When Bad Things Happen to Good Companies: A Crisis Management Primer

Authors

Harvey L. Pitt, Fried, Frank, Harris, Shriver & Jacobson LLP
Karl A. Groskaufmanis, Fried, Frank, Harris, Shriver & Jacobson LLP

Abstract

What to do next was a daunting question. In the fall of 1982, executives at Johnson & Johnson were confronted with the deaths of seven people, who had swallowed capsules of the company's Tylenol product which had been laced with cyanide. Tylenol was important to Johnson & Johnson. The painkiller accounted for nearly one-fifth of Johnson & Johnson's profits in 1981. Moreover, Tylenol's thirty-five percent market share represented a longterm marketing success; its active ingredient is a compound any company could produce. Yet, when it was discovered that the tampered products came from two different manufacturing plants, Johnson & Johnson Chairman James Burke decided on a nationwide recall. It was an expensive judgment-resulting in the removal of thirty-one million bottles, with a retail value of over $100 million, from store shelves.

Keywords

Attorneys, Legal Profession, Foreign Investment, Investment, Securities Law, European Communities, International Agencies, Stocks, Securities, Treaties, Foreign Affairs

Disciplines

Law | Legal Profession | Securities Law

Recommended Citation

Harvey L. Pitt & Karl A. Groskaufmanis, When Bad Things Happen to Good Companies: A Crisis Management Primer, 15 Cardozo L. Rev. 951 (1994).
Available at: https://larc.cardozo.yu.edu/clr/vol15/iss4/4