Johnson & Johnson and Mattel

Chapter 4: Lessons Learned from Companies Caught in the Act

Posted by Dawn Lomer in on March 3rd, 2015

Chapter 1: Xerox and Ford

Chapter 2: Siemens and Satyam

Chapter 3: Tyco and Hewlett-Packard

Chapter 4: Johnson & Johnson and Mattel

Johnson & Johnson

Issue: Recall Response

After several years of continuous recalls, Johnson & Johnson has been roundly criticized for its lack of communication and ability to take control of the situation.

An Associated Press (AP) story reported that J&J had roughly two dozen recalls of “prescription and nonprescription medicines, replacement hips, contact lenses and diabetes test strips, including tens of millions of bottles of children’s and adult Tylenol and Motrin” since September 2009. The continuous safety failures put three J&J manufacturing facilities under federal scrutiny.

Lessons Learned

  • Transparency
    • During the tainted Tylenol scandal in the 1980s, the company’s chairman communicated regularly with the media and, in a press conference, gave a tremendously transparent overview of every detail related to the recall.
  • Timely crisis communication
    • J&J’s quick and bold reaction to the 80s Tylenol recall has gone down as one of the best in history, setting the bar for crisis management. Its more recent behavior has fallen short.

Johnson & Johnson set the standard for handling product recalls in the 80s, but is now criticized for the way incidents have been handled.

Mattel

Issue: Supply Chain Quality Control

In 2007, Mattel launched four separate product recalls. The recalls were the result of large quantities of lead found in the paint used in a number of its products. Mattel, like many other companies, uses contractors inChinato manufacture products.

This case raises supply chain concerns, bringing to light the importance of quality control and keeping an eye on the actions of your overseas operations and partners.

Lesson Learned

  • Keep an eye on your supply chain
    • Chinese contractors had subcontracted the painting of the toys to another company that used inferior and unauthorized products. Third parties need to be held to the same standards to which you hold your own company. If your third party contracts out to another company, make sure to do your due diligence on them as well.

Chapter 5: BAE and Google

Chapter 6: International Monetary Fund and Verizon

Chapter 7: Happy Days Children’s Wear


Dawn Lomer
Dawn Lomer

Managing Editor

Dawn Lomer is the managing editor at i-Sight Software and a Certified Fraud Examiner (CFE). She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery for the company blog and industry publications. Through her interviews with industry experts and attendance at conferences and seminars, Dawn has developed broad knowledge of the subjects she covers.