CRISIS MANAGEMENT AND PUBLIC RELATIONS

1. CRISIS MANAGEMENT AND PUBLIC RELATIONS BelalDoufesh & Claudia Rosu COMM 321 – Principles of Public Relations FALL 2011

2. Introduction • Companies face crises all the time and crises can strike any company at any time. • Crises do not discriminate based on a company's size or name, • Crisis Management plan is essential for any successful organization. • Crisis Management is the responsibility of Public Relations practitioners.

3. What is Crisis? • A crisis is an unexpected incident that contains some element of surprise, and might poses a threat to an organization, and required to be addressed immediately. • It is an emotionally stressful event that causes significant business interruption. • Crisis has the potential to damage the reputation of any company, and it might even affect its survival.

4. What is Crisis Management? • Crisis Management is the dialogue between the organization and its publics prior to, during, and after the negative occurrence. • The strategies and tactics are designed to minimize damage to the image of the organization. • The factor that determines how a company will withstand a crisis is its ability to respond to the crisis.

5. Types of Crisis • Natural Disasters: Tornadoes, earthquakes, hurricanes, etc. • Malevolence: Product tampering, sabotage, kidnapping, malicious rumors, etc. • Product Recall: Misbranded, adulterated, or violative product in the market. • Confrontation: Boycotts, picketing, protests, etc. • Technological Breakdowns: Software failures, infrastructure collapse, computer viruses, etc.

6. Types of Crisis • Hazardous Materials: Spills, leaks, etc. • Utilities Failure: Power outages, gas, water, sewer, garbage, etc. • Human Error: Mistakes that cause significant damage or loss to the company. • Workplace Violence: Violent actions against other in the workplace. • Medical Emergencies: Heart attacks, broken bones, lacerations, etc. • Organizational Misdeeds: Deception, management misconduct, misrepresentation, illegal actions, etc.

7. Most likely causes of crisis Research conducted by Infoplan International among senior UK company executives showed that the following crisis are more likely to occur:

8. Exxon Valdez oil spillCase study On 24 March 1989, Exxon Valdez oil tanker struck Prince William Sound’s Bligh Reef (Alaska) and spilled 260, 000 to 750, 000 barrels of oil in the ocean. Resulted in massive damage to the environment, including the killing of around 250, 000 seabirds, nearly 3000 sea otters, 300 harbour seals, 250 bald eagles and up to 22 killer whales. It is considered to be one of the most devastating human-caused environmental disasters.

9. The company’s actions Top Exxon executives declined to comment for almost a week after the spill, increasing the impression of a company that was not responding vigorously. When the media asked for a comment, they were told that this was a matter for Exxon Shipping Company and refused to comment. When asked if the chairman, Lawrence Rawl, would be interviewed on television, the response was that the chairman had no time for that kind of thing. Rawl was known for having a strong dislike of publicity and journalists and that he perceived media as a danger, to be avoided at all costs. Later, a spokesperson from Exxon coolly informed the press that emergency procedures and manuals existed for such events. Lawrence Rawl

10. The company’s actions The biggest mistake was that the chairman sent a succession of lower-ranking executives to Alaska to deal with the spill instead of going there himself and taking control of the situation. Frank Iarossi, director of Exxon Shipping, flew after a week to Valdez, Alaska, to hold the first press conference. The remote Alaskan town had limited communications operations,complicating the problem of disseminating information. The public statements of the company often contradicted information from other sources. Frank Iarossi

11. The company’s actions The chairman, Lawrence Rawl, decided to appear on television. When asked about the public relations disaster his company was facing, he replied: ‘ The reason we’ve got this public relations disaster is because of the media’s reporting of the situation’. He then proceeded to blame the world press for the company’s current problems. He showed no emotion over the enormous environmental disaster and offered no apologies to fishermen whose livelihood had been destroyed. The clean-up

12. Conclusions The company failed to follow its own procedures; It showed little leadership; It failed to show concern (‘no action demonstrates more a company’s concern for what has happened than the top man or woman being seen to go to the site, to be seen to take personal charge of the aftermath’); It failed to involve the media and to respond to activists; “People will still feel aggrieved by what has happened but the anger will be dissipated if the company is seen to do its best in what is likely to be the most difficult of all circumstances”

13. ‘Four hostile newspapers are more feared than a thousand bayonets.’ Napoleon Bonaparte Crisis Management and the Media The media cannot ever be ignored in crisis situations. In most cases, the media will act responsibly if a situation is handled in an open and honest way. Establish the organization as the single authoritative source of information about what has happened and what is being done about it. Monitoring the media on a regular basis is one important way to spot evolving issues before they become full-blown crises. The media should be viewed as potential friends rather than potential foes. It is important to establish and track their agendas. Monitor the media constantly through the crisis; leave no stone unturned in obtaining retractions for seriously inaccurate reporting.

14. How to Respond to Crisis • 1) Avoid a crisis in the first place • January, 2011 - Keebler’s Fudge • Keebler (a Kellogg’s company) recalled its cartons of Jumbo Fudge Sticks after a mix up packaging with Peanut Butter. • The risk was for consumers sensitive to peanuts. • The company made a fast recall through media, its website, and information line. • The recall adequately handled and crisis avoided.

15. How to Respond to Crisis • 2) Quickly address and resolve crisis issues before they escalate • 1986 - Johnson and Johnson - Tylenol case • the company responded quickly and addressed the public. • spent $300-million recalling all samples of the medicine bottles. • introduced new tamper-proof medicine containers. • managed to overcome the crisis and maintained their dominance in the market.

16. How to Respond to Crisis • 3) Seek possible ways to turn your crisis into an opportunity • Los Angeles - Mel’s Diner • a huge water pipe burst in the middle of one of the busiest streets. The area was blocked off - no customers. • hamburger restaurant called Mel’s Diner, start giving away free hamburgers to the workers repairing the water pipe. • TV news took videos, and that evening thousands of viewers saw a positive report on Mel’s Diner deed. • the restaurant got media coverage you just cannot buy.

17. Important tips Recognize you have a crisis. Be seen to take the appropriate actions. Be heard to say the right things. Remember television is the most important medium. Don’t blame the media for your problems; they can be your best friends. People’s anger leads to product boycotts, fall in share price and more demanding restrictions and penalties. Talk about people first, then the environment and property, and, finally, money. Anticipate the ‘information void’ and be prepared to fill it.

18. Crisis Management and Public Relations • Crisis Management is the responsibility of public relations department and PR practitioners. • Public Relations is about reputation, and crisis usually hits the heart of organization’s reputation. • The first hours after a crisis hit are the most crucial. • Organization should not wait until the crisis happen, but its PR department should be ready with a crisis management plan. to minimize the risk, reduce damage and save or maybe enhance the reputation of the organization.

19. Conclusion • Crisis Management is a crucial part of Public Relations work. • The way organization handles the crisis will determine the reputation of that organization and its future. • Being out early addressing the public with understandable explanation of the problem and showing how the crisis will be handled, is the most efficient way of dealing with a crisis. • Helping an organization to pass through a crisis successfully is the ultimate test of Public Relations practitioners.