Today we are living in a competitive environment, where market forces determine the prospects of a company, the products and services. Globalization and liberalization has provided alternatives to the customer, with companies from different parts of the world competing with each other to secure the attention of the consumers. It is now almost mandatory for the companies to present themselves as socially and ethically responsible in their behavior in order to gain the confidence of all stakeholders in the business.
It is quite clear from the case study that managers of Johnson & Johnson and Dow Corning have differing viewpoints in regard to ethical behavior. While on the one hand Johnson & Johnson believes in behaving ethically to earn goodwill for the sake of a sustainable business, but Dow appears to be working with a narrow vision of maximizing the profits. The profit motive used to be one of the predominant one in earlier days, but in today’s context, responsible corporate houses are supposed to value all types of earnings like customer’s loyalty, shareholder’s goodwill, proximity with the social issues of the government etc. Cyanide content was found from the Tylenol capsules from Johnson & Johnson.
The case was indeed very serious, and in all likelihood this might have been done by some unscrupulous elements with ulterior motives. But, once the name of a reputed brand name got involved in the incident, the company managers started thinking about taking appropriate step. The FBI must have investigated the case and then only came out with the suggestion that the company need not take any action as no clue was found about company’s involvement in the incident.
But, the company management started thinking beyond the legal position; while putting in place the efforts to take all precautions, they wanted to establish themselves amongst their customers, as a responsible and sensible company not immune to public concerns, even at the cost of millions of dollars. With this objective Johnson & Johnson recalled all supplies of Tylenol capsules in the U.S. market. This certainly resulted in loss of millions of dollars to the company but it helped in gaining lots of goodwill, which cannot be measured in simple monetary terms.
On the other hand, Dow acted with short term benefits in sight. The company’s behavior smacked of the behavior of a small time corner shop where the shop-owner desires to have immediate returns on all of his investments. Dow Corning not only resorted to unethical behavior, but the lack of a long term strategic vision is quite evident from the way company has behaved. The company is considered a pioneer in Silicon breast implants and in order to retain the identity the company should have acted in a professional manner.
In fact, company’s ill intentions are quite apparent from the evidence suggesting lack of responsible behavior in taking appropriate action when shortcomings were pointed out in the products during 1976-77. This company did not consider its customers as an asset and instead of honoring their commitment expressed through ethical statements; the company resorted to irresponsible behavior. There might be valid enough reasons necessitating the closure of the breast implant units, but resorting to such steps when customers need help, amounts to gross unethical behavior.
The management of Dow Corning should have taken the following steps to avoid the present crisis.
- The company should have widely publicized its ethical behavior statement amongst all employees, so that everybody is conscious toward his/ her responsibility towards the customers.
- When pointed out some discrepancies in the product in 1976, the company should have taken immediate note of it and instead of concealing the facts; it should have initiated steps to rectify the defects.
- Had the company taken corrective measures that would have resulted in motivating the concerned employees to be positive in their approach towards customer’s requirements.
- The company must have encouraged such people who are coming out with ideas resulting in improvement of the product features and stature of the company.
- Before discontinuing the breast implant business, the company should have done something noticeable to address the concerns of its customers, which could have helped in attracting the customers towards other products of the company. This could be in the form of replacement of the product or offering something else in lieu of the hardship being faced. Legally the company might not be answerable to customer’s concerns after a predetermined time period, but ethically the company must have come out in support of the customers facing the problems. In fact, quite often the viewpoint of female members of a family happens to be the deciding factor in purchase decision. Therefore, by ignoring this segment Dow has done irreparable loss for its reputation and it future prospects.