The paper "Reputational Crisis in Shell Australia Limited" is a good example of a business case study. Reputational issues have faced a number of business entities across the globe which has negative effects on the company and the shareholders (Giles, 2015). One company that has been faced with a reputational crisis is Shell Australia Limited. Shell Australia Limited is a subsidiary of Royal Dutch Shell that has been in operation since 1901. Initially, the company dealt with the delivery of fuel and had storage and distribution terminals (Staas, 2011). Today, the company has expanded its operations to coal mining, oil exploration as well as petrochemicals.
Shell Australia has a Sydney Harbour which is a receiving and storage facility that distributes crude oil in Australia. Ships offload more than four million tonnes of oil and petroleum products that are distributed by underground pipelines (Murray, 2001). In 1999, residents living near the Sydney Harbour were astounded by a strong gassy smell that was caused by a spill of about 80,000 litres of oil. This led to a reputation crisis for Shell Australia Limited (Murray, 2001).
This paper will offer a brief description of the Sydney Harbour oil spillage and will describe the company’ s assessment of the crisis. In addition, the paper will detail out how Shell Australia responded to the oil spillage and the role of public relation theories in responding to a crisis incident. Lastly, the paper will describe the outcome of the company’ s response and will provide a list of recommendations for improved reputation planning and management. Description of the Reputational Issue In the evening of August 1999, an Italian oil tanker was transporting crude oil cargo at Shell’ s Sydney Harbour (Staas, 2011).
300 tonnes of oil was spilt accidentally into the Bay terminal at 6.25 p. m. on a Tuesday. The reason for the spill was unknown at that time. The spill overwhelmed the residents living near the harbour and threatened the company’ s reputation and business operation (Staas, 2011). The crisis could potentially ruin stakeholder relations and could influence the government to stop the shipping and transportation of Shell’ s crude oil in Sydney Harbour. The termination of the oil shipping would severely affect Shell’ s Clyde refinery as well as Gore Bay terminal that distributed almost fifty per cent of South Wale’ s fuel requirements (Australian Maritime Authority, 2000). Shells External Affairs team came up with a pre-planned crisis communication plan immediately after the crisis which exploited the strong stakeholder relationships that have been available for the past ten years (Australian Maritime Authority, 2000).
In addition, the company’ s key messages were reinstated in several mediums through the use of communication tools such as personal briefing, media campaign and letterbox drops to name a few (Australian Maritime Authority, 2000).
The campaign and key messages from Shell were successful as key local shareholders expressed their belief in Shells ability to solve the crisis and their integrity and competence. More importantly, after the reputational crisis involving oil spillage, Shell in collaboration with the government announced the commencement of the commercial shipping of crude oil in Sydney Harbour (Australian Maritime Authority, 2000). Key Stakeholders of Shell Australia A stakeholder is either a person or a group of people who are directly affected by the operations of the company (Giles, 2015). Stakeholders of Shell Australia include shareholders, customers, employees, and government and business partners.
They are significant to the company since they bring a very substantial impact on the performance of the company. Shell Australia often holds a forum involving all the stakeholders to explain the concerns of the society around Gore Bay (Giles, 2015). After the oil spillage in Sydney Harbour, the stakeholder held their usual forum and accepted the responsibility of the oil spillage and wanted to be more informed of the company’ s activities. Additional stakeholder relations were created after the spillage with the ministerial politicians and public servants to create a two-way communication channel (Murray, 2001).
When a problem emerges, the government require the need to be informed even before the community is hit in order to respond accurately and immediately.
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