Bus 600 Wk 5 Essay examples

775 Words Apr 12th, 2014 4 Pages
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BUS 600
Dr. Baldonado
November 28, 2013

The success or failure of a company depends on a series of decisions made by the company’s leadership. Although there are companies that have had short term success by making unethical decisions history has demonstrated that a company tends to have more long term success when the leadership makes ethical decisions. A prime example is when Johnson & Johnson’s CEO in the 1980s made a series of ethical decisions that contributed to the success of the company. During the Tylenol crisis James E. Burke made decisions that cost the company a substantial amount of money in the short term to protect the public’s safety. In the long term Johnson & Johnson’s productivity
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The recall cost Johnson & Johnson $100 million (Rehak, 2002). The decision was made based off of Johnson & Johnson’s Mission Statement (Effective Crisis Management, n.d.). The Mission Statement drafted by Robert Wood Johnson dictates that the company place those that they serve first (“Our Credo Values,” 2013). James E. Burke carried out the mission statement with vigor. He took a deep financial hit to protect the safety of those the company serves. Immediately after the poisonings Johnson & Johnson’s thirty seven percent share of the $ 1.2 billion market plunged to a mere seven percent (Rehak, 2002). Market experts predicted that Johnson & Johnson would never recover from the cyanide tragedy (Rehak, 2002). But just one year later Johnson & Johnson’s share of the market was back up to thirty percent (Rehak, 2002). Stock prices dipped immediately after the tragedy but many shareholders recouped their loss as stock prices climbed back up just two months later (Rehak, 2002). Stockholders that invested in the Fall of 1982 just before the tragedy are still seeing gains in their portfolios today from the purchase of Johnson & Johnson shares almost thirty years ago (Rehak, 2002). Much of Johnson & Johnson’s success can be attributed to James E. Burke’s swift and ethical decisions. He not only implemented a massive recall of the Tylenol capsules but when the product returned to the market he ensured

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