Welcome back to the Strategic CSR Newsletter! The first Newsletter of the Spring semester is below. I will be traveling quite a bit this semester, so apologies in advance for any disruption to service. I will try and keep the Newsletters as regular as possible. As always, your comments and ideas are welcome at any time. |
The article in the url below, which appeared towards the end of December, focuses on firms’ PR management of the most prominent business crises in 2010. While the crises were a surprise to the general public, a common theme, in retrospect, is that the root causes were embedded in dysfunctional aspects of operations within each of the firms. Another common factor was mistakes by the firms in responding to the issues that served to exacerbate the negative reaction. In the case of Apple’s slow response to hardware problems with the iPhone 4, for example, the article advises:
“Always listen to your customer -- and if they are telling you something, say 'thank you' and offer to remediate the problem immediately. … Apple tried to minimize the problem, which is always a mistake.”
What seems clear is that each of the firms lacked a broad stakeholder approach to the problems it faced. While the firms focused on what they thought were key stakeholders (i.e., investors), they failed to appreciate the reaction of other stakeholders who turned out to be equally important in rectifying the problem (e.g., the government and consumers). While both BP (Gulf oil spill) and Toyota (product re-call) underestimated the role of regulatory authorities (in particular, the interaction between general public reaction and politicians’ willingness to act), for example, Apple (“Antennagate”) and Facebook (user privacy) failed to appreciate the central concerns of consumers. The cost of these misjudgments was often significant:
“A study by Interbrand, a branding firm owned by Omnicom Group Inc. that tracks and publishes the top 100 global brands every year, found that the BP brand fell off its top-100 global brand list this year. The oil company had been on the list for nine years, and ranked as the 83rd most valuable brand last year. … Interbrand found that Toyota's brand value fell 16% this year because of the recall. The car maker had been the eighth largest brand in the world in 2009 but slipped to No. 11 this year. Interbrand's metric takes into account the company's financial condition, third party consumer polling data and its specialists' opinions.”
Happy New Year!
David
Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
The Year of Crisis Management: Public Relations Learned the Hard Way
By Suzanne Vranica
2020 words
30 December 2010
The Wall Street Journal
B6
