Corporate Social Responsibility: Why Cyanide-Laced Tylenol Couldn’t Sink Johnson and Johnson

Public relations is the study of perception, understanding and communication. It deals with the psychological processes that individuals go through to make decisions about what they trust, like, and support. Who a company is and what it stands for is important. It’s much more than the buzz word “branding.” It is a reflection of a much deeper conviction in business, economy, and goodwill.

Around 70 years ago, Johnson and Johnson developed a credo of Corporate Social Responsibility. In 2013, the CEO of the company Alex Gorsky reflected on what the Credo has meant for the company in the opening of his annual report to the stockholders. Here is the historic Credo; it is worth reading word for word:

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit.

We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognize their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfill their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical.

Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realize a fair return.

This credo is a pyramid structure of what sound business is. It is a syllogism of sorts that claims that if you do well by your customers and employees, and if you run your business with integrity and innovation, then you will be successful and profitable.

It is also a statement of faith in a system that makes shareholders dependent upon the operation of a sound business enterprise – and not the other way around. It doesn’t make maximizing shareholder’s profits the core and sole critical task and function of the business. The pyramid is set soundly right-side-up with blocks in place that make business development and corporate social responsibility the key function of the business. Profits will then come.

Johnson and Johnson came through the 1982 crisis of cyanide-laced Tylenol in no small part because of their corporate culture. Their Credo is something any business owner as an example of something worth emulating.

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