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JNP: How Johnson & Johnson Distracts us from its Failures

Sarah A Brasher

OGL 260- Module 5

ASU

November 13, 2018

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Operating for over 130 years, Johnson & Johnson is a company with products you may

not even know you already use. From Band-Aids to Listerine mouth wash, they’ve become

popular for some of the most popular products you use. They also produce medicines you may

take, and medical supplies used in hospitals everywhere. Promoting diversity and employing

more women, they engage the public in a way that caters to its audience’s needs- and its audience

is everyone. With a recent project of vision care in Singapore, it’s no wonder how easy it is for

Johnson & Johnson to remedy any past mishaps.

-And Johnson & Johnson has had a lot of mishaps. In 2012 they were fined $1.1 billion

for misleading their marketing in association with their drug risperidone, a drug used as an

antipsychotic (Tanne, 2012). They hadn’t defined the risks of their drug properly, leading to

many problems that especially affected the elderly and children (Tanne, 2012). Today, this drug

is still on the market, and does, indeed, help those with diseases such as schizophrenia and

bipolar disorder. However, the introduction of this drug was poorly executed.

However, this is not the only occurrence of a lawsuit like this. One of the more recent

problems they’ve had to remedy involves their lawsuit that resulted in paying $110.5 million to a

Virginian woman, who claimed that their talcum powder, Talc, caused her to develop ovarian

cancer (Liebhard, 2017). She claimed this as the result of using their hygiene products for over

40 years (Liebhard, 2017). Within the year 2017, there were over 2,000 legal charges related to

Talc products (Liebhard, 2017). This highlights the playing field of the industry J&J conducts

their business in, and why it’s so important to have regulations for basic hygiene products.

They’ve also had concerns with regard to their over-the-counter medications: medicines

you can easily buy from your local drug store. One vital point in their history that made them a

model for crisis management was in 1980 when they recalled their Tylenol; it had been laced
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with poison (Anonymous, 2011)! Continuously, they’ve still had many similar recalls on their

over-the-counter medications. In 2008, they recalled defective Motrin (Anonymous, 2011). In

2009 and 2010 they recalled Tylenol, Rolaid, and Benadryl for smelling ‘odd’ due to traces of

chemicals used to treat wood (Anonymous, 2011). This highlights how quick they’ve been to

manage crises such as defective product. However, it brings about questions on quality control.

So, how does Johnson & Johnson bounce back from all this backlash from customers? In

the same year that they were being sued over cancerous products, their stock rose 21% to

$139/share (Kapadia, 2017). How does this happen? This is because they’re always releasing

new products. They have so many drugs and household items out there, and they continuously

create and develop more. Known for their many smaller companies they parent over, 20% of

their sales come from companies under them such as Aveeno, Neutrogena, and Band-Aid

(Kapadia, 2017). They also know how to use marketing to their advantage, shaping the image

we see outside of lawsuits and settlements. In 2010, they hired famous actor Neil Patrick Harris

to advertise their Listerine product (Arnold, 2010). While the advertisement was arguably bad,

this shows how in tune they really are with their customers.

Catering to the public and investing in new products keeps Johnson & Johnson afloat. In

2016, they invested in a new global health strategy in Cape Town, South Africa (“South Africa”,

2016). Their plans were to focus on specific areas of concern, such as HIV and women’s

maternity. Their most recent project pulls them to Singapore, investing in a myopia initiative that

helps children receive vision care. These large public displays distract from a past of

misinformation (it’s only been this year that they created a “100% transparency disclosure” for

their product’s ingredients!).

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Some people look up to this business, and you have to admit that after 130 years they’ve

got to know what they’re doing. As a model of leadership, early on they created a credo stating a

strong care for its customers (Fulmer, 2001). They follow 3 basic rules: commitment to the

credo, commitment to decentralized management, and commitment to the long term (Fulmer,

2001). These are definitely realized through their engagement with consumers, focused smaller

companies, and long-lasting development. Their innovation in new products separate them from

other companies.

Historically, Johnson & Johnson has a stock value that only raises as the years go on.

Their success lies in their customer relations, their advertising, and their successful crisis

management. Not only does their common stock price rise, but their dividend rate has increased

dramatically since 1997. They also focus on important aspects regarding cash flows, as stated as

one of the first principles that form the foundations of finance (Keown, Martin, Petty, 2014). All

these things lead to a successful, though volatile, business model.

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References

Anonymous. (2011). Business: Looking for a Band-Aid; Johnson and Johnson. The

Economist. Web. Retrieved November 13, 2018.

Arnold, M. (2010). Johnson & Johnson. Medical Marketing & Media. Web. Retrieved

November 13, 2018.

Fulmer, R. (2001). Frameworks for Leadership: Johnson and Johnson. Elsevier, Pages

211-220. Web. Retrieved November 13, 2018.

Kapadia, R. (2017). Johnson & Johnson Can Rise Further. Barrons. Web. Retrieved

November 13, 2018.

Keown, A., Martin, J., Petty, J. (2014). Foundations of Finance. New Jersey: Pearson

Education, Inc.

Liebhard, B. (2017). Johnson & Johnson loses another talcum lawsuit. Elsevier. Page 7.

Web. Retrieved November 13, 2018.

“South Africa”. (2016). South Africa. Nature Publishing Group. Web. Retrieved

November 13, 2018.

Tanne, J. (2012). US judge fines Johnson & Johnson $1.1bn for misleading marketing of

risperidone. British Media Journal, Page 6. Web. Retrieved November 14,

2018.