Crisis Management

Part
01
of two
Part
01

Crisis Management 1

In order to earn its employees and consumers' trust, Walmart agreed to settle its wrongful firing claims and conducted an employee training program as recommended by the Justice Department. Claire’s recalled three of its products after the FDA announced possible asbestos content in the ingredients. KFC was able to solve its supply chain disruption within ten days, although it caused significant effect on the company's global sales.

WALMART SETTLE WRONGFUL FIRING (HR) CLAIMS

Overview of the Problem

  • In October 2017, a lawsuit was filed against Walmart for violating the deferral immigration law by asking non-American citizens to provide unnecessary documents during the recruitment process. According to the US Department of Justice, a lawful permanent resident complained that the company fired her on her first day of work at the company’s Fort Worth store amidst the fact that she had records needed to establish her employment eligibility. Instead, she was fired for not having documents from the Department of Homeland Security.

Detailed steps taken to mitigate crisis communications and management

  • Walmart collaborated with the Justice Department to investigate the case, and was able to establish that in 2017 October, one of its employees was indeed fired in Store 3044 due to lack of unnecessary Homeland Security document. It was also established that the HR manager at the store failed to intervene in the matter.
  • To settle the dispute, the company rehired the fired worker immediately, providing $1,944 for back wages. Walmart also paid a civil penalty worth $1,000 to the federal government.
  • The company then released a public statement citing that does not discriminate any potential employee in the eligibility verification process. Further, it assured the public of its commitment to protect the rights of its workers and to cooperate with the Justice Department to ensure that all the staff based in Fort Worth gets trained on the areas proposed in the settlement.

Outcome

  • The company was able to settle the HR dispute amicably and gained employee trust. Also, the company gained public confidence after resolving the case, claiming that it was just an isolated incident associated with work authorization forms. Since the training, the company has not experienced any HR discrimination disputes.

CLAIRE'S ADDRESSES ASBESTOS CLAIMS THROUGH PRODUCT RECALL

Overview of the Problem

  • In early March 2019, the US Food and Drug Administration (FDA) issued a warning that certain Claire’s products were found to contain potentially cancer-causing asbestos. The products included Claire's Eye Shadows, Batch No/Lot No: 08/17; Claire's Contour Palette, Batch No/Lot No: 04/17; and Claire's Compact Powder, Batch No/Lot No: 07/15.

Detailed steps taken to mitigate crisis communications and management

  • Immediately the beauty products retailer learned of the possible cosmetics contamination; it announced a voluntary recall of the identified products including Claire's Eye Shadows, Claire's Compact Powder and Claire's Contour Palette.
  • On its public announcement regarding the recall, the company assured its consumers of holding the highest safety standards as well as providing its contacts (800-252-4737) for any consumers with questions.

Outcome

  • Up to date, the company has not received any reports of adverse illnesses, reactions, or injuries caused by asbestos in the recalled products. The company continues to have confidence in the composition and safety of its beauty products and is taking an abundance of caution. By publicly declaring that it will continue to work with the FDA, the retailer has continued to win its consumers’ trust.

KFC SOLVES A SUPPLY CHAIN CRISIS

Overview of the Problem

Detailed steps taken to mitigate crisis communications and management

Outcome

  • With quick crisis management, the company was able to restore confidence in its consumers who could purchase their desired products within ten days. However, the disruption greatly impacted the company’s global sales. The company's manager cited that the effect of the interruption will persist through to the second quarter.

YOUR RESEARCH TEAM CONDUCTED THE FOLLOWING RESEARCH:

In order to identify examples of the ways that major retail brands have dealt with crisis management surrounding the suggested areas, we began our research by looking for industry reports and market research that have pre-compiled case studies of key retail brands. However, we were unable to get this information from the public domain. We then began searching through the company websites and sustainability reports of individual brands (Target, Costco, Walmart, Macy's, Coca Cola, Pepsi, Ford, et al.) for any pre-compiled crisis communication and management case studies in relation to the #metoo movement, a product recall, HR issue, or a supply chain issue over the past three years. However, this was also not fruitful. We, therefore, resorted to look for popular crises in relation to the key areas suggested in the research criteria that top retailers in the US have faced in the past three years and how detailed they addressed the issues. We located past crises from three retailers including i.e. Claire’s, KFC, and Walmart and how they addressed the crises. We compiled the information as presented above.




Part
02
of two
Part
02

Crisis Management 2

Through its efficient crisis communication and management plan, Starbucks was able to restore the public’s trust after facing racial allegations. In order to mitigate its data breach crisis, Coca Cola supported law enforcement to investigate the matter while also issuing a notice breach to all the 8,000 affected employees. Target Corporation agreed to settle its hazardous lawsuit with a sum of $3.2 million as penalty and another $3 million for annual audits and inspection; the company also agreed to pay $900,000 for the investigation processes.

STARBUCKS RACIAL CRISIS MANAGEMENT

Overview of the Problem

Detailed steps taken to mitigate crisis communications and management

  • Once the company issued an apology to the public and the two gentlemen, it shared its long-term solution to the problem. Schultz announced that the company would close up to 8,000 of its stores on May 29th in order to educate its employees about racial bias. The company utilized the opportunity to show that it upholds the value of equity and does not tolerate any implicit biases. The closure, according to PR Week, cost the company over $16.7 million.

Outcome

  • The company managed to restore its reputation to the public, and as such did not have any impact on the subsequent sales. Also, Starbucks employees became more informed of racial equity and the need to uphold such values.

COCA COLA ADDRESSES DATA BREACH

Overview of the Problem

Detailed steps taken to mitigate crisis communications and management

  • In order to mitigate the crisis, the company supported the law enforcement to investigate the matter, and was able to confirm the authenticity of the documents that had been recovered in line with its workers’ personal information. The company, however, did not disclose the unfortunate incident immediately as requested by the investigation authorities.
  • After incident confirmation, the company began sending breach notices to about 8,000 employees whose personal information was included in the hard drive that was recovered from the former employee. A copy of the notice is available on the link attached.
  • The company also promised that it would offer free identity monitoring every year to the affected employees as they had always done.

Outcome

TARGET INC. SETTLES CONGRESSIONAL INVESTIGATION CLAIMS

Overview of the Problem

Detailed steps taken to mitigate crisis communications and management

  • Target, through its attorney, attended several court sessions to hear the charges that were filed against them. In order to respond to the allegations, the company made a statement in 2018 citing that it has made significant progress to how it handles waste, and never admitted to violating any environmental or state laws.
  • The company agreed to the settlement calls which required Target to pay $3.2 million as penalty and commit another $3 million for annual audits and inspection. Target further agreed to pay $900,000 for costs associated with attorney’s fees, enforcement, and investigation processes.

Outcome

YOUR RESEARCH TEAM CONDUCTED THE FOLLOWING RESEARCH:

In order to identify examples of the ways that major retail brands have dealt with crisis management surrounding the suggested areas, we began our research by looking for industry reports and market research that have pre-compiled case studies of key retail brands. However, we were unable to get this information from the public domain. We then began searching through the company websites and sustainability reports of individual brands (Target, Costco, Walmart, Macy's, Coca Cola, Pepsi, Ford, et al.) for any pre-compiled crisis communication and management case studies in relation to labor issue, racism, a congressional investigation, or a data breach over the past three years. However, this was also not fruitful. We, therefore, resorted to look for popular crises in relation to the key areas suggested in the research criteria that top retailers in the US have faced in the past three years and how detailed they addressed the issues. We located past crises from three retailers including i.e. Target, Coca Cola, and Starbucks and how they addressed the crises. We compiled the information as presented above.

Sources
Sources