Managing
Negative
Publicity
Amici Restaurant,
Whangarei.
Executive summary
The purpose of this report is to advise Amici Restaurant of Whangarei on the processes and
options in achieving a favourable outcome to counter the recent crisis issue of negative
publicity experienced. Due to horrendous consequences of negative publicity to the business,
specific objectives were to identify key problems and offer recommendations to Restaurateur
owner, Ms Deister.
Problems were located in the restaurant’s lack of crisis management plan in conjunction with
the need for the development of a Corporate Social Responsibility approach in helping secure
and deter the dire effects of bad publicity via ‘Consumer Generated Social Media’ from its key
public’s lack of consumer purchasing habits. The report suggests a major implementation of
initiatives in crisis management communication with the recommendation for the formation of
a crisis management team. In addition, training in professional media and presentation is
recommended for restaurant owner, Ms Deister to ensure future stability in risk management
relations is secured.
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Table of Contents
Executive Summary
2
Table of Content
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1. Introduction............................................................................................................
1.1 Background..................................................................................................
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5
2. Discussion
2.1 Issues/Crisis Management...........................................................................
2.2 Consumer Generated Social Media - Word of mouth.................................
2.3 Corporate Social Responsibility...................................................................
2.3.1 Trust Bank of Goodwill...............................................................
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8
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3. Conclusion...............................................................................................................
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4. Recommendations.................................................................................................
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5. References...............................................................................................................
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6. Appendix A..............................................................................................................
Appendix B...............................................................................................................
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1.0 Introduction
This report was commissioned by Ms Deister – owner/manager of Amici Restaurant,
Whangarei. Its purpose is to analyse and advise on the implementation of a crisis management
plan to Amici Restaurant in order to improve existing crisis management and communication
practices to its external publics.
Amici Restaurant is characterised in experiencing a lack of development in crisis management
and communication planning, whereby all staff including the owner should follow under
emergency situations. This oversight, coupled with the lack of initiatives in the formation of a
crisis management team inevitably has lead to ineffective management decisions and practices.
This not only jeopardises the restaurant’s capacity to continue operating in business, but also
the long term damage that it is potentially harming to its reputation is apparent.
The report analyses these problems and offers recommendations on how to counter them in
improving better management and communication practices. These no doubt will lead to the
stability and improvement of the restaurant and save its reputation. Crucial elements include,
the need for the restaurant to identify in managing the crisis of ‘consumer generated social
media – word of mouth’ and the implications that it brings in terms of its negative publicity
which has affected consumer purchasing habits as highlighted by the media.
Fundamental to this entire dilemma and the underlying key to preventing similar occurrences in
future is what Al Golin(2003) would suggest in aligning the restaurant’s need to be Socially
Responsible in the concepts of ‘Trust Banking’ in goodwill, ensures a guaranteed positive result
in handling reputation management threats in future.
Restructuring the restaurant’s management practices and instigating new communication and
training programmes are the key to addressing these problems. Bindoff’s (2010) ‘Rebuilding
Crisis’ plan and Corporate Social Responsibility strategies will be highlighted in this report. The
limitations to this report were found in little information received from the perspective of the
restaurant themselves, limited consistency of data from media coverage and blogs concerning
the case, therefore added assumptions were included to benefit the completion of this report.
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1.1 Background
In Febuary 2010 Amici Restaurant located in Whangarei, New Zealand with an estimated
population of 50,000 received negative publicity when an upset customer wrote and sent
personal angry email to a handful of friends. The email was forwarded and quickly spread
throughout Whangarei residents and eventually ended up in the Northern Advocate and the
New Zealand Herald online as news. Appendix A is a copy of the media article from the
Northern Advocate where it states that the email urged
people to boycott the restaurant.
Appendix B is the media article from NZ herald online where it states the restaurant owner
estimates the email has cost her $4000-$5000 a week in takings and that a high school teacher
read it to a hospitality class.
Amici’s restaurant had received favourable reviews prior to this incident and has a service
rating of 8.4, with a chid friendly rating of ‘extremely’, (Dine out, 2010). Allens Goode Leith
Realty Ltd describes Amici Restaurant as a popular licensed Italian style restaurant set in quaint
cobbled Quality Street Mall: Very friendly staff serving delicious food and great coffee. Dine
inside or out on the spacious patio. Child friendly with toy box provided, plenty of room for the
kids to run around without interfering with other diners, and no traffic to worry about (Allens
Goode, 2010).
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2.0 Discussion
An organisational crisis is defined as, any abnormality of negative consequences intruding
into the daily course of operations and it is usually a surprise (Linke, 2009 cited by
Nikolaev, 2010). Negative publicity is a crisis situation for any business small or large.
Whether the accusations are true or not, the resulting negative publicity causes particular
damage to how consumers perceive the company and its products (Grobben &
Vanhamme, 2009). Amici Restaurant had not contemplated in facing a crisis that was to
cause them significant disruption and as a result was in the view of public scrutiny from
media coverage. The negative perceptions that were not only highlighted from reactions
closer to home from customers and non-customers alike but nationally from public views
and opinion that seriously affected the restaurants’ reputation in addressing this issue of
difference.
2.1 Issues/Crisis Management
Issues management is the process by which the company can identify and evaluate those
governmental and societal issues that may impact significantly on it (Lazar & Tymson,
2008). What to do and how to resolve a crisis are not often considered until after a crisis
occurs. To manage a crisis an organistation needs to understand the issues facing them so
they can make steps to manage them therefore are able to minimise any potential harm.
This strategy can be started by asking what sorts of issues could cause the company
reputational damage (Lazar & Tymson, 2008).
A crisis creates witnesses; they are the people who become involved with the crisis
through learning and reacting to the issue. This witness becomes a stakeholder because
they are linked to the company via the crisis (Bies, 1987 cited by Coombs & Holladay,
2007). Anger is a factor that attributes for both negative word-of-mouth and purchase
intentions with existing and potential consumers. Anger energisers people to say or write
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negative things about a company and to avoid buying a product or service (Coombs &
Holladay, 2007).
Repairing damage from a crisis is called reputation building. Reputation management
strategies vary in how much emphasis is placed on the victim (not the company). Minimal
emphasis on the victim includes denial, attack the accuser, and scape-goating (Coombs &
Holladay, 2007).
 Denial: Management claims there is no crisis.
 Attack: Management confronting the person or group claiming something is
wrong.
 Scape - Goating: Management tries to shift the blame to some person or group
 Outside of the organization eg: the victim or blaming a supplier for the crisis.
As it was apparent with Amici’s, the crisis wasn’t handled well thus impacting negatively on the
restaurant’s capacity to be financially earning consistently in business. Due to the caliber of
media attention and negative repercussions instigated by one dissatisfied and unhappy
customer; a negative snowball effect transpired from the restaurants external publics. This in
turn had a major impact on the owner’s reputation as well as the staff that worked for Amici’s,
invariably resulting in an all round diminishing morale in considerably affecting the business’
workplace.
If we are to compare all efforts according to the structures of a typical PR reputation
management rescue plan, it would be fair to ask “What has Amici done in order to restore a
good reputation for itself?” Have all efforts been made in saying “I’m sorry that this situation
has got to the stage that it has etc.” Is it possible that Amici could be seen to be doing the right
thing in making all efforts to fronting up publicly in bringing resolution to this dilemma?
(2010) Bindoff believes that rebuilding a crisis plan, one must deal with the situation honestly,
in order to achieve three things;
o Must tell their story so that the media may know about it otherwise they may not be
interested ( or possibly only in the conflict of negative impact that it brings)
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o Build on Amici’s own reputation – as the interface with media and the public, an utterly
vital necessity to developing a corporate reputation.
o Build on Amici’s own corporate reputation.
“And how do you build that trust: be available, be honest, fess up, and say what you intend to
do and then do it – and if it isn’t working out be the first to say why” (Bindoff, 2010, p.16).
2.2 Consumer Generated Social Media – Word of Mouth
Stakeholders angered by a crisis will be more likely to engage in negative word-of-mouth,
dissatisfied customers are much more likely to tell friends and family about a product or
service than happy customers (Schlosser 2005 cited by Coombs et al 2007).The increased
use of the internet makes negative word-of-mouth easier to create and to disseminate
Word-of-mouth is recognized as a powerful force in shaping attitudes of consumers.
Negative word-of-mouth demonstrates a stronger effect on customer evaluations than
positive word-of-mouth (Brown & Reingen, 1987; Herr et al., 1991 cited by Coombs et al
2007). According to Jorgensen (1996) cited by Coombs et al (2007) crisis responsibility and
anger should be predictors of negative word-of-mouth because the two variables predict
purchase intention.
On closer observation with the dilemma that Amici’s has encountered, The negative
word-of-mouth demonstrated two critical differences from the patron’s purchasing
intentions. First, its negative word-of-mouth spread by the complainant, Ms Donnelly. As
a result, the potential damage was not limited to her only in experiencing the crisis.
Typically unhappy as a customer, she told x amount of people about her displeasure and
negative word-of-mouth spread unfavorably with information from one person-toanother. The result was that the crisis had a potential effect on behaviors well beyond
those she experienced. Many came to know the crisis or learned about the crisis through
the news media. Secondly the negative word-of-mouth from this scenario came about
with a longer lasting effect on buying intention from most that got news of it in
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Whangarei. People may read or hear about the issue long after the crisis has happened.
The person who sent the message may no longer be angry but his/her angry words can
still influence the purchasing intent of others. As a result, they may become equally as
angry when an organization or restaurant, as is the case here, is at the least partially
responsible for an unexpected and negative event because these violate stakeholder
expectations of how an organization should behave (Hearit, 1994, 2006.)
2.3 Corporate Social Responsibility (CSR)
Business experts have stressed the importance of establishing social initiatives to build a
strong company reputation since the 1990’s. Academic literature on Corporate Social
Responsibility (CSR) has a major influence on how consumers evaluate companies’
products positively (Grobben et al, 2009). Further more consumer reports imply that CSR
helps a company build a reputation that can protect its image against negative publicity or
help restore it. Klein & Dawar, (2004) cited by Grobben et al, (2009) found that consumers
tend to hold a company less responsible for a crisis when it possesses a strong CSR
reputation however the greater the need for legitimation, the more sceptical consumers
are of legitimating attempts. Consumers are more skeptical about the cause-related
marketing efforts of for-profit companies than of the same efforts by non-governmental
organizations as they perceive the for-profit companies’ motivations as mainly self-serving
(Webb and Mohr (1998) cited by Grobbenet al (2009)
CSR communication has to be used wisely especially during a crisis, as it represents a
defense mechanism that can seem suspicious to consumers and produce a negative effect,
and/or not the desired effect (Ashforth & Gibbs, (1990) cited by Grobben & et al, (2009 ).
Companies need to be careful they do not protest too much during a crisis. Grobben et al,
(2009 ) conclude that companies with a long history of CSR involvement have earned the
trust and goodwill of their stakeholders.
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2.3.1 Trust Bank of Good Will
(2004) Golin’s term ‘Build trust today or lose your market tomorrow’ describes the
deposits of goodwill that can serve a company when it faces a crisis or other bad news.
This effectively is what’s termed as a savings fund for trust, goodwill, and the support of
employees, communities and the media which can be used to maintain support when
inevitable hardships or disasters occur, as is seen with Amici’s. Although it may come
the umbrella of ‘Corporate Social Responsibility’ it goes one step further in that the
effects of its impact are synonymous as being a continuum of ongoing benefits from its
primary through to its secondary, tertiary etc stakeholders. It filters through to the very
core of the public.
This internationally recognized method can be used as part of an organizations
reputation management planning to prevent damage and /or as well as to repair
damage already facing crises. Unlike many facets of business in the traditional manner
of operation, whereby the organization’s worth is easily measured by its tangible assets;
trust bank is the opposite in that it is the intangible qualities of trust banking that result
directly from the approach of genuineness by the organization when applying honesty,
sincerity and openness to its intended audience.
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3.0 Conclusion:
3.1 Issues/Crisis Management
There are no existing risk management plans that have been incorporated as part of the
Amici restaurant’s overall business strategy incentives, therefore the lack of existing
reputation building processes have resulted only as reactionary damage control
responses.
3.2 Consumer Generated Social Media – Word of Mouth
Amici restaurant’s image and reputation is damaged from the greater social reach of a
disgruntled customer via its social media connections - the electronic form of ‘word of
mouth’
3.3 Corporate Social Responsibility
3.3.1 Trust Bank of Good Will
Amici restaurant does not operate under any form of corporate social responsibility
frameworks nor does it appear to be forming trust banking partnerships with any of its
publics.
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4.0 Recommendations:
4.1

Prepare and develop contingency plans as part of Amici Restaurant’s business
strategy and ensure that they are reviewed regularly as part of the business’
ongoing development

Form a crisis management team with the inclusion of restaurateur Ms Deister,
other management representative’s as well as Amici’s company lawyer.

Ensure all can be called together easily, from having noted all contact details at
times of when confronted by future emergencies.

Ms Deister to undergo professional media and presentation training on a regular
basis during the year in preparation for future possible scenarios

Have in place action plans with each member being given specified
responsibilities to particular assigned areas to guarantee
* informing internally that Ms Deister, is the central spokesperson
and the only one to speak about the crisis externally.
*moving quickly through the stages of crisis management with the
help of specialized expertise including the media to inform the
public.

Visible and honest in owning up to the problem and apologizing

Visible in keeping in touch via the media

Always show remorse and concern

Be honest and sincere in assuring fix time

Give a generous compensation offer as a starter to relay Amici’s genuine concern
for its disgruntled customer

Must show respect for all involved
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4.2

Set up Amici’s very own social networking blog or discussion group posting
via Face Book/Twitter
4.3.1

Assess where Amici stands in matters of trust

Take steps to create trust amongst its constituencies and stakeholders

Provide a framework to put things in perspective based on Amici’s
organisational core values

Identify and establish partnership incentives by engaging with open and
honest communications at all times

When creating trust bank relationships, keep customers in mind and focus on
developing a solution that’s the best possible return for them, and delivers
successful business results.
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References
Allens Goode Leith Realty. (2010). Whangarei and the CDB. Retrieved on April 25, 2010 from
http://www.allens.co.nz/content/web/index.cfm?ContentTypeID=18828&MenuItemID
=58781
Coombs T.W and Holladay, S. J. (2007). The negative communication dynamic exploring the
impact of stakeholder affect on behavioral intentions. Journal of Communication
Studies, 11, 4.
Dineout (2010). Amici Restaurant review. Retrieved May 7, 2010 from
http://www.dineout.co.nz/restaurant.php?rest=7570
B. Grobben and J. Vanhamme. (2009). ‘‘Too Good to be True!’’.The Effectiveness of CSR History
in Countering Negative Publicity. Journal of Business Ethics.
Lazar and Tymson. (2008). The Australian and New Zealand Public Relations Manual 5 th ed.
Millennium Books.
Nikolaev, A.G (2010). The Handbook of Crisis Communication. Wiley-Blackwell Chichuster UK
Mersham, G., Theunissen, P., Peart, J. 2009. Public Relations and Communication
Management: An Aotearoa/New Zealand Perspective. Auckland :Pearson
D. Bindoff, personal communication/class lecture, April,2010.
Golin, A. 2010. What Does a ‘Win' for Amadeus Consulting's Software Clients Mean? Retrieved
26/05/2010 http://www.articlesbase.com/software-articles/what-does-a-win039-foramadeus-consulting039s-software-clients-mean-2215732.html#ixzz0p2FcKwef
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Appendix A
Ejected diner in email attack
Northern Advocate
12th April 2010
A Whangarei restaurateur has taken an online bagging from a disgruntled mother who was asked to
leave when her baby started yelling during an opera performance.
Amici owner Angie Deister said her business had suffered because of damaging comments forwarded
to hundreds of people.
In her email, Nicola Donnelly urged people to boycott the restaurant. Her version of events and that
of Ms Deister's differ.
Both women say they are collecting witness statements that back up their own stories: the mother's
that her child had behaved perfectly and the family was shocked at how rude the restaurateur had
been; Ms Deister's that the baby had made a lot of noise as the opera was starting, at which point she
asked them to leave.
Ms Deister said she had waived the family's dinner bill, telling them "to just go", and while she felt
under pressure at the time had not been rude.
Ms Donnelly's family group, which included two other children, had gone to Amici on February 24 to
celebrate her 1-year-old daughter's birthday.
She agrees that when Ms Deister saw the booking included young children she had tried to warn her it
was not a suitable night. But the Donnellys did not get the phone message in time.
As soon as the family arrived Ms Deister told them about the opera performance and they had agreed
to eat and leave before it started.
But the meal was slow to arrive and before it ended Ms Deister had come over and yelled at them to
take their baby and go, according to Ms Donnelly's email.
Ms Deister said that since Ms Donnelly's critical email "had flown around the whole town" bookings
had been cancelled and people had come into the restaurant or stopped her in the street to complain.
"A lot of people reacted to it, and it's shocking to realise how much impact something like that can
have," Ms Deister said.
"I hope nothing like this happens to other businesspeople in town. It is so easy for one nasty act to
destroy a reputation."
She said she was seeking legal advice.
One witness who did not want to be named at this stage but is supplying a written statement to Ms
Deister, told the Northern Advocate the baby had been noisy for some time before the family were
asked to leave."The whole restaurant heard it," she said.
Meanwhile, Ms Donnelly told the Advocate she did not want to be seen as "an email bully". While she
stood by the sentiments expressed in the email she initially sent to a handful of friends, she did regret
the matter "had spiralled out of control and generated so much publicity"
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Appendix B
New Zealand Herald
Owner cries foul over email
By Joseph Barratt
A restauranteur claims her business was pushed to the brink of closure by an angry email from
a disgruntled customer spread "all around town". Thousands of Whangarei residents are
believed to have seen criticism of Italian restaurant Amici written by Nicola Donnelly on
February 19. The email claims owner Angie Deister screamed at Donnelly as she threw her out
because her baby Maia was making noise during an opera performance. It has prompted an
inquiry at Whangarei District Council, where Donnelly works as a part-time human resources
adviser.
Council spokesman Alan Adcock said Donnelly sent the message to colleagues from a personal
account while she was home during her lunch break. The organisation had launched an
"internal investigation" after recipients used work accounts to forward it, contrary to email
policy.
Deister says Donnelly and her family had been told about the opera night but decided to eat
there and leave before the singing. She says she politely asked them to leave and waived the
bill. Deister estimates the email has cost her $4000-$5000 a week in takings.
She said almost everybody in town had seen it and she had heard about a high school teacher
reading it to their hospitality class.Deister said her business was only three years old and just
getting off the ground when the incident happened.
"Turnover has dropped, group bookings were cancelled. One email almost wiped me out. It's
unbelievable one viral email about an untrue story could impact on us so much." Donnelly's
email said family members were celebrating her daughter Maia's first birthday when Deister
said "shut her up or go".
When she later refused to pay the entire bill, she said Deister came up at her screaming: "Just
shut up, shut up, go away. Shut up and get out of here, get out. I don't want your money just
leave, get out."
Donnelly wrote: "Honestly throughout the whole thing Maia hadn't made a sound. By this time
she was eating icecream and playing with my phone." She ended the email by asking recipients
to pass it on.
Thomas Brown, who was sitting two tables away from Donnelly on the night, disputes her
account and said the backlash against Deister had been "completely unfair". "I could hear the
child where I was at. It was absolutely distracting and hard to hear what was happening. "It was
not the sort of thing you want to deal with while trying to listen to classical opera."
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Donnelly said this week she was "sick" of talking about the incident and was standing by her
version of events. Despite urging recipients to pass on the email, she had only sent it to a small
group of friends and never intended it to spread so widely.
"I'm surprised it has gone so far. I stand by what I said but I regret all the publicity."
Viral venom
Other Kiwis have learned the dangers of forwarded emails the hard way.
March, 2010: DB Breweries executive Anna Isaac received an email containing one word "whore" - from a work account belonging to Fergus Cleaver.
Isaac had rejected an approach for event sponsorship that Cleaver had been copied into.
She wished him luck getting sponsorship for future events after copying in key colleagues in the
industry.
Cleaver apologised but denied sending the email. December, 2007: Caterer Margaret McHugh
sent an email to Hayley Johnstone, an accounts and event manager at Ray White in Auckland,
which said: "Get into the real world young lady ... You were probably bottle-fed till late teens."
The email was sent after a series of emails querying a quote for a catering job.
McHugh later said she received more than 1000 emails criticising her.
August, 2007: Auckland University lecturer Dr Paul Buchanan was sacked after sending an email
to a student refusing to extend an assignment deadline.
In a follow-up he said: "I say this reluctantly but not so subtly: you are not suitable for a
graduate degree. It does not matter if your father died or if you have a medical certificate.
"The extension is meaningless because you have not attended the last few classes and are the
worst performer in the class."
The Employment Relations Authority ruled he had been wrongfully dismissed and awarded
$66,000 in lost wages. He was later reinstated.
October, 2006: Kiwi law clerk Craig Dale hit headlines around the world after sending an email
to colleague Azadeh Bashari proposing they become "friends with benefits". Bashari forwarded
the email with the title "loser alert" saying: "If you ever have the misfortune of meeting this
little charmer, run!!!"
By Joseph Barratt
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