Crisis Communication in AWB Company - Case Study Example

Crisis Communication (WBA) Executive Summary Crisis communication refers to a way through which the executive of the company do handle situations of crisis in their organizations. It is notable that in order for this practice to be handled better, the management of the company should put some considerations in their practices. For instance, regarding the AWB scandal, the management had to first consider the situation in hand whereby in this case the situation was that AWB was involving in corruption practices in camouflaging themselves with the UN Oil-For-Food program. However, after the discovery of these corruption practices by the UN and the Australian government AWB limited has lost its reputation and also experiences a lot of losses especially after the Australian government decide to withdraw its support from it. It is also always important to consider the stakeholders involved in the situation at hand in that this always enhances application of effective measures.. WBA Case Study Context and Its Situation Analysis The case study has it that the United Nations (UN) had imposed a trade embargo to Iraq in 1990. It is this factor that consequently resulted in at least 150 deaths of Iraqi children who were starving. The increase rate of starvation and deaths of Iraqi children later forced the United Nations to change its stand in 1996 thus allowing Saddam Hussein to sell some of the oil with UN holding the money for the purposes of buying food and medicine for Iraqi people. AWB then took advantage of the situation to try to become the largest Iraq supplier of food. However, this practice was marred with a lot of bribery involving a number of AWB officials and statesmen. It is believed that contract prices of these food was secretly inflated by the AWB who were sending the UN falsified invoices under the cover of some Australian statesmen and AWB officials (Main, 2012). Later, this secret bribery service within AWB was discovered by the UN. Nevertheless, some of the AWB officials who are believed to have had a hand in the scandal have decided to resign including Mr. Lindberg who became the managing director of AWB in 2000. It is also believed that a number of AWB officials were aware that the wheat trucking fee was being paid to Saddam Hussein through the Alma the Jordanian company that never existed. This therefore implies that the AWB went against the sanctions that U.N had placed on Iraq. On the other hand these practices were also against the Australian law. All these factors have left the AWB in a poor condition with an immediate need of trying to get back to its initial status. Identification and Classification of Stakeholders Regarding the AWB case study, stakeholders involved here can be categorized in relation to their active involvement. Therefore, stakeholders here can be categorized as active, latent and passive. Active stakeholders can be referred to those that are actively involved in the project and are also affected by the actions taken. Considering the situation at AWB where the main project remains to be regaining the image of the organisation and taking it back to a status where it can be profitable, the active stakeholders can the depicted as the managerial team. The latent stakeholders on the other hand are those that are unaware of the situation at hand yet it affects them (Panjabikesan, 2011) . For instance the suffering children of Iraq were unaware of the injustices that were being done in their expense yet it was them who suffered in turn. United Nations and the Australian government can therefore be depicted as the passive stakeholders in that they are not that active in the practices taking place yet they get affected with the decision made by the organisation. On the other hand the operation of the organisation depends on them. This category of stakeholders is sometimes known as the hidden stakeholders (Panjabikesan, 2011). Identification of relevant theory applied to the case study In the AWB scandal case study, there are a number of crisis communication theories involved. One of the major theories applied in the case study is the image restoration theory (Kbconway, 2011). This is theory is being applied by the AWB when they decide to change the managerial team that existed when the corruption deals were being practiced. This facto has the implication that AWB had accepted its mistakes and was able to work towards correcting it. UN has also applied a number of decision theories in various scenarios of the case study. Just as this theory requires counseling leaders and management to make the most effective decision, UN also applied the same strategy when it came up with the decision of lifting the restriction it had earlier placed on nations trading with Iraq (Kbconway, 2011). It is evident that this decision was reached after the number of Iraqi children who were dying out of starvation increased. Identification and classifications of issues/ risks Effective risk communication is believed to be the one that informs individuals about the environmental or health dangers, manages difficult problems in a way that promotes friendliness, release information, and communicates possible crisis and emergency conditions in a harmonious manner thus encouraging cautious actions and panic reductions. On the contrary, poor communication of risk can cause development of crisis of communication (Fearn-Banks, 2010, p. 205). It is also important to note that risk communicators are encouraged to understand how the public perceives risk and also how to differentiate between objective and subjective risk. Regarding the AWB scandal case study, it is notable that there are two types of risks. This depends on how the risk itself is looked at. For instance, UN looks at risks objectively while Australian politicians’ looks at risk subjectively. This is evident at a scenario whereby UN takes an action that will help reduce the number of Iraqi children who were dying out of starvation (Main, 2012). On the other hand a few individuals on the AWB and Jordanian Company consider a shallow risk that places them as subjective beneficiaries in the expense of the larger population they are supposed to be serving. Communication opportunity and Threat There are several communication threats which should be considered during the crisis communication within the AWB. First, AWB as an organisation faces the threat of laying off most of its managers hence recruiting new and fresh people who might need time to adapt to their new jobs. On the other hand the opportunity is that by doing this the company does not only discipline the previous team but also enhances the winning back of public trust which might have been lost as a result of the scandal (The Sydney Morning Herald, 2006). The other threat that AWB faces is the loss of government support which has exposed them to losses. In this scenario, it can be argued that even though the government of Australia had thrown in the towel for supporting the organisation, AWB might just win another support from other institution should they prove their seriousness in reforming the organisation as a whole. For example replacement of managers within the organisation might just convince the government or any other institution that the culprits within AWB are not there anymore thus enabling it to win back their support. Threat Opportunity 1. Loss of support from the government This provides opportunity for the institution to reform if they want to win back the support from the government or any other institution 2. Loss of experienced managers This action will provide opportunity for adequate investigation and scrutiny of the previous actions by the initial personnel 3. Loss of public trust Ending the corruption practices that were secretly taking lace between AWB and Saddam Hussein regime. A table showing some of the threats and opportunity that AWB is facing Summary of the Case Study Using Organizational Renewal Theory Most of the organizational renewal theory literature currently does suggest that in order for any organization to achieve competitive success, it must have some measures in place to help in enhancing nonstop learning and adjustment. Regarding the AWB situation, it is clear that the institutional itself took an action of laying off the managerial team that was present in the duration of the corruption practices, this therefore implies that the AWB accepted the wrongs done and wanted to correct it as a way of moving out of the situation at hand. The Australian government also acted its part through organizational renewal theory in that it provided the platform that enhanced scrutiny of the involved parties in the scandal through its juries. The government of Australia also withdrew its support for the AWB Company, a measure that provides room for the company to solve renew itself in order to win back the government support back. Who used to be the managing director (The Sydney Morning Herald, 2006). Reference: Fearn-Banks. K. (2011). Crisis communication: A case book approach. London: Routledge. Holder, R.W. (2009). Crisis and Renewal: The Era of the Reformations. Westminster: Westminster John Knox Press. Hurst, D. K. (2002). Crisis and Renewal. Havard: Havard Business Press. Kbconway. (2011). Excellence Theory & The Evolution of Crisis Communication. It,s aSocial Media World. Retrieved July 2, 2013 from wordpress database. Main, A. (2012 June, 02). Coming clean on AWB scandal. Retrieved from http://www.theaustralian.com.au/business/wealth/coming-clean-on-awb-scandal/story-e6frgac6-1226380838500 Panjabikesan, R. (2011). Stakeholders – Characterestics and Types. Retrieved from http://toostep.com/insight/stakeholders---characteristics-and-types The Sydney Morning Herald. (2006 Feb, 09). Kickbacks: AWB boss quits. Retrieved from http://www.smh.com.au/news/business/kickbacks-awb-boss-quits/2006/02/09/1139379621332.html?page=2 Zaremba, A. J. (2009). Crisis Communication: Theory and Practice. New York: M.E. Sharpe Read More