Crisis Communication
Why the Exxon spill was a bigger deal than BP
-BP threw $ at the problem to make it go away --compensated those affected quickly, unlike Exxon -Storyline was more technical and harder to follow --not as fun as dying animals and a drunk captain
the 5 categories of image restoration
-Denial -Evasion of Responsibility -Reducing Offensiveness of the Event -Corrective Action -Mortification
GEICO's Solutions
-Fired CEO and brought in aggressive new management -long range financial planning - loan from Goldman Sachs - improving communication with their employees --surveys
3 corporations that scored big contracts to clean up Katrina
-Haliburton -Blackwater -Titan Corp all aligned w/ Republicans
4 stages of a product life cycle
-Introduction - stress competitive advantage -Growth - use social media, stress brand loyalty -Maturation - market segmentation, reward consumers -Decline - new technology introduced, life cycle restarts
Profile of a whistleblower
-Male -Conservative -high self esteem -need to control their environment -strong religious convictions -middle aged -married -educated -high achiever -see things in black and white, no gray areas -desire for justice
people blamed for Katrina
-Michael Brown, unexperienced head of FEMA -Pres. Bush - no visit -City of NO - lack of transpo, collapsed levy
Emergency Objectives Model
-Mitigation (zoning, building codes) -Preparedness (training, emergency centers) -Response (evacuation behaviors, looting) -Recovery (stabilize, return to normalcy)
Pre-crisis
-Non-performance phase = goals of organization are not being fulfilled, management overlooks problems -Denial = management acknowledges problems but ignores their importance - Anger & Fear = finger pointing & rivalries within organization
Promotion
-Stimulate demand -Create a favorable image -generate good will (through charitable efforts)
Arguments for why Tylenol is the best case of crisis comm ever:
-Tylenol recovered 95% of its market share -its employees were loyal ambassadors -created the first crisis team w/ a situation room -J&J credo
Ideas to fix FEMA
-abolish (favorable opinion) -independent from HS, report directly to POTUS -stronger NG presence, recalibrate military-civilian relationship -pre-exisiting relationships and resources for civilians -more centralized communications to get info out
4 postures speakers adopt in apologia
-absolution -vindication -explanation -justification
Duke president's mistake
-acted too quickly -faulty decision led to enduring stigma
qualities of problems that go through the cycle
-affect a minority (poverty, racism, addiction) -powerful are benefitting -no intrinsically exciting qualities - can be overtaken by competing stories
HRO: High Reliability Organization
-appear preoccupied with all safety issues -value expertise and knowledge, not authority -look for messiness of problems and seek solutions -learn from mistakes, are resilient
Role of Tylenol CEO, James Burke
-appeared forthright, caring, and likeable -shifted role, appearing front and center of the crisis -had a great deal of internal communication with employees -decision to pull product, working with FDA & FBI SET PRECEDENT THAT CEO MUST BE A CRISIS MANAGER
Meyer's crisis recommendations for companies
-assess strengths and weaknesses -create a crisis management team -perform simulation exercises -establish a crisis control room
reducing offensiveness
-bolstering: emphasize positive aspects, downplay negative -minimization of negative feelings -differentiation: distinguish from similar but worse actions -transcendence: place action in a more favorable context -attack accuser -compensation
Lessons about communication from GEICO
-centralize communication functions -communicate BOTH good and bad news -communicate as early as possible (don't wait until everything is nailed down) -don't rely on a single method of communication
Elements of Perceptive Forecasting
-demographics (people living longer, growing Hispanic population) -economic conditions (high interests rates) -social and cultural trends (2 income families, marrying later, etc) -political and legal forces (deregulation of banks, globalization) -technology (AI, streaming, electric cars) -level of competition (oligarchy vs high competition)
Four synonyms for a crisis are:
-distraction/nuisance -marketing campaign failure -accident -natural disaster
Entertainment (actor, athlete) Image Repair
-don't have rivals -right to private life -job doesn't have serious impact on lives of others
Why people don't become whistleblowers
-don't trust the internal system -don't want to be snitches -misguided solidarity - loyalty to union/company -fear of retaliation, isolation, or alienation (lead to divorce, addiction, $ problems) -belief that management is not held to same standard
BP crisis management failures
-failed to apologize effectively, blaming others -failed to display technical competence in capping the spill --> media mockery -ineffective CEO -recovery trust fund for stockholders?
HRT advocates contend that we can protect society against failures if there are
-firewalls -safeguards -vigilant testing -redundancies (back up systems and check and balance protocols)
Corporation Image Repair
-have rivals -can be sued -executives easily replaced -does not have a private life -face for significant decisions
Political Image Repair
-have rivals working to keep it in public eye -relied on by taxpayers and must answer to them -require public trust
Things Kennedy denied
-having an affair with Miss Kopechne -driving under the influence
7 characteristics of a crisis (business)
-high government scrutiny -high media scrutiny -will disrupt normal business operations -public confidence in the management of an organization will be shaken -stock values / profitability will be lowered -will lead to managerial changes -will serve as an impetus for internal & external changes
role of Texaco CEO Peter Bijur
-highly visible throughout the scandal -casted blame on "a few rotten apples" -promised corrective action -said their corporate culture was not racist -executed mortification (though he probably knew of the problem and had no pre-crisis enactment)
Texaco's Response
-immediate response and investigation (ambiguous response until truth known) -CEO offered apology to employees and all -announced 6 step plan: apologize, reflect, diversity ed, Ethics Hotline, committee to review diversity program, outside examiner -executives were immediately punished
motivations for whistleblowing
-impact public safety -financial reward
Arguments against why Tylenol is the best case of crisis comm ever:
-it happened TWICE -didn't get rid of capsules until second time, taking a "consumer sovereignty argument" position, but really $ focused -the media was helpfully sympathetic -took a few weeks for all capsules to be pulled from the shelves
Reasons why Exxon Valdez wasn't the worst managed crisis of all time
-no deaths (but the otters!) -only the 26th worst spill of all time -spent $2B on cleanup, w/ lots of PR -incident was sensationalized by the media (drunk captain?) -Coast Guard was somewhat to blame
Problems with EuroDisney
-opened during a recession -cultural inaccuracies (didn't serve alcohol or breakfast) -took on too much debt -the employee life cycle was poor -high prices on hotels (led to 1 night stays), food, and merchandise (a more frugal culture) -not enough bathrooms for tour buses (poor logistical planning)
Kingdon's three streams of the policy process that come together
-political stream: the state of politics and public opinion -policy stream: potential solutions to the problem -problem stream: the attributes of a problem and whether it is getting better or worse
Exxon as a paradigm of CC failure
-possible villian (Hazlewood, drunk) -charismatic sea animals -->flawed but expensive scrubdowns -extensive scapegoating -delaying of financial settlement ~A story that is understandable~
Meyer's 3 stages for crisis management
-pre-crisis period -crisis period -post-crisis period
Name way in which Tylenol responded competently to the incident:
-provided factual and truthful info ASAP -toll free # for questions, free coupons -
reasons the Edsel failed
-released during a repression (bad luck) -released in September (bad timing) -people didn't like the name -poor design, no "it" factor (over-hyped) -sold at separate dealerships, not Ford, etc.
Properties of the HRT
-safety is the first priority - always anticipating -continuous training and preparation -decentralized decision making authority -focus on trial and error
L & B's 3 failures of conservative govt
-shrinking govt, too small to act effectively ($ spent on terrorism, rescue funds and workers cut back on) -privatizing core functions, placing blind faith in the market -pay-to-play politics - money and personal gain account for more than performance
Elements of Denial
-simply denial: didn't happen, no one was harmed -shifting the blame (Exxon -> Coast Guard)
Why Southwest was successful (strengths)
-started low fare flights in TX, slowly branching into CA & beyond -frequent flights -full flights, using same planes -employee commitment -cost containment (didn't serve meals, no 1st class)
Solutions proposed by Sobel and Leeson
-take govt out of disaster relief process altogether (unlikely - weak solution) -stop FEMA from preventing competitors from providing resources - private suppliers should be able to make own decisions
Reasons why Exxon Valdez was the most mismanaged crisis of all time:
-the CEO did not respond to the incident -there was no centralized channel of communication -the time window was poor (need to respond in 45 min to 12 hours; 3 days of silence) -arrogant company, failed to accept responsibility -no pre-crisis plan -employees were not ambassadors - hostile -the case was not settled quickly (years)
The three elements of a crisis are...
1) a surprise/unexpected event 2) a threat to important values - something is hurt 3) a short response time - acknowledgement and resolve
Fink's 4 stages for crisis management
1) podromal 2) acute phase 3) chronic crisis 4) crisis resolution
3 reasons we experience more crises today
1) the growth of the news media has led to journalists hungry for content 2) enhanced government reporting 3) more whistleblowers and watchdog groups
4 P's about business trends
1. Perceptive Forcasting 2. Product Development 3. Pricing 4. Promotion
Benoit's 4 suggestions for crisis communication
1. Preparation of Crisis Contingency Plan -review periodically 2. Analysis of the Crisis and the Accusations -fully understand the accusations and severity of them 3. Identification of the Relevant Audience -tailor message to one's audience 4. Repairing a Tarnished Image -redefine the attack, refocus attention to other issues
2 parts of Ted Kennedy's speech
1. minimizing his responsibility for his actions after the death of Miss Kopechne 2. placing responsibility for his senatorial future on the shoulders of the people of MA
Down's 5 dynamics of the issue attention cycle
1. pre-problem stage 2. alarmed discovery and euphoric enthusiasm 3. realizing the cost of significant progress 4. gradual decline of intense public interest 5. post-problem stage
3 imperatives for CEOs during a crisis
1. remain at the helm of the company 2. go to the media 3. communicate a clear message
3 reasons Kennedy's speech hurt his national image
1. showing a lack of agency made him appear unfit for the Presidential role 2. his use of advisers to craft his speech made it seem manipulated and untruthful 3. his lack of detail in the story aroused suspicions/
2 things about the nature of image attacks
1. the accused is held responsible for an action 2. the act is considered offensive (by a salient audience)
Vaughn on the 3 things that influenced the Challenger launch
1. the competitive environment (Pressure on NASA, $) 2. organizational characteristics (communication failure, groupthink, engineers silenced by management) 3. the regulatory environment (under-resourced safety monitoring)
Sobel and Leeson' 6 issues w/ FEMA's response to Katrina
1. tragedy of the anti-commons 2. Type 2 Error Policy 3. Political manipulation 4. problems of information 5. glory seeking by govt officials 6. shortsightedness effect
Hazard management properties
1. upstream measures (prohibit products, use alternative tech, preventative measures, public policy, zoning laws, safety measures, emergency planning) 2. forestalling crisis-initiating event (need for industry training to cut down on human error, simpler control panels) 3. downstream measures (early warning, evacuation, safety gear, relief efforts)
BP Deepwater Horizon oil spill case (2010)
11 killed, 17 injured took 86 to cap the spill 180M gallons of gas spilled (much more than Exxon)
Challenger Explosion
1986- Explosion due to malfunctioning O-Rings- Disaster for NASA and the Nation looked on in Shock -Teacher in Space Christa McAuiliffe died + 6 astronauts
Tylenol "image rescue project"
25 PR specialists / task force changed from capsules to tablets concentrated on employee morale redesigned ads
1994 lawsuit against Texaco
6 black employees filed a multi-million dollar lawsuit on behalf of 1400 minority employees alleging that they were systematically passed over for promotions given to less qualified white employees
Southwest case
A Cinderella company ~ first major discount airline that works
Overview of Robert Hall case
A clothing store that opened after the Depression -blue collar market -large retail space with parking lots -convenient hours and good advertising BANKRUPT
Johnson and Johnson's credo
A responsibility to: -consumers and medical professionals ($) -employees (<3) -communities (<3) -stockholders ($)
Exxon Valdez situation
An oil tanker struck a reef on the Alaskan coast, spilling 11M gallons of oil, causing an ecological disaster
Anthony Hayward
BP CEO -resigned in middle of crisis (never a good sign) -made awkward media statements, spent time yachting -refused to take blame
Why was Tylenol able to disassociate and recover?
Because their product itself was not at fault, it was tampered with after it left the factory. Therefore, they didn't have to defend the product or accept wrongdoing
how FEMA changed after 9/11
Bush combined it with Homeland Security and focused it as a security agency against terrorism -departure from traditional function -further slowed process for approval
What was New Coke?
Coca Cola decided to introduce New Coke, a replacement flavor, to compete with sweeter Pepsi -over the top marketing -shocked and angry consumers (didn't want a replacement)
Takeaway from EuroDisney
Disney showed too much arrogance and overconfidence in opening EuroDisney -you cannot impose values on other cultures -you need to listen to your market, conduct focus groups
What was the worst crisis management case?
Exxon Valdez oil spill in 1989 -7M gallons spilt -terrible communication
T/F: BP oil spill is regarded as the worst case of crisis comm ever
False
Sobel and Leeson say Katrina was marked by unfilled promises, cronyism, fraud, waste, and abuse
False - Lotke and Borosage, liberal view -Bush hired friends w/o experience (cronyism)
T/F: small errors that interact in unexpected ways and lead to increasingly large failures is an example of High Reliability Theory
False - Normal Accident Theory
the failure of the Ford Edsel can be blamed on a lack of market research
False - considerable resources were put into this, but the actual execution was poor
T/F: Crisis Communication is the same as PR
False - it is an outgrowth of the field, but goes beyond mere public relations
T/F: HRT takes into account human error
False - made by those in charge of Challenger launch
T/F: HRT believes we need less complex and complicated systems as our economy progresses
False - need MORE -digital based systems Example: aircrafts are safer than ever due to new digital technologies that monitor the envionment
T/F: political decision makers are biased toward future over current benefits
False - reason why levees were not replaced in NOLA; no incentive
T/F: the national guard responded ASAP
False - took 5 days
T/F: Kennedy's national image was not impacted by this event
False, although MA received his speech positively in MA and he was allowed to keep his Senate seat, but was detrimental to his national perception
T/F: there are ways to reduce your risk to zero
False, but you can mitigate it
T/F: the whistleblowing trend is phasing out
False, it is only just beginning -remains a controversial practice -raises important issues about accountability and social responsibility
T/F: Most whistleblowing cases attract a lot of attention
False, most are low-profile and don't receive media attention -garner public support when their actions protect a large number of people
T/F: Natural disasters occur more frequently than technological and industry disasters
False. Technological disasters outnumber natural disasters 3:1
T/F: Texaco is an example of another oil industry failure in crisis com
False. A paradigm case for best handling of a crisis
T/F: Exxon never accepted responsibility for the oil spill
False. Exxon publicly accepted responsibility, spearheaded the cleanup, and expressed regret, but the public and the media were still unappeased, saw it as insincere
T/F: Perrow agrees that most accidents are the result of operator error or equipment failure
False. He criticizes this media portrayal and argues that it is the result of interaction of all the elements
T/F: Kennedy used an idealist philosophy in speaking to whether or not he would remain in the senate
False. He is still agent focused, but makes the people of Massachusetts the agents, resting responsibility w/ them -if he leaves, it will be because the people of MA have lost confidence in him (+ believe the whispers and innuendoes) -guilt shifted to them
T/F: Excessive news coverage of the Tylenol crisis hurt the brand
False. It actually helped clarify the situation and disassociate Tylenol from the source of the poisoning -promoted it as an issue of public safety -portrayed Tylenol as a victim -media was a "handmaiden"
T/F: Exxon portrayed itself as humble and apologetic
False. It took an arrogant approach which fell flat
T/F: The Texaco lawsuit was national news from the start
False. It went largely unnoticed until a leaked tape of Texaco executives using discriminatory language and conversation about minority employees and the case came to light -were also planning to shred evidence
T/F: everyone involved in the Challenger launch was in the same control room at the time of the decision
False. NASA officials in Houston, shuttle group in Florida, Morton Thiokol in Utah -allowed them to go offline -tried to get a premature consensus -felt pressure by media outlets and past delays
T/F: NASA had data on O-rings in cold temperatures
False. Only had data on 53 degrees and above
T/F: Exxon Chairman Lawrence Rawl made the right decision by sending lower ranking officials to Alaska and laying low
False. Rawl took heat for staying out of the public eye and it served as a lesson to CEOs that they should "hop on the plane"
T/F: a crisis usually proceeds quickly
False. Slow build, long restoration time
T/F: the 3 streams are always intertwined
False. The 3 streams run parallel and somewhat independently of each other in a policy area until something happens to cause the streams to meet in a "window of opportunity"
T/F: NASA was 100% confident in the launch of the Challenger that day
False. There was some hesitation and uncertainty beforehand -unusually cold temperatures in Florida, talks of delaying launch
T/F: by definition, a focusing event must lead to policy change
False. it merely needs to focus attention on something for a sufficient amount of time to provide a "window of opportunity" for new legislation to be enacted
Overview of the Edsel case
Ford wanted to develop a new mid-sized, medium-priced car
GEICO stands for...
Government Employees Insurance Company -always sold below state's car insurance rate b/c it sold to government employees
Herbert Miller
Ideal CEO, Southwest Airlines -emphasized teamwork -commitment to safety
William Benoit
Image Restoration / Strategies
Solution to Tylenol crisis
Introduced the Triple Safety Seal - tamper-resistant packaging -refused to abandon Tylenol name (based on 100 years of trust) -made presentations to win back trust of health professionals
Threats to Southwest
JetBlue, other respectable discount airlines
Penn State scandal
JoePa forced to resign -example of a power coach who was held responsible for the activity of his underlings
ambivalent apology
Leaves the unsatisfied public demanding more, resulting in defensive communication by corporate executives -Exxon gave one after Valdez oil spill "an accident"
Diane Vaughn
NAT: discusses the normalization of deviance -expert on the Challenger accident
Steven Fink / Gerard Meyers
Natural History approach / Stages
Paula Coughlin
Navy Tailhook scandal -an admiral's aid who was one of 26 women to be sexually harassed at an office party and blew the whistle --can't sue Navy, but sued the hotel --appeared credible --social backlash, now out of the service
Crisis period
Organization's problems are visible to everyone -increased public scrutiny -lack of respect for management by lower levels
postcrisis period
Shock and uncertainty -heavy board involvement -need radical change to save organization --control passed to new management team, filing for bankruptcy
Apologia
Speaking in self-defense -genre of presentation -attack/response
Previous BP accidents
Texas, 2005 15 died in fire many warning signs that the refinery was in bad shape some alarms didn't work, some equipment wasn't on hand Alaska a well blew up due to aging infrastructure
What event started the field of Crisis Communication?
The Cuban Missile Crisis in 1962 -involved risk assessment and strategy -The Department of Defense relied on strong communication
3 mile island
The most significant U.S. nuclear power plant accident in history, although no human deaths from radiation detected. Pennsylvania, 1979
High Reliability Theory
Theorized by La Porte theory that we can learn from our operating and regulatory mistakes, put safety first, and empower lower levels, therefore making risky systems quite safe
Normal Accident Theory
Theorized by Perrow theory that no matter what, there will be serious accidents because of the interactive complexity and tight coupling of most risky systems -accidents are inevitable -systems interact in ways we cannot imagine
T/F: Berg & Robb's view on the case is that Tylenol handled the incident competently, and it did not pose a big PR issue
True
T/F: Both government and pharmaceutical industries both had to respond to the Tylenol crisis
True
T/F: Exxon Valdez was the alleged worst case of crisis communication
True
T/F: crises within companies often lead to a clean sweep of management
True
T/F: it is important to take into account both the HRT and NAT
True
T/F: the Tylenol case is a paradigm of good crisis communication
True
T/F: the long recall window gave consumers an opportunity to make a considered judgment against buying Tylenol
True
T/F: whistleblowers reporting significant conduct are usually put in some form of danger of retaliation
True
T/F: Whistleblowing is regarded as a positive good
True -encourages free flow of information -promotes resolving problems early
T/F: FEMA refused to ship trailers to MS to be used as temporary housing in weeks after Katrina
True -misallocation of resources
T/F: BP was known as a profit maximizing company
True -only saw value for shareholders -known for cost-cutting -a major growth surge in 2002, spearheaded by Hayward, saw the company growing beyond its managerial capacity, aging infrastructure -profits > safety
T/F: NAT believes organizations contribute to their own technical failures
True -replace technical fix w/ organizational fix
T/F: FEMA kept the Red Cross out of hurricane relief process
True -seen as competitors who would steal their image -roll up your sleeves and look like you're working CORRUPT
T/F: whistleblowers may have bad motives
True -may be retaliating against supervisor w/ false accusations or targeting someone for discriminatory reasons
According to Benoit, a company should admit fault immediately
True (but may conflict with a desire to avoid litigation)
T/F: There was a copycat incident of Tylenol poisonings in 1986
True - tamper proof, not tamper resistant -finally ceased the manufacturing of any capsules --> "caplets" ($$$)
T/F: perceptions are more important that reality in the case of image restoration
True - whether or not the firm is thought responsible matters b/c then the image is at risk
T/F: Tylenol withdrew all of its products immediately from shelves with a product recall
True, also notified the FDA and sent alerts to hospitals
T/F: The Normal Accident Theory prioritizes profits
True, b/c accidents can't be avoided anyways, and they are infrequent
T/F: Kennedy accepted both the blame for the events of the evening and the responsibility for the decision regarding his future
True, but Ling argues that the rhetoric he used in his speech forced the audience to reject both these conclusions
T/F: there are more crises today than ever
True, but we are also better equipped than ever
T/F: athletes can easily recover from scandals if their career is good
True, easily forgiven -Tiger Woods' 3 apology speeches were unconvincing, but people still want him to succeed
T/F: Kennedy used a materialist philosophy in describing the events of the night.
True, he suggested that he was at the mercy of the situation and a helpless victim -road was unlit w/ no guardrails -was drowning -family is cursed
T/F: in a Type One event, the response becomes the focal point
True, public expects govt. to intervene
T/F: it is likely that the digital world will be more reliable, with less accidents
True, the argument can be made that there will be reduced corporate accidents due to computerized systems and vigilant testing
T/F: whistleblowing is looked upon more favorably now than in the past
True. Before, people could be fired without just cause (except unionzed employees) and reports were often ignored
T/F: BP had an ambiguous track record for safety
True. In the long view, they had a good track record, but in recent years, they had a number of safety violations -Iranian revolution (1979) = turning point in managerial approach --> expanded market
T/F: policy decisions can be viewed as a form of symbolic enactment
True. Individuals and groups utilize symbols and images to obtain specific and tangible benefits -symbols as a form of persuasion
T/F: the professor argues that there is no adequate legal remedy for the social and psychological pressure a whistleblower encounters
True. Peer pressure cannot be totally altered by legal enactments and new laws rarely help
T/F: Production was rushed on the Edsel
True. Production was rushed to get it to market on schedule -led to quality assurance problems
T/F: The Tylenol case of 1982 was the first commercial crisis in the US
True. Seven deaths from cyanide poisoning led manufacturer Johnson & Johnson to pull from the shelves
T/F: the media plays a critical role in Birkland's focusing event theory
True. The media's coverage creates a sense of urgency to take action and correct the problem
Crisis Resolution Stage
a full recovery from the crisis -managers redirect their attention to detecting prodromes
Madoff's scheme
a phony investment fund that took money fro charitable organizations -turned himself in when lies collapsed
Prodromal
a pre-crisis phase -being alert for possible signs of danger -ask "what if" questions -an opportunity for companies with effective crisis management teams to anticipate and detect dangers and remedy them -create a "reservoir of good will"
focusing event
a sharp, sudden even that serves as the impetus for bringing an important issue to the public's attention and in creating acceptance for the issue in a public-policy arena
What is perceptive forecasting?
ability to anticipate trends and developments in society that will lead to new products and services
Reformative
accepts the current context
transformative
alters the current context
Fukushima, Japan 2011
an earthquake triggered a tsunami which crippled nearby nuclear power plant --> 3 nuclear meltdowns
Whistleblower
an employee who reports misconduct to entities in power in order to obtain corrective action -selfless martyrs or snitches??
Duke scandal
an enduring crisis -racial tensions -sexual assault -question of university governance
Grant's apology
appeared on 5 talk shows, engaged in: -mortification (worked b/c he's an entertainer) -bolstering (appeared sincere, modest, witty, expressed concern for gf) -denial (limited scope of accusations) -attacking one's accusers (British media)
New Coke case takeaway
be wary of research anomalies & market research ($4M on R&D) "marketing blunder of the century", but ganered more than $4M in publcity
justification
bolstering + differentiation -seeks approval
explanation
bolstering + differentiation -understand my motives
Hugh Grant scandal
caught with a prostitute in public - arrested
mortification
confession of guilt and request for forgiveness (could invite lawsuits)
Sobel and Leeson
conservative theorists criticizing FEMA's response to Hurricane Katrina in 2005
FEMA (Federal Emergency Management Agency)
created in 1979 to coordinate recovery activities -characterized as sluggish and disorganized (calls for disbanding it) -abused by politicians "bureaucracies perform poorly in a crisis"
Type 2 Error Policy
delays stemming from overcautiousness - can also lead to deaths -less visible than active type 1 events -opposite of responding too quickly (less risky) --govt hesitancy, waited for more info
absolution
denial + differentiation -seeking acquittal, clearing of name
James Lee Witt
director of FEMA 1993-2001 -first professional emergency manager to hold position -visited sites after disasters and worked with media --> best
Natural Disasters
disturbances in the physical environment that menace life, property, and the environment itself -predictable in that we expect them to happen -"acts of God" - no one to blame for them (but can blame responses)
equivocal communication
doublespeak; non-straightforward communication
alarmed discovery and euphoric enthusiasm
dramatic series of events --> public awareness and desire to solve problem
Sabanes-Oxley Corporate Reform Act 2002
extends protection to all employees in a publicly traded company -illegal to fire or discriminate against whistleblowers -criminal penalties for retaliation -right to jury trial -audit board
Ware and Linkugel
first modern authors to seriously look at the nature of apologia
Materialist Philosophy
focuses on the scene as the central element in any situation -views agent as a victim -deflect attention from personal motives by deriving an act from the nature of the situation
Type Two: new event
has never happened before -usually result of change in technology or society -violates expectations, upsets norms, and creates uncertainty and unpredictability -groups struggle w/ interpretation and social reality -attention on blame and responsibility
Public Choice Theory
individual actors in both the private and public sector are motivated by self interest
Hurricane Andrew
largest hurricane before Katrina -hit Florida in 1992 -FEMA had poor response --Bush had to create task forces -military provided security, radios, and tent cities -cost $30B
Weakness of Southwest
less prestige - no first class lounges, etc
Lotke and Borosage
liberal theorists' criticism on FEMA's response to Katrina
stereotype of people in the oil industry
male, white, Prostestant
group think (Janis)
mode of thinking that individuals engage in when pressured to conform as a cohesive group -don't allow in outside information -premature striving for agreement overrides the search for possible alternatives -brought on by a highly insular environment, budgetary pressures, and stress
Type One: Normal focusing events
natural disasters, an "act of God" -predictable in that they happen in same places with similar conditions -occur fairly often -attention on helping victims
Chernobyl
nuclear power plant in Russia had an explosion after a carelessly executed test in 1986 that released radioactive materials into the air -40,000 people die due to cancers acquired in the aftermath of the explosion (poisoned crops)
False Claims Act
passed in 1989 and upgraded in 1992 by HW -whistleblowing protection for private individuals to sue govt contractors --paid up to 25% of any loss or fraud that is proven
Political manipulation
politicians seeking reelection will cater to groups they want to win over, not who needs help -uneven money distribution
issue-attention cycle
problems leaping into prominence, remaining there for a short time, and then - though still largely unresolved - gradually fades away from the center of public attention
corrective action
promising to correct the problem -restoring it to original form -promising to prevent a recurrence
post problem stage
replaced and moved into a state of limbo -some progress may have emerged
Fishman on focusing events
rhetorical strategy has a symbolic end result
price skimming
setting a high price when introducing a new product to the market ~exclusivity -over time, the price is brought down
penetration pricing
setting a low initial price on a new product to appeal immediately to the mass market (opposite of skimming)
Texaco lawsuit outcome
settled, awarding $176M to 1400 employees and diversity training
According to Meyers, the best managers are ones who can...
shape unstructured situations
EuroDisney case
shows the effect of a global economy Disney wanted to expand into the European market, chose Paris
Birkland's focusing event approach
sudden, unpredictable events play an important role in promoting public policy decisions/enactment of laws
Result of Texaco's crisis management
taken off the front pages within 10 days -boycotts were called off -sales did not suffer
What is the thesis of Lisa Tyler's essay, "Liability means never having to say you're sorry"?
the higher the liability, the more difficult it is to apologize (but we should encourage apologies) -apologizing incurs fault, legal liability -not apologizing incurs public anger and distrust
Agenda setting
the process by which issues gain greater mass and elite attention
Bhopal, India
the worst industrial accident ever in terms of fatalities, but not in terms of toxicity -2500 dead, 200,000 injured -huge white cloud of lethal gas after a series of failures
Dramatic Pentad
theorized by Kenneth Burke -Act: what -Scene: when/where -Agent: who -Agency: how -Purpose: why indicates how someone perceives the world around them
GEICO's problem & reasons for it
they lost $124M in a year and had to cut jobs -their communications were fragmented with no single voice -claims reached an unprecedented level due to inflation and increased cost of auto repair -had a no fault insurance policy --> higher rates
tragedy of the anti-commons
too much access to materials with no property rights -too many people have veto power over use of resources -they will not act in accordance with the group's best interest -results in a layered bureaucracy that makes decisions slowly
T/F: athletes are the public face of a university
true
Pre-problem stage
undesirable social condition exists but hasn't yet been brought to life
vindication
uses transcendence to go beyond specifics of case
Idealistic philosophy
views the agent as central, subordinating other elements to it -deflects from scenic matters, situating motives of act on the agent (warlike instinct)
Expected price
what people expect to pay
When does the media move on from an issue?
when it is no longer selling because it is either threatening or boring people --gradually fades from center stage
what is an affinity scam?
when you target people similar to you -ie Madoff targeting Jewish investors in Palm Beach and NY
Harry Markopolos
whistleblower in the Bernie Madoff Ponzi Scheme -had competitive motive and sought financial reward -numbers guy, detected fraud
John Dean
whistleblower of the Watergate Scandal, after the fact
The takeaway from the Robert Hall case is that...
you must adapt your business to the changing times to stay current and competitive!
chronic phase
(longest of the 4 phases) take steps to correct whatever difficulties surfaced during the acute crisis phase -Tylenol: whether or not brand can be saved - restoring employee morale, switching to tablets
acute phase
(shortest but feels like the longest) -situation escalates from an undisclosed problem to a receptable of attention -attracts increased govt/media scrutiny -critical distractions interfere with normal business activity -situation hurts the positive image of the company and its officers -situation impacts the financial well-being of the company Must ID and isolate the problem!
Evading Responsibility
- a response to another offensive act -defeasibility = a lack of information or control of the event - happened by accident - was performed w/ good intentions
Mistakes Robert Hall made
- didn't accept credit cards (failure to adjust to the changing times) -conservative styles (didn't adapt to fashions) -refused to move to indoor malls -didn't do sales or markdowns on excess inventory -no store renovations -poor management, inbreeding