Unit 8. Case study
Pre-reading task. Before reading answer the following questions:
What is case study?
What examples of PR handling crisis do you know?
Read the text:
The case study is a descriptive, qualitative research method that analyzes in great detail a person, an organization, or an event. Case studies are found in most applied areas, such as business, law, and marketing, and offer insight into practices and tactics. The case study’s major advantage is the detail and analysis it provides of a specific person, organization, or event. Its major disadvantage is that it cannot be generalized to situations other than the one that was studied. A major problem in using case studies is the “it worked here, it will work for me” mode—that is, trying to take specific tactics or messages from one case and apply them to another. Even in situations where cases are within an industry, trying to compare case 1 to case 2 is like trying to compare apples to oranges.
Case studies provide public relations practitioners with examples of good and bad public relations tactics. In some instances a case study provides insight into how a public relations firm operated. Others might provide insight into how public relations was not employed and the impact of that failure. Each provides the practitioner with examples of successful and unsuccessful strategy and tactics.
It used to be the case that specialist crisis public relations consultants were employed and deployed by corporates and government agencies to manage any disastrous PR (more accurately, damning media coverage) that accompanied client malpractice or scandal. The following list outlines the principal categories that the PR disaster can spring from: Acts of God. Even when natural disasters - such as a Tsunami - cause unforeseeable real life crises (and even if no-one was directly responsible for the incident) pockets of the media frequently describe how it's a PR disaster of some sort; for tourism or even for the governments of the countries involved.
Business Operations. This is where corporate activity adversely impacts on stakeholder groups, such as when Coca Cola and Pepsi had to defend themselves in India against allegations that their soft drinks contained excess levels of toxins. From a PR disaster viewpoint, both companies managed to fan the flames or discontent, rather than calm matters down.
Corporate Moves. Around the time of acquisitions, mergers or takeovers, there's plenty of room for dissatisfaction and even scandal, such as when a London PR man found himself rumbled, tried and prosecuted after indulging in a bit of insider trading. This happened after a client had confidentially told him of its plan to take over a competitor organization.
Legalities. When contentious issues are debated in court, then reported in the media - such as in the notorious McDonald's 'McLibel' case - the potential for PR disasters is massive. Media watchers labeled this case 'the world's biggest corporate PR disaster'.
Rumours. Gossip can be highly damaging for brand reputation, as Procter & Gamble found when malicious rumours of Satanism - in part propagated by a P&G competitor - dogged the company for decades, forcing a worldwide logo redesign and extensive counter PR efforts.
Staff. When New York's Twin Towers collapsed on 9/11, staff at one of the city's Starbucks charged rescue workers for bottled water they needed to treat victims of the attack. When word got out 'virally' about this incident, the PR fallout was highly damaging.
Scandal. Financial or sexual shenanigans generally capture the media's attention, such as when basketball star Kobe Bryant faced allegations of sexual assault. 'PR disaster' the media screamed, as Bryant's lucrative sponsorship deals and image as an all-round good guy were jeopardised.
Dealing with PR disaster always the situation should be managed ethically, with good grace, humility or humour - at least that's a good foundation on which to rebuild any damage done by a PR disaster.
PR nightmare for McNeil Labs and Johnson & Johnson over Tylenol case in 1982.
In 1982, Johnson and Johnson discovered that some bottles of its Extra-Strength Tylenol capsules had been laced with cyanide. By the end of the crisis, seven people had died.How Johnson and Johnson dealt with this situation set a new precedent for crisis management. The company was lauded for its quick response and sincere concern for its consumers.
Faced with tough decisions that would severely impact the future of his company, CEO James Burke immediately turned to the company's mission statement. Written by Robert Johnson in 1943, the document defines the focus of the company as its customers.
Based on this credo, Tylenol used the media to promptly begin alerting people of the potential dangers of the product. It dispatched scientists to determine the source of the tampering. Johnson and Johnson then made a decision that would set a new standard for crises involving product tampering.
The company ordered a massive recall of more than 31 million bottles at a cost of more than $100 million. It also stopped all production of capsules and replaced them with more tamper-resistant caplets.
This level of response had never been attempted before, and resulted in much criticism from investors. However, Johnson and Johnson stood firm behind its decision - and for good reason. The company was able to "use the crisis to demonstrate to its customers its commitment to customer safety and to the quality of the Tylenol product."
Despite the initial losses, Johnson and Johnson regained and exceeded its previous market share within months of the incident.
Exxon Valdez runs aground in Prince William Sound, Alaska, causing the largest oil spill in US history in 1989.
In 1989, the Exxon Corporation caused one of the worst environmental disasters ever. The Exxon Valdez oil tanker ran aground, spilling 250,000 barrels, an amount equal to more than 10 million gallons, of oil into Alaska's Prince William Sound.
Efforts to contain the spill were slow and Exxon's response was even slower. The incident would go down in crisis management history as a textbook case of how not to respond during a crisis. "By the time the media was finished, the Exxon name was synonymous with environmental catastrophe."
It took company officials nearly 10 hours after the accident to deploy booms to contain the spill. In addition, Exxon was criticized for refusing to acknowledge the extent of the problem, which was due, in part, to the advice of company lawyers.
To make matters worse, company executives refused to comment on the accident for almost a week. The biggest criticism the company received was the fact that CEO Lawrence Rawl waited six days to make a statement to the media and that he did not visit the scene of the accident until nearly three weeks after the spill.
These actions left the public impression that the Exxon Corporation did not take this accident seriously. Initially, Exxon blamed state and federal officials for the delays in containing the spill. When asked how Exxon intended to pay the massive cleanup costs, one executive responded by saying it would raise gas prices to pay for the incident.
Ten days after the spill, Exxon spent $1.8 million to take out full-page ad in 166 papers. In the ad, the company apologized for the spill but still refused to accept responsibility. Many consumers saw this approach as insincere and inadequate.
Exxon paid the price for its actions in several different ways. The cleanup effort cost the company $2.5 billion alone, and Exxon was forced to pay out $1.1 billion in various settlements. A 1994 federal jury also fined Exxon an additional $5 billion for its "recklessness," which Exxon later appealed.
Give Russian equivalents to the following words and word combinations and use them in sentences of your own:
Offer insight into, shenanigans, humility, deploy, damning media coverage, malpractice, spring from, unforeseeable, adversely, stakeholder groups, defend against allegations, excess levels, acquisition, merger, rumbled, legalities, prosecute, indulge, contentious issues, fallout, acknowledge the extent of the problem.
Guess what words from the text are meant by these definitions:
the effect or impression of one thing on another
space for movement, opportunity for;
in secret, privately, personally, behind closed doors;
known widely and usually unfavorably; infamous;
to track or trail persistently;
to fall down or inward suddenly;
to state the precise meaning of (a word or sense of a word, for example); to describe the nature or basic qualities of; explain;
a reply or an answer; a reaction, as that of an organism or a mechanism, to a specific stimulus;
to give the main features or various aspects of; summarize;
the act or an instance of assuming control or management of or responsibility for something, especially the seizure of power, as in a nation, political organization, or corporation;
deliberately harmful information, often a mixture of truth and untruth, told by one person to another;
an example that is cited to prove or invalidate a contention or illustrate a point.
Study the difference between the words example, instance, case, illustration, sample, specimen, then use these words to fill in the gaps in the sentences below:
These nouns refer to what is representative of or serves to explain a larger group or class.
An example is a typically representative part that demonstrates the character of the whole: "Of the despotism to which unrestrained military power leads we have plenty of examples from Alexander to Mao" (Samuel Eliot Morison).
An instance is an example that is cited to prove or to illustrate a point: an instance of flagrant corruption.
A case is an action, an occurrence, or a condition that relates specifically to something being discussed, decided, or treated: a typical case of child neglect.
An illustration clarifies or explains: provided an illustration of the word in context.
A sample is an actual part of something larger, presented as evidence of the quality or nature of the whole: gave us a sample of her temper.
Specimen often denotes an individual, representative member of a group or class: This poem is a fair specimen of her work.
Stapleton, and the ... has now been so entirely cleared up that I am not aware that there is anything which has remained a secret to us.
"My perfected friend," he said, "my parental instinct recognises in you a noble evidence and ... of the theory of development.
With those words, the young lady followed her sister's ... by seating herself on a hall chair and looking aimlessly out through the open house door.
We looked at ... of different types of rock under the microscope.
His ... is, that for the achieving of a desperate conspiracy, a man should not rest upon the fierceness of any man's nature
Here now was a ... of it, for he had just been thinking that Rose had better defer her run till the wind went down and the sun was warmer.
Complete the sentences:
Johnson & Johnson was confronted with a crisis when …
Evidence suggested that somebody …
After the crisis Johnson & Johnson needed to …
A new pricing program gave …
Without the help of the media …
After the accident the Exxon corporation …
The biggest criticism the company received was …
To pay for the incident Exxon was intending to …
The Exxon corporation incident would go down in crisis management history …
Answer the following questions:
What is case study? Explain its advantages and disadvantages.
What can be the reason of PR disaster?
When did Tylenol crisis happen? Why did the people die?
How was the nation warned about the danger?
What measures did the company take to protect its customers?
Why did the name of Exxon corporation become synonymous with environmental catastrophe?
What was the company’s response to the crisis?
Comparing these two cases prove the importance of company’s cooperation with the media.
Johnson & Johnson lost millions of dollars when they recalled all Tylenol capsules from the market. Do you think it was a really necessary step? Wasn’t it more rational to recall Tylenol capsules only in Chicago area (where seven people died after taking Tylenol capsules)?
What decisions put Johnson & Johnson’s public relations program into the right direction and Exxon Corporation’s – into the wrong one?
Sometimes public relations practitioners are also called Risk Managers. What contribution do you think practitioners can make to risk management?
What training do you think practitioners need to be equipped to analyse information accurately?
Comment on the following:
'If a company at the centre of a crisis is seen to be unresponsive, uncaring, ...[or]... reluctant, the damage indicted on its reputation will be lasting - and measurable against the financial bottom line' (Regester and Larkin, in Kitchen 1997: 215).
'A good reputation enhance profitability because it attracts customers to the company's products...'Fombrun (1996: 81)
Role-play:
Study the background information and work in pairs, one of you will be a representative of the company and the other one – PR practitioner explaining ways of enhancing company’s image via media relations.
Background information. For some years, Marks & Spencer (M&S) was the benchmark for quality produce and clothing. Indeed, the company was so confident that for many years it did not spend anything on advertising, relying on the reputation which had been built up over many years. Problems at top management level and a severe drop in profits had far-reaching effects on all aspects of the company. Clothes were denounced as dowdy by the fashion press. Speculation about possible takeovers still had to be quelled. Financial and corporate help was hired from Brunswick, recognising that M&S had previously neglected this area. Whereas previously the product spoke for itself, M&S has had to fight for coverage more recently. On the fashion side, the introduction of the Autograph designer range went some way towards improving the fashion ranges.
The food area had its fair share of issues to deal with. There were one or two product recalls each year. Some milk chocolate bunnies were found to cause an allergic reaction, and it was found that they had been made on a production line next to one where nuts had been used and some dust may have blown over. Genetic modification (GM) of food also caused problems for Marks & Spencer. Initially, M&S welcomed the emerging science, and issued a statement that ‘good science, well applied, is an essential principle of our business’.
Prepare reports on the following topics:
The role of mass media in a crisis.
Tips for handling a crisis.
Russian companies handling PR disasters.
|
