James Burke: A Career in American Business

Organizational Behaviour-II

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IntroductionThis case revolves around James Burke. He was born on February 28, 1925 in Rutland, Vermont. His father was an army officer, who was an optimist. His mother, on the other hand, used to enjoy intellectual discussions. Initially Burke attended Bethlehem central high school and was there till ninth grade. This school was testing new educational methods while Burke was there. When Burke’s father realized that his son was doing very little work and getting A’s he then decided to send him to Vincentian institute, which was a strict Catholic high school. According to Burke, this was the greatest favor his family did for him, because he knew the fact that many of his friends from Bethlehem Central didn’t make it into college. After this, he attended Holy Cross, in Worcester, Massachusetts, in September 1942. When he passed out of Holy Cross, Burke’s brother convinced him to get into Harvard business school even though he was not sure whether he wanted to get into business or not.

James at Harvard (Class of 1949):

Here are some of the experiences of James as he entered HBS:-

James’s experience was intellectually a real turn-on for him as he had never worked so hard in his entire life till now. He enjoyed each and every minute of it and the thing that amazed him was that whatever he did, it reminded him of the moral values in decision making.

It was James’s values, which were instigated in him from the beginning which prevented him from compromising during various situations.

James at Procter & Gamble:

James entered P&G as a sales representative. After one year he was promoted to assistant brand manager for a new product called as Lilt home permanent, which had been introduced in 1949.

James stayed at P&G for three and a half years but eventually decided he wanted to pursue some of his ideas for marketing consumer products.

James at J & J:

James joined J&J in 1953 as a product director for Band- Aids. Initially when James was searching for a job, he went through many advertising jobs which were attractive from financial point of view, but he finally joined J&J when he was offered $ 12000.

In the initial year James realized that he was not very productive because he was parallelly working on his own products, which were about to fail.

As we see James was very much concerned about his own products but at J&J he found that nobody is taking interest which frustrated him and took the bold decision of quitting again.

James finally got an opportunity to set up a new products division along with 50% raise in salary by Ed Gerbic, who was his boss’s boss. He soon realized that he was recalled because of the power struggle between Gerbic and McLaughlin. Few years later, both Gerbic and McLaughlin left the company and Burke was promoted to Gerbic’s job.

The first success for James came with athlete’s foot remedies, which eventually sparked the work in R&D that created the product named as “Micatin”. During the same time, he began to upgrade the line of baby products to encourage more adult use.

James was hugely inspired by Smith and at the end of a successful working under Smith, Burke was promoted to Vice President of product management for the operating company.

In a broader sense, James had a healthy relationship with all of colleagues because everyone has helped him in developing him and achieving what he wanted in J&J.

Case AnalysisEvidence states that successful managers take more risks than unsuccessful managers, but managers can take risks only if organizational environment permits them to do so. Upper level managers can encourage risk taking by allowing employees to fail without fear of punishment. As given in the case J&J’s President, Robert Johnson II was happy with Burke’s attempt to create the new product line even when they were complete failure. He encouraged Burke by saying that while making decisions mistakes happen but he should not repeat same mistakes, he can make other mistakes.

Johnson & Johnson was founded by two brothers James and Edward Mead Johnson in New Brunswick, New Jersey in 1886 as a medical products company. Later their third brother, Robert Johnson also joined the company. J & J first products were surgical dressings, and then launched their main product Band-Aid in 1920.

Johnson & Johnson quickly gained a reputation as a major health products company. It was constantly searching new products and with time they launched many successful products in different areas.

Johnson was involved in every aspect of the business and was always respected by his employees. After his sudden death in 1910, the company’s future was in hands of his eldest son Robert Johnson II. Robert had keen interest in the business and to have the knowledge of the company he had worked in each of its department. He wanted to globalize the business so he opened an international plant in England in 1924. He believed in decentralization which demands

trust. He also developed credo which represented his views on corporate public social responsibilities.

Tylenol was one of the marketing successes of J&J and Burke was responsible for it. It was similar to aspirin, but milder and hence had fewer side effects. It had a continuous growth of 20% and in the early 70s when credibility of the aspirin was questioned then Tylenol took advantage of the situation and its sales increased tremendously.

J&J faced problem when Bristol-Myers launched an acetaminophen drug, Datril. It was advertised as effective as Tylenol but cheaper than that. In response to that J&J reduced the price of Tylenol from $1.69 to $1.19 for a 100-tablet bottle. They also spend lot of money nearly $12 million on its advertising. They also launched extra strength Tylenol which was heavily advertised as most potent pain reliever.

Main crisis and confusion occurred when four people died due to the consumption of Extra-Strength Tylenol. It was found that a batch of Tylenol which had 4.7 million capsules had traces of cyanide. Earlier top executives assured that no cyanide was present in the plant but later it was found that small amount of cyanide were present as part of a quality-assurance process, required by the FDA, that tested the purity of raw materials.

Burke has been successful at J&J in launching new products. He has shown leadership skills in leading a successful team in many different verticals. He had proven himself in the company and moved up the ranks very quickly becoming the youngest board member.

Problems like Tylenol poisonings usually happen very rarely due to some process or machine failure for which some person can be make accountable sometimes. However there are times when failures like these can’t be foreseen and extremely bad incidents can happen. During times like these, depending on the seriousness of the issue it could fall on the shoulders of a leader who may not be directly related to the cause of problem but he would have to step up and handle the situation nevertheless. Great leaders emerge during tough times. The way they handle the issues depends on their past experience, their background, upbringing and their mentors in the organizations they have served. Having an organizational credo could be one way they can deal with issues like these because it helps them put things into perspective. They would have a benchmark that they can evaluate their actions with. Leaders also need to do a lot of introspection and have a good idea about their values and ethics and need integrity. Finally, leaders need to have a good set of followers who have faith in the leader and would help and support the leader during tough times because it has been seen time and again that leaders by themselves cannot accomplish everything.

SolutionEver since the establishment of the Johnson and Johnson company the organization prides itself on being committed to the values of Integrity, Trust and Transparency. The president of the company in 1940 developed a credo for the company, which represented the company’s view on public and social responsibility. The fundamental tenet of the credo was Trust. When Burke took over as the CEO, though he challenged the credo, he was still committed to the company’s core values. In 1965, when he was selected to run the domestic operating company, an incident occurred which remained fresh in Burke’s mind. When they were ready to launch a Baby liquid cream and just before shipment it was found that the lotion caused irritation to some on the people it was tested on, the launch was called off by Bobby Johnson, then the president. This also showed the company’s commitment to ethics and social responsibility.

Coming to the incident of Tylenol poisonings in 1982, a thorough investigation should be conducted internally and Burke should leave no stone unturned to get to the bottom of the situation. If it is proved that the contamination indeed occurred from the manufacturing facility of McNeil, the company would accept the blame and come out clean rather that brushing the incident under the carpet. Honesty and credibility are of utmost important for a brand like Johnson & Johnson. They should come out with a public apology and explain to the people what went wrong and need to work out a solution to the problem and communicate to the people about the changes they have done, reaffirming their commitment to their customer and society at large. Knowing the kind of person Burke is and what the company stands for we think they would not let any incident tar the image of the organization.

They should instruct the doctors and pharmacists to stop sale of the Extra-strong version of Tylenol with immediate effect and the entire stock of the contaminated drug should be recalled and tested to check the extent of the contamination. Strict action should be taken against the employees found responsible for the lapse. Burke and the management could also decide to compensate the victims of the poisoning on their own before the victims’ families decided to sue the organization for damages.

To avoid such an embarrassment in the future there has to be an overhaul of the quality control system in the plants, which was the main source of contamination in the reported case of poisonings. It is mentioned that cyanide was used in miniscule amounts during quality control and it is from here that it made its way into the product, so an immediate step should be to replace this chemical and eliminate it from the process of manufacturing. They could check how testing is done in other organizations and if there is a safer alternative to cyanide or a different process.

Learnings A leader needs to be honest and clear and open communication is important to develop

credibility. For people to believe in a leader, he should be competent and have proven his worth to be

a leader A leader should not only think about profits and business, but also people. A leader should be forward looking- imagine or discover a destination for the company or

community. A leader should adopt different leadership styles according to the situation. Adopting the

right leadership style at the right time is very critical.