2017 Mock Test -12: Case Study-2

The situation is quite challenging from the point of view of CEO as 10 people have lost their lives due the drug and reputation has been damaged.
The immediate course of action would be to take back the stock of existing medicine with the store in the Chennai region. Those in possession would be requested to stop consumption and consult their doctors. Based on medical report, an internal inquiry team is to be constituted to investigate in to the incident. It is important to know whether death occurred due to drug or some contamination of the drug. It is also necessary to establish whether drugs were authentic or spurious. Since the incident took place only in Chennai hence entire supply chain of the region has to be investigated. The plant from where the drugs came would be immediately shut down for investigation of contamination
Ex-gratia compensation would be announced for the families who lost their loved ones due to the drug.
Reputation that has been hurt can only restored if the grievance is addressed in a transparent manner and actions are taken to punish those who were at fault. Once the investigation report of internal inquiry is received the loopholes would be plugged.  All the reports and actions would be put in public domain. The process of investigation-fixing the responsibility would be taken up at faster pace as company has global presence and such news travel quickly.
Reputation building after such an event would not be short term process but a long term commitment to act responsibly and sensitively and undertake corrective actions to restore the trust.

The above case study is based on a real case Johnson and Johnson in 1982. Johnson & Johnson without doubt did the right thing in taking all Tylenol capsules off the shelf. Even though it could have ended up as a public relations disaster and a large decrease in sales overall, they still had the courage to make the right decision, something that we think a lot of other companies might not have been able to do. We think it’s good to see that the decision paid off for the company in the end and was rewarded for doing the right thing: Some might say that the decision probably was made because they didn’t want to lose sales as a result of not taking the Tylenol off the shelves but we really think that Johnson & Johnson had their customers best interest in mind.
Socrates posited that people will naturally do what is good, if they know what is right. Evil or bad actions are the result of ignorance. If a criminal were truly aware of the mental and spiritual consequences of his unethical actions, he would neither commit nor even consider committing them. Any person who knows what is truly right will automatically do it, according to Socrates.
This case also deals with philosophical issues such as: rational choice, welfare, integrity, justice and fairness; capabilities and development: self-interest. Their ethical decision was based on their credo their founder created. We believe It is admirable the company has made a commitment to honour the ethical beliefs the company was founded on. While Johnson & Johnson may have lost profits by performing the recall, they gained the respect of many customers; which is priceless. A lifelong customer is extremely valuable and we believe Johnson & Johnson may have solidified them through their respectable, ethical decision.

Question for UPSC Mains:
You are CEO of a company “X” which manufactures a number of pharmaceutical products and enjoys great reputation as an ethical company that produces some of the- reputed life saving drugs. One of your drug “Y” is a life saving drug used by over 10 million people in not only India but also several other countries. One day you come to know from media that around 10 people have died in Chennai after using this drug. A government medical examiner testifies that the contamination / poison in your drug are killing people.
  1. What will be the course of action for you immediately after this?
  2. Since your reputation is hurt. What will you do to win back trust and reputation? {200 words, 20 Marks}

Published: September 30, 2017 | Modified:September 30, 2017

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