Professional Documents
Culture Documents
business continuity planning process are minds of the consumers and convinces them
identified, teams of professional experts that products have value-added components
should be assembled to prepare responses in above and beyond the products offered by the
order to minimize risks/damages. This will competition. Value-added components can
enable management not only to forecast include product quality, price, design, and
potential damaging events, but also to intangible elements such as status, nostalgic
decisively confront a situation as quickly as memories, confidence in company
possible after an actual crisis has occurred. management and leadership, and a positive
Individuals to be included on the team could record of corporate social responsiveness.
be: engineers, medical personnel, scientists, When the tangible elements are relatively
security experts, media specialists, policy equal, then intangible elements must be
analysts, and others depending on the preserved and protected for a company to
particular industry. maintain and to continue its long-term
From a historical perspective, there is position in the market. Preserving and
evidence that the greater the response time to protecting brand image necessitate identifying
a critical incident, the greater the long-term potential threats, and addressing those threats
damage to a company’s financial security and when they occur, as effectively and
reputation. In an age of instantaneous expeditiously as possible. This can be done by
communication, Internet availability and not only designing and implementing
satellite media coverage, the amount of emergency response plans as a part of the
information and the speed at which customers overall management strategy, but also by
can be informed of a perceived or actual having extensive quality assurance systems,
problem have increased exponentially. The effective communication processes, and
prevailing media trend is to accentuate the ongoing reinforcement of the company’s
negative rather than the positive aspects of commitment to the community.
situations. Nature abhors a vacuum.
Therefore, if decision-makers are unwilling or Conclusion
unable to rapidly address challenges, then For decades, The Coca-Cola Company has
sensational images will linger and grow been a standard-bearer of management and
unabated in the perceptions and attitudes of leadership practices against which other
stakeholders. Perception becomes reality. In companies have been measured. The
this case, the company’s silence as they Corporation reigned supreme in areas such as
attempted to identify the source of the quality assurance, product development,
problem led to a loss of public confidence. manufacturing and distribution, brand
The longer management delays a response, marketing, customer service, stakeholder
the more opportunity for permanent damage relationships, and corporate social
to the psychological bond which connects the responsiveness. The Coca-Cola brand has
consumer to company image and reputation. become a symbol of globalization – the
A critical component in this emotional second most recognized phrase world-wide
contract is trust and confidence in the after ‘‘OK’’. It also enjoyed unparalleled
corporation’s ability to maintain its successful loyalty and commitment from employees,
position in the market and in the community. customers and stockholders. One has only to
It is therefore imperative that local personnel evoke examples such as the New Coke/Classic
who have built rapport and credibility with Coke case, the rapid and steady increase in
local customers and political units be the stock price under Chairman Roberto
included as a visible part of the immediate Goizueta, the passion and zeal of Company
response plan. There had been a recent employees who have ‘‘Coca-Cola Red’’ blood
change in political leadership in Belgium flowing through their veins, and the ubiquity
following the dioxin crisis and, as the head of of respect and admiration for the Company to
CCE’s Belgian operations was in the process illustrate the stature of its image. The
of stepping down from his position, the Company had a reputation for doing the right
necessary rapport between company and things and for doing things right.
government had not been established. This favored status was dealt a severe blow
Another important consideration in critical when the health crisis erupted in Belgium.
incidents such as this is the preservation of Historically, the Company had been
brand image. Brand image is created in the especially adept in confronting challenges and
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Crisis management in Belgium: the case of Coca-Cola Corporate Communications: An International Journal
Victoria Johnson and Spero C. Peppas Volume 8 . Number 1 . 2003 . 18-22
minimizing risks with little or no permanent that the symptoms were psychosomatic. Ben
damage to its financial resources or image. Deutsch, Coca-Cola spokesman, said these
However, the mad cow disease and dioxin findings brought clarity and closure to the
contamination cases had very recently incident. He further stated that ‘‘the recall
threatened the health and safety of Belgian was a humbling experience – a wake-up call
citizens. Perceiving a cover-up, public unrest from which we learned to be ever-vigilant in
subsequently led to the resignation of a our concern for our consumer and the quality
number of government officials. of our products’’ (Unger, 2000).
Undoubtedly, this environment was In spite of these assurances, damage to
conducive to yet another episode of suspected Company image, reputation and prestige has
product contamination and ultimate product yet to be completely alleviated. Subsequent
recall. Therefore, the precarious social/
events continue to affect the Company as is
political environment necessitated a
illustrated by the sudden resignation of
calculated and sensitive approach to crisis
Chairman and CEO, Douglas Ivester, the
management.
flattening of the organizational structure, in-
The Company’s response to the
country assignment of executives responsible
unprecedented product recall included
for global operations, and a renewed
identifying two very specific production and
distribution problems that apparently led to commitment to local management decision
quality breakdowns, taking steps to eliminate making.
those problems, and re-establishing public
trust and confidence. The issue in this
situation is not whether the Company was Note
able to accomplish these tasks, but rather
1 KO = New York Stock Exchange ticker symbol for
when and how it actually did so.
The Coca-Cola Company.
When the crisis began, Company executives
took several days to make the matter a top
priority. The Company did identify and
publicly admit that there had been References
manufacturing mistakes. However, according
Adler, L. (2000), ``Psychiatrist says Coke crisis was
to some observers, Coca-Cola stumbled psychosomatic’’, The Coke Machine News Digest,
repeatedly, exacerbating the situation. For April 3.
example, an apology to consumers came more Hayes, C., Cowell, A. and Whitney, C.R. (1999), ``Execs
than a week after the first public reports of admit stumbling in Coke contamination’’, Times-
illness. It took ten days after the first child Picayune, New Orleans, LA, June 30.
became dizzy and nauseated for top KO Now (1999a), ``Ivester responds to Belgian product
withdrawal’’ KO Now, June 16.
executives to arrive in Belgium and Coca-
KO Now (1999b), ``Coke back in Belgium’’, KO Now,
Cola’s initial response attempted to minimize June 23.
the number and severity of the illnesses (The) Los Angeles Times (1999), ``Coca-Cola executive
(Hayes et al., 1999). A senior CCE official, says firm mishandled scare; beverages: he admits
Phillippe Lenfant, did state that the scare had communication was inadequate as products were
been mishandled, that communication was pulled from shelves’’, The Los Angeles Times,
inadequate, and that the Company was June 28.
Unger, H. (2000), ``Illnesses in Coke recall found
unprepared for a crisis of this magnitude (The
psychosomatic’’, Atlanta Journal-Constitution ,
Los Angeles Times, 1999). Atlanta, GA, April 1.
Tests conducted in Europe found that the Wolf, J. (1988-1989), ``The legacy of Mary Parker Follett’’,
products did not contribute to illnesses and Bureaucrat, Winter, pp. 53-7.
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