J&J – are legal and financial pressures more important than reputation?

NJ.com provides an interesting review of the historical background to the logo argument between the American Red Cross and Johnson & Johnson.   Similar presentation and reflection on the history and legal situation can be found at – a J&J blog that discusses historical matters relating to the company.

Although such detailed consideration is interesting, it underlines the complexity of legal situations, especially when viewed back over more than a century. 

Much of the actual legalities, will be of little interest to most people who will view this entire crisis as a black mark against J&J as the “big bad corporate”.

Another interesting angle on this crisis is the consideration of stockholders (shareholders).  reports a cost cutting strategy at J&J noting: “Shareholders haven’t had much to cheer about lately”.

A shareholder perspective would expect J&J to protect its sales against the competitor products licensed by ARC to use the “common brand” icon.  But, does that ignore the possible impact on its reputation and/or share value of negative coverage?

Actually the company is one of only eight in the US with AAA credit rating and reports that it raised $2.6 billion on 13 August, in a move that saw its high-quality debt offering take advantage of current concerns about risky investments.  The company may well use the monies to fund a $10 billion share repurchase programme announced in July, which aims to keep up share value. 

J&J recognised the danger to its reputation in deciding to sue ARC, but this case highlights how companies face legal and financial pressures to take strategic action.

The company seemed prepared for the inevitable negative reaction, including using its blog, , to initially present a clear perspective on the situation.  But, this has not been updated since 10 August.  The company also does not seem to have been very active in following up the ongoing blog postings on the topic.

Blogging is an active process and anyone using it as part of a crisis strategy needs to be out there in the trenches of the discussion as well as keeping the home front up to date.

(US version – subscription) reports that neither organisation responded to requests to follow up the story.  It also cites expert PR opinion that:

if the company can shape the debate into one about intellectual property rights, as it is attempting to articulate on its blog postings, then there could be room for escaping without its reputation having been tarred and feathered in the process.

At present, there seems to be inherent goodwill behind J&J’s good reputation and its top notch credit rating.  That might well support the strategy to prioritise legal and financial pressures.  Will this prove to be a successful calculation of risk to its reputation?

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Heather Yaxley

Heather Yaxley is passionate about PR - teaching the CIPR qualifications, lecturing part-time at Bournemouth University and running the Motor Industry Public Affairs Association (MIPAA). I'm undertaking a PhD looking at Career Strategies in PR. I love sharing ideas and knowledge - connecting news and views by blogging on public relations and educational developments, especially relating to accelerated and active learning. I'm also a published author, qualified trainer and experienced consultant.