Ethical Issues in Johnson and Johnson: A Case Study

This report discusses the ethical dimensions of the issues faced by Johnson and Johnson, the role of business in society, key stakeholders, and ethical choices that can impact the business. It also explores two ethical theories and their application, as well as the role of ethical leadership in managing the business.

Business Ethics

Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
PART 1........................................................................................................................................4
PART B.......................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
The meaning of ethics can be understood as a philosophy which involves systematizing,
defending and recommending concepts of right and wrong conduct. It involves questions of
human morality by distinguishing between good and evil, right and wrong, virtue and vice,
justice and crime (Ferrell and Fraedrich, 2015). it provides certain set of principles which should
be followed by every individual as well as in the organisations. There are many concepts which
are studied in ethics. It is applied in all the industries irrespective of any factor. This report is
about Johnson and Johnson which as its headquarter in New Jersey, USA. It operates under
pharmaceutical, medical devices and consumer products industries. Furthermore, this report
covers ethical dimensions of the issue of above mentioned company, role of business in society,
key stakeholders and ethical choices that can impact the business. In addition to this, two ethical
theories and their application and role of ethical leader in managing the business.
MAIN BODY
PART 1
a. Report to the senior manager
To,
Mr. David Hog
Johnson and Johnson is a successful company which has been surviving in various
industries from a long time and has seen many ups and downs. It has number of competitors who
have gained a significant share in the market as well as customer base which has impacted the
business of the above mentioned company. Every organisation is established for making profit as
it is considered the primary goal. Business entities are the part of the society for which they make
products and services in order to sell them and fulfil their needs (Trevino and Nelson, 2016).
That should be done within the ethical limits by which organisations can be benefited without
causing any harm to the society. Any activities which may create issues for the customers or
other stakeholders should be avoided. However, it seems like Johnson and Johnson has crossed
all its ethical boundaries in order to make profit for retaining the position for a long time. There
are many issues which has been caused by the company which are beyond the ethical code of
conduct. In the case of Johnson and Johnson, it made a medicine which is basically a painkiller

made from opium. The company has what responsibility for helping to create the worst drug
epidemic in US history. According to the judgement passed by Balkman Hunter, company has
failed to to take adequate safety precautions while making the narcotic pain killers. Also, it has
made false statement about being safe while consuming. There is a certain limit for consuming
opium which was exceeded by Johnson and Johnson. High consumption of this element can
provide relief from pain in a very short span of time (Akhavan, Ramezan and Moghaddam,
2013). This was the unethical strategy of this company which caused many deaths among
various parts of United States. The ethical dimensions of the company can be understood such as
since, Johnson and Johnson is a company operating in pharmaceutical industry has very well
knowledge of the substance and chemicals which may lead to death or severe issues in a human
body. The narcotic pain killers were made by including opium in excessive amount which
caused death of large number of individuals. The company considered making profit is more
important than taking precaution or including safety measures for the medicine. It claimed more
than 400000 lives over past two decades due to the consumption of this pain killer. Furthermore,
it had made this drug available to all the pharmaceuticals stores. Also, doctors were made
confident for this drug because of its quality of giving fast relief from the pain. People believed
in the company but Johnson and Johnson maliciously and diabolically e created the opioid
epidemic in various states of America. It failed to consider society as an important stakeholders
and no one from the company raised the voice against such practices being conducted. As per the
judgement made by the judge, a penalty of $270m on the company and to be paid before the trial.
The company has a record of hundreds of other legal actions but it did not bother about those
legal actions and preceded with the manufacturing of OxyContin which is a deadly medicine. It
believe that making this medicine will be an effective marketing strategy which can increase the
brand image among the customers (Khomba and Vermaak, 2012). The company did not leave a
chance to make the doctors conveyance for prescribing the medicine also they sent sales
representative for providing the doctors with misleading messages about the drugs. Also,
advertisement contained false and misleading information about OxyContin medicine. It is a
matter of ethical issue the company being in pharmaceutical industry is at better position and
understanding of the elements which may cause death. It has neglected every possible safety
measure in order to make huge profit in a short period of time. Also, the company provided
misleading information to doctors and in the advertisements for the general public. It is totally

unethical to provide false information about a product or service by any organisation irrespective
of the industry in which it is operating. Johnson and Johnson company has failed to play a strong
role of business in the society and the sole motive which was considered by the management was
to make profit. This is because manufacturing of the above mentioned drug is not the first time
which has been treated as a legal action. Even after being involved in more than and one legal
action it has continued to bring a medicine which had the capacity to cause death. Its key
stakeholders are employees, customers, government, community etc. All of these stakeholders
are affected in a significant way (Wallace and Sheldon, 2015). People who have lost their family
members have made government responsible, with the responsibility of paying hefty amount
$270m made it under the obligation to cut down the budget for the employees. On the part of
society, they have lost their family members which it is a huge laws that a business organisation
can cause to the customers. There are many ethical choices which can either take the company to
next level or may bring it down to the extreme level. there have been many cases in the past from
which Johnson and Johnson could have taken hence of the consequences of being unethical. For
instance, Intel has gained huge recognition as well as the market value of shares were increased
because of being good ethical company. On the other hand, Johnson and Johnson has lost the
reputation and goodwill by making unethical choices which had bad consequences.
The above matter can be summarised and concluded in a way that it being ethical is
always beneficial for the company from the perspective of a society in which it has to survive for
a long time. There may be low profit as well as revenue for sometime but customers like the
company which things about them. Johnson and Johnson has failed to give importance to its
customers and the people living in the community which caused increased number of death. This
has imposed a a fine of $270m which is huge and an additional financial burden that made take
the profit even more down. Also, it has number of legal actions which were also not taken into
account by proceeding with the manufacturing of the above mentioned drug. Therefore, it is
important to be ethical in carrying the business activities and profit can be put secondary.
Involving with this society and giving them back for the favour they have made by letting the
company operate in the society should be one of the main objectives. Every unethical act should
be avoided in order to prevent any legal obligations in future.
b. Ethical theories and their application

The word ethics have been derived from Greek word ethos which refers to two character,
habit, custom or disposition. This branch of philosophy comprises of well defined standards
which help an individual in in making choices between right and wrong. There are some basic
principle as well as fundamentals which govern the activities of a person. In order to make it
easy for business entities as well as human beings, ethical theories have been given. It is
categorised into different kinds of theories such as deontological, justice, virtue, utilitarian and
many more. Each one of these have their individual characteristics, meaning and pros and cons.
These should be e applied within the organisational context by considering the current situation
or circumstances. Apart from this, these have been developed many years ago and are important
part of corporate governance for the organisations (Percival, 2014). It helps the management in
understanding the ethical behaviour in which it should act. In the case study of Johnson and
Johnson, it cause harm to the society by providing misleading information on which the
customers purchase the medicine and consumed it. A large number of individuals in the United
States have died from the consumption of OxyContin drug which is actually a painkiller. Also
the doctors prescribed the same to patients by acting on the information as given by the company
Johnson and Johnson. Therefore, the ethical theories which are suitable to this case study have
been provided below:
Utilitarian ethics- This branch of ethical theory is related with the concept of “the
greatest good for the greatest number”. Unlike deontological theory, the brightness and
wrongness of an act is judged by the consequences of the same act. Even if an act is being
conducted in a wrong way but the end results are good or for the benefit of large number of
people than it is considered ethical otherwise unethical. It has nothing to do with the way a
person behave or the activities of business organisation as long as the consequences are for the
benefit of greatest number (Miller and Truog, 2012). It seems like, this theory has been
developed for providing benefits to the general public and take them into consideration while
making decisions by the organisations. For example, if a person is stealing food then this action
can look at the first instance but if he is stealing to give to his starving family then it will be
treated article because of benefit to the large number of people. it is one of the ethics which is
used by many business organisations in order to provide use benefit to the society in which they
are operating. However there are advantages and disadvantages of applying this ethics which are
as follows:

Advantages
 It promotes happier world by making large number of people beneficial from the action
of one single individual or organisation.
 Any decision taken by one person or entity becomes important because it has greater
impact on huge number of people. It is a very powerful ethical theory which helps in making decisions in difficult choices.
Disadvantages
 Actions are based on the outcomes which occur in future therefore and accurate
judgement is not possible in the present time (Hayry, 2013).
 There can be different factors for every individuals which may create difference between
good or bad. In other words, one person may consider the outcome of an action good
wherein it may be bad for other individual.
 Favouritism is natural which means that a person make decisions for the the individuals
who are close.
In the case study of Johnson and Johnson, it has been seen that the company thought
about itself by giving importance to earning more profit and neglecting the moral duty to provide
safety to the consumers. It has acted against the ethical code of conduct and considered
maximizing of profit and revenue as this sole objective (Vandenbroucke, 2012). Utilitarian
approach tends to provide that an action should be done in such a manner creates benefit to the
greater number or huge general public. With the application of this theory, Johnson and Johnson
could have taken causes of excess usage of opium. It could have avoided the death and other
issues. It has acted against the will of general public which has caused use harm to them. The
actions carried by the company are not good enough to create benefit for the society. In fact it
has provided adverse effect to the community and the people living in the society. Since, the
products of this company were famous and liked by huge number of population, application of
this theory could have saved. In nutshell, it has acted in such a way which is not appropriate for
the society and has not benefited. every organisation operating in a society should think about the
society first and then the profit making objective should be fulfilled (Kahane and et. al., 2015).
Justice theory- This theory is linked with justice to every individual living in a society.
Majority of people refers justice as fairness. There should be this element of fairness in every
activities of organisations which are operating in the society. One of the important concepts is

social Justice which provides that every individual should be treated equally in all the aspects
and given equal opportunities. Also, all the people living in a society should be treated in a fair
manner which can benefit them and reduce the negative impact. The theory of social Justice is
about making corrective actions of all the acts which have been conducted unfairly. There are
statues and legal actions against the wrongdoers which promote the trust of general public in the
legal system. Any person or organisation doing activity in a wrong manner should be punished
by imposing penalties and giving imprisonment (Lopez-Gunn, De Stefano and Llamas, 2012).
There should be justice in every activity so that no person can complain about issues which may
provide harm on negative impact. It is a moral obligation for everyone as well as every business
entity to act in a fair manner. An organisation such as Johnson and Johnson which is operating in
pharmaceutical company should have avoided providing misleading information as well as using
more than the prescribed limit of opium in the medicine. It clearly shows that it has failed to
conduct the business activities in a fair manner which is absolutely opposite to this theory. It is
the basic right of every person to be treated in a fair basis and given equal opportunity (Inghilleri,
2013). This theory is beneficial for helping an organisation conducts activities in a way which is
appreciated and accepted by the people living in a society. It is the legal as well as moral duty to
provide goods and services which are healthy and free from any contamination or have adverse
effect. However, acting against the code of conduct and not applying social Justice theory have
made Johnson and Johnson to pay a huge amount of $270m as a fine. this is the first rule of this
theory that if an organisation or a person is doing something wrong then, punishment should be
given.
PART B
Ethical leadership refers to the form of leadership in which individuals demonstrate conduct
for the common word that is acceptable and appropriate in every area of their life. a person is
called ethical leader when he or she respect the ethical beliefs and values of other people. It is
based on trust, honesty, consideration and fairness in every aspects. There are some
characteristics such and ethical leader should carry the activities in such a manner that outcomes
are appreciated by other people. He or she should have good knowledge about ethics which can
benefit a society and should be at a place to take good decision in ethical dilemma.
Communication should be there by making all the people comfortable to exchange their views
and problems. Sometimes, ethical leader and ethical manager are considered one because of the

underlying fact of doing the activities which is beneficial for the large number of people. Both of
these individuals have the target to do good on a common basis without showing or including
discrimination or unequal treatment. I personally think that, there are certain qualities of an
ethical leader which should be transfer to an individual in order to make him or her an ethical
personality. A person may come across ethical dilemma which requires ethical leader to make
right decision which works in the favour of all the people living in a society. The incidents of
unethical acts which have occurred in the past could have been avoided by showing ethical
leadership. Johnson and Johnson should have made its leader to think in an ethical manner in
order to avoid the adverse effect which it has caused to the society. I as an ethical leader think
that, personal ethics are also a big part of showing the ethics while conducting activities in daily
life as well as in the organisational context. an organisation which is ethical is always supported
by the people living in a society and entities should think about the society and then the profit.
There are different theories of ethics which can be applied for preventing any actions that can go
against the company. Along with this, there is a connection of personal ethics with the ethical
leadership. There is a code of conduct for every individual which is made by them and should be
followed in every aspect of life in order to avoid any immoral act.
CONCLUSION
From the above report it has been concluded that, ethics is a big part of an individual as
well as organisation operating in a society. It should be we looked in a positive way so that
greater benefit can be given to general public. An organisation following the code of conduct and
carrying activities in an ethical manner is always accepted and appreciated by different
stakeholders. It does not include profit making objectives but It may help a company to earn
more profit by making the investors invest in an ethical organisation. There are many theories
which can be applied for becoming more ethical so that legal consequences or or wrong
decisions can be avoided.

REFERENCES
Books & Journals:
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson
Education.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
Akhavan, P., Ramezan, M. and Moghaddam, J.Y., 2013. Examining the role of ethics in
knowledge management process. Journal of Knowledge-Based Innovation in China.
Khomba, J.K. and Vermaak, F.N., 2012. Business ethics and corporate governance: An African
socio-cultural framework. African Journal of Business Management. 6(9). pp.3510-
3518.
Wallace, M. and Sheldon, N., 2015. Business research ethics: Participant observer
perspectives. Journal of Business Ethics. 128(2). pp.267-277.
Percival, T., 2014. Medical ethics. Cambridge University Press.
Miller, F.G. and Truog, R.D., 2012. Death, dying, and organ transplantation: reconstructing
medical ethics at the end of life. OUP USA.
Hayry, M., 2013. Liberal utilitarianism and applied ethics. Routledge.
Kahane, G., and et. al., 2015. ‘Utilitarian’judgments in sacrificial moral dilemmas do not reflect
impartial concern for the greater good. Cognition. 134. pp.193-209.
Lopez-Gunn, E., De Stefano, L. and Llamas, M.R., 2012. The role of ethics in water and food
security: balancing utilitarian and intangible values. Water Policy. 14(S1). pp.89-105.
Inghilleri, M., 2013. Interpreting justice: Ethics, politics and language. Routledge.
Vandenbroucke, F., 2012. Social Justice and Individual Ethics in an Open Society: Equality,
Responsibility, and Incentives. Springer Science & Business Media.