Cost of Doing the Right Thing: The Case of Saran Wrap

Saran Wrap, also known as plastic wrap or cling wrap, has been a staple in households for years due to its ability to preserve and seal food. The clear adhesive plastic was highly valued by various industries, including the food and auto industries, as well as the U.S. military. However, the cling in Saran Wrap has not been the same since the days of Fried Green Tomatoes. The reason for this lies in the change in its chemical formula. The original wrap contained polyvinylidene chloride (PDVC), a chemical that was toxic to the environment. When the wrap was burned, it released toxic chemicals into the air.

The Food and Drug Administration raised concerns over the product's chemical content, and SC Johnson, the parent company, had to make a difficult decision: continue contaminating the environment or change the formula. CEO Fisk Johnson chose to change the formula, even though it resulted in a huge loss for the company and a decrease in market control from 18 to 11 percent. Johnson believed that the goodwill of people was the only thing that endured in any business and that the rest was shadow, and his decision was based on this principle. Ultimately, SC Johnson chose to stop using the harmful chemical in its product, even though it backfired in terms of profits and market control.