Crisis Management: Impact of a Crisis
Disclaimer: This work has been submitted by a student. This is not an example of the work written by our professional academic writers. You can view samples of our professional work here.
Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.
Published: Fri, 15 Sep 2017
Crisis management will most likely require more than being remorseful to the press or the CEO of some organization appearing on the news. We know the news that is broadcasted goes viral quick. Organizations must be vigilant to respond to a crisis quickly and decisively utilizing all platforms of communication to speak to the public. Furthermore, the most important thing is for organizations to accept responsibility for the actions and not distant themselves from the crisis or from the public. It’s given there is no fix for all methods to remedy a crisis, but the lessons learned should be important.
In this assignment, it will allow chance to analyze a major crisis and the impact on a community, nation, and the world when bearing in mind crisis management. The assignment will discuss the threat or hazard to the organization, elements of surprise, decision making of leadership with timelines of event and decisions made, successful and unsuccessful decision making, and changes resulted or should be considered.
THREAT TO ORGANIZATION
The New York Times accused Coca-Cola, stating that the company “was funding obesity research that attempted to disprove the link between obesity and diet and shifted the problem to lack of exercise”. It was said that Coca-Cola financed the new nonprofit Global Energy Balance Network and it advocated propaganda and deflects the role of soft drinks in the spread of obesity and Type 2 diabetes. (reference COCA). The accusation had a huge impact to the company to a point it was losing in the market sales. It was a first-class type of crisis for Coca-Cola and it was caught off guard, especially the intent was to fund scientific researches for health and well-being programs. The idea was misconstrued from the public’s and social media’s eyes.
LEADERSHIP DECISION-MAKING EVENTS
During the crisis that could cripple Coca-Cola, the CEO (Muhtar Kent) had professionally managed the crisis and to act quickly to make decisions. He assumed responsibility, owned up to it through the whole ordeal. He understood the business’s level of reputation and if he left the crisis to take its course, the business could have lost it reputation and the market sale of the products. The CEO is the best spokesperson to rectify the issue and that person is who you want out front telling the truth or the intent. In most public relations (PR) incidents, the CEO is shielded and it portrays that the CEO has no interest to the issue. The making of an outsized response is crucial to the crisis. Overreacting is preferred to a small measure or ignoring the critics helps as well, since it is all about opinions. CEO Muhtar Kent led Coca-Cola to initiate a management committee of impartial experts to give governance on the investments of the business from an academic research and appoint professionals to investigate opportunities for research and health initiatives. The bottom line is that Coca-Cola’s response to the allegations that it finances a group to protects it interests at the expense of public health is a case study in PR crisis management. The explanation by CEO Muhtar Kent characterizes a business response that encompasses the important elements of effective business PR crisis management.
The successful outcome for Coca-Cola over this accusation was all due to the CEO’s professional decision-making. He provided guidance when responding to occurrences and apologies. CEO Muhtar Kent’s first successful decision was admitting the company’s mistake while not really apologizing in his explanation, “We’ll Do Better”. Furthermore, he took this accusation in a resilient way, at the source, which was acknowledging the accusations that were deceiving the public’s and social media’s eyes about its support for scientific research. In return, he defends the company by attempting to confront the global obesity epidemic and that the company had good intentions. However, CEO Muhtar Kent admits the intention is not working. Additionally, the actions that were taken to support the research for health and well-being were misconstrued and it caused a lot of confusion and mistrust. In the CEO’s explanation, the company will act forward and with more transparency. It will put on the website the list of health and well-being partnerships and research activities it supported in the past five years and updating bi-annually. CEO Muhtar Kent stated that efforts will be made to continue to support the healthy options by having lower sugar and calorie drinks to include his company will stay committed to fight obesity.
The unsuccessful decision-making by the leaders was broadcasting their intent and ensuring it wasn’t misleading to allow the intent to make out that Coke was averting criticism about the role sugary drinks have played in the spread of obesity and Type 2 diabetes. The support was in good intentions with health and well-being, but how the public and social media viewed it was the opposite. It became a huge PR crisis as it seemed that Coca-Cola was trying to save their sales by funding an alleged cover up.
CONSIDERATIONS AND RESULTS FOR CHANGES
The businesses or organizations can save themselves from potential crisis is the highpoint of their element. In the event the organization is faced with these crisis, its ability to rise from the bottom and reveal the strength shows its crisis management plan. Additionally, the organizations do have practice something called the ‘Conflict Management Life Cycle’. It is a cycle that supports organizations to remain stable during or after a crisis. The Conflict Management Life Cycle is the cycle that gives the ‘know how’ to manage a conflict or crisis. The cycle deals with being proactive (environmental scanning, issue tracking, issue management, and crisis planning), strategic (risk communication, conflict positioning, and crisis management), reactive (crisis communications, litigation PR, and conflict resolution), and recovery (reputation management and image restoration).
Coca Cola had a Crisis Management Plan and the CEO Muhtar Kent utilized the Conflict Management Life Cycle. The considerations that was discussed for Coca-Cola was dealing with issue management, plan for communications, and how to respond to a crisis. For issue management, the key steps were to identify the issue (accusation of supporting for the wrong intention), evaluate the facts (support for the right reasons), priorities (reputation and sale), response (response from CEO with the real facts), and implementation (plan to gain trust and show intentions were good). The communication plan that CEO Muhtar Kent (Coca-Cola) had allowed for anticipation (identify the threat and monitor risks), prepare (define the key information in advance and anticipate information), and response (react quickly and efficiently, utilize the organization’s processes and procedures, and practice potential events). CEO Muhtar Kent responded with Coca-Cola supporting health and well-being programs was in good intentions and not to be misconstrued. He responded with the ‘5C’s’ (confidence, clarity, control, concern, and competence).
Crisis management requires more than being remorseful to the press or the CEO of some organization appearing on the news. Organizations must be vigilant to respond to a crisis quickly and decisively utilizing all platforms of communication to speak to the public. Furthermore, the most important thing is for organizations to accept responsibility for the actions and not distant themselves from the crisis or from the public. It’s given there is no fix for all methods to remedy a crisis, but the lessons learned should be important.
Coca-Cola’s CEO, Muhtar Kent, quickly addressed the accusations professionally into the reactive phase of the Conflict Management Cycle. Furthermore, he made statements acknowledging accusations and the strategies “is not working”. Even though he did not completely express regret, he disclosed the company did not choose the best way to fight obesity and assuring they would be “transparent” from now on. The CEO benefits from this approach to move on to the reputation management part of the recovery phase by promising that Coca-Cola will update frequently a list of its well-being partnerships and research activities. In this manner, the public’s trust will be salvaged and the company’s image will be restored.
Coca-Cola did a noble thing when they took responsibility for their unsuccessful decision-making. The company showed interest and sent their CEO to address the problem that had good intentions by following the Conflict Management Life Cycle and their Crisis Management Plan. The importance of the CEO speaking out is critical since communication plays a relevant part in not identifying the crisis and the impact. A crisis can damage the organization’s products or services, threat public safety, harm employees, customers and stakeholders (physically, emotionally, and financially). Furthermore, it can cause operational, financial and reputational loss to include the impacting the future probability and growth. The frameworks, Conflict Management Life Cycle and Crisis Management Plans, are essential when it comes to being proactive to a crisis, using strategy for a crisis, being reactive to a crisis, and recovering from a crisis.
Bernstein, Jonathan (N/A) Free Management Library, All About Crisis Management, Retrieved
Cantoria, Ciel S. (2011). Bright Hub Project Management, Great Real-Life Examples of
Successful Crisis Management, Retrieved from: http://www.brighthubpm.com/risk-
January 29, 2011.
Comcowich, W. (2015). Cyber Alert, Case Study: Coca-Cola PR Crisis Management, Retrieved
Preach (N/A). How do you act in crisis?, Public Relations, Retrieved from:
Poston, Leslie (2012). Salesforce Marketing Cloud, Shining examples of excellent social media
crisis management, Retrieved from: https://www.marketingcloud.com/blog/shining-examples-
of-excellent-social-media-crisis-management, September 21, 2012.
O’Connor, A. (2015). The New York Times, Coca-Cola Funds Scientists Who Shift Blame for
Obesity Away From Bad Diets, Retrieved from: http://well.blogs.nytimes.com/2015/08/09
Cite This Work
To export a reference to this article please select a referencing stye below: