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Organization-public Relationships Essay Sample

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Organization-public Relationships Essay Sample

Introduction

            An organization has both internal stakeholders and external stakeholders. Inasmuch as the organization’s survival depends on consumer perceptions and these consumer perceptions are influenced mostly by the media, two of the most important external stakeholders for the organization are its consumers and the media. Therefore it is important for an organization to maintain good relations with the consumers and the media. In this respect, the area of public relations is the area of concern. An organization must be able to communicate well with the outside environment in order to conduct public relations successfully. This is particularly true when it comes to crisis management. A real life example is the crisis management strategies undertaken by Johnson and Johnson during the Tylenol crisis in 1982. By managing relations well with the public, the company was able to defuse a crisis situation which put the very existence of the company in question (cited in Devlin, 2004). The case study of the Tylenol crisis serves to illustrate the importance of well-managed communications strategies when it comes to managing public relations in a crisis situation.

The crisis

            At the time the crisis erupted, Tylenol was the most successful product of Johnson and Johnson. The leader in the painkiller market, it was contributing 33% of the year-to-year profit growth of the company (cited in Watson, 2006). During the fall of 1982, some unknown party removed a number of Tylenol packages from store-shelves in the Chicago area, opened those packages, took out the extra-strength capsules, replaced them with cyanide laced capsules and was able to replace those packages on the shelves without any apparent signs of tampering.  As a result of the cyanide in the capsules, seven people died horribly and overnight, the most trusted product in the industry became the most feared product in the industry (cited in Swit, 1982).

Crisis communication strategies

            The Tylenol crisis was the result of an act of terrorism because the contamination resulted from the action of a third party which was intent on destroying the impeccable reputation of the company (cited in Comfort, 2001). However the public did not know that. Therefore the management at Johnson and Johnson had to manage public relations during the crisis in such a way as to prove to its customers and the general media that it had been victimized by a malicious third party. In this respect, the management was in a rather disadvantageous position at the outset because at the time the seven people died as result of consuming the cyanide laced capsules, the public relations department at Johnson and Johnson knew nothing about it. It was only when a Chicago news reporter called the company that the management came to know about the crisis (cited in Swit, 1982).

Therefore the damage had already been done when the crisis came to its attention. The Johnson and Johnson management immediately clarified to its public relations department that the company had to save the consumers first and the product second. The first course of action that the company implemented was to alert consumers nationwide to the incidents of contamination found and to urge them not to resume using the tablets until the company officials could tell them the full extent of the tampering perpetrated. The company immediately halted all production and advertising activities related to Tylenol (cited in Swit, 1982). The company also recalled all the products nationwide, even though no incidents of contamination had been found outside of the Chicago area. This public relations strategy showed to the general public that the company did not just care about its profits, that the company put consumer health and safety first. As a result of recalling all the products in circulation nationwide, Johnson and Johnson lost millions of dollars (cited in Swit, 1982).

            In managing public relations during the crisis, the company kept in constant touch with the general public and the media. Some of the communication strategies that the management followed were: using the media to issue a national alert, setting up a 1-800 hotline for the consumers to call and using the same number to answer any questions the consumers might have about product safety, and setting up a toll-free line that news organizations could use to access daily messages about the crisis. The company arranged several press conferences which were broadcast nationwide through a live television feed via satellite. The company also developed a new tamper-resistant packaging. These public relations activities helped to restore public confidence in Tylenol and today the product is once again the market leader.

Critical analysis

            The strategies that Tylenol followed have since been held up as a textbook example of how a business organization should handle its relations with various external stakeholders during crisis situations. As mentioned before the most important external stakeholders for a business organization are its consumers and the media. With both these stakeholders Johnson and Johnson communicated well in defusing the situation. In fact the management is to be commended on the speed with which it lost ground initially when the public came to know of its complete unawareness regarding the crisis. At the time the deaths occurred, the public relations department of the company knew nothing about it. It was only when the Chicago news reporter called in that the management of the company found out about the crisis. Therefore, when the management set out to control the situation, it already had a negative image in the minds of the consumers springing not only from issues of product safety but also from what the public considered to be crass indifference on the part of the management to the deaths caused by its products. The management was able to overcome this initial difficulty by formulating and implementing clearly focused strategies, however that initial difficulty revealed how the public relations department was not doing a good job in communicating well with the media.

            The long-term objective of every business organization is maximization of shareholder wealth. However that objective cannot be reached unless a business organization maintains good public relations. Good public relations are particularly important when intense competitive rivalry is the defining feature of a particular industry. Even if there is not much competition in the industry under analysis, good public relations are the key to survival. The Tylenol crisis illustrates that point. When the crisis occurred, Johnson and Johnson was the dominant market leader because Tylenol was outselling three other competitor product combined. However some party unknown harbored ill-will towards the company and in order to hurt its market share, committed the sabotage. However the public did not know that. The public assumed that it was something in the internal processes at Johnson and Johnson that was responsible for the incidents of product contamination. The only way the company could convince the public that it had been the victim of an act of terrorism was through well-managed public relations. At the heart of well-managed public relations however is a set of clearly targeted communications strategies which the management at Johnson and Johnson implemented (cited in Moreira, 2001).

            The management at Johnson and Johnson started its campaign by clearly instructing its public relations department that consumer safety came first. This strategy created a good impression in the market. The company proved its consumer loyalty by immediately recalling all the products in circulation nationwide even when no instances of contamination had been found outside the Chicago area. In the process the company lost millions of dollars. However the important aspect of the public relations strategy that the company followed was that the management kept the public and the media in the picture all the way as it went on battling the crisis.

It set up communications facilities so that consumers could call in and have any questions regarding product safety answered. The public relations department also set up a toll free line that allowed news organizations to keep in constant touch with the steps the company was taking to handle the crisis. Using these communications media, the management had issued a national alert which urged consumers not to use Tylenol until the company had ascertained the full extent of the damage. These communication strategies clearly showed to the public that Tylenol cared about consumer safety, so that when Tylenol was released again in triple seal packaging, the consumers were prepared to give it a second change, allowing the product to regain its position of market leadership.

Questions and answers

Q:        Were there any policy decisions that led to the crisis?

A:        No policy decisions were involved because the management of the company could not have foreseen a crisis of this magnitude hitting it. As mentioned in the paper, the contamination was carried out by a third party who did not have anything to do with Tylenol. Therefore the crisis did not spring from any flaws in the internal processes at Johnson and Johnson.

  1. Based on the short-term and long-term effects of the crisis, what could the company have done differently to either avoid or better manage the crisis?
  2. It is tempting to conclude from hindsight that the company should have been packaging its product in a tamper-resistant form. However at the time the company was merely following industry standards in packaging and because a crisis of this sort had never occurred before, there was no way company officials could have anticipated a crisis of this magnitude. Therefore the company would not have been able to avoid the crisis. However once the crisis did spring full-blown, the company should have kept itself apprised of it ahead of a Chicago news reporter. The crisis clearly indicated to the company officials the gap that lay between the public relations department of the company and the media. If the Chicago news reporter had been adversarial instead of cooperative, the company management would have found it difficult to get control of the situation. Even when they were broadcasting daily news feeds nationwide, Johnson and Johnson was doing it in a sleek advertising manner which was much criticized by the media. Therefore, the campaign might have been better managed with closer relations to the media and with less stylistic communications.
  3. How can the company prevent this type of crisis from happening in the future?
  4. The crisis erupted because the package was not tamper resistant. Therefore, the company will have to continually monitor packaging safety in order to make sure that any tampering is apparent even to the most casual viewer. The company should promote greater security precautions to ensure that anyone cannot just walk out with some products and then come back in to replace them on the shelves. Consumer education on how to detect signs of tampering would also prevent this sort of crisis from happening again.

 References

Elliot, Dominic. Key Readings in Crisis Management: System and Structures for Prevention

and Recovery. McGraw Hill/Irwin (2004)..

Devlin, Edward S. Crisis Management Planning and Execution. McGraw Hill/Irwin (2004)..

Greenstone, James L and Sharon C Leviton. Elements of Crisis Intervention: Crises and How

to Respond to Them. Prentice Hall. (2005).

Swit, David, et al. Product Survival: Lessons of the Tylenol Terrorism. Wiley. (1982).

Seeger, Matthew W, et al. Communication and Organizational Crisis. Prentice Hall. (2003). Moreira, J. Paulo. A Framework for Responsive Health Policy and Corporate

Communication. Corporate Communications: An International Journal, 4, 1-6. (2001)

Comfort, Louise K. Crisis Management in Hindsight: Cognition, Communication,

Coordination and Control. Public Administration Review, 4, 1-6. (2001)

Watson, Tom. Reputation and Ethical Behavior in a Crisis. Journal of Communication

Management, 18, 116-119. (2006).

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