Recent Crisis Communication Case Study
This paper looks into the case of Tesco horse-meat scandal with a view to analyze it using the situational crisis communication theory by Coombs. First, the paper will present what an organizational crisis is and why Tesco’s case is categorized as a crisis of the organization. An organizational crisis refers to a definite, unforeseen and non-habitual occurrence or a sequence of events, which generate elevated levels of doubt and danger to an organization’s image and reputation (Seeger 231). It includes any happening or mishap that could threaten to harm an organization, its stakeholders and the general public by threatening a major product line, damaging the organization’s fiscal performance, hurting the health and well being of customers, employees, or surrounding environment, and wiping out the public’s trust in the organization, its reputation and image.
The crisis is usually unexpected because it is human nature that the managers cannot foresee everything and can only attend to a restricted amount of tasks, threats and precedences (Seeger 231). This is based on the fact that the events that they can foresee are often mitigated and therefore prevented from developing into a crisis.
A review of Tesco’s case indicates that it was a crisis because it affected the company’s reputation as well as the finances. Some media rooms described the incident as the biggest scandal of the 21st century, which resulted in the withdrawal of millions of burgers and beef products throughout Europe.
The Case: Tesco Horse-meat Scandal
The discovery of horse-meat in several UK processed beef products in 2013 led to the recalls of meat products and steered the spotlight on the food industries in the market (McIntosh 7). The case led to more strict food testing regime across Europe, to curb such incidents in the future. In January 2013, it was announced by food inspectors that horse-meat was traced in frozen beef burgers that was processed by such firms as the Irish Republic and the UK and sold by many supermarket chains across the UK which included Tesco (McIntosh 7).
The widespread of the horse-meat scandal spread through Europe and emphasized the complexity of the supply chain of the Europe’s food industry. The Food Standard Agency advised food retailers to examine their beef products for horse-meat as soon as this meat scandal emerged. Investigations revealed that the horse-meat was sourced from slaughterhouses in Romania and were then traded to a Dutch food trader, who also traded it to a Cypriot trader and ended in France (McIntosh 7). In the wake of the scandal, the Nestle Company, as a result of this scandal, stopped its delivery activities on beef products from German suppliers.
The drive to this fraud is believed to be from the financial gain intended to be derived from the sales of this meat product. This is because horse-meat is less expensive than other meat products in many countries. Some insiders in the food industry said that profit margins on processed meat had been squeezed by the supermarkets and it was understandable for the firms to commit the fraud to extend the profit margins.
Many firms were raided concerning the meat fraud and arrests made to those who were suspected. In addition, most of the meat that tested positive for horse-meat was removed from the sale shelves (Sarpong 271). However, the business did not go down as customers continued to purchase meat products following the heavy discounts on the processed meat products.
After the scandal, TESCO communicated to the public and offered a sincere apology for letting their customers down, and followed the withdrawal of all of the other meat products on the shelves (McIntosh 7). Tesco also launched a new website to showcase its activities in the farms and factory for transparency and also to enable it build trust of the consumers towards their food supply chain. They had received three cases of three burgers sold in the UK and they offered their public apology through the CEO, who appeared on the video blog on their website saying that nothing was more important to Tesco that the trust its customers placed on it and that the trust depended on the quality of the products that Tesco sold. In addition, they requested the customers who had those products at home to return them to their stores and get full refund.
When a crisis transpires, an organization’s reputation is threatened by negative perceptions of the stakeholders, whose consequences are damages of greater negative effects than that created by the crisis event itself (Yamoah et al. 98). In the cases of human error accidents, such as in the case of Tesco Corporation, the stakeholders usually attribute enormous responsibility on the organizations involved, and therefore, the management must adopt suitable communication mechanisms so that they are able to put off or minimize reputational damage. Coombs’ SCCT provides the management of organizations with assets they can use to establish the kind of crisis they face and the most appropriate communications approach they can employ in order to protect organizational reputation (Coombs 163).
The type of crisis, the crisis history and the preceding relationship reputation allows the management of the organization to draw a clue on the expected perceptions and the reactions of the stakeholders towards the crisis as well as the organization in crisis (Coombs 163). The comprehension of these reactions prepares the crisis manager to the point that they can be able to anticipate the degree of reputational risk that the case crisis presents. For instance, the stakeholders’ anger towards the organization and the persons considered to be responsible for the crisis is often a representation of the aggravating factor, to which the management should pay attention while strategizing on the specific types of crisis. The anger comes about as a result of the presence of victims and their condition(s) in such a measure that when the stakeholders take these elements into consideration, they may take a step further in their approach to the crisis, therefore, presenting a case of increased responsibility on the part of those regarded to bear the blame. Tesco Corporation was readily available in the wake of the scandal to answer all the questions from their consumers and reassure them that initiatives are in place to ensure that such an incident would never occur again. Even though the Tesco Corporation took responsibility, it also told its consumers that they were also victims of fraud.
The stakeholder perceptions suggest the kind of response strategy or strategies that would be employed to best serve the purpose of protecting the reputation of the organization. The crisis response strategies would have an effect on the on the perceptions of the stakeholders as well as an impact on reputations assets (Coombs 170). Given that reputations shape the manner in which stakeholders relate with the organization, fortification of the reputation is beneficial as well. Tesco Corporation was quick to come out and make a public apology about the horse meat scandal. Even though, this move brought them to the limelight sooner and quicker, which hurt their sales revenue for some time, it is reported that Tesco Corporation was able to regain its glory within a short period of time. Their response strategy used by Tesco Corporation was essential in protecting the corporation from negative reactions to the horse-meat scandal. For instance, instead of ignoring bad press, Tesco Corporation was responsive and honest with their consumers, which soon enough aided in realigning the consumers’ trust in their brand, and also helped in preserving the stakeholder perceptions over the corporation’s accountability and responsibility.
Tesco proved to the world that the best response ought to be ready, confront the issue head on and be fast with answers (Hutton et al. 247). Tesco launched a website that was meant to present food news and aid in allaying public doubts after the exposure of the horse-meat scandal. The Tesco Company works to demystify the food chain while reassuring the public through catchphrases denoting that they will be bringing food closer to their homes.
The significance Tesco’s reputation management can be measured by the fact that their CEO, through a video blog reassuring customers that Tesco’s current process would be changed, unveiled the food website launch. It is also imperative to note that it is not just the brands that are often negatively affected that put the statements in the media. The crisis affected many people across Europe, but it also provided an opportunity for Tesco to let the general public know that the company was doing well, thereby winning public support and increasing their business.
Ethical Communications Practice
Tesco Corporation strives to deliver the greatest outcomes for the company, the maximum returns for their shareholders and the most favorable service to their customers through practices that are morally correct and honorable (Weaver et al. 539). This is shown through the public apology the corporation made through its CEO. This also projected one of the core ethical values of Tesco, which is honesty towards their consumers about their products and operations. The corporation was also quick to provide answers to the public immediately the horse-meat scandal arose. Tesco is committed towards the carrying out their business practices in a manner that is legal and ethical by adhering to the Code of Business Conduct and Ethics, and this applies to all directors, officers, employees, agents and representatives of Tesco Corporation and its subsidiaries.
In his presentation of the video blog, the CEO described a number of measures that the corporation was implanting in response to the scandal, citing that they will create a new digital website that will allow the consumers to have a look at their operations and see their efforts in striving to be the best supply chain in the world. The consumers would be shown the farms and the factories, plus the farmers and the other individuals in line putting together the meals that end in the consumers’ plates. The CEO also reassured the consumers that the corporation would set a new a benchmark through a label that would differentiate their products from the market to help the consumers in identification purposes.
Coombs, W. Timothy. “Protecting organization reputations during a crisis: The development and application of situational crisis communication theory.” Corporate Reputation Review 10.3 (2007): 163-176.
Hutton, James G., et al. “Reputation management: the new face of corporate public relations?.” Public Relations Review 27.3 (2001): 247-261.
McIntosh, Anne. Contamination of Beef Products: Eighth Report of Session 2012-13, Vol. 1: Report, Together with Formal Minutes. Vol. 1. The Stationery Office, 2013. 7
Sarpong, Sam. “Traceability and supply chain complexity: confronting the issues and concerns.” European Business Review 26.3 (2014): 271-284.
Seeger, Matthew W., Timothy L. Sellnow, and Robert R. Ulmer. “6 Communication, Organization, and Crisis.” Communication yearbook 21 (2011): 231.
Weaver, Gary R., Linda Klebe Trevino, and Philip L. Cochran. “Integrated and decoupled corporate social performance: Management commitments, external pressures, and corporate ethics practices.” Academy of Management Journal 42.5 (1999): 539-552.
Yamoah, Fred Amofa, and David Eshun Yawson. “Assessing Supermarket Food Shopper Reaction to Horsemeat Scandal in the UK.” International Review of Management and Marketing 4.2 (2014): 98-107.