Johnson & Johnson Case Analysis

Johnson & Johnson, a healthcare company that has dominated its industry for several decades, is currently undergoing managerial upheaval in light of recent blunders amongst its top-tier managers. It has spent years priding itself on appeasing stakeholders and being a safe provider of various pharmaceuticals, but product recalls and subsequent revenue drops have plagued the company as of late. Alex Gorsky spearheads Johnson & Johnson’s revival after previous CEO William Weldon resigned due to missteps. The cause of which stems from misinterpretation of common business ethics through poor leadership and social responsibility that damage the stakeholders.
Managers have a responsibility to place stakeholders such as customers and stockholders

Economic responsibility requires a company to remain profitable in order to appease stakeholders and risk management and sound business practices play a large role in acceptable economic responsibility. Johnson and Johnson may have tried too hard to increase its profits, which resulted in mediocre production rather than timely inspection to ensure the products are safe for distribution. A halt in production may decrease profits temporarily, but in the long run, products distributed will be safer and revenue would resume to a normal amount. Instead, trying to be profitable and avoid loss in the short run made Johnson and Johnson less profitable in the long run. Failure in legal responsibility may have caused Johnson and Johnson to fail. The Food and Drug Administration (FDA) regulates drug distribution and has several criteria to pass in order to allow Johnson and Johnson to administer its premier medicines such as Tylenol. Not adhering to those laws allowed the distribution of unsafe medicines, subsequently leading to recalls and damaging the company financially. Johnson and Johnson tried covering up prior recalls of Motrin by hiring contractors to buy every packet (Kimes). Ethical responsibility requires companies do not perform questionable practices such as that described. The secret recall bought attention to Johnson and Johnson that it makes shoddy products out of the public’s view, which is wrong on many ethical bases. In the recent occurrence with Tylenol, Johnson and Johnson slacked on its labeling and tarnished the company’s