What Was Volkswagen Thinking?

On the origins of corporate evil - and idiocy.

- Jerry Useem

One day in 1979, James Burke, the chief executive of Johnson & Johnson, summoned more than 20 of his key people into a room, jabbed his finger at an internal document, and proposed destroying it.

The document was hardly incriminating. Entitled “Our Credo,” its plainspoken list of principles—including a higher duty to “mothers, and all others who use our products”—had been a fixture on company walls since 1943. But Burke was worried that managers had come to regard it as something like the Magna Carta: an important historical document, but hardly a tool for modern decision making. “If we’re not going to live by it, let’s tear it off the wall,” Burke told the group, using the weight of his office to force a debate. And that is what he got: a room full of managers debating the role of moral duties in daily business,and then choosing to resuscitate the credo as a living document.

Three years later, after reports emerged of a deadly poisoning of Tylenol capsules in Chicago-area stores, Johnson & Johnson’s reaction became the gold standard of corporate crisis response. But the company’s swift decisions—to remove every bottle of Tylenol capsules from store shelves nationwide, publicly warn people not to consume its product, and take a $100 million loss—weren’t really decisions. They flowed more or less automatically from the signal sent three years earlier. Burke, in fact, was on a plane when news of the poisoning broke. By the time he landed, employees were already ordering Tylenol off store shelves.