The Role of PR in Crisis Management - Assignment Example

? THE ROLE OF PR IN CRISIS MANAGEMENT Table of content Appendices………………………………………………………………………………………15 Executive summary It is important to establish the roles that public relations play in crisis management specifically focusing on Pepsi Company. Moreover, finding out how the multinational beverage company maneuvered itself through the syringe crisis and still manage to win back its customers trust in the competitive manufacturing market out there. Public relations play a vital role in shading the negative image of a company especially after the company faced with a crisis that paints it in bad light. This report explores the technique that the Pepsi management establishes to handle the crisis and redeem its public image (Pinsdorf, 2009). Introduction The main aim of this report is to establish the roles that public relations plays in handling a crisis in an organization. The findings will enable us to understand the significance of public relations practices in the modern day world and ultimately means of implementing the same PR practices. The rationale of this report stands as follows; to establish the roles of modern public relations in the corporate world, to establish the success and failures of the public relation activities among other important aspects (Martin, 2011). This report focuses on the interview Pepsi-Cola CEO Mr. Craig Weatherup and the leadership skills he employed as he sorted out the syringe crisis that threatened to bring down the giant company. Mr. Weatherup worked for Pepsi-Cola Company for twenty-four years as the president of the company. Mr. Craig led the company to its initial public offer until the year 2003 when he stepped down officially as the CEO. Mr. Weatherup steered the company professionally during the infamous syringe crisis and managed to redeem its tainted image. Mr .Weatherup raised the company from the syringe crisis and hit the market even stronger than before. He managed to turn the crisis in to an opportunity a quality that distinguishes his management skills from other CEOS. I used several methods in data collection for my report and that included the following; use of questionnaires, both closed and opens ended questionnaires, interviews, and data from secondary sources. My report organization consist of the following; a table of contents, abstract, introduction, literature review ,methodology, results, discussion and finally the conclusion. Literature review According toAdubato (2008), PepsiCo faced a crisis in 1993 that involved a syringe found in some diet Pepsi cans. The company instructed that all its cans remain on the shelves as investigation started to try to establish the validity of the claims. During the crisis, Pepsi launched a video of the whole production process in an attempt to prove that product tampering within the factoring was nearly impossible. From the crisis above the PepsiCo CEO established a full-fledged media public relations exercise and used the media as her medium of communication. The CEO adopted the five leadership competence skills in managing the crisis. Alvintzi (2010), states that the CEO established an environment of trust and achieved this by producing a video that educated the public with the whole process that takes place in the company and how tampering with the process was not easy. The surveillance cameras further affirmed the security precautions that the company had put in place so as to erase any possible doubt. The company also produced a second video to the public that showed a woman replicating the tampering incident. All this video footage helped the company to justify its innocence in the public. According to Green (2010), another aspect of public relations, that the PepsiCo adopted in an attempt to solve the crisis was engaging direct communication with its customer and by providing sufficient information. Many at times companies fail to rise from crises because they try to suppress the issue, PepsiCo on the other kept a constant flow of information and kept the information channels open into the public. The video footage that caught a woman tampering with the PepsiCo cans played an important role in public relations campaigns. Pepsi attacked the crisis with allegations that the foreign objects in their drinks had been inserted by malicious individuals who wanted to taint the image of the company and even threatened to open a legal suit to anyone who made such claim as the company termed them malicious and baseless (Boin, 2008). The second strategy was the denial strategy that saw the then Pepsi president Craig Weatherup making appearances on TVs and further holding interviews on radios refuting the claims. Weatherup also conducted magazine interviews assuring the public that the bottling process of the company was secure. The company rose from the crisis successfully and the following aided greatly in averting what would have been a disaster for the company; The company handled the situation exquisitely by way of keeping communication on constant flow by use of all the available media (Coombs, 2012). Once the company proved that they were no way foreign objects could find their way in the bottle the crisis had actually ended (Green, 2010). The situation turned out to be a perceived crisis and not actually an actual crisis. However, a crisis whether perceived or actual results in equal damage to the reputation of the company and appropriate public relations exercise must be established to restore the damaged image. Pepsi for instance after proving that the crisis was a hoax further thanked the whole public for standing by the company through the crisis period promised to continue offering customers with quality products in the days to come. The incident a above clearly demonstrates how a good public relations campaigns exercise can intervene and rescue an otherwise bad situation. Public relations re-establish goodwill between the company and its public. The company CEO played a very crucial role steering the company through the crisis successfully. Methodology To obtain the above information, two interview sessions conducted with Weatherup remaining the sole resource person. The first interview involved a direct phonically to the former CEO where various questions channeled to him and the feedback recorded accordingly. The second session entailed a face-to-face interview with Mr. Weatherup whereupon relevant questions concerning the crisis asked and his response to the same question recorded. The questions include the following; (1) how the CEO responded to the crisis. (2) The kind of communication he used in keeping touch with the media (3) The strategy he employed to redeem the company’s image from the negative publicity that the crisis had painted on the company. (4) The measures he established to avert a repeat of a similar scenario in future. The interviews held in duration of a year. Questionnaires were also given out to the employees of the company who were present during the crisis including Mr. Weatherup the then CEO. The responses sampled provided crucial information for the report that enabled me to illustrate the significance of public relations in process of handling a crisis. Results From the interview conducted above, I managed to obtain the following five results; Communication plays a vital role in crisis management. Mr. Weatherup the then Pepsi CEO maintained a constant communication with all the media channels thus keeping the public on the- know a move that helped kept speculation at bay. A fully-fledged public relations exercise played a significant role in redeeming the image of the company. The crisis actually painted the company in bad light and without a comprehensive public campaigns strategy in place then PepsiCo risked losing the reputation it had built for a very long time. Public relations exercise in crisis management seeks not stall the issue but rather to shade light on the prevailing matter with an ultimate goal of restoring public confidence the company and its products. I established that the public relation campaigns carried out by the company reaffirmed to the public the quality and safety of their product. In my results, I further discovered that information consistency plays a very important role in crisis management. The information given to the public by the company CEO remained consistent from the beginning of the crisis to the end. Consistency of information in all the media channels and the results from the investigation helped in building credibility to the same. Finally, I established that public relations remain a significant institution that ought to remain active and in place, whether a crisis exists or not. Public relation exercises need to have persistence in order to build the public’s trust in the company and its products. This result is affirmed from the CEO’s response where he said that the longtime good relationship that the PepsiCo had established over the years enabled played a central role in restoring the public’s confidence in the company and its beverage products. Discussion My findings a above bear great relevance not only in their research report above but also in solving contemporary worlds crisis situations. The findings above shade light on the public relations strategy and procedures that play a critical role in image redemption as a crisis recovery strategy. The findings established that a clear communication channel that ensures there exists a continuous flow of information in crisis times saves the company from disintegrating and further redeem its image. Consistency of the information given also plays a central role in the way the public will view the company. Inconsistency in the information presented to the public stating the company’s position in the crisis determines the kind of image the company will posses after the crisis. For instance, the PepsiCo above managed to sustain its reputation amongst its customers because of the then president Mr. Weatherup providing information that reflected what the investigations revealed. Varied information brings doubt and creates room for speculations, which often blows the matter the matter out of proportion (Ulmer, Timothy & Seeger, 2011). I further established that, the character of the C.E.O in a crisis determines whether the companies overcome the aftermath of the crisis or disintegrate with it. The CEO should be knowledgeable enough of the situation at hand and sharp enough to respond to questions arising from the members of the forth estate (Ahmed, 2006). The CEO ought to be swift in order for him or her to arrest the situation at its smoldering stage to avoid the same from blowing into a full-scale crisis. The CEO ought to have his communication lines open and respond to interview invitations immediately. Availability for questioning shows goodwill and transparency of the company. This also shows cooperation and willingness but absence of this will create an impression of sabotage and conspiracy to hide critical information considered vital to the public. More information on this topic discussed in the appendices Conclusion Companies as well as corporate institutions’ and individuals have an image around them and occasionally the image tarnished due to unavoidable circumstances. It is with the above understanding that I consider the public relations office or rather department a significant part of the company (Pinsdorf, 2009). Any company that does not have a public relations department runs the risks of disintegrating when hit by a crisis, which stands unavoidable in the business world. Handling of communication during the crisis time should remain the sole responsibility of the communication department that falls under the public relations docket. Using the public relations office as the mouthpiece of the company during crises renders the communication official and credible (Meitar, 2011). Another clear point is the fact that the CEO of the company in crisis determines a lot the direction that the company takes during and after the crisis. The CEO provides guidance and instructions on the way forward and this achieved by acting as a liaison between the media and the company. The CEO, need to establish a comprehensive public relations strategy that will redeem the company’s image in the publics’ perception. Crisis by whatever means creates a negative impression to the company and its products. If not handled professionally, the situation will results in product rejection thus influencing negatively the company’s sales. Decrease in profits ultimately renders the company insolvent. Public relation is no longer an optional entity in modern day corporate world but rather a compulsory entity that every institution must establish (Alvintzi, 2006). An advance public relation exercise remains solemnly the only way institutions can remain afloat in this competitive corporate world. It is also clear that no institution or company can exist without finding itself in a crisis and thus measures ought to put in place to handle any eventuality. The situation tends to be even worse because crisis often occur by surprise. This ambush always finds these institutions or companies on the wrong foot resulting in hasty and making of uniformed decision. Handling a crisis at its emerging stage averts image damage and thus stands advisable by all standards. Individuals need to establish a clear and open communication channel that will enable get to know what their customers’ feel about the products or services they offer. Feedback from the consumers enables the company to make improvements on its products and services and thus ensuring customers’ satisfaction maintained (Meitar, 2010). Customers satisfaction creates product loyalty, which is something that every organization strives to, achieve (Heath & Dan, 2009). Customers’ loyalty reduces the amount of public relation exercises conducted in times of crises since the consumers often have their resolution and however much the product may have tainted by a crisis they remain firm and committed to it (Adubato, 2008). This was well illustrated by how the PepsiCo. Beverages managed to maintain its sales in the Indian market despite facing allegations of its products containing foreign materials in it. The confirmation that the whole crisis was a hoax only helped to re-affirm the consumers’ trust and not to build it. Even though crises come along with many negative consequences, at times it might provide an opportunity for the same company to re-invent itself and hit the market in a new way. Crisis provides an opportunity for an institution to re-invent itself, which in most cases results in an increased sales volume. Several options exist as strategy for crisis recovery and they are as follows; re-branding the commodity altogether. Even though this stands as an expensive undertaking, it remains the only logical option in a situation where the company has failed to clear its name. A negative reputation had to shade and at times, it becomes easier to shade the name of the product come back under a different name (Coombs, 2011). Establishing a comprehensive public relation campaign to redeem the brand image is also another option. Even though this is an expensive undertaking at times, it saves the whole company from disintegrating. A public relation exercise changes the perception of the public towards the product and consequently reduces product rejection by the consumers. Public relations exercise may differ in the duration they take depending on the extent of damage caused on the image of the company or the amount of financial muscle available to sustain the same campaigns (Adubato, 2008). The ultimate objective of public relations campaigns in a crisis is often to improve the consumers’ perceptions and attitudes towards the product with the goal of establishing goodwill and mutual understanding between the same consumers and the company in question. Goodwill reduces negative attitudes towards the company and its employees in the end. A good CEO ensures that his/her company enjoys the mutual friendship a factor that promotes a harmonious co-existence for the both of them. Recommendations From the above interview that involved the PepsiCo president Mr. Weatherup, I would advise that every organization or corporate institution establish a comprehensive public relations exercise. Establishment of an active public relation department in organizations helps to avert crisis. My second recommendation will be that every organization ought to keep a good and active relation with the media through the public relation office (Mahajan, 2009). A good relation with the media prevents the media from portraying the institution or company in bad light. The media will offer the corporate institution fair or balanced coverage with a fair chance to prove its true position concerning the prevailing crisis. My final recommendation lies with the management of Pepsi (Alvintzi, 2010). The management needs to establish a means of communication during crisis that will incorporate all the members of the company. Every employee of Pepsi needs to be part of the team in the entire situation that the company faces. Creating the impression that the other employees play a less significant role in providing ideas in crisis moments creates a negative impression that further worsen the crisis situation already prevailing. References Adubato, S. (2008). What were they thinking? crisis communication : the good, the bad, and the totally clueless. New Brunswick, N.J.: Rutgers University Press. Ahmed, M. (2006). The principles and practice of crisis management: the case of Brent Spar. Basingstoke [England: Palgrave Macmillan. Alvintzi, P. (2010). Crisis management. New York: Nova Science Publishers. Boin, A. (2008). Crisis management. Los Angeles: SAGE Publications. Coombs, W. (2011). Timothy, and Sherry J. Holladay. The handbook of crisis communication. Chichester, U.K.: Wiley-Blackwell. Green, A. (2010). Creativity in public relations. 4th ed. London: Kogan Page. Heath, R and Dan, H. (2009). Handbook of risk and crisis communication. New York: Routledge. Mahajan, C. P. (2009). Principles & techniques of business. Jaipur, India: ABD Publishers. Meitar, A. (2010). An unimaginable journey: how Pepsi beat the odds in Romania. S.l.: BookSurge.com. Morden, T. (2009). Principles of strategic management. 3rd ed. Aldershot, England: Ashgate, Oliver, S. (2010). Public relations strategy. 3rd ed. London: Kogan Page/CIPR. Pinsdorf, K. (2009). Communicating when your company is under siege surviving public crisis. 3rd ed. New York: Fordham University Press. Martin, P. L & Dente, S. (2011). Images that injure: pictorial stereotypes in the media. 3rd ed. Santa Barbara, Calif.: Praeger. Ulmer, R. Timothy L & Seeger. (2011). Effective crisis communication: moving from crisis to opportunity. Thousand Oaks: SAGE Publications. Appendices Table A. Top of Form Bottom of Form Read More