Business Crisis Management in the Pre-Crisis, Crisis and Post-Crisis Phases - Essay Example

Business Crisis Management in the Pre-Crisis, Crisis and Post-Crisis Phases

Introduction

Businesses often face challenges that can result in massive threats to their functioning or even their fall. Such risks may include the tarnishing of its name, which can lead to losing of customer loyalty, eventually leading to reduced profitability. Therefore, businesses have to find ways in which they can ensure appropriate reaction to crises before they occur, as they surface and after their occurrences to prevent future recurrence. For instance, Taco Bell, in 2011, had a lawsuit wherein the alleged accusations; it had practised a false advert. The allegation suggested that the company’s “beef seasoning” used as ingredients that only contained 35% of meat and 65% fillers that were way below the requirement of 70% (Reed, et al., 2014). As a result of the bad image created, the company used some crisis management tactics to overcome the situation, as the utilisation of the media advertising and social media platforms to assure their clients of the quality of their products. There are a couple of business crisis management models, which include the image repair theory (Benoit, 1995), the social-mediated crisis communication model (Liu, Austin & Jin, 2011) and the integrated crisis mapping model (Jin, Pang & Cameron, 2012). The situational crisis communication theory assumes that crises are negative occurrences that stakeholders try to attribute responsible (Coombs, 2007). For this section, it will use the Situational Crisis Communication Theory in an excellent platform for the provision of an evidence-based framework that is essential for ensuring the maximum protection of reputation accorded to an organization in the application of post-crisis communication.

The report is a critical analysis of the crisis management and crisis management skills employed by the Taco Bell during and after the "seasoned beef" meat filling lawsuit. Moreover, the report shall provide necessary conclusions and recommendations for the handling of the crisis.

Background of Taco Bell & detailed of the crisis (see Appendix 6 for more details)

Pre-Crisis

The prevention involves attempting to reduce the risks that could result in crises and is part of the risk management plan. The preparation includes the creation of the crisis management plan, selection and training the crisis management team and carrying out exercises that test the programme and the team (Jaques, 2007). Organizations best handle emergencies when they have an annually updated crisis management plan, a selected crisis management team and occasionally conduct exercises that test the programmes and units yearly. Additionally, pre-crisis management works best when the company pre-drafts some emergency messages (Jaques, 2007). The four aspects compose the best emergency preparation best practices. Having the organisation to prepare and plan for the uncertainty allows the emergency teams to make a quick reaction, making effective decisions.

In making the initial response to the crisis, the management should be quick to make the reaction in the first hour (Avery et al., 2010). The fast response needs quick decision making of the crisis manager. The decisions the manager makes at this phase in response to the crisis need to be accurate, which it achieves through properly checking of all the facts. Consistency is also significant to decisions at this initial phase, through informing the spokesperson of the events and the message points (Avery et al., 2010). When making this early reaction, the decisions that the manager makes need to make public safety the priority, making sure that the public understands that they are safe from the impacts of the crisis. Additionally, it is appropriate that the management sorts the decisions of using the available communication channels like the internet and mass media to notify the public of the issue. When making these clearances, the company needs to express some sympathy or concern to the victims, while at the same time including the employees in this phase. For Taco Bell, the crisis manager ensured that they kept their clients’ assurance of the safety their priority (Taco Bell, 2016). They checked all the allegation facts to make it open that their “beef seasoning” contained 88% beef and 12% filler, assuring the public that the product was safe for consumption (The Orange County Register, 2011). Furthermore, they responded through the use of social media such as the YouTube, Facebook, and Twitter, by assuring their users that the allegations were wrong (The Orange County Register, 2011).

Crisis

The crisis response refers to what the management sorts out and says at the time of the event (Boin et al., 2010). Public relations have a great role in this phase, as it assists in helping develop the messages that eventually get to the clients (Boin et al., 2010). The response entails two sections, which include the initial crisis response, and the reputation repair behavioural intentions.

The Situational Crisis Communication Theory

The theory suggests that the crisis managers need to match the strategic crisis responses to the intensities of disaster responsibilities and reputational threats that it poses (Coombs, Holladay, 2002). Through evaluation of the emergency type, prior relationship reputation, and crisis history, the managers can predict the degree of the reputational threat faced and how the clients will perceive the crisis, attributing it to responsibility. The actions that the organisations adopt at post-crisis depend on the emergency.

SCCT Crisis Response Strategies

Deny Crisis Intervention Strategies

One way that a company can respond to the crisis is by attacking the accuser (Coombs, 2007). The use of this method sees the crisis manager confronting the person or the group who claim that there is something wrong in the organisation. For instance, Taco Bell would in return attack the Beasley Allen as a way to deny the accusations. Additionally, denial implies that the crisis manager utterly refutes that there is no cause for alarm, taking no action to counter the crisis. The other method where the strategy denies the existence of the crisis is the scapegoat technique, where the manager shifts the blame to another group of people outside the company (Coombs & Holladay, 2002). Shifting the blame helps justify the defence of the organisation among the clients.

Diminish Crisis Response Strategies

The approach ensures that they assure customers that the company never meant to do any harm to them. For instance, the corporation may adopt the excuse method, where the manager minimises the responsibility of the agency through denying any intentions to hurt the clients, or also claiming that it was in no position to control the events that led to the crisis (Coombs, 2007). For example, Taco Bells used this technique in assuring the clients in the media that it certainly had no intentions of selling harmful beef to the clients (Wasserman, 2011). Alternatively, the justification method is when the manager has to minimise the perception of the damage that the crisis causes. Through making the clients understand that the harm is not as high as hyped, the manager assures the customers that the products are of no wilful intention to hurt.

Rebuild Crisis Response Strategies

These techniques ensure that the company regains the trust of the customers after the crisis by either compensations or apology. For the former, the crisis business manager may offer money or gifts to the victims, or even other samples of their products (Coombs &Holladay, 2002). In the case of Taco Bell, they provided samples of the beef as gifts to their clients as a way to regain their loyalty once more (Zack’s Equity Research, 2011). Alternatively, the apology strategy involves the crisis manager indicating that the organisation takes the overall responsibility for the crisis, asking the clients for forgiveness. Regarding this, Taco Bell never adopted this method, as they already denied the allegations, and instead asked for an apology from the accusers rather than the clients (Wasserman, 2011).

Bolstering Crisis Response Strategies

The reminder strategy involves reminding the stakeholders on the past good works that the organisation has done while the ingratiation method includes the emergency manager praising the company’s shareholders (Coombs & Holladay, 2002). For instance, Taco Bell praised their clients for the continued support, while also praising the accusers for having accused them. The victimage technique sees the manager having to remind customers that it is additionally a victim of the crisis, that the incidence has also affected the organisation.

Requirements for Successful Crisis Management

Leadership is essential in managing the crises in an organisation (Boin et al., 2010). The crisis manager may become the leader, showing the institution and the clients on what next steps they need to adopt (Boin et al., 2010). The leadership is in charge of figuring out what is going on in the organisation, making prompt but not hurried decisions, managing the expectations of the clients and demonstrating control over the situation.

Decision-making is another important aspect of managing the crises in an organisation (Nokhbatolfoghahaayee, Menhaj & Shafiee, 2010). Proper decision-making of the crisis manager safeguards against the actions, which are usually emotionally or politically driven at such times (Nokhbatolfoghahaayee, Menhaj & Shafiee, 2010). It also ensures that there is total compliance with the priority of the management of the crisis, which is to safeguard the clients and the employees. Additionally, it is a requirement in the elimination of the unpredictable actions that may be because of the trauma and stress of the incidence. Furthermore, decision-making is critical in ensuring that the teams remain focused on the changing impacts of the disaster. Proper decision-making at such times also helps to counter the bullying that the organisation receives (Nokhbatolfoghahaayee, Menhaj & Shafiee, 2010).

Effective teamwork is necessary for the management of the crisis in an institution (Boin et al., 2010, p. 709). The crisis management team has the roles such as early detection of the signs of the crisis, identifying the areas that cause the crisis and discussing with the employees the concerned areas. Additionally, the teamwork at such times assists the organisation to prepare the plan for managing the issue, encouraging them to face the challenge with courage and helps the company in coming out of the terrible situation and prepare for the future.

Communication as a Strategy of Managing Crisis

Communication is vital in managing the successful management of crisis (Avery et al., 2009). In the pre-crisis phase, communication is important in anticipating the uncertainty and taking appropriate preparations. The organisation can communicate to the parties before the crisis, informing them on the most suitable ways to counter the incidence (Jin & Liu, 2010). It is also essential for the identification of the crisis team, as the organisation needs to come up with counsel that will make decisions to counter the event. Communication is important in the training of the spokesperson of the company on the occurrence of the crisis, who need the guidelines on what to submit to the customers. It enables the organisational spokesman to have the right skills, position and training to face the public. Besides, the success of the management of the crisis depends on the communication to the various stakeholders, especially the clients (Coombs, 2014). For purposes of Taco Bell, communication became the best strategy to employ in the counteraction of the crisis (Wasserman, 2011). It was because this approach of communicating to the customers was the best in improving their perception of the products of the company.