Danielle Rocca (n8302057)
Salvage of Carnival Corporation: Report on the Costa
Concordia Disaster
Executive Summary
The Costa Concordia disaster was the largest maritime event in recent years and became one of the
leading news story in 2012. Occurring off the coast of Italy, the disaster had more far-retching
consequences with the parent organisation Carnival Corporation facing criticism and the global
cruising industry facing a reputation crisis. The Carnival Corporation initiated crisis communication
immediately; however, it faced criticism from both public relations experts and the general public.
This criticism steams from an absence of Carnival Corporation’s management personnel at the scene
of the disaster and other communication strategy that portrays the organisation of lacking empathy
and involvement. Furthermore, key stakeholders of investors and global cruise tourists were
neglected which in turn affected the financial profitability of the organisation. This report details
three alternative solutions to the Costa Concordia disaster which can be compared with decision
making framework to justify a best practice solution.
Introduction
The Costa Concordia disaster can be considered one of the most significant maritime events in
recent years with ramifications extending from the coast of Italy, to boardrooms in Florida and the
larger global cruising industry (Knightley, 2012; Arthur Page Society, 2012). As the Costa Concordia’s
owners are a subsidiary of Carnival Corporations, this parent organisation and its CEO Micky Arison
have faced the strong criticism for their actions immediately after the disaster. Their response has
been described as a failure with limited presence at the scene in Italy, no visible leader and the
perception that the organisation lacks empathy of stakeholders (Booton, 2012; Gallow, 2012).
Consequently, the reputation and financial stability of the organisation and the larger global cruising
industry suffered from inappropriate crisis management.
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Critical facts, factors and context
Critical Factors
Who
Primary Stakeholders
Carnival Corporations (active public)
 Carnival Corporation is the parent company of Costa Crociere which operates the Costa
Concordia (Arthur Page Society, 2012).
 Micky Arison is the long term CEO of Carnival Corporations, having replaced his father who
was the co-founder (Lublin & Campo-Flores, 2013).
 The Arison surname is heavily associated with the brand and Micky Arison is well-known
within the general public of Florida and the larger cruise industry.
Passengers onboard Costa Concordia (aware public)
 Costa Concordia had 4,252 on board at the time of disaster, including 3, 206 passengers
from a variety of nationality and 1, 023 crew with a total of 32 deaths and 64 injuries
(Malm, 2014).
 All passengers have the opportunity to acquire significant financial compensation from
Carnival Corporations (Nadeau, 2012).
Secondary Stakeholders
Investors of Carnival Corporations (aware publics)
 The Costa Concordia disaster resulted in a 17% decrease in share price with the
organisation’s stock devalued by $1 billion dollars (Neate, 2012).
Global cruise passengers (aware publics)
 Even though Costa Crociere (the owners of Costa Concordia) account for only 1.5% of
Carnival operations, this disaster resulted in significant decrease in global cruise bookings
which previously totalled 20.3 million in 2012 (Arthur Page Society, 2012).
What Carnival Corporation’s response to the Costa Concordia disaster resulted in both reputation and
financial losses to the organisation through their failure to engage with their key stakeholders.
When The sinking of Costa Concordia occurred on January 13 2012 with the organisation
acknowledging and initiating crisis communication shortly after (Arthur Page Society, 2012).
Where The disaster occurred off the coast of Italy, however the implications were more far retching
with the organisation’s headquarters in Florida criticised and the reputation of the larger global
cruising affected.
Critical factors and context
How
 Tourists perceived the cruising industry to be unsafe and there is a potential that the Costa
Concordia disaster is not seen as a one off event by prospective consumers.
 Investors in Carnival Corporation are concerned by the significant decrease in share price
and with no clear solution the confidence in the company has suffered.
 The passengers onboard the Costa Concordia must feel that they are the priority and have
access to information on Carnival’s actions to improve their awareness and limit public
hostility of the organisation in the media.
Why
 The brand and reputation of Carnival Corporation suffered from the disaster through a lack
of engagement with key stakeholders, a hostile media and no clear leader directing the
crisis management.
 A combination of high fuel prices, the global financial crisis and the disaster occurring in
peak bookings seasons has affected sales and the long-term financial stability of Carnival
Corporations and its relationship with shareholders (Mouawad, 2012).
 Coverage of the disaster dominated international media for days. This is due to the news
value of timeliness, unexpectedness and negativity allowing for the story to remain in the
headlines. Furthermore, the conflict between the arrested Captain and Italian authorities,
as well as the salvage operations kept the Costa Concordia in the news for a longer period.
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Problem Definition
Even though the Costa Concordia disaster occurred off the coast of Italy, there are numerous
ramifications within the headquarters of Carnival Corporation in Florida and the larger global
cruising industry. The intense media coverage and perceptions of key publics affected the brand and
reputation of Carnival Corporation – an organisation that prioritises safety. This damaged
reputation had a larger impact on the global cruise industry with a decrease in bookings immediately
after the disaster reflecting the public’s attitudes towards the organisation (Arthur Page Society,
2012). As a result of the decrease in bookings, not only did the organisation suffered short-term
financial pain, but also a decrease in more long term investor confidence. Ultimately, the public and
industry experts criticised the organisation’s response due to limited leadership involvement and no
presence at the scene which in turn impacted the level of engagement with stakeholders (Arthur
Page Society, 2012).
The Costa Concordia disaster and response affected the brand and reputation of Carnival
Corporations which in turn impacted the mutually beneficial relationship with each stakeholders;
those onboard the Costa Concordia, investors and potential passengers. The affects of the disaster
where intensified by both the in-depth media coverage and the crisis communication strategy
adopted by Carnival Corporations. This communication strategy had limited two- way
communication with stakeholders which resulted in reduced dialogue and engagement with those
who were either most affected or were a latent public with an interest in the case. A lack of
company created engagement meant those who were on-board the Costa Concordia, their families
and other publics where unaware of the actions the organisation’s actions to manage the crisis and
as a result were more likely to be hostile. Importantly, the intense media coverage made it difficult
for Carnival Corporation to have control over the message. Hence, their message of being the safest
mode of transport was lost and their negative reputation and perceptions amongst stakeholders
increased (Johanson, 2013). The failure to alleviate their negative brand and reputation, as well as
the perception of the global cruising industry reflects Carnival Corporations inappropriate crisis
management of the Costa Concordia disaster.
An alternative solution to Carnival Corporations management of the Costa Concordia disaster must
address the public’s perception of the cruise industry and the reputation of the organisation. The
Costa Concordia disaster created a perception that Carnival Corporation has negligent practices. This
perception had large reaching effects on the brand and reputation of Carnival Corporation, its
relationship with stakeholders and financial profitability. Therefore, it is recommended to reverse
the negative reputation and perception of Carnival Corporation by immediately creating a proactive
communication strategy which directly engages with each individual stakeholder. In particular, the
CEO Micky Arison should play a more active role by openly engaging with stakeholders, as well as
establishing company communication practices which cater for cultural differences and foreign
languages. Additionally, all public relations practices would adhere to the Public Relations Society of
America (PRSA) main principles of honesty, advocacy and fairness (Public Relations Society of
America, 2014). In doing so, the organisation would address the concerns of stakeholders by direct
engagement which would reassure publics and alleviate any public backlash of Carnival
Corporation’s response that is generated from the media.
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Organisation’s Response
Carnival Corporation response to the Costa Concordia disaster has been criticised by the media,
public relations experts and the general public. To diminish criticism Carnival Corporation attempted
to distance itself from the Italian operations, conducted limited media campaign and held
responsible the largest disaster in the organisation’s history one individual – the Captain Francesco
Schettino. As the Costa Concordia was a global event with international stakeholders and media,
special considerations into cultural needs was required to ensure the message reached its intended
foreign publics. Grammatical errors from translation were reported in some press releases;
therefore, all communication material should be properly translated to ensure no confusing
messages (Johnson, 2012). A combination of absence of a leader and limited cultural considerations
have played a role in the negative perception of the organisation, but the use of social has faced the
loudest criticism from society and the public relations industry.
During crises, social media is an opportunity to “engage one’s stakeholders, involving them in twoway communication that is both purposeful and meaningful” (Duhe, 2012, p.289). This two-way
communication demonstrates an organisation’s willingness to engage with dialogue, listening,
sharing information and responding to feedback (Duhe, 2012). Consequently, Micky Arison social
media blackout has been criticised by both experts and the general public who have questioned
Arison priorities and reluctances to directly engage with stakeholders. By examining Arison’s actions
with the situational crisis communication theory and can be seen that the social media blackout was
a crisis response strategy that aimed to distance the larger organisation from the disaster (Coombs,
2007). This strategy, however, is dependent on the situation and in the Costa Concordia case the
public saw Arison’s social media blackout as a lack of involvement in the response and limited
empathy to the victims and their families.
In times of disaster, especially negative crises with significant media coverage, events are
interpreted and examined by the public to better understand the cause and place fault (Coombs,
2007). In the Costa Concordia disaster both the public and Carnival Corporation held the Captain
responsible blaming human error (Johnson, 2012). This is a form of attribution theory were an
organisation can either deny or accept responsibility in a crises (Coombs, 2007). In the Costa
Concordia disaster Carnival Corporation denied responsibility, limiting the negative publicity. The
public, however, questioned how such a large disaster could occur in the first place and the safety
prioritise of the organisation. Furthermore, the absence of Carnival Corporation’s top level managers
in Italy immediately after the disaster, allowed for the public to blame the organisation not for the
trigger event, but rather a perceived lack of involvement in the response in the days following.
Overall, the success of crisis management relies on the ability of an organisation to effectively
communicate and connect with all stakeholders (Palmer, 2012). Consequently, defining all
stakeholders and their motivation are vital in ensuring communication strategies achieve their goals
and reach the intended audiences. In the response to Costa Concordia disaster, the organisation
appropriately prioritised those onboard the ship. Other stakeholders, including investors and
potential cruise passengers, received limited attention in the days following the disaster. This
resulted in more long-term impact on the brand and reputation, as well as financial longevity of
Carnival Corporation.
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Alternative public relations response
Alternative public relations response 1 – management centred crisis communication
An alternative approach to the Costa Concordia disaster includes a response that rebuilds
relationship between stakeholders and Carnival Corporation, as well as reminds publics of past track
record of the organisation. This is achieved by using crisis managers from Carnival Corporation, not
an external public relations team, as the main mediator between stakeholders and the organisation.
The CEO Micky Arison should play more of an active role in media relations and stakeholder
engagement, however, to receive the best results a variety of spokesperson from the organisation
should be utilised (Braud, 2014). Furthermore, Micky Arison would use social media to directly
engage with key stakeholders and portray the key messages that the passengers are the priority and
the Costa Concordia disaster is a one off event and does not reflect the wider organisation safety
practices. These key messages will also be portrayed in all communication material, which
importantly considers the cultural and language needs of international stakeholders. As the main
feature of Attribution theory is the public drive to find the causes of a disaster (Coombs, 2007). This
can easily be creating by an effective management led response detailing the organisation’s
commitment to safety which will decrease its chances of the public criticising the organisation
response.
Alternative public relations response 2 – rebuilding brand and reputation
It has become evident that the brand and reputation of Carnival Corporation suffered from both the
disaster itself and the following response. Consequently, if a similar disaster was to occur in the
future it would be more difficult for Carnival Corporations to receive trust and support from
stakeholders unless there are improvements in their crisis management (Coombs & Halladay, 2009).
Additionally, a history of poor crisis management affects the reputation which will result in the
organisation receiving more blame for future disaster (Coombs & Halladay, 2009). Therefore, it is
recommended the organisation immediately improve the reputation of the brand by conducting an
extensive media and advertising campaign. This campaign would revolve around a key message of
Carnival Corporations being safe with a proven track record.
Alternative public relations response – improving investor/ financial relations
Similar to most organisations, Carnival Corporation both values and relies on investors as a means to
raise extra revenue. As a result of the Costa Concordia disaster, the share price of the larger parent
company Carnival Corporation fell more the 17% (Neate, 2012). This led to a $1 billion dollar drop in
the value of the organisation and investor’s attitudes where negatively affected (Neate, 2012). The
financial impact of the Costa Concordia disaster has the potential of being more long-term with
investors questioning how an organisation could suffer so much from one disaster. Furthermore,
investors are concerned with the actions Carnival Corporations are taking to ensure the chances of a
similar disaster are limited and seek detailed plans on the improvement of future disaster response.
In the days following the disaster an emergency investor meeting would improve investor
confidence. In crisis communication the post crisis stage is often overlooked, however, in this
solution it would include a public report on the organisation’s response and future improvements to
alleviate any investor and other stakeholders concerns (Guth & Marsh, 2005).
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Decision making framework
The decision making framework allows for the organisation’s response and the alternative solutions
to be effectively compared and critiqued. In each category a mark out of 10 is given to a solution,
with 10 representing a solution with no mistakes, a 5 a reflection of some considerations and 0 a
sign of no evidence. At the end a tally of total marks demonstrate the best practice solution to be
the highest score.
Decision-making
area of influence/
category of
decision-making
Criteria statement
Organisation’s
solution
Alternative
solution 1 management
centred crisis
communication
Alternative
solution 2 –
rebuilding
brand and
reputation
Alternative
solution 3 improving
investor/
financial
relations
Stakeholder
involvement/
impact
Does the solution
appropriately define all
stakeholders and
prioritise certain publics
over others?
7
8
6
2
Application of
‘working theory’
Does the solution apply
and understand working
theory and how it
impacts on stakeholders
and the organisation?
Does the solution
consider the social and
intercultural needs of
stakeholders?
Does the solution
consider the local,
national and global
context and implications?
5
8
6
5
4
9
6
7
6
8
8
6
Does the solution
consider the organisation
prioritises and goals?
Does the solution reflect
the key characteristics of
its PR practice area?
Does the solution meet
all legal, ethical
considerations?
6
8
7
4
5
7
6
7
7
7
7
5
40
55
46
36
Social/
intercultural
considerations
Local, national
and global
Organisational
prioritise
PR practice area
Ethics, morality
rules and the law
Total
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Justification
The decision making framework table concluded with the alternate solution of management centred
crisis communication as being the best practice. This solution achieved high in all categories,
especially in stakeholder involvement, intercultural considerations and organisation prioritise. In this
solution not only are the stakeholders effectively identified, but they are also the only solution which
engages in two-communication with key publics who are appropriately prioritised. Additionally, this
solution scores the highest in working theory, as it best uses the attribution working theory to
understand the motivation behind stakeholders’ perception of Carnival Corporation. With
stakeholders being critical of the level of engagement and dialogue between management and
stakeholders, attribution theory allows for Carnival Corporation to accept responsibility not for the
disaster itself, but rather the ineffective response and communication strategy.
The next best solution is the alternative response on focusing on the brand and reputation of
Carnival Corporation. This solution scored high in the global context as it has the potential to use
media to reach more publics. However, a change in brand and reputation is reliant on the same
media and advertising which is more difficult to control, as well as time consuming and expensive to
meet the cultural and language needs of all stakeholders.
The response undertaken by Carnival Corporation was judged the third best solution. As previously
stated this solution appropriately prioritised those on-board the Costa Concordia, however,
secondary stakeholders (investors, global cruise passengers) were neglected. Importantly, this
solution reflected some characteristics of crisis communication, however it did not following a
structure of pre-crisis, crisis event and post crisis and also the tactics used were not encouraged by
industry experts and opinion leaders (Coombs, 2007).
Finally, the investor and financial relations solution was deemed to be the worst at identifying the
stakeholder involvement. This can be seen as a focus on investors immediately after the disaster
would be seen as inappropriate and lacking compassion to the victims of the disaster. This solution
importantly reflects the public relations practice area by focusing on investor relations, improving
the financial outlook for the organisation and increases the long-term survival of Costa Concordia.
However, this practice area is not suited for crisis communication as it would impact the
relationships with other stakeholders and has a higher potential to break PRSA code of ethics
through the neglecting of the victims of the disaster. Overall, Carnival Corporation will see success in
improving crisis communication with more proactive leadership and direct engagement with
stakeholders.
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