Law for Business 12th Edition by James Barnes,Terry Dworkin,Eric Richards

Exercise 7

After someone laced Tylenol capsules with cyanide, killing seven people, Johnson Johnson (the maker of Tylenol) recalled and destroyed 31 million capsules at a cost of over $100 million. Within six weeks, Tylenol was back on store shelves in new, triple-sealed safety packages. Within three months, Tylenol had recovered 95 percent of its leading market share. In weathering this storm, the company credited its corporate philosophy, which held that the company had four responsibilities: customers, employees, communities, and shareholders. Was Johnson Johnson assuming a profit maximization or social responsibility posture in responding to this crisis? Explain.