In late September 1982, Johnson & Johnson recalled all of its Tylenol products after seven people in the Chicago area died after taking Extra-Strength Tylenol capsules. The company's chairman at the time, James E. Burke, made the difficult and expensive decision to recall 30 million Tylenol products voluntarily. This cost the company over $100 million.
Johnson & Johnson was not deemed responsible for the product contamination. The pills were tampered with after the products had reached the market shelves. The perpetrator(s) introduced enough potassium cyanide in each altered capsule to kill thousands of people. This crime caused nationwide panic, copycat crimes, and even the suspicion that Halloween candy might be poisoned as well. No one was ever found guilty of adding the poison into the capsules. Time magazine lists this as one of its top 10 unsolved crimes.
The company's actions epitomize the true meaning of corporate social responsibility. Even though Tylenol products were generating approximately 17% of Johnson & Johnson's yearly income, the company acted quickly and decisively to remedy the situation. It removed the products from shelves, offering refunds and safer tablets as replacements free of charge.
Chairman Burke adhered to the company's credo that outlines its ideal of corporate social responsibility. The first sentence of this, written by former chairman Robert Wood Johnson, states, "We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services."
The end result of these incidents was that Johnson & Johnson became the first manufacturer to begin using tamper-proof packaging. When Tylenol products were reintroduced into the market two months later, they included seals around and beneath a child-proof cap. The company also launched an extensive marketing campaign touting the new packaging.
Many believed these events would deal a devastating blow to Johnson & Johnson, but the company's quick, honest and responsible handling of the incident was viewed extremely positively by both the general public and investors. As a result, the company quickly recovered from the financial losses incurred and regained the trust of consumers.