Public Relations Departments - Dissertation Example

? Outline A Case of Food Poisoning in Hotel Inter-Continental Hong Kong: Evaluating the Response of Public Relations Practitioners in a Crisis Situation 2.0 Introduction The hospitality industry, which includes tourism, food services and the hotel sectors, is currently one of the fastest growing industries in the whole world. Because of this significant development, major players in the business have realized the increasing demand for efficient public relations services primarily to enhance marketing efforts and improve relationships with customers, members of the community, government, management and employees. This treatise will focus on the responsibilities and challenges facing the public relations department of a hotel. However, before proceeding with the wide gamut of issues and concerns, it is imperative to define the wide range of tasks entrusted to public relations practitioners. First and foremost, they have to contend with the multi-faceted aspects of corporate communications such as media relations, promotions, internal relations, damage control and more importantly, crisis management. According to Lanz and Fischoff, the practice of public relations is very vital to the hospitality industry and this includes the functions of crisis management, press relations, special events planning, targeted outreach for focused editorial coverage, press familiarization tours, community relations and newsletters. Ironically, while marketing budgets have decreased over the last few years, it was public relations that usually took the hit, even though it is a less expensive cost item than the other marketing tactics mentioned above, and that it produces more beneficial results. It’s just that it is usually considered an afterthought, rather than as a core marketing tactic. The power of public relations is well proven. It’s the most cost-effective method for promoting a travel product, establishing third-party credibility, and getting your name in front of the trade industry and publications, and of course, the public (2004). The power of public relations has been proven time and again and is considered one of the most cost-effective means to establish total credibility in the industry. 2.1 Public Relations 1. What is Public Relations As defined by Botan and Taylor, “Public Relations indicate both a professional practice and sub-field of communication with its own research and theory base. However, it is relatively young as an academic field having developed identifiable theory only during the last 50 years. The discipline has evolved into a theoretically-based area of applied communication that has the potential to inform several areas of communications and mass communication and offer theoretic and conceptual tools useful in health, risk, and political communication (2004). 2. Purpose of Using Public Relations There is a multitude of strategies, ethics, and benefits in managing and maintaining relationships. A public relations practitioner has many roles and responsibilities which have already been discussed in various publications, discourses and forums. For one, a significant responsibility of a practitioner is to counsel organizations and clients regarding communication strategies and tactics that can be used to gain the support of key stakeholders. (Fitzpatrick, 2003) 3. Importance of Public Relations More importantly, reputation denotes a mirror image of an organization as perceived through the eyes of its stakeholders taking into consideration such factors as: product quality, management, financial performance, social responsibility and market leadership. It is earned fairly and not bought and is highly susceptible and crucial in the world of commerce. 4. Case Study: Food Poisoning in InterContinental Hong Kong Hotel In the case of food poisoning in the Inter Continental Hotel in Hong Kong, eleven patrons suffered illness after dining at the Harbour Side Buffet Restaurant. As a result, most of them had to undergo hospital treatment due to vomiting and diarrhea and this incident immediately leaked out. Even regular guests stopped dining there which affected revenues considerably. Worse, the local media learned of this regrettable occurrence and came out with negative press releases not only against the restaurant but the hotel as well. This is reminiscent of the deadly SARS epidemic that hit Hong Kong in 2003 which was described as the most severe crisis that afflicted Hong Kong since the relinquishment of sovereignty. “For the first time, the tourism industry was severely hit as the Chek Lap Kok international airport reported a 70% drop in passenger traffic. Cathay Pacific Airways cancelled 55% of its flights while hotel occupancies dropped by 10% and inbound and outbound travel decreased by 70%.” (Review of Tourism Research 2003) In recent years, increasing attention has been given to crisis management in tourism literature. (Faulkner 2001, Huang and Min 2002, PATA 2003, Knable 2002, Stafford, Yu and Armoo 2002) Crisis incidents happen because “nothing is certain in this modern world where we are so often at the mercy of events, people and technologies over which we have absolutely no control.” (Jefkins, 1987) Cases of food poisoning, power failure, fires or crew strike are the examples of existing crises in hospitality industry. “A crisis reflects poorly on an organization and will damage a reputation to some degree.” (Coombs, 2007) In addition, customers will definitely be disappointed or angry after a crisis situation. Therefore, hotels need an expert Public Relations to efficiently manage these situations since it plays an important role in the hospitality sector nowadays as Barton (2001) points out, Public Relations consultants are always members of the crisis team. Going back to the case of Hong Kong Inter Continental, the hotel spokesperson gave a statement right after the incident that the dishes in question were disposed of after submitting samples for laboratory testing. All these actions were done under the scrutiny of the government’s food and environmental hygiene department. In addition, management made sure to double check the process of food preparation and offered medical assistance to the victims. In short, the hotel was willing to take all the responsibilities for what happened and responded to the crisis situation promptly. This is a typical example of what Hearit (1994) cites that “an organization demonstrates compassion by stating concern for those stakeholders affected by the crisis - the victims. A statement of regret is a common expression of compassion.” The statement of regret indicates the organization feels badly about the situation and is concerned about the victims. However, regret does not entail taking responsibility for the crisis. As we will discuss later, there are important legal implications for regret and responsibility. Regret does help to lessen the reputational damage from a crisis. (Holladay 1996) Moreover, information and compassion reassure stakeholders by helping to create the perception that the organization is in control of the crisis (Birch 1994), (Hearit 1994) and (Sturges 1994). 2.2 Definition of Crisis and Potential Damages 5. Definition of Crisis A crisis is a sudden and unexpected event that threatens to disrupt the operations and functions of an organization's operations and poses both a financial and reputational threat. Crises can harm stakeholders physically, emotionally and financially. Crisis conditions threaten to damage reputations because a crisis gives people reasons to think badly of the organization. Crisis Response strategies are used to restore damaged reputations, reduce negative effects and prevent destructive behavioral intentions. A researcher cannot hope to create a perfect list of crisis response strategies but a list of useful crisis response strategies. Situational Crisis Communications Theories requires a theoretical link between crisis situations and crisis response strategies. Logically, we cannot match crisis response strategies to the reputational threat of a crisis if there is no conceptual connection between the two. Responsibility provides the conceptual link in Situational Crisis Communications Theories. The evaluation of the reputational threat is for the most part a function of crisis responsibility. Responsibility requires accountability and the organization must answer for its actions (Weiner, 2006). The crisis response strategies are the organization's answer. The list of crisis response strategies is built around the perceived acceptance of responsibility for a crisis embodied in the response. As crisis response strategies become more accommodative, show greater concern for victims, stakeholders perceive the organization as taking greater responsibility for the crisis (Coombs and Holladay, 2004, 2005). Previous research found that the primary crisis response strategies form three groups based upon perceptions of accepting responsibility for a crisis. These are denial, diminish and rebuild (Coombs, 2006). 6. Potential Damages that Crisis brings: Safety, Financial Lost, Reputation Lost Reputation management is an essential part of crisis prevention. Banks asserts that two-way communications build relationships with key publics and may prevent crises, minimize crises, or limit the duration of crises. They inform target publics about company news and allow publics to contact the company with feedback and suggestions. The field of crisis management is synonymous with the value of reputations. An expression of this concern is the notion of reputational capital which indicates an organization's stock of perceptual and social assets or the quality of the relationship that it has established with stakeholders. A favorable pre-crisis reputation is a buffer against the reputational capital lost during a crisis and an organization with a more favorable prior reputation will still have a stronger post-crisis reputation because it has more capital to spend. As a result, a favorable prior reputation means that an organization suffers less and rebounds more quickly. Fombrun and Van Riel report that a number of event-based studies found support for the reputational capital effect when examining stock prices. (2004) In a smaller number of crises, stakeholders learn about crises through online social media. The exceptions would be victims or potential victims who are more likely to experience the crisis or to be informed directly by the organization about the crisis. If a reputation shifts from favorable to unfavorable, stakeholders can change how they interact with an organization. Clearly, the benefits of a favorable reputation noted earlier may be lost. Furthermore, stakeholders may sever ties with the organization and spread negative information about the organization. 2.3 Crisis Management Theory One vital component of public relations is Crisis Management. Although there are various theories, opinions, comments and postulation regarding a crisis, there is no accord on the definition of crisis and issue management. However, Banks has a good definition of crisis which is a “major occurrence with a potentially negative outcome affecting the organization, company, or industry, as well as its publics, products, services, or good name.”(2002) On the other hand, one very relevant description of issue management entails looking into the future to identify potential trends and events that may influence an institution or business organization while crisis management is considered a more reactive discipline focusing on the situation after a crisis has occurred. Jacques reveals a novel style in crisis management which conceives new opportunities for enhanced organizational development and redesigns the methodology within a more flexible and expansive scale of management activity. (2010) The strategy is to avert the crisis rather than merely respond to it. In so doing, the accountability is transferred from the operational to the executive level to maximize effectiveness. Jacques identifies a distinct model in crisis management that includes four fundamental elements: crisis preparedness, crisis prevention, crisis incident management and post-crisis management, each one built around clusters of activities and processes. (2007) The graphic illustration below of his Model aims to present a clearer picture of this stratagem: Crisis management is a diverse and complex process. The messages organizations deliver to stakeholders after a crisis hits are called crisis response strategies. Crisis response strategies include what the words and actions of an organization. For almost a decade, researchers in a variety of fields have been exploring their dynamics. The link is vital because communications research has proven that situations do affect message selection (Metts and Cupach, 1989) In short, some message strategies should work better than others in certain situations. Research indicates the same holds true for crises. Certain crisis response strategies work better in certain crisis situations (Holladay, 2006). Significant developments in the hospitality industry with respect to crisis management arose in recent years just like what happened in the USA during the September 11, 2001 terror attacks and subsequent acts of terrorism in Europe, the Middle East and Asia (Israeli, Moshin and Kumar, 2007). The end product is that a crisis, if not handled properly results in extreme damages to properties, unnecessary loss of lives and ruins the business instantly. Conclusion Business organizations must recognize the need to learn from crises and respond to these situations with utmost efficiency and promptness. It is just regrettable that some of these corporate institutions fail to notice some important lessons and pay no heed to ways to improve their crisis learning. The reason why business entities specially those in the hospitality industry opt for professional public relations practitioners is to assist them in handling publicity concerns and manage crisis situations. In the case of Hong Kong Hong Kong Inter Continental, the adeptness that they demonstrated speaks well of their capability to respond to an unpredictable negative occurrence and stop it from escalating into a full-blown catastrophe. It is therefore crucial to their survival that they master the concepts of Public Relations, Crisis Management and Crisis Response Strategies. References Banks, K. 2002 Crisis Communications: A Casebook Approach, Second Edition, New Jersey, Lawrence Erlbaum Associates, pp. 8-13 Birch, J. 1994 New Factors in Crisis Planning and Response, Public Relations Quarterly, Spring pp. 31-34. Botan, C. and Taylor, M. 2004 Public Relations: States of the Field. Journal of Communications, Volume 54, Issue 4, pp. 645 – 661 Dowling, G. 2001, Creating Corporate Reputations: Identity, Image and Performance, Oxford University Press. pp. 10 – 12. Faulkner, B. (2001). Towards a Framework for Tourism Disaster Management, 22 (2), 135-147. Fitzpatrick, K and Gauthier, C. Towards a Professional Responsibility Theory of Public Relations Ethics. Journal of Mass Media Ethics, Issue 16. 2/3. Accessed October 19, 2003. Fombruns, C. 1996. Reputation: Realizing Value from the Corporate Image. Boston, Massachussets Harvard Business School. p. 79. Hearit, K.M. 1994 Apologies and Public Relations Crises at Chrysler, Toshiba, and Volvo, Public Relations Review, 20, Summer pp. 113-125. Huang, J. and Min, J (2002) Earthquake Devastation and Recovery in Tourism: The Taiwan Case, Tourism Management, 23(2), 145-154. Israeli, A, Moshin, A. and Kumar, B. 2010. Hospitality crisis management practices: The Case of Indian Luxury Hotels, International Journal of Hospitality Management. Jacques, T. (2007) Issue management and Crisis Management: An integrated, Non-linear, Relational Construct, Public Review, vol.33, no.2. pp. 147-157 Citation: Organizational Development Journal 28(1), 2010, pp. 9-17. Jefkins, F. (1987) Public Relations for your Business. Gloucestershire, Management Book Ltd. Knable, C.R.J. (2002). September 11, 2001: Recovering Hospitality at Ground Zero, Cornell Hotel and Restaurant Administration Quarterly, 43 (5), 11-26. Lanz, L. and Fischhof, B. 2004, How Does Public Relations Fit into a Hotel's Marketing Plan? National Hotel Executive, http://www.hvs.com/article/921/how-does-public-relations-fit-into-a-hotels-marketing. Luecke, R. 2004 Crisis Management: Master the Skills to Prevent Disasters. Harvard Business Essential. Boston, Massachusetts. Harvard Business School Press, pp. 12 – 14. Marconi, J. Reputation 2002 Marketing: Building and Sustaining your Organization’s Greatest Asset. New York, McGraw Hill.pp. 1-19. Metts, S. and W.R. Cupach 1989 Situational Influence on the Use of Remedial Strategies in Embarrassing Predicaments, Communication Monographs, 56, pp. 151-162. Oliver, S. 2001 Public Relations Strategy, The Institute of Public Relations, London: Kogan Page. PATA (2003). Crisis: It Won’t Happen To Us! Bangkok: PATA. S.J. Holladay, (1996) Communication and Attributions in a Crisis: An Experimental Study of Crisis Communication. Journal of Public Relations Research, 8(4), pp. 279-295. Stafford, G., Yu, L., & Armoo, A.K. 2002) Crisis Management and Recovery: How Washington, D.C. Hotels Responded to Terrorism, Cornell Hotel and Restaurant Administration Quarterly, 43(5), pp. 27-40. Sturges, D.L. (1994) Communicating through Crisis: A Strategy for Organizational Survival. Management Communications Quarterly, pp. 297-316. Read More