MBA Case Study
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Tylenol Crisis: You Are James Burke

Chicago, Sept 30 1982. Seven people are dead from cyanide-laced Tylenol. You're CEO of Johnson & Johnson. Decide.

Progress15% • due By close of week

The situation

You are James E. Burke, Chairman and CEO of Johnson & Johnson. Overnight, seven people in the Chicago area have died after taking Extra-Strength Tylenol capsules laced with potassium cyanide. Tylenol is 17% of J&J's profits and the most trusted brand in America. The FBI says do not recall — it will reward the killer. Wall Street is in free-fall: the stock opened down 12%. Reporters are at the lobby. The Credo your father helped write hangs on the wall behind you: 'We believe our first responsibility is to the doctors, nurses and patients...' What do you do, and in what order?

Context

  • Tylenol commands 37% of the US analgesic market and generates roughly $400M in annual revenue.
  • Tampering occurred at the retail shelf, not in J&J's plants — but the public does not yet know this.
  • The FBI and FDA are urging against a national recall; they fear copycats and reward effects.
  • J&J has no crisis playbook. The Credo (1943, Robert Wood Johnson II) is the only written guidance on priorities.
  • Competitors (Datril, Anacin, Bufferin) are already briefing retailers to take Tylenol shelf space.

Your objectives

  • Decide within 24 hours: national recall, regional recall, or hold.
  • Align the executive committee and the board on a single public position.
  • Draft the CEO statement and the message to 100,000+ J&J employees.
  • Define the path back to market — packaging, pricing, and trust.

Phases

  1. Triage — the first 12 hours

    Assemble the seven-person strategy committee. Stop the bleeding. Get the facts.

  2. The recall decision

    Now

    Weigh FBI guidance against the Credo. Choose: national pull, regional pull, or hold and warn.

  3. Speak to America

    Press conference, 60 Minutes interview, and the message to employees.

  4. Rebuild the package

    Tamper-evident triple seal. Coupons. A reintroduction the world will trust.

  5. The classroom defense

    Defend your choices to the HBS section. What would you do differently?

Tasks

  • Convene the seven-person strategy committee
    Day 1, 8:00 AM
  • Pull all Tylenol advertising nationwide
    Day 1, 11:00 AM
  • Draft recall recommendation memo for the board
    Day 2, 9:00 AM
  • Prepare CEO opening statement for press conference
    Day 2, 2:00 PM
  • Write all-employee letter invoking the Credo
    Day 2, 5:00 PM
  • Approve tamper-evident packaging spec with McNeil
    Day 4
  • Submit reintroduction plan to FDA
    Day 5

Inbox for this scenario

Open inbox
DC

David Collins · Chairman, McNeil Consumer Products

Day 1, 06:42 AM

Chicago — confirmed seven deaths

Jim, the medical examiner has confirmed potassium cyanide in the capsules. Three different lot numbers, three different plants. The contamination is downstream of us. I need a call in ten minutes.

Urgent
FB

FBI — Chicago Field Office · Special Agent in Charge

Day 1, 10:15 AM

Do not recall

Mr. Burke, a national recall sends the message that terrorism works. We strongly advise you hold the product on shelves while we investigate. The Bureau and FDA are aligned on this point.

High
WN

Wayne Nelson · CFO

Day 1, 11:30 AM

Street reaction

We opened down 12%. A full recall is roughly $100M in product plus the writedown. Analysts say the brand is finished either way. The board meets at 4 PM.

High
LF

Lawrence Foster · VP Public Relations

Day 2, 08:05 AM

60 Minutes wants you Sunday

Mike Wallace is offering a full hour, unedited. Phil Donahue is also asking. My recommendation: take both. If we are not the source of truth, someone else will be.

FYI
JB

Joan Burke · Your wife

Day 1, 10:48 PM

Dad's Credo

I found the framed copy in the study. 'Our first responsibility is to the doctors, nurses and patients, to mothers and fathers...' Whatever you decide, I think you already know.

FYI

Success criteria

  • A defensible decision grounded in the Credo, not in quarterly earnings.
  • Stakeholder map shows patients and physicians ahead of shareholders in your sequencing.
  • Recovery plan addresses tamper-evident packaging and a credible relaunch timeline.
  • Post-mortem memo would survive scrutiny from the Harvard Business School classroom.

Stakeholders

  • DC

    David Collins

    Chairman, McNeil

    supportive
  • WN

    Wayne Nelson

    CFO

    tense
  • LF

    Lawrence Foster

    VP Public Relations

    supportive
  • AH

    Arthur Hayes

    FDA Commissioner

    neutral
  • FB

    FBI Chicago

    Federal investigators

    tense
  • BD

    J&J Board

    Board of Directors

    neutral

Deliverables

  • Recall decision memo

    in review

    One page to the board: national recall, regional, or hold — with reasoning grounded in the Credo.

  • CEO press statement

    draft

    Opening remarks for the Sept 30 press conference. Tone, sequencing, what you will and will not say.

  • All-employee letter

    pending

    A message to 100,000+ employees on why we are doing what we are doing.

  • Reintroduction plan

    pending

    Tamper-evident packaging, $2.50 coupons, sales-force redeployment, 90-day relaunch.

  • HBS post-mortem

    pending

    Five-page case write-up: decision, alternatives weighed, what you would do differently.

Competencies assessed

  • Ethical Judgment88 / 100
  • Crisis Decision-Making Under Uncertainty72 / 100
  • Stakeholder CommunicationWeight 20%
  • Brand & StrategyWeight 15%
  • Board & Investor ManagementWeight 10%

Tools

Memo EditorStakeholder MapPress Statement DraftCredo Reference