How Important is Crisis Management: A Case Study of Johnson & Johnson’s cyanide-laced Tylenol Capsules

Every crisis gives you the opportunity to expand

The crisis management field has matured into such an area that it is impossible to proceed further in any domain without making provisions to combat it. Today, we are living in a society where all the major systems are engulfed in crisis- be it the global financial crisis, water crisis, poverty crisis, etc.

Every crisis gives you the opportunity to expand

When we talk about businesses, they also operate in a risky environment where crisis are common occurrences. Crisis in business can arise in the form of potential disruption in the market, threats, unknown weaknesses, unidentified risks, lack of attention to operations, technology, and unexpected problems. These crises can pose great risk and impact different aspects of business such as functionality, operations, profitability, sales, and reputation depending on the crisis which the company is facing.

Thus, it is vital to manage the crisis at the earliest to prevent damage to businesses. This blog highlights the importance of crisis management by presenting the case study of Johnson and Johnson:

Johnson & Johnson’s cyanide-laced Tylenol Capsules

For several decades, Jhonson & Jhonson was leading the over-the-counter analgesic market with its products. Tylenol, which was a significant medication product of Jhonson, was contributing to 15 percent of the profit of the company.

However, one of the employees laced the medicine with cyanide resulting in the death of seven people. Widespread panic ensued after that, and there was no knowledge regarding the spread of contamination.

The market share fell to exponential levels due to this incident, and if the crisis was not managed, the company could have gone bankrupt losing all its business everywhere in the world. The main challenge in front of the company was to gain that reputation back.

The company acted quickly and called back each and every Tylenol packet from various outlets. To ensure better protection for the product, they developed tamperproof packaging and re-launched the product in the market again, marking a great comeback.

The cost of this incident was although high, they achieved the status of consumer champions and succeeded in preserving the long term value of the brand.

J&J is viewed as a role model by many organizations for the successful handling of the crisis. The management team of the organization took prompt action in light of the crisis. It also managed to regain the reputation it enjoyed before the event.

After that incident and many such similar incidents, understanding crisis management and developing those skills became more important.

Crisis Management Education

Crisis management education is becoming vital, and business schools are incorporating it as a part of the curriculum. The courses emphasize crisis management lessons, including risk management, hazard management, communications, and conflict management. It is essential that students join top management colleges in Rajasthan to learn beyond theoretical aspects. With Sangam University’s MBA programme, you will witness practical skill development as well.

Our coursework focuses on brainstorming, creative problem solving, improvisation, and conflict management so that students develop the abilities to deal with crises while working in the industry.

With the MBA coursework, students become capable of viewing crises through trans-disciplinary and multi-stakeholder lenses, which eventually helps them in becoming the leaders of tomorrow.