PHI 3840 Module 6 Final Project: James Burke, the Credo and the Tylenol Recall Example

Putting the Credo First: James Burke's Ethical Leadership in the Tylenol Crisis

Student Name

Bachelor of Science in Professional Studies, Thomas Edison State University

PHI-3840: Ethics and the Business Professional

Mentor Name

Month Day, Year

Putting the Credo First: James Burke's Ethical Leadership in the Tylenol Crisis

Part 1: Why James Burke

James Burke led Johnson and Johnson as chairman and chief executive from 1976 to 1989. I chose him because his response to the Tylenol poisonings is widely taught as a model of ethical crisis leadership, and because it shows how a written statement of values can guide decisions under pressure. Burke had, before the crisis, led the company's managers through a review of its Credo, a statement first written in the 1940s that ranks the company's responsibilities: first to the doctors, nurses, patients and families who use its products, then to employees, then to communities and finally to shareholders (Johnson & Johnson, n.d.). The Tylenol crisis tested whether that order meant anything.

Part 2: The Crisis and the Decisions

In the fall of 1982, seven residents of Chicago and its suburbs died after swallowing Extra-Strength Tylenol capsules into which cyanide had been introduced after the bottles reached store shelves. The tampering did not happen in Johnson and Johnson's plants, and the deaths were confined to one region. Burke and his team nonetheless withdrew Tylenol capsules from stores across the country, about 31 million bottles, at a cost then estimated at about $100 million, warned the public not to use the product, cooperated openly with police and the press and later reintroduced Tylenol in tamper-resistant packaging with three seals. Tylenol, which had led the pain reliever market, lost much of its share but recovered most of it within about a year. Burke also appeared on national television, including the news program 60 Minutes, to explain what the company knew and what it was doing, at a time when executives rarely spoke so openly during a crisis.

Utilitarian Analysis

A utilitarian weighs consequences. A local recall would have cost far less, and the risk outside Chicago was unknown. But the possible harm, more deaths from copycat tampering anywhere in the country, was severe, and public trust in over-the-counter medicines was at stake. Byars and Stanberry (2018) describe utilitarian reasoning as aiming at the best overall outcome for everyone affected; the nationwide recall protected millions of users at a cost borne by the company, and, as it turned out, it also protected the company's long-term value. A narrow calculation might have favored a local recall; a fuller one, counting the public and the future, favored Burke's choice.

Deontological Analysis

A deontologist asks what duty requires, regardless of consequences. The Credo states that the company's first responsibility is to the people who use its products. Burke treated that statement as a duty, not a slogan. Kant (1998) taught that people deserve to be treated as ends and not used merely as instruments; keeping a possibly poisoned product on shelves to protect sales would have treated customers as means to revenue. The recall honored the duty even before its consequences were known.

Virtue Ethics

Virtue ethics turns attention to character: what would a good person in Burke's place have done? Burke showed honesty, in speaking openly to the public and the press when lawyers might have advised caution; courage, in accepting a large and immediate loss; and practical wisdom, in redesigning the package so the product could return safely. A reputation for ethical leadership, Treviño et al. (2000) found, belongs to executives whom others see as personally honest and caring and who also put ethics on display and hold their people to it. Burke was both: his personal conduct and his use of the Credo made ethics visible across the company.

Stakeholder Analysis

The Credo is itself a stakeholder ranking. Freeman (1984) urged managers to weigh every group that shapes, or is shaped by, the firm. Burke's decisions served customers first, as the Credo required, but they also served employees, whose company kept its reputation, the medical community, which relied on Tylenol, and, over time, shareholders. The case suggests that putting the first-ranked stakeholder first can serve the others too. Retailers were stakeholders as well, and the company's offer to exchange capsules for tablets kept pharmacies and their customers on its side.

What the Case Teaches About Communication

Burke's openness was itself an ethical choice. Speaking early and plainly, before all the facts were known, risked legal exposure and embarrassment, but it gave the public information it needed to protect itself. The textbook's discussion of transparency suggests that honesty with stakeholders builds the trust that lets a company recover from harm, and the Tylenol case is an example: customers returned because they believed the company had told them the truth.

Criticisms and Limits

The case is sometimes told too neatly. The recall was not costless to everyone: retailers and the company bore the expense, and the crime was never solved. Some observers note that the decision was easier because the tampering clearly happened outside the company, so there was no internal wrongdoing to confess. Johnson and Johnson's later record has also been mixed, with major product recalls and litigation in the 2000s and 2010s, which shows that a credo guides only as well as later leaders follow it. Burke's example is strongest as a model of decision making in one crisis, not as proof that a company with a credo will always behave well.

Part 3: Reflection

Studying Burke changed how I think about my own small decisions. In Module 1, I refused to sign an inflated forecast and offered an honest alternative; Burke's case showed me that a written ranking of responsibilities helps people act under pressure, when there is no time to deliberate. Our dealer has no such statement. I plan to propose a one-page statement of our responsibilities, to clients, employees, manufacturers and community, for discussion at our next managers' meeting. In the definition offered by Brown et al. (2005), ethical leadership means behaving as the norms of the setting require and encouraging the same in followers by what one says, rewards and decides; even at my level, I can promote it by how I explain my choices to coworkers.

I also learned from the criticisms. A good decision in one crisis does not make an organization ethical forever. Values must be renewed by each generation of leaders, as Burke renewed the Credo before the crisis tested it. I will also keep notes on my own small dilemmas, as I did with the forecast, so that I can see whether I act consistently over time.

Conclusion

James Burke's handling of the Tylenol crisis shows ethical leadership grounded in a stated ranking of responsibilities and carried out with honesty, courage and practical wisdom. Utilitarian, deontological, virtue and stakeholder reasoning all support his decisions, while the case's limits remind us that values must be practiced continually, not only invoked in a crisis.

References

Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117-134. https://doi.org/10.1016/j.obhdp.2005.03.002

Byars, S. M., & Stanberry, K. (2018). Business ethics. OpenStax. https://openstax.org/details/books/business-ethics

Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman.

Johnson & Johnson. (n.d.). Our credo. https://www.jnj.com/our-credo

Kant, I. (1998). Groundwork of the metaphysics of morals (M. Gregor, Trans.). Cambridge University Press. (Original work published 1785)

Treviño, L. K., Hartman, L. P., & Brown, M. (2000). Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42(4), 128-142. https://doi.org/10.2307/41166057