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This particular crisis began on March 24, 1989 after the Valdez oil tanker struck Bligh Reef. The impact of the collision tore open the ship’s hull causing some 11 million gallons of crude oil to spill into the water, spawning a flurry of governmental, environmental, and media attention. Over the course of several months, the government, scientists, environmentalists, and Alaska residents tried to reduce the harm the oil was having on the environment an economy. Meanwhile, Exxon struggled in every area. They struggled to appropriately respond, manage backlash from their CEO’s response, prepare for legal cases, and salvage its public reputation.
Situational Crisis Communications Theory
Crisis management includes different aspects of to detect potential crises, called prodromes, and to learn from crisis experiences. Also, crisis management has continued to emphasize post crisis communication and evaluating the use of crisis response strategies. The situational crisis communications theory (SCCT) falls into the post crisis category. This model is used to demonstrate how crisis response strategies can be used to protect reputational asses after a crisis. This theory tries to explain what stakeholders do to protect themselves from the crisis, what happened, and what the organization is doing to fix the crisis and to prevent the same crisis from happening again.
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Over the years SCCT has suggested several ways in which crisis response strategies can be classified and understood. For example, Fearn-Banks proposes that crisis responses can be grouped into three clusters, namely the victim cluster, the accidental cluster and the preventable cluster. It explains that the victim cluster consists of natural disasters, rumors, workplace violence and product tampering actions, and the organization itself is also a victim of the crisis. An organization that distances itself from the crisis and refuses to take responsibility for the crisis fits the definition of the victim cluster (Fearn-Banks, 2011). The accidental cluster is characterized by technical-error accidents, technical-error product harm, and challenges (leading to inappropriate actions). Within the accidental subtype, the organization has minimal attributions to the crisis event and does not have crisis intentions in its actions (Fern-Banks, 2011).
The third crisis cluster characterizes a crisis as an event that a company creates by deliberately placing people at risk, taking inappropriate actions, or violating laws/ regulations (Fearn-Banks, 2011). This cluster is referred to as the preventable cluster and consists of human breakdown accidents and recalls, organizational misdeeds with or without injuries, organizational misdeed and management misconduct (Fearn-Banks, 2011). In these instances, stakeholders may be correct to attribute the crisis to the organization. Regardless of the type of crisis, a response strategy will be required. In that case, the response strategy will be determined by the complexity and the type of the crisis event (Fearn-Banks, 2011).
With the first cluster, the victim cluster, Exxon arguably tried to put themselves in this cluster by using communication and media. It is obvious that Exxon did not follow the guidelines for best practices mentioned above. I would argue that Exxon’s initial response was not timely or thoughtful enough. Exxon did take a preemptive approach to protect their assets by discouraging increased government regulation of oil transportation, citing it as unnecessary and potentially dangerous (Johnson and Sellnow, 1995).
Seven months after the spill on October 2, 1989, W.D. Stevens who was the president of Exxon Company implied that the crisis happened due to “human imperfection” and that Exxon was fully capable of cleaning up during the Alaska State and Anchorage Chambers of Commerce hearing. This followed the earlier statements that Exxon felt that government regulation was unnecessary, and Exxon was a victim of government bureaucracy. Stevens used that speaking opportunity to try to salvage Exxon’s image while trying to avoid even more policies that restricted oil transportation. Also, Johnson and Sellnow emphasize that “the concept of accountability is critical for maintaining a positive public image” (1995). Although, it is obvious that Exxon did not take full responsibility for the crisis and engaged in unethical crisis communication strategies including denial, scapegoating, justification, and evasion of responsibility (Johnson & Sellnow, 1995).
Exxon had many issues during this crisis but perhaps the biggest one was the fact that Exxon refused to take responsibility for the crisis and instead blamed anyone and anything else. Exxon blamed the capital of the Exxon Valdez and the third mate, Gregory Cousins, because Hazelwood was intoxicated during the incident and put Cousins who was inexperienced in charge of the Exxon Valdez (Fern-Banks, 2011). Exxon also blamed the Alyeska Pipeline Service Company, U.S. Coast guard for the out of date radar, the Alaskan government for not waiting on Exxon to clean up the spill, the weather, and the Department of Environmental Conservation ().
The second biggest mishap of the crisis was that Exxon clearly did not have a chain of command to handle the crisis. In the wake of the spill, there was no communication from the very top of Exxon, who was CEO Lawrence Rawl. Instead Frank Iarossi who was the president of Exxon shipping was the main representative at the spill site (Fearn-Banks, 2011). There was no statement from Rawl for 10 days and it came in form of a letter that clearly lacked remorse. Also, there was no visit from Rawl to the spill site for nearly three weeks.
Once the cleanup of the spill had been initiated, Exxon hardly participated in any efforts in containing and cleaning up the crisis like they should have. Instead, Atlantic Richfield (ARCO), British 10 Petroleum (BP), and five other companies initially participated in the response (Johnson and Sellnow, 1995). Exxon soon after took over the clean-up efforts from the other companies and the local fisherman once the backlash from that became apparent.
In the accidental cluster, the company did not have crisis intentions in its actions, including technical breakdown accidents, recalls, challenges and mega-damage (Fearn-Banks, 2011). Obviously, the company did not have an intention of creating a crisis when the oil tanker set sail on March 24 so one could argue this position and put this crisis in this category. Exxon also could address the fact that they cut down on the number of crew members on the Valdez which led to them being overworked and exhausted. Many of the crew members were exhausted, a routine feeling on Exxon ships, they testified, having worked an average of 140 hours of overtime a month per person. The ship carried a crew of 20, a third less than on some older vessels. This downgrading was approved by the Coast Guard after Exxon argued that the new technology of the Exxon Valdez and other tankers of its class did not merit larger staffing; but the modern instruments did not keep crew and officers from frequently going long stretches with no or little sleep and working extensive overtime on every sail (Egan, 1989b). Clearly, Exxon would have preferred if this crisis never happened, however, it did, and in my opinion, it could have been prevented.
In the preventable cluster, characterizes a crisis as an event that a company creates by deliberately placing people at risk, taking inappropriate actions, or violating laws/regulations (Fern-Banks, 2011). This cluster consists of human breakdown accidents and recalls, organizational misdeeds with or without injuries, organizational misdeed and management misconduct. In these instances, stakeholders may be correct to attribute the crisis to the organization. Regardless of the type of crisis, a response strategy will be required. In that case, the response strategy will be determined by the complexity and the type of the crisis event. Exxon put people and animals at risk, took inappropriate actions in its response, and violated laws/regulations.
There were three main factors have been identified as contributing to the incident, the first one was that the captain Joseph Hazelwood put the supertanker on autopilot and headed straight for Bligh Reef, some confusion pointed Hazelwood had been drinking that night; the second factor was the third mate Gregory Cousins was not qualified to take command during that critical period; the third factor was the Exxon’s corporate culture, the company cut the number of people worked on the tanker, so the employees worked long hours and didn’t have enough rest. Exxon also did not have a prompt response time to media, the publics questions, and it lacked openness and honesty from the beginning. They also did not have the proper clean up kit on board the Valdez, they did not take the proper steps to clean up the environment, nor did they respond to the Alaskan residents that made their living off the sound.
The initial response from Exxon was not only late, but it lacked openness and honesty expected from organization who were at fault in times of crisis. Exxon did not release a media statement until the early afternoon hours of March 25 and it was not then CEO Lawrence G. Rawl who spoke it was spokesperson David Parish (Shabecoff, 1989). Some would argue that this delayed response can cause people to search for sources of information, and make the company appear it was hiding something. This sense of distrust continued to peak throughout the crisis as Exxon did not handle the clean up as they should have.
Exxon, through David Parrish its spokesperson stated that “the company did not expect major environmental damage” (Shabecoff, 1989). In that very same article, environmentalists rebutted the assertions of the company directly state, “this spill would cause drastic damage to the abundant marine life’ (Shabecoff, 1989). This effort by Exxon to try to downplay the effects that the spill was going to have affected the company’s image and was not received by the public very well.
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Exxon was not open and honest about the spill’s impact on the environment and that was an overwhelming error especially since the company had cut resources to the tactical spill response team (Associated Press, 1989). This was made worse when Rawl was asked about cutting the spill team, he refuted them stating “he had no knowledge”, again worsening the public confidence (Associated Press, 1989). Several days later on March 27 after making that statement, Exxon contradicted themselves by stating that the environmental effects where going to be larger than anticipated. On March 29th Exxon revealed that it was going to be unable to contain its spill (Associated Press, 1989). This revelation was further impacted when Exxon failed to appropriately clean up the spill and instead local fisherman and state officals were taking the lead role in the massive clean up attempts.
Exxon’s response to the tragedy in the Price William Sound, the grounding of the Exxon Valdez has long been seen as the example of a failure in Crisis Communication. Without a concreate crisis communication plan already in place, Exxon’s response to the oil spill was not handled well. Exxon made decisions with reactionary movements, limited resources, and planning. Efforts to communicate with the media were often contrary to statements from other media sources. Exxon should have had a concreate Crisis Communication Plan in place before the Valdez crisis occurred. That is why this is viewed as a failure across the spectrum, Exxon did not do anything the way they should have.
Exxon could have had a through crisis management plan in place. Starting with clear objectives that were used as guidelines and goals to make sure that the plan was effective. Exxon also should have had a clear crisis communication team. There were too many spokespersons releasing too many contradicting messages. There should have been clear key spokespeople with clear roles such as Dan Cornett who was the president of Exxon Alaska, David Parish who was the Exxon Worldwide spokesperson, and Frank Iarossi who was the president of the Exxon Shipping company. All of these men were high ranking Exxon employees who were present at the spill site, had ties to the area and Exxon, and could have fostered a more open way of communication. This would have given clear roles and messages to the public while providing them faces to associate with Exxon and giving them people to give them answers to their questions.
Exxon’s response to this spill should have been quick and effective instead of lagging and lazy. Exxon is a part of an industry that some publics may preconceived ideas about and then needed to reassure all publics that they were doing everything that they could to stop the leak, clean up the environment, compensate those who were impacted, and investigate the situation thoroughly.
Exxon should have a strategy in place to communication with stakeholders and provide information to ensure that they understood clearly what was going on and how they were remedying the situation. External stakeholders such as the EPA, NOAA, Alaska’s Fish and Wildlife Department, the community, and the people who made their livelihood off of the contaminated water should have been taken into consideration when making Exxon was making all decisions. Exxon should have made sure to clearly communicate when any information came up, they should have made sure that the information was correct and not contradictory, and they should have apologized.
Overall, the best strategy Exxon could have implemented is the forgiveness strategy. They should have accepted full responsibility for the crisis, the cleanup, environmental remediation, and the financial compensation of those who were impacted. Also, Exxon could have even used the sympathy strategy show that they were also a victim of incompetent employees and their own decisions that led to the cuts to the oil spill cleanup teams, less employees, and longer hours.
In my opinion, Exxon’s response to this crisis is an example of how corporate greed can negatively impact a large corporation and its publics if faced with a crisis. If Exxon really never expected a crisis like this to happen when they were shipping millions of gallons of oil over difficult to navigate water ways is foolish. There are some lessons to be learned from this crisis, but the biggest one is to make sure that you have a solid relationship with your publics and to a crisis plan that includes a crisis communication plan in it. I hope that Exxon and other companies learn by looking back at this tragedy to make sure to always respond immediately to a crisis with appropriate human emotion/empathy and take responsibility for the loss of life or damage no matter what. Also, there needs to be a statement from the CEO of the company, even if the CEO is not the designated spokesperson. Someone from the top of your organization must be on scene and managing the project. Instead of doing that, Lawrence Rawl, sent lower ranked executives to Alaska instead of going there himself which gave the impressions that Exxon disregarded the spill.
Exxon should have made sure that they were heard and heard promptly. Obviously, there was not Social Media platforms back in 1989, but Exxon didn’t still do enough to get the message out about how they were responding to the crisis. They held their news briefings in a remote Alaskan town which was not the best location to get media out worldwide then spent millions of dollars to run newspaper ads when they could have been using that money to clean up the spill.
The biggest things that organizations should take away from examining this crisis is: get your facts straight and take responsibility. At one point, an Exxon spokesperson said damage from the spill would be minimal, while others said the damage was likely to be substantial. There is no use trying to downplay a worldwide crisis. However, it is useful to remember that the public will likely be more forgiving if you show compassion and competence. Exxon did not get the facts straight which is something publics frown upon especially when your organization is supposed to be an authority in the business in which it operates.
Overall, Exxon’s image was permanently tarnished. Angered customers cut up their Exxon credit cards and mailed them to Rawl, while others boycotted Exxon products. Exxon was forced to pay financially and legally; however, they seem to have made a recovery economically but not reputationally and certainly not environmentally. Cleaning up the Exxon Valdez disaster took four summers and cost approximately $2 billion, according to the Exxon Valdez Oil Spill Trustee Council. In 1991, Exxon reached a civil settlement with the U.S. government and the state of Alaska in which it agreed to pay $900 million in payments, a $25 million criminal fine and $100 million in restitution (Latson, 2013).
This happened 25 years ago, so we might note the anniversary as we do any other historical event. That, however, would imply that the oil spill is over. It’s not, and likely never will be. The sound’s coastal ecosystem is permanently damaged. Thousands of gallons of Exxon Valdez oil still pollute the beaches; this oil is still toxic and still hurting the ecosystem near the shore. The government considers, as of 2010, only 13 of the 32 monitored wildlife populations, habitats and resource services that were injured in the spill as fully “recovered” or “very likely recovered.” Some are still listed today as “not recovering (Holleman, 2014).
There is so much to learn about and from the way that Exxon handled the Valdez Oil Spill in terms of crisis communication. By using the SCCT theory I was able to show that while this was certainly a crisis, it was also preventable by Exxon. Exxon handled this crisis poorly on many different levels and one could argue that they continue to handle it poorly due to the lack of continuous environmental cleanup in Prince William Sound. However, this is one of the foundational crises that an organization, especially those in the oil industry can learn from. As oil exploration and transport continues to become more international, exposing to risk more inhabitants, coastlines, and ports of the world with their diverse environments the local postmodern communications lessons from the crisis of the Valdez and its recovery, learned at such a painful cost, can be of global value.
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