case analysis tylenol

As with any business, their primary purpose is to make money and grow the business for everybody to prosper from. This makes a very delicate struggle between appeasing stockholders and satisfying customers and for the business to determine which side is more important.As stated in the case study the actions taken by Johnson & Johnson were well received by consumer advocates and physician groups within the United States, but there was considerable grumbling among financial analysts and fund managers(Hosmer, 2011, p 126-127). Although there is no legal requirement for a company to maximize profits it is however an assumption for any business especially those that are publicly held by stockholders. These stockholders lend their money by purchasing stock in the company to help cover the needed capital for growth. In return it is there assumption, although not guaranteed, that they will receive a return on their investment greater than the contributed. In order to meet that assumption corporations must maximize profits and many times to do so it means they must cut costs or minimize the unexpected. From this assumption births an management atmosphere that bows to the wants and needs of the controlling stockholders. The emphasis is placed on their satisfaction for a very basic reason, they can call to order a meeting and replace the management of a company. So even though the initial vision of the company would have been to achieve customer service and satisfaction at all costs, with the corporate greed prevalent in many corporations it is a necessity to maximize profits even at the cost of the customer. There was no legal requirement for Johnson & Johnson to recall all tylenol after the tampering of their product however there were warnings issued which retailers accepted. Many other states and retailers decided to follow the FDA's warning and remove only the products with particular serial numbers linked with the deaths that posed the greatest threats(Bell, p 1).