Horse Meat Scandal - Tesco - Case Study Example

Horse Meat Scandal Name Class Unit Introduction Tesco is a Britain food retailer with more than 2318 stores globally. The multinational retailer has about 1,878 stores in UK while others are located in Europe and Asia. Tesco has been operating in more than 40000 food products, clothing and other non food lines. In 2013, Tesco conducted a test to see what was in their beef products. This test was ordered after a French company who also used the same beef supplier found horse meat in their products. The results were shocking after Tesco beef products were found to be contaminated with horse meat. The scandal led to a loss of 300,000,000 pounds (Fletcher, 2013). After the scandal, Tesco lost 1% of their market value. To address the issue, Tesco communicated product withdrawals as one of the measures to curb the scandal (Philipson, 2013). This was followed by a reactionary video by the company technical director. The company also replaced all their ads in newspapers with a post apologizing for the scandal. This essay will look at the way in which Tesco handled the scandal through communication. After the scandal, health concerns became a major issue among Tesco customers. The issue was further aggravated after it was found that not all products which had been communicated as withdrawn by Tesco were withdrawn (Philipson, 2013). Tesco was forced to apologise due to this action. After food safety investigations, it was found that Silver crest who were a third party supplier to Tesco were the source of horse meat. This led to Tesco making it public that they had terminated the contract with them. Tesco also communicated to the stakeholders that they were going to be carrying out horse meat DNA tests on their products (Philipson, 2013). This was a sign of shared responsibilities (Honey, 2009). Further findings of contaminated products on Tesco products made the company recovery worse. The scandal became wide and it was found that it had affected 11 major UK food suppliers. This led to a collective effort by all suppliers through communication to the public in order to win back trust. Tesco CEO made promises through a video making major promises (Telegraph, 2013). He promised to make sure that trust was established in the supply chain. He also promised that they were willing to offer their customers substitutes at no extra costs and make sure that they provided products overview. The initial video response by Tesco technical director used several tactics for image restoration. The video starts by offering an apology through the manner in which the speaker addresses the public (http://www.telegraph.co.uk/news/newsvideo/9872906/Horsemeat-scandal-Tesco-Chief-Executive-Philip-Clarke-issues-statement.html). He starts by declaring that the company was very sorry for the distress brought about by the scandal. He also shifts the blame to the supplier. This is a denial strategy in which he states that, “…in this case the supplier had not met…” (Telegraph, 2013). The then initiates a corrective action by stating that the will cover in great details what happened, determine who is responsible and also establish for how long the issue have been going on. He also says that the company will be engaging in preventive actions to prevent the incident occurring in future (Telegraph, 2013). This communication also serves to show that the organisation is ready to address any question that the stakeholders have. Bolstering is also used in this case (James, 2012). This is seen through Tesco pointing out that they are cooperating with relevant authorities as well as the supplier. The prompt communication was aimed at gaining lost consumer confidence (Burton, 2006). Therefore, use of video was a successful communication aspect. Though Tesco highly utilized communication, defeasibility was evident (Benoit, 1997). The organization evaded responsibility through giving excuses. This was done through claiming that they were yet to receive full information. This was a tactic used by Tesco to ensure that they evaded questioning which could have further damaged their reputation. They claimed that they will give more updates as the investigation gave results. The constant communication showed by Tesco was a sign that the organization upheld transparency (Schöpflin, Rukavishnikov & Dessewffy, 2013). The communication also called the stakeholders to be audience and make sure that they were part of the investigations. Despite the communication efforts by Tesco, the public reacted with rage. Most of the stakeholders viewed Tesco to be colluding with the suppliers. The health risk of the meat whose origin was unknown made the matter worse. Most of the consumers did not view Tesco guilty. They claimed that Tesco had been choosing suppliers based on the prices but not quality. The rise of internet has made communication to be very fast (Baubion, 2013). This implies that in case of a scandal, it spreads fast and prompt damage control is needed (Coombs, 2007). Tesco faced outrage from their consumers in social media. Their apologies on the social media gained a lot of negative comments. Most of the customers were against Tesco and its efforts to restore image over the social media seemed futile. Tesco adopted another mode of communication as investigations continued throughout Europe. The organization came up with a strategy in which the information from the investigation was to be used for own benefit. Tesco also admitted to share the blame partly based on their choice of suppliers. This was through their Facebook post which was titled “what we found”. This communication received more favourable response from the customers than the previous ones. There was a good choice of words and used a favourable tone (James, 2012). Most of those who participated in the discussion showed appreciation. Despite the communication being received more favourably than the previous ones, there was still call for more action from Tesco side by the consumers. Tesco made a mistake in their communication by shifting blame in the first place. They also blamed a single supplier but later, other suppliers were found with the scandal. This made their communication to lose credibility. Openness is always required when dealing with scandals (Coombs, 2007). The twists that Tesco communication presented were a threat to their reputation. They led to loss of customer trust. The strategy of shifting blame in Tesco earlier communication presented a major obstacle in gaining consumer trust. The scandal escalated when Tesco Czech supermarkets were implicated (Philipson, 2013). The matter was addressed through product removal from shelves and use of more communication. The company posted the matter in their Facebook page and directed the audience to a website which gave the findings and test results. The matter was made worse after it was discovered that Tesco were giving contradictory information. The communication that was used by Tesco at this stage was aimed at image maintenance rather than restoration (Honey, 2009). Tesco also assured their customers that horse meat did not pose health risks to anyone. The communication that Tesco used showed that they were determined to retain customer trust but at the same time shifting the blame (Ulmer, 2001). The company communication made it more difficult for the consumers to believe that there was no negligence by Tesco when choosing their suppliers. Customers viewed Tesco choice of suppliers to have been based on price rather than quality. The constant communication by Tesco despite this enabled the elimination of suspicion of negligence. When an organization is facing an incidence such as Tesco had, stakeholders always view it as responsible. It is important to note that perceptions are very vital than the reality (Garcia, 2012). When the crisis occurs, the stakeholders are also keen in looking for information which can help them make sense of it (Davis & Andrew, 2002). The information made available to them during this period plays a major role in shaping their opinions. The audience starts by trying to come up with the symbolic reality about the incident. Crisis communication strategies, thus become a very vital tool (Honey, 2009). Crisis communication is dependent on the audience that is being addressed at the time. There is also need to prioritise the audience being addressed as stakeholders (Coombs, 2007). This helps in framing the information and ensuring that the customers are only addressed with the facts that they really care about and can easily comprehend. It is also vital to ensure that the information being disseminated is consistent to avoid loss of credibility (Benoit, 1997). The choice of communication that was used by Tesco was appropriate based on the situation and audience (Benoit, 1997). This is due to fact that horse meat scandal presented the organization with varying range of offensiveness. In some cases, even the innocent organizations accept responsibility in order to regain customer trust (Davis & Andrew, 2002). Tesco mostly used image restoration and evaded taking full responsibility during their communication. Use of social media in Czech to address the problem did not gain appropriate response. There were less than 50 comments on the issue which was a clear indication that the platform was not necessary to address the issue in the Czech market. It was the first time the issue was being addressed using social media in Czech context. The medium thus proved inefficient in addressing the matter in this context (Millar, 2004). In the Czech context, Tesco was viewed as a villain during the whole period. Evading responsibility as seen in the initial communication was used with an aim of looking for more time. Through this, Tesco wanted to gain more information and come up with a better explanation. The corrective action communicated helped a lot, especially in the UK market. This was not the case in the Czech market. There was an incompatibility of the results that were given by Tesco and those from the government. This made it hard for the Czech stakeholders to believe in Tesco corrective action. Use of full confession in their communication as witnessed at the end was very significant. This helped Tesco in ensuring that they were not perceived unreliable by the customers (Millar, 2004). The communication strategies by Tesco representatives on horsemeat scandal showed commitment and transparency. The communication was used as a means of regaining customer trust. In their external communication, the representatives uses words such as “we will act quickly”, among others (Telegraph, 2013). As the crisis became severe, the tone of communication changed. The company used communication terms which implied greater commitment. Though Tesco was directly implicated in the horsemeat scandal, their response through external communication was not good as expected. The image restoration attempts were not as expected (Honey, 2009). The organization communication strategies attempted to divulge information in bits with an aim of waiting until the stakeholders forget the whole issue. When this did not work as more issues on scandals came out, they changed the communication tactics. The actions by Tesco show the importance of communication in image restoration (Courtland, 2003). Tesco have managed to recover partly but there is need to keep the consumer more informed through communication. This is through communicating on the measures in place to curb reoccurrence of the scandal (Millar, 2004). The response to Tesco horse meat scandal gives insight of how effective use of communication can help to solve a crisis. Conclusion To sum up, Tesco horse meat scandal which occurred in 2013 led to negative impacts on its financial performance. The organization image and reputation among the consumers and other stakeholders was damaged. The company responded through communication to address the issue. Tesco faced a major problem in using communication to restore their image. This is due to fact that what consumers perceive is more vital than the reality. Communication thus had to be used strategically to ensure that consumers changed their negative perception about the company. The dialogical nature of communication especially on the social platforms also presented a major challenge. Initially, Tesco blamed the supplier in their communication trying to evade responsibility. But as the matter escalated to Czech, they had to take partial blame on choice of supplier. In this case, Tesco utilises both social platforms and print media to communicate with the stakeholders. Despite this, the use of social media in Czech does not succeed. The essay shows that media of communication should be based on the context. Lastly, the company will have to continue engaging their consumers in communication to ensure they fully solve the crisis. References Baubion, C 2013, OECD Risk Management: Strategic Crisis Management, international government publication, no.23. Benoit, L.W 1997, “Image Repair Discourse and Crisis Communication”, Public Relations review, Vol. 23, No. 2, pp. 177-186. Burton, S.K 2006, “Without Trust, You Have Nobody: Effective Employee Communications for Today and Tomorrow”, Public Relations Strategist, 12, 2, pp. 32-36, Business Source Complete, EBSCOhost. 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Lawrence Erlbaum Associates, Publishers. Philipson, A. 2013, “Tesco confirms its frozen spaghetti Bolognese is up to 100 per cent horse meat”. Daily Telegraph, Accessed 27th January 2015 from, < http://www.telegraph.co.uk/foodanddrink/foodanddrinknews/9863542/Tesco-confirms- its-frozen-spaghetti-bolognese-is-up-to-100-per-cent-horse-meat.html > Schöpflin, G., Rukavishnikov, V., & Dessewffy, T 2013, “The crisis today”. Central European Political Science Review, Vol.14, no.1, p. 52. Telegraph 2013, Horsemeat scandal: Tesco Chief Executive Philip Clarke issues statement , Telegraph news video, Accessed 27th January 2015, Available from http://www.telegraph.co.uk/news/newsvideo/9872906/Horsemeat-scandal-Tesco-Chief- Executive-Philip-Clarke-issues-statement.html Ulmer, R.R 2001, “Effective Crisis Management through Established Stakeholder Relationships”. Management Communication Quarterly, Vol.14, no.4, pp.590-615. Read More