CrisisCommunication

Course:BusinessCommunicationClass:MBA(Classof2011) FacultyMember:DrKalyanaChakravarthi Introduction

This is a comprehensive Case Study on Crisis Communication which is an integral part of Business Communication,acourseforMBAstudentsatIBSHyderabad.Itpracticallycoversvariousaspectsofthe topicalongwithworksheets,whereevernecessary. Thecasecanbehandledintwoways,eitheritcanbereadthoroughlyfirstbythestudentsfollowedbya classroom discussion and finally, the written communication activities can be completed; or the entire casecanbedividedintoconvenient,topic/syllabuswisechunksalongwiththewritingtasks. TheFacultyconcernedmaydecideonthepedagogyandnumberofsessionsasperhis/herrequirement.

Objectives
TopresentandexplaintheconceptofCrisisCommunication Todiscussthetopicanditsrelevanceandinterconnectivitytoacademics,corporateandmedia To familiarize the students with Circulars, Speech, Press Notes, Pamphlets, Press Conferences, Memos,ReportsandtheirformatsrelatedtoBusinessCommunication

ComprehensiveCaseStudy

Panacea Crisis Management Consultants

- Dr Kalyana Chakravarthi1, IBSHyderabad Overview
It is said that in crisis situations, the pace of the conflict accelerates dramatically. This surely means that the involved parties have to react very quickly to the changing situations or risk having their ability to protect their interests substantially reduced. Crisis is said to be a complicated process which increases the personal levels of fear, anger, anxiety, confusion, dilemma and hostility which are likely to be present. At this juncture, communication plays a vital role may it be top-down, bottom-up or lateral communication in the academia, media and corporate.

Background Crisis communications is generally considered to be a sub-specialty of the public relations profession that is designed to protect and defend an individual, company, organization, government etc., facing a public challenge to its reputation.These challenges may come in the form of an investigation from a government agency, a criminal allegation, a media inquiry, a shareholders lawsuit, a violation of environmental regulation, or any of a number of other scenarios involving the legal, ethical or financial standing of the entity. It is during crises that communication gets distorted or cut off entirely due to which rumours often displace facts, and in worst cases assumptions aggravate the situations to cause confusion. In addition, the concerned parties try to keep their real interests, strategies and procedures as a secret, sometimes, and use deceptive strategies to try to mislead others. Crisis can be defined as a sudden, uncomfortable and uncontrollable event that threatens the lives of number of people in a particular area. When crisis occurs there may be a need for rapid communication of various types such as Government agencies to common public, Public to government, Employer to employees, Boss to subordinates, Companies to consumers, Corporate to media etc. Importance of Crisis Communication Crisis is unpredictable and can happen any time. Crisis is not only due to natural calamities but also could be manmade. The best way to handle the crisis situation is to be prepared for it. Crisis occurs in organizations as well and need to be monitored. It can range from product recall due to safety or health reasons, natural calamity like tsunami and accidents in the factory unit causing deaths or injuries to the valuable employees. Here is a list of crises that could
happen:
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Product recall, Closing of a facility , Serious injury to someone within or outside of the organization Dramatic downsizing causing significant job loss, Union grievance, Computer system crash and loss of important data Alien abduction of your entire management team, A major competitor throwing crisis attention on your company Caught in lies to the customers, False advertising accusation, Celebrity spokesperson embroiled in personal scandal Plane crash, Cooked up Books and other Publication, Plummeting stock price, Sexual harassment case

Prepared byDr Kalyana Chakravarthi, Faculty Member, Business Communication and Soft Skills, IBS Hyderabad (Deemed To Be University); Former Associate Professor, BC& SS, ASBM, BBNSR & Ex Domain Faculty Trainer, FTP/SRC, INC HQ, Hyderabad 2


Insider trading scandal, Hostile takeover, Outbreak of food poisoning caused by your company Company picnic mishap at local Country Club which gets defame in the media, CEO gets arrested Natural disaster Fire, Explosion, Floods, Earthquake

Panacea Crisis Management Consultants (PanCMC), is a company which deals with various kinds of crises and disasters. They specialized in Crisis Communications apart from Operations Management and Logistics & Supply Chain Management. Eashwar is a newly appointed COO, Emergency Rescue Services, a special wing of PanCMC. His job involves multitasking as he has to deal with different people and organizations such as his team members, bosses, social service volunteers, NGOs, media personnel, Govt. officials, lawyers, corporates, police officers and doctors. He has to be always on the toes and keep a track of incidents and events happening around. Eashwar was going through the headlines of a TV news report which was narrating about the recent product releases and the damage caused to the people. Immediately he looked into the news papers for more details. He reads the following news: Exhibit 1
Glutton FMCG India Ltd., Costs Lives
23 September09, Bangalore, (PTI).

As per the media reports, a south Indian regional hospital registered maximum cases of food poisoning, nausea, vomiting and high fever. There were nearly 160 cases registered in the local Govt. Hospital itself. There can be many in other private hospitals. The local Food and Sanitary inspector says, People keep buying and eating whatever new products pumped into the market. In most of the cold drinks there are traces of dangerous EColi bacteria, fruit juices and food products contain fungus also. These things affect the public health. They hardly see the physical and chemical conditions of the products may it be a food product, cold drink or a fruit drink. Neither, the retail store keepers bother about the sanitation. It is the responsibility of the consumers and the companies to keep up the quality of the goods being consumed! When asked about the issue, a retailer states, We are only distributers and sellers, the quality assurance and control is the responsibility of the Wholesaler and the Company itself. We only sell that reaches us in as-iswhere-is condition. While the consumers and NGOs feel that the company, Glutton FMCG, is solely responsible for the damage to public health.

As soon as Eashwar understands the reports, he got an idea on his future action plan. He mind-maps a Communication Strategy for his own organization first. He starts working on his action plan. In response to the media reports the Chief Operations Officer, Emergency Rescue Services, alerts his team of executives, field workers, volunteers through an Inter-office memo via an E-mail and a Circular. He drafts a Press Note and calls for a Press Meet also. Meanwhile Bhargav, CEO, Glutton FMCG, wanted to take a quick action to control the situation and to protect the brand-image of the company. His idea is to explain to the consumers and the employees of the company, about the quality of the products and the responsibility of consumers as well as the company. First of all, he wants to give a counter-statement in the media through a press note as follows:
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 Exhibit 2

CEO Glutton FMCG Saves Lives ?

26 September09, Bombay, (PTI).

In response to the recent media reports related to the food poisoning and other allegations, the CEO, Glutton, submits a clean chit to the public. Mr Bhargav, CEO, explains, We take utmost care while most of the cold drinks processed at our production units, there cannot be traces of dangerous EColi bacteria in those because we fill the cold drink at -5 degree Celsius, and a P263- a preservative gas is added to all the bottles before sealing. Moreover, the empty bottles are washed at 120 degrees Celsius, more than a boilingpoint, to protect the drink from bacteria. In case of fruit juices and food products there cannot be fungus formation also. All our fruit drinks contain the juices extracted from our own scientificallygrown farm-fresh fruits. The workers who pick the fruits cover their hands with hand-glows. As soon as the fruits are plucked, they are steam-washed at 75 degree Foreign Heat in our labs, then they are cut with steel choppers and sprayed with T235, a preservative for long life, before they are packed. Then our containers also have scientific apartments to keep these products safe till those are delivered at various retail outlets across the country. It is the responsibility of the retailers, vendors and consumers also to keep up the quality of the goods being consumed before they consume! The consumers, media and the NGOs are welcome to visit our factories and see for themselves how we care for the public health! Hence, our company, Glutton FMCG, is not responsible for the damage to public health. This news has created perplexity among the consumers and competitors in the market.

Having issued this press note, Bhargav, now wants to have a Crisis Communication Plan on the first hand, to combat the future crisis. He reads the material and notes that he got from a premier B-School which conducted an MDP on Crisis Communication for Corporates and understands the following information:

The Need for a Crisis Communications Plan

The Crisis Communication Plan is must for any company or organization, may it be small, medium or big enterprise. A crisis can take place any time and in any shape irrespective of the individuals, products, segments, company or organization. Hence it always advisable to be ready with an action plan to combat crisis which is quite unexpected. There are many aspects to being prepared for a crisis, many of which, frankly, are not worth preparing for in advance, either because of their low probability of occurrence (alien abduction of your entire management team), or the fact that many crises require more real-time attention that a crisis plan simply cant prepare for in advance. But almost all crises have a consistent element, which you can, and we believe, must plan for in advance how your company will communicate with the media during and after the crisis. Why? Because how well your company manages the stakeholders, internal employees and media during a crisis could determine whether your company gets hurt, or even sometimes, grows as a result. Many companies who do not handle these issues suffer the ultimate fate the death or reorganization of the company.
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 The fate of many companies across the world such as the recent corporate scandals Enron, Lehman Brothers, Satyam Computers - and how those companys bottom lines have been affected. Positively, the excellent crisis management when the original poisoned Tylenol case, where J&J came out more strongly positioned with the public than they were before the crisis happened. Another great example of how excellent crisis management can build, rather than destroy is the success that former New York Mayor, Rudi Giulaini has enjoyed since his excellent handling of the press during the 9/11 attacks on the World Trade Center. Much of this success came as a result of their relationships with the press during the disaster. The Two Aspects of Crisis Plan: 1. The crisis plan itself (how your company will deal with the issue at hand, to minimize loss and downtime.) 2. The crisis communications plan (how you will communicate with the press and the public about the crisis that is occurring.) Many companies prepare one without the other. Unfortunately, both are vitally important. Most company crises never get reported in the press. Sometimes that happens because the story was not newsworthy, but oftentimes is happens because the company handled the situation skillfully enough that it never became visible to the press. Other times, a crisis may be significant enough that it is both newsworthy and gets attention in the press. But that attention either lasts for a very short period of time, or it is so well handled that the company grows as people see how well they handled the crisis. A key element in making sure that this happens is the development of a Crisis Communication plan in your organization. Even if you dont elect to create a crisis plan, it is vitally important that you put together a plan to effectively communicate with the press and the public when the inevitable crisis occurs. In other words, an effective Crisis Communications plan may be the most important part of your crisis planning process.

Discussion

Why do you need a crisis communications plan? How does it differ from a crisis plan ? How to identify crises likely to hit your company ? How to sell the process to management ? What should be in your plan ? How to organize and communicate your plan within your organization ? What should you have prepared in advance, ready to hand it over to the media when the crisis occurs ?
Assignment 1 Imagine that you are the COO, PanCMC. In response to the media reports, draft an Interoffice Memo which has to go via e-mail. Study the information in the case, various Formats of correspondence and Workplace communication and write with suitable vocabulary 5 Based on the situation which can happen in any state, country, organization etc., draft an email, on behalf of the COO, within 10 sentences Workout the first draft by jotting down the points to be written.

Assignment 2 Based on the situation draft a Press Note on behalf of the COO, PanCMC, within 10 sentences

Assignment 3 Imagining that your are Bhargav, CEO, Glutton FMCG, prepare a presentation on Crisis Communication Strategy and Action Plan for the future of the company.

Assignment 4 Based on the case study, what can be the services provided by PanCMC to customers who are affected by bad FMCG products. Prepare a one-page brochure explaining the services for the suffering customers across India.