INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

Executive Post Graduate Programme in Management

LEADERSHIP AND CORPORATE ACCOUNTABILITY

Max Time. 6.00 hours Max Marks: 40

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PART – III
Instructor: Prof. Joshy Joseph
Max. Marks: 10 marks Max. Time: 90 minutes
.Instruction: Descriptive question carry ten (10) marks

QUESTION

Q.1.What different problem is Anderson facing, as opposed to James Burke, in the

?issue of product recall

Both the problem of product recall falls under the purview of major differentiators. In
the case of James Burke, he had to deal with a product issue which has been as a result
of quality control issues of an acquired company McNeil laboratories and the
customers who used the pharmaceutical product faced physical implications including
death by using higher concentrated components that directly lead to the complaint. In
that case the marketing and advertising functions were also vested with the
responsible persons from that company. And once the product caused issues which
even the FDA was not able to identify, James Burke had to make the decision of
product recall. From the point of view of James Burke, the firm as such has not
committed anything wrong as it was a matter of trust between the firm and the
manufacturing entity. The legal implication from point of view of FDA as well is
convoluted to address as it is an FDA approved drug in the first place. It was the
presence of cyanide in the medicine that triggered the onset of the issue while McNeil
Laboratories had the benefit of explanation where cyanide was used as a part of
.quality control and tend to be not dangerous to the users

However in the case of Anderson and Beech-nut Corporation the issue was something
different and they as the manufacturers where directly responsible for the product
wrongly advertised as 100% apple juice where a major portion of the product under
consideration was corn starch. Also no customer had been raising this complaint, but it
was researchers who did the testing came up as whistleblowers and a product which
This study source was downloaded by 100000866850237 from CourseHero.com on 05-24-2023 10:16:26 GMT -05:00
was used by even kids had a far reaching implication in the revenue of the company
https://www.coursehero.com/file/164000511/Source2-Part-IIIdocx/
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 and Anderson was responsible for the brand image to a larger segment of the
consumer market. The product used was to do with low grade corn starch which was
not found to provide advertised benefits and contradicted the advertisement of 100%
apple juice. The stocks which were piled across countries has to be recalled and
Anderson was in charge of the decision of reporting it to their parent company. Nestle
.Corporation which would again create trust issues

Comparing and contrasting both cases, James Burke had the advantage of passing on
the potential cause of issue to its merging partner, while Anderson’s was a trust issue
with raw material provider and he was responsible to answer to a higher entity like
Nestle. Both were quality assurance issues gone wrong and could significantly affect
.the brand images

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 This study source was downloaded by 100000866850237 from CourseHero.com on 05-24-2023 10:16:26 GMT -05:00

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