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Role Model Johnson & Johnson Fails Brand Crisis Management, Business Scholars Argue

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The Harvard Business School has long used a template to teach its business students how to handle a brand crisis, such as a recall. The template is based on Johnson & Johnson’s conduct in 1982, when several people died after taking tainted Tylenol pills. Business experts have long-regarded the company’s response to the 1980’s crisis as the "gold-standard" in appropriate behavior in brand crisis management. However, with the recent recall of several hundred batches of popular over-the-counter medications, some business experts are stunned at Johnson & Johnson’s seemingly lack-luster approach to the crisis.

At the end of 2009, Johnson & Johnson recalled some batches of Tylenol Arthritis Pain Relief caplets after receiving complaints from consumers of "moldy-smelling" bottles. Some people even complained of temporary digestive problems after taking or smelling the medication, including nausea, vomiting, and stomach pains.

On Friday, Johnson & Johnson expanded the recall to include Benadryl, Motrin, Rolaids, Simply Sleep, St. Joseph Aspirin, and other Tylenol products. However, according to a Food and Drug Administration inspection, Johnson & Johnson’s behavior in response to the increasing number of consumer complaints was anything but swift. In fact, the recall occurred 20 months after the McNeil unit of Johnson & Johnson began receiving complaints. The FDA also sent Johnson & Johnson a warning letter stating that the company failed to conduct a timely, comprehensive investigation, did not identify the source of the problem and did not alert authorities in a prompt fashion–increasing the chance that more consumers would become ill from the tainted products.

Business scholars say that Johnson & Johnson’s slow response to the smelly medicine makes the company look careless and breaks consumers’ trust of one of the most trusted corporate brands. Moreover, the recall has the potential to persuade customers to switch to cheaper store brand medications, when they have historically purchased the name-brand products because of the perception of a "better quality" medication. Finally, the FDA comments exemplify the image of a sloppy, careless, or complacent company that failed to act when faced with a brand crisis.