UNIT 6
Risk management
Crisis management quiz (p.70)
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What would you do in these crisis
situations?
VOCABULARY:
Recall – to ask for sth to be returned (because there is sth wrong with it)
Scrap – to cancel or get rid of sth that is no longer practical or useful
Tamper-proof – specially designed so that it cannot be easily changed or damaged
Wrongdoing – crime, offence
Crisis management quiz- answers
1. C) Tylenol, a Johnson & Johnson
company, was praised for recalling 31
million bottles when this happened in
1982. After falling to 8%, the product
subsequently recovered its 35% market
share when it was relaunched in a
tamper-proof package.
Crisis management quiz- answers
2. C) Wendy’s restaurants lost millions of
dollars in sales and had to make
redundancies when a woman claimed she
had found a finger in her chilli in 2005. The
company contested the woman’s story, and
she was eventually sentenced to nine years
in prison for filing a fraudulent insurance
claim.
Redundancy – the situation when somebody has to leave their job because there is
no more work available for them
Contest – to formally oppose a decision or statement because you think it is wrong
Fraudulent – intended to cheat somebody, usually in order to make money illegally
Crisis management quiz- answers
3. B) In 2007, CBS cancelled a show and
terminated a contract worth $40 million
with Don Imus, a TV and radio talk show
host who had made racist remarks
about a female basketball team.
CBS – Columbia Broadcasting System
Terminate – to end, to make something end
Crisis management quiz- answers
4. B) Eric Dezenhall, the author of Damage
Control, says that his company refuses
this type of PR contract.
Damage Control (p.71)
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attempting to make big changes in society or to a
political system in an extremely determined and
enthusiastic way
on the line
evaporate
a false report or piece of news
espouse
opponent
at risk
canard
to give your support to a belief
threshold
to treat somebody as a famous or important person
purport
lionize
not affected by
messianic
the level at which something starts to happen
exempt from
or have an effect
scrutiny
inspection
to disappear
adversary
to claim to be something or to have done
something, when this may not be true; profess
Answer the questions:
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What did crisis cost a leading cell phone
manufacturer, Merck, Perrier and Audi? Why
does Dezenhall refer to them?
The cell phone manufacturer’s stock dropped by 20%,
Merck lost roughly $750 million in the fourth quarter of
2005 alone and was expected to have to pay between $4
billion and $18 billion in damages, Perrier lost its position
as market leader, and Audi had very few sales in the US
market for ten years.
Dezenhall refers to them as examples of how crisis
management can be crucial to a company’s survival (and by
implication, how easily his PR company’s fees are justified)
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How does Dezenhall argue these concepts
are relevant for crisis survivors?
STRONG LEADERS-survivors are able to take difficult decisions
FEEL-GOOD GURUS-survivors do not blindly follow conventional
wisdom on reputation management
CLIMATE SHIFTS-survivors are flexible enough to adapt when necessary
GUARANTEES-survivors know there are no guarantees, even when
major investments are made
PAIN THRESHOLDS-survivors accept short-term losses in return for
long-term gains
BABY STEPS-survivors do not try to solve everything at the same time
SELF-KNOWLEDGE-survivors are realistic and objective
THE LITTLE GUY-survivors believe that the ordinary citizen does not
automatically have more rights than the corporation
LUCK-survivors sometimes get lucky breaks
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According to Dezenhall, how has the way we
judge a crisis changed?
In the past, crisis management was judged by
financial and ethical standards; now a company’s
handling of a crisis is judged by its stock price,
its advertising campaigns, its success or failure
in court and its image on TV.
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What is the political model of crisis
management?
The political model of crisis management
assumes that a crisis is motivated by an
opponent and must be resolved by fighting,
rather than being the result of accident or
misfortune and resolvable through good
communications.
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How does Dezenhall see the media in
general and TV in particular?
Dezenhall seems to be rather cynical about
the media: he refers to the hostile scrutiny used
to fill the media vacuum on tenty-four-hour-a-day
cable news, and suggests that radio and TV
encourage experts to criticize crisis
management on the grounds that successfully
resolving crisis doesn’t make for very good TV.
Fill in!
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They question __________ PR wisdom
and do not worship at the altar of feelgood gurus who espouse
________________, the canard that
corporate ___________ follows
popularity.
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They believe that _______________ is
an exercise in moral authority, and that
their critics are not necessarily _______
simply because they purport to be
standing up for the ˝little guy˝.
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Since the __________ burst and
corporate scandals have come to fill the
media ______ once occupied by lionizing
of messianic CEOs, it seems as if no one’s
exempt from ________ scrutiny.
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The opposing team consists of
competitors, plaintiffs’ lawyers, the news
media, politicians and __________,
______________, multi-million dollar
non-governmental organizations (NGOs),
corporate stalkers, _________ and
bloggers.
Discussion
1. In our culture, whoever attacks, wins,
whoever defends, loses. Is this a sad
indictment of American culture, a more
global phenomenon, or a misleading
exaggeration?
2. Do you think there are circumstances in
which PR firms should defend
companies that pollute the environment,
exploit workers, or market defective
products?
3. In your opinion, which of Dezenhall’s
characteristics of crisis survivors can or
cannot be influenced or developed by
PR firms?
4. Dezenhall presents competitors, lawyers,
the news media, politicians and regulators,
short-sellers, NGOs, corporate stalkers,
whistleblowers and bloggers as opponents
that want to torpedo you. Is this paranoia,
sensationalism, savvy marketing, or
simply facing facts?
5. As CEO of a large corporation, would
you hire Dezenhall’s company? Why (not)