Organization and Leadership Case Study:

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Organization and LeadershipCase Study James
Burke A Career in American Business

• March 1st, 2007
• Peter Bell

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Stakeholders/interested parties

• Victimsand their families
• Consumers
• Press
• Employees
• Shareholders (owners)
• Competition
• Regulatory and legal (FDA and FBI)

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Dilemma

• Death (7 deaths) were no fault of the company.
  No problem with normal use of the product
• Vs. deaths on the road, alcohol
• Contrary view as long as your name is on the
  product, it is your responsibility
• Other if JJ was so decentralized why was this
  not handled by McNeilwhy is corporate office
  taking the lead?
• Credo says make a sound profitbut the cost was
  100 MM plus to shareholders? Dilemma?...where
  do shareholders fall in the Credo
• Did it make sense to withdraw without a plan to
  reintroduce?
• How do you balance company interests with human
  interests?

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James Burke

• Foundation
• Family
• Education
• WW II
• Track Record
• Decision Framework
• Network
• Sense of optimism/purpose
• Communication Skills

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(No Transcript)
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Johnson and Johnson

• Decentralization
• Burke You must give people freedom to do what
  they are capable of and stay out of the way
• The Credo
• Burke I have to tell you that without a moral
  center that you can recognize and understand, I
  am absolutely convinced you can swim in chaos
• Time horizon
• Burke The company really has to manage for the
  long terms

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Tylenol

• Acetaminophen-commodity
• Marketed to doctors until mid 1970s
• 100 MM people in the US took a Tylenol in 1981
• Competition
• 35 of the OTC market (est. 1.6 B in 1985)
• JJ advertising spend
• 1975 142,000
• 1983 62,000,000

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Leadership under James Burke Growth and Profits
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Takeaways

• Match-between Burke and JJcareer choice
• Importance of culture and organizational DNA
• Brand equity
• Leadership in the face of disaster
• Importance of value system/moral compass
• Contrast (Kendall Square Research vs. JJ)
• Dilemmas/Hard choices never end