Yummy Snacks: Options for Crisis
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Table of Contents
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Option for Crisis
A. Background
Yummy Snacks is a 100 million dollar food manufacturer that has grown quickly from its start fifteen years ago. Two days ago, we received an urgent telephone call from a section manager at CDC (Center for Disease Control and Prevention). Over a dozen people in all parts of the country have been hospitalized with Salmonellosis, or an infection caused by the Salmonella bacteria. According to the CDC, one of the few items that linked almost all of those hospitalized was that each had eaten our Zippy Do Da Cakes.
As a result of this difficulty, the senior leaders of Yummy Snacks are under considerable pressure to react. However, we know that our reaction can make or break the future of the company. We must review the options, and review them quickly, so that we respond in a manner that is in keeping with our corporate values and safeguard our future existence.
This is a critical time for our company. We have just expanded our territory and opened up three new manufacturers and four new distribution centers. We do not have deep pockets nor the resources to weather an extreme downturn in business. About Salmonella
Salmonella infections have been much in the news lately, and many myths have arisen regarding it. Some news articles have called it an “unstoppable flesh- eating bacteria” that travels rapidly through the human bloodstream and causes death within days of infection.
None of that is true. Salmonella infection causes diarrhea, fever, and abdominal cramps usually lasting 4 to 7 days. Most people recover without any medical treatment. While some strains of Salmonella do have a resistance to many known antibiotics, the infection is not nearly as bad as it is presented in the media. People who are elderly or already sick are in the most danger. Salmonella bacteria are transmitted through the feces of humans or animals.
B. Statement of the Problem
The basic problem is that we don’t know whether or not it was actually the Zippy Do Da Cakes that caused the problem, or if any other type of snack might be
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affected. We don’t know if this was accidental or sabotage. We don’t know if someone has a grudge against our company or the people who got ill. We don’t know if this is the end, or just the beginning. We don’t know if any of our employees are involved.
We don’t know much – except that some people have gotten ill and except for one or two, they all ate our Zippy Do Da Cakes.
C. Options
The senior leaders of the company must make a decision quickly about our immediate response. D. Ignore the issue
One option is to completely ignore the issue and not respond. We have been notified by the CDC that our snacks may be involved, but that is not yet certain and we may very well find out that there is a completely different cause that has nothing to do with us. The media are not yet aware of the problem, and the CDC has assured us that they do not plan to release any information to the media until they are completely sure of the cause – and they will let us know prior to any information release.
Advantages
The advantage to ignoring the issue is that if it turns out to be nothing, there would be no harm done. In the meantime, we can spend the time learning more about Salmonella and the issues so that if it does turn out to be something in our processes or one of our employees, we will have time to develop a carefully controlled response.
Disadvantages
The disadvantage is that if it is discovered later that we knew about this issue and ignored it, both public opinion and federal courts may judge us harshly. This would be especially true if the information gets leaked and the media finds out about the potential link to our snack prior to our response. E. Respond Publicly with Denial
We could respond, publicly, and announce that the illness is not related to our employees, manufacturers, or distribution centers. We would hypothesize that someone else with a grudge is trying to hurt our company, or indicate that the
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CDC has not ruled yet on the cause so people shouldn’t be jumping to conclusions.
Advantages
The advantage for this choice would be that we would get a jump ahead of the media, looking like the good guys because we let people know about the problem. Our denials may mitigate the issue so that few people would consider us to blame.
Disadvantages
The disadvantage is that public acknowledgement of the problem itself may be enough to impact our sales. Furthermore, people may not believe our denials, and if, for some reason, it is discovered later that one of our employees was involved in this, it would look bad for us. F. Respond Privately With Denial
We could still respond to all people who already know about the issue and let them know that we deny any wrongdoing. We would insist that our processes, manufacturers, and distribution centers are beyond reproach and could not possibly have been involved in this problem.
Advantages
The advantage of keeping it private is that the public media would not necessarily become aware of the issue because of us, giving us more time to investigate and compose a response. At the same time, we get our denial on record, early on, so that when it turns out the virus did not come from us, we will be vindicated.
Disadvantages
The disadvantage is that if, indeed, any of our employees, processes, manufacturers, or distribution centers is involved, we will look like we were trying to cover it up. Denying a problem at this point might hinder further investigation, and make us look all the more guilty. G. Respond publicly with apology
We could respond with an apology and a recall of all of our Zippy Do Da cakes. We would start a thorough investigation immediately, and make the media aware of our cooperation.
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Advantages
Although we didn’t do anything wrong, our products may very well have been involved in these illnesses. If the act of a saboteur, though it was not our fault, many will blame us if anyone else dies once we know about the issue. If we immediately go public, admit what we know and what we don’t know, and begin an immediate investigation, then even if the problem does turn out to be our manufacturer or distribution center, the impact might be mitigated by our honest portrayal of the facts and our willingness to take a huge loss to avoid further problems.
Disadvantages
The biggest disadvantage to this choice, of course, is that it will cost us millions to recall all the Zippy Do Da cakes. Additionally, that may not be enough. If this is the act of a saboteur, they may simply switch to a different product, causing us to recall another product, and another.
Additionally, if the problem turns out to have nothing whatsoever to do with our products, we will have wasted product and money for no good reason. H. Respond privately with apology
We could respond with an apology privately to everyone who got sick, pledging to investigate and find out if we were culpable, but not do a recall or make a public announcement.
Advantages
This response may be enough to calm the people who have become ill and their families. If the problem is determined to be outside our control, the apology will be seen as a nice gesture. If the problem was within our control, the apology may work to lessen any litigation fervor. This would also be the least expensive option, at least until we know more about the causes.
Disadvantages
The disadvantage is that the apology may be enough to touch off a litigation frenzy – even if it is determined at a later date that we were not involved at all. Additionally, though done privately, this may cause a media leak, causing the issue to become public prior to our investigation.
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I. Discussion
There have been several well-known cases of similar corporate crises.
Pharmaceutical Industry: Tylenol cyanide poisoning
Automobile Industry: Tires (blowouts)
Soft Drink Industry: Perrier contaminated water
Fast Food Industry: Chili containing human finger
There are several business ethics experts who discuss these and other corporate crises. The overwhelming majority point to the pharmaceutical industry crisis as the “textbook” case on how to successfully handle an issue. In our options, they used the option described in our Respond publicly with apology- Error: Reference source not found. Although the issue cost the company millions of dollars, their public image was not damaged. When it was discovered that they were not to blame at all, they might even have gained a bit due to their swift and complete response before all the facts were known and the perpetrators identified.
The problem within the automobile industry of tires causing accidents is equally used as an example of a poor way to deal with problems of this sort. In this case, no one was willing to take responsibility and company representatives spent quite a bit of time publicly pointing fingers. The reputations of all involved were stained as a result.
The fast food company involved in the crisis described previously took the “denial” route, and, indeed, it turned out that the so-called “victim” perpetrated a fraud upon the company and is now in jail. Nonetheless, financially this company took a big hit, and their reputation has not quite recovered.
J. Recommendation
After considering all the options, I recommend that the senior leaders initiate an immediate recall of all Zippy Do Da cakes, and hold a press conference to announce our sorrow at the people who have become ill or died and vow to investigate to identify exactly how this tragedy occurred.
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