Public Relation Campaigns as Key Constituent of Contingency Plan In Crisis Situation - Essay Example

Research paper on Public relation campaigns as key constituent of contingency plan in crisis situation A study of Tylenol murder case Introduction The success of a firm is major imperative that fundamentally pre-empts and promotes tools and creative mechanisms to address issues or factors which impact its performance and market credibility. The dynamics strategies of organizations help organizations to cope with external and internal issues and factors which could adversely influence its performance. They are especially pertinent in crisis management as they equip managerial leadership with creative inputs and contingency plans to address crisis issue. Crisis management necessitates immediate attention to the issues or factors which have huge potential to damage the credibility of the firm leading to significant financial loss (Cornelissen, 2008). Consequently, contingency planning has become intrinsic part of crisis management which identifies and evaluates creative ways to mitigate risks from the crisis situation. Effective public relation exercise and communication have emerged as vital strategic tools, especially in crisis situation, that help to maintain market credibility and trust of various stakeholders of the firm (Heath & Coombs, 2006). Tylenol murder case prime example of excellent public relation and effective communication during and after the crisis that had significantly contributed in retaining its credible image and trust of its stakeholders and shareholders. Background of the Crisis issue In 1982, with more than one million over the counter sales and 37% of the market share, Tylenol capsule was the leading brand of painkiller in United States. It also accounted for 33% of Johnson & Johnson’s profit growth (Berge, 1998). On 29 September, 1982, a twelve years old girl had become the first victim of cyanide laced Tylenol capsule in Illinois. On the same day another adult had died in the hospital after taking Tylenol capsule. Between 29 September and 1 October 1982, a total of seven people from across Chicago, were reported dead after the consumption of extra strength Tylenol capsules, including three people of same family. It was a major crisis situation that called for immediate response to avert any long-term repercussions on the credibility and performance of the Johnson & Johnson, the manufacturer of the Tylenol capsules. Situational analysis Johnson & Johnson was a major conglomerate in the healthcare field with major presence in pharmaceuticals, consumer goods and medical devices and diagnostics. Over the years, it has earned huge credibility for its quality products, incredible customer service and innovation in the area of healthcare products through its state of the art research and development. Of its various pharmaceutical products, Tylenol capsules have been top painkillers with significant market share. But in 1982, company had faced major crisis when its Tylenol capsules were used as murder weapon that had killed seven people in Chicago (Bartz, 2012). The bottles containing the capsules were tampered and capsules were laced with cyanide. Between 29 September and 1 October 1982, seven people had died after taking the capsules. Investigations revealed that the bottles had come from different factories, thus delineating the possibility of sabotage during the production process (Chicago Magazine, 2012). It was held that bottles were taken from the shelves of the stores and replaced after cyanide was added to the capsules. As there were no witnesses, it was assumed that the deed was done at another location and bottles with cyanide capsules were replaced on the counters. This was also vital information that came much later. The seven deaths with Tylenol as key instrument of murder had emerged as key damaging issue which necessitated urgent response. Lerbinger (2012) asserts that recognition of crisis is vital ingredient that promotes immediate remedial steps to avert potential damage to the credibility and performance of a firm. The Tylenol deaths were accepted as crisis situation and company displayed exemplary leadership by responding to it with high expediency. The seven deaths had enormously risked the credibility of the firm and its products. The crisis had not only adversely impacted the reputation of the company but also jeopardized the interests of its various stakeholders. Its market share plummeted from 37% to 7% and stock crashed from $46 to $39 (Rehak, 2002). In a significant move, Johnson & Johnson withdrew nearly 32 million Tylenol capsules from the market across America at a loss of nearly $100 million. It also offered to replace the capsules with safer tablets free of cost. Crisis management can be broadly defined in terms of strategic planning that helps to remove or mitigate ‘risk and uncertainty and allows the organization to be in greater control of its destiny’ (Fearn-Bank, 2001: 480). The company took immediate steps and stopped production of Tylenol capsules, suspended its advertising campaigns of the product and issued warning to hospitals and all its stakeholders against using the product. It’s communication strategy during the crisis, greatly facilitated in creating an environment of trust and credibility. James Burke, the chairman of Johnson & Johnson used media to convey the various measures that the company was taking to help investigate the murders. His appearance on public platform was designed to project honest and socially responsible behavior which helped inculcate trust. He also announced a reward of $100,000 for the capture of Tylenol killer that emphasized company’s keenness to solve the case (abc news, 1982). The firm constantly updated the public with the development in the case and showcased its position. Moreover, one of the most distinct fact that came out during the crisis was that despite falling stake of Tylenol painkiller in the market, its rival companies did not take advantage of the situation. Though competitors gained market share by default, they made no significant efforts to redefine their marketing strategies for competitive advantage. The crisis also propelled Johnson & Johnson to evolve tamperproof packaging, thereby forging new ways of safeguarding medicines (Powell, 1986). Johnson & Johnson’s crisis response Cornelissen (2008) asserts that in crisis situations, the interests of the stakeholders become dominant issues for firms that require innovative measures that must be implemented urgently. The company’s response to the crisis was immediate with well-defined strategy and sustained public relation exercises that were able to communicate effectively with its various stakeholders and shareholders. Public relation was the vital tool that was used to address the challenges of the crisis situation. During the period of Tylenol murder case trial, the firm relentlessly pursued an effective communication strategy that constantly informed its various public of the developments of the case and its position. Its sustained public relation campaigns were designed to show its concern for the welfare of the people and project an image of credibility and socially responsible behavior. The daily updates on various media were critical elements of public relation exercises to influence public opinion. The chairman, James Burke’s appearance on 60 Minutes, the investigative news program was crucial PR exercise that was clearly aimed at influencing the public opinion. The platform was used to assure the public and various stakeholders of the fair intentions of the firm and firm’s cooperation in the investigation of the case. The announcement regarding the recall of all Tylenol capsules from the market was important factor that considerably contributed in reaffirming the trust of the public and helped convey its strong ethics and concern for people (Broom, 1994). The crisis situations are also linked to cascading issues which form chain of causality that can cause considerable damage to the firm’s credibility and performance (Coombs, 2007). The crisis disturbs normal business leading to reduced financial and structural efficiency. The speedy response of managerial leadership had gone a long way in preventing the issues to escalate. The various measures used by the company to maintain stakeholders’ trust had positive impact and helped boost its market credibility. The situational crisis communication theory or SCCT was judiciously exploited by the firm during the crisis. The theory proposes corporate communication as key strategic tool to develop vital linkages between knowledge, attitude and behaviour that fundamentally rely on the level of recognition of the problem, its constraints and level of involvement (Steyn & Niemann 2010: Hearit, 1999). By acknowledging the issue as crisis, the leadership was able to evolve appropriate strategy to address its wider implications on the performance and market credibility of the firm. Moreover, the stakeholders’ theory postulates transparency in actions and cohesive communication that reflects collective vision of the stakeholders (Christensen et al, 2008). Company’s PR exercises were able to show that it followed a transparent modus operandi that inherently incorporates stakeholders’ interest. An effective corporate communication also exploits attrition theory that promotes the importance of organizational reputation and role of public relation in building constructive relationship with its various stakeholders (Coombs, 2007). Prior to the Tylenol crisis, Johnson & Johnson enjoyed tremendous goodwill that was reflected in its market share and growing profits. The immediate response and creative public relation campaigns hugely helped the firm to overcome early setbacks and retain its market credibility and trust of its stakeholders. The management, under the leadership of Burke had formed seven members team to evolve strategy to address the crisis and mitigate its damaging impact on firm’s market credibility and financial outcome. The key element that influenced public opinion was the nationwide recall of 32 million Tylenol capsules. It decisively showed firm’s priority that they were not willing to risk the safety of the people and loss of millions of dollar was not as important as the wider welfare of the public. Post crisis phase Tylenol murder case was exemplary example of public relation that was used as tool for effectively managing crisis situation. The extensive media campaign in the post crisis phase enabled the company to recover its falling stock as well as the market credibility which had witnessed considerable damage in early crisis phase. Most pertinently, the period was distinct in its highly creative PR strategy that had continued to exploit various media platforms to communicate company’s position and new measures to meet the challenges of the crisis. The PR exercises in post crisis phase helped to promote tamperproof tablets and regain public trust. Conclusion Crisis management and corporate communication have become increasingly important issues to cope with unexpected situations and respond timely to thwart long-term harm of any kind. Acknowledgement of the crisis per se becomes the key enabling element of crisis management that helps to develop appropriate strategy for minimizing the damage and expedite recovery. In the case of Tylenol tragedy, leadership initiative of the chairman of Johnson & Johnson and strategic PR exercises hugely contributed in overcoming the negative publicity and maintaining public trust. The crisis issues have cascading influence and can lead to considerable damage if not addressed early. Therefore they need to be addressed urgently; using effective communication that can convey firm’s stance and the measures that are taken to address the crisis. Johnson & Johnson’s crisis management was distinct in its creative public relation that had redefined corporate communication and its wider implications. (words: 1789) Reference ABC News. (1982, October 1). Tylenol poisoning. Video, Retrieved from: Bartz, Scott. (2012). TYMURS: The 1982 Tylenol Murders. NY: CreateSpace Publishing. Berge, T. (1990) The First 24-Hours. Cambridge, MA: Basil Blackwell, Inc. Broom G, Center A, and Cutlip, S. (1994) Effective Public Relations. (7th ed.). Prentice-Hall Inc. Chicago Magazine. (2012, October) Chicago Tylenol Murders: An Oral History. Retrieved from: Christensen, L.T., Morsing, M. & Cheney, G. (2008) Corporate Communications: Convention, Complexity, and Critique. Thousand Oaks, California: Sage Publications. Coombs, W. T. (2007) Attribution Theory as a guide for post-crisis communication Research. Public Relations Review, 33, 135-139. Cornelissen, Joep. (2008) Corporate Communication: A guide to theory and practice, London: Sage Publication. Fearn-Banks, Kathleen. (2001) Crisis Communication: A Review of Some Best Practices. In Heath, R. L. (Ed.), (pp. 479-485). Handbook of Public Relations. Thousand Oaks: Sage Publications. Hearit, K. M. (1999) Newsgroups, activist publics, and corporate apologia: The case of Intel and its Pentium chip. Public Relations Review, 25(3), 291–308. Heath, Robert L. and W. Timothy Coombs. (2006) Today’s Public Relations: An Introduction. London: Sage Publications, Inc. Lerbinger, Otto. (2012) The Crisis Manager: Facing Disasters, Conflicts, and Failures. (2nd ed.). NY: Routledge. Powell, B. (1986, Mar. 3) The Tylenol rescue: J & J rushes to limit the corporate damage. Newsweek Magazine. Rehak, Judith. (2002, March 23) Tylenol made a hero of Johnson & Johnson: The recall that started them all. New York Times. Retrieved from: Steyn, B & Niemann, L. (2010) Enterprise strategy: a concept that explicates corporate communication’s strategic contribution at the macro-organisational level. Journal of Communication Management. 14(2), 106–126. Read More