response and Management, 5(3), 63-80. doi: 10.4018/ijiscram.2013070104

Ushanov, P. (2015). CRISIS MANAGEMENT AS A NEW MANAGEMENT PARADIGM. Effective Crisis Management, (1), 66. doi: 10.17747/2078-8886-2010-1-66-79

Zhang, X., & Borden, J. (2016). Linking Issue Management, Corporate Social Responsibility and Crisis Communication: Applying Balance Theory in Crisis and Issue Management. Journal of Contingencies and Crisis Management, 25(4), 209-222. doi: 10.1111/1468-5973.12136