Defective Product Liability

To effectively present the issue of a company selling potentially defective 

products to the CEO, other directors, and managers, I would want to be as honest 

and as forward as possible. A product that could potentially lead to serious injuries

 is an extremely serious issue and should not be taken lightly, regardless of whether 

or not the company’s ethical guidelines have been communicated. This type of

 situation could have serious legal repercussions and could also seriously hurt the 

reputation of the company. It would have to be made clear very early on in the briefing 

that this is an extremely serious issue that could end up costing them the entire company

 if the proper steps are not taken.

               Natasha Singer (2011) of the New York Times highlights the recent quality-control 

problems of Johnson & Johnson. For the company that built their brand on providing the

 highest quality products available, the 2011 recall of over 288 million items was devastating. 

Many consumers felt they could never again purchase their products because they no longer

 trusted them. Mother of two, Thien-Kim Lam pronounced “It’s like a breakup,” … “I’m done.

 I’ve moved on.” in reference to the brand loyalty she once had for Johnson & Johnson.  

               "Consumers have typically been willing to forgive a brand for one incident or product

 problem, industry analysts say, if a company acts swiftly to rectify the situation and to issue

 an apology" (Singer, 2011). I would emphasize to management that taking such steps as

quickly as is feasible is the best way to preserve as much brand integrity as possible. In the

 case of Johnson & Johnson "the FDA says the company should have acted faster" 

(Singer, 2011). Defective products have also been known to lead to shareholder lawsuits 

against the company, consumer lawsuits against the company, overall consumer sales losses, 

and consumer reimbursement losses to name a few. A significantly decrease in the amount 

of liability claims brought against the company can be achieved only by taking the product off 

the shelves and removing the products from as many consumer hands as quickly as possible. 

                The recall logistics should have a consumer product recall announcement process. 

The product recall notification is the responsibility of the manufacture. Section 15(b) of the 

consumer product safety act states the Consumer Product Safety Commission be informed 

within 24 hours of the discovery that a product poses a safety concern to the public  

(Zurich, 2007). Because the product poses the risk of serious injury to the consumer, a 

mandatory total recall should be initiated. All of the appropriate regulatory agencies should 

be notified immediately. 

               Any and all retailers, distributors, wholesalers, and dealers should be contacted 

and informed to immediately remove the product from the shelves. The distribution and sale 

of the product should be suspended. Stores should also be informed that they need to post 

notification of the recall throughout their establishments. These retailers will be responsible 

for receiving recalled products. A recall letter should be sent to all traceable customers via 

certified mail and the recall should be publicly announced. Depending upon how widely the 

product was distributed, it may be necessary to publish notices of the recall in magazines, 

newspapers, on the radio, or on TV. These notifications should also serve as damage control, 

combating adverse publicity. An incentive should be offered to guarantee maximum return of 

the product to include, at the least, a full refund of the purchase price. A recall coordinator 

should be named and required to record the number of products returned."The advice is to 

pay now for a well-tuned, debugged standby recall plan or pay more later in terms of confusion,

 tarnished image and loss of consumer confidence" (Zurich, 2007). To ensure that a strong

 sense of business ethics permeates the company I would recommend mandatory annual ethics 

training for everyone that is employed there. 

References

Singer, N. (2011, January 15). The New York Times. Retrieved November 10, 2011, from Can Johnson & Johnson Get Its Act Together?: http://www.nytimes.com/2011/01/16/business/16johnson-and-johnson.html?pagewanted=1&_r=1&ref=defectiveproducts

Zurich. (2007). Risk Topics. Retrieved November 11, 2011, from Product Recall Program: http://www.zurichna.com/internet/zna/SiteCollectionDocuments/en/media/inthenews/RiskTopicsProductRecall.pdf