Biblical Leadership & Ethics

Week One – Case Study:

Johnson & Johnson CEO,

James Burke

1)What actions did Burke take upon assuming direction of J & J that helped affirm and develop the existing moral climate?

As one of the first noted point of business after he was named CEO of Johnson & Johnson, Burke called the leaders of the company together to discuss the validity of their Credo (Murphy & Enderle, 1995). Simply because it was one of the first things he set out to do showed that it was important to him. It also demonstrated to the rest of the organization that he meant to do business by the “rules”. Not just any rules, but the Credo which was set in place by his predecessors. It showed his loyalty and that he was interested in making sure it was still viable. Have things changed since the original draft? Where there additions that should be inserted? Was it still the basis for how they ought to behave organizationally? Apparently there were things that needed improvement because it was modified slightly.

By placing the Credo into the corporate eye and elevating it's content, Burke was able to give everyone within the company a standard with witch to measure themselves. Weather it is how they interact with customers, vendors or coworkers they had universally understood guidelines. Before they spoke or made action they were enabled to discern weather it was the right thing to do. When we all have the same guidelines we can be sure we are working with one another an not against, ensuring progress toward becoming a better organization.

2) When the first Tylenol poisoning incident occurred, how did Burke's responses directly reflect specific declarations in J & J's Credo?

Burke's response to the first poisoning was a direct reflection of the first three lines of their Credo:

We believe our first responsibility is to the doctors, nurses and patients,
to mothers and fathers and all others who use our products and services.
In meeting their needs everything we do must be of high quality.

Burke was stating with the companies actions that the customers who use the product were first in priority. The company pulled 31 million bottles of Tylenol from store shelves, even though it is likely that most were not tampered with, because they did not want to chance any further mortality from low quality (Murphy & Enderle, 1995).

Burke was leading by example. Although the mistake was not directly their fault, they accepted responsibility because they did not do enough to prevent the tampering. Near the end of the Credo they state their willingness to ensure mistakes are paid for. Rhode (2007) describes how this is one of the most important aspects of leadership, leading by example. We was willing to lead in this case by putting the public before the business. The huge cost of the recall may have seemed like a loss, but in the long term everyone benefited. The drug industry made improvements to packaging, Johnson & Johnson was seen as a company who cared and Tylenol is still used and accepted by consumers today.

3) What proactive steps did J & J undertake to ensure against future repetition of the criminal incident?

The first time the medicine was poisoned, Johnson & Johnson went after the root cause. Once it was discovered that the poisoning was post manufacturing they set up press conferences to alert the media to avoid any further problems. They organized the removal of product from shelves to assure consumers the problem was being solved. Next they worked with government agencies to improve the packaging so that it was tamper proof (Murphy & Enderle, 1995).

Then it happened again. They were already working diligently to prevent tampering and did not have any further ways they could ensure the safety of the consumers. So, in 1986 they removed product from the stores altogether. This must have been a challenging decision to make since Tylenol was one of the main brands for the company and was a major contributor to the success of Johnson and Johnson, with Burke at the helm (Murphy & Enderle, 1995).

4) When Burke permanently withdrew Tylenol capsules from the market after the second poisoning incidents, what message was he sending to both the public and his own internal clients?

By permanently removing the product from the shelf he was again saying that the consumer and truly the view of Johnson & Johnson products must be preserved. He desired that the customer be safe and would hold a high view of the companies products. Since the product was once again tainted, that product must be removed. Its removal showed the public that Johnson & Johnson had taken the initiative. This was also good marketing. Taking the product out of the limelight, gives meaning to the saying “out of sight; out of mind.” The customers apprehension was removed completely until the perceived risk was gone. For example, I can go to the store and purchase Extra Strength Tylenol right now, without even the slightest hesitation, in fact I have some in my kitchen drawer.

The internal customers (his management and employees) were able to be proud of their work because Johnson & Johnson did the right thing. They could rest assured that in the little things their employer would do what was best for themselves, not just what looked best on the bottom line. In many places of employment the idea that employees are being taken advantage of is rampant. I sincerely hope that this idea is only spread because employers are poor communicators or are having trouble in an area of policy; not actually trying to take advantage of the ones who do the work, who make the organization what it is.

5) What conditions had to exist to allow Burke to exercise the kind of decision power he exercised?

Burke must have been in a situation where his team asked the hard questions. The management team looked at the situation and undoubtedly had debate over what to do. There may have been some who wanted to take the same stand as the FBI stating that a full recall was not necessary. But through skillful debate, problem solving and a moral compass Johnson & Johnson was able to make that choice. It is unlikely that he made the decision alone, but because they had their Credo written and it was part of the culture, he could have made the same decision on his own. This points out the power of the moral compass and the benefit of having the alignment model visible and easily accessible as seen in Moral Intelligence (Lennick & Kiel, 2007).

6) After the incidents and Burke's reactions, how do you think the public saw Burke? Johnson & Johnson?

The public was stunned that there had been two different incidents of poisoning. Seeing that Burke was willing to completely remove a product from the shelf gave confidence that he cared for consumers. Even beyond the profit of his company.

The public was in disbelief that Johnson & Johnson was dealing with this issue again. Since this company did not know how to solve the tampering problem, they were loosing stock value, and consumer confidence. Then Johnson & Johnson pulled the product. I think the public would have been comforted that Johnson & Johnson were looking out for them. The removal of the product fueled questions from the public. But what about these other over the counter medications? Don't they have the same problem? What are they doing to ensure my safety? How are they going to prevent me or my family form being the next victim? They turned this truly tragic moment into a scenario where the Public now only trusted them. Brilliant marketing based on ethical principals.

7) Evaluate Burke's performance throughout his tenure as CEO in terms of moral and emotional competence. How did his actions demonstrate alignment with his moral compass? Finally, how did Burke help J & J take steps toward becoming a morally intelligent organization?

During Burke's employment as CEO of Johnson & Johnson, he acted according to his personal ethical standard. He was fortunate to align himself with a company that shared those standards. His moral competence was, from what I know, superb. Every situation was met with a decision that was gaged carefully by the companies Credo and his personal ethics. As far as his emotional competence, he seemed to be a talented reader of others. He directed the Credo to be reestablished getting input of others on his management team. He correctly predicted the reaction of the public and was able to use that emotional information to make wise business decisions. He was in all actions aligned with his moral compass.

Burke took the lead and demonstrated that morality was one of his critical drivers. It was not just something spoken about, but displayed in every action, and it worked. It worked for Burke because he was continually promoted, and respected. It worked for Johnson & Johnson because they were able to come through several crisis situations and become stronger through them. It worked for society because now medication has many warning labels and anti-tampering protection for consumers. Although ethical leadership may be uncomfortable at times, it is the better choice in the long run.

Lennick D. & Kiel F. PhD (2007). Moral intelligence: Enhancing business performance & leadership success. Upper Saddle River, NJ: Wharton School Publishing.

Murphy, P.E. & Enderle, G. (1995). Managerial ethical leadership: Examples do matter. Business Ethics Quarterly 1, (5). 117-121.

Rhode, D.L. (Jan. 2007). Moral leadership: Inspire ethical behavior. Leadership Excellence 24, (1).