Turkon America Company’s Crisis Communication Plan Case Study

Introduction

The field of crisis communication has achieved tremendous growth in recent years as researchers and business practitioners become increasingly aware of the serious threats that crises pose to the most fundamental objectives of an organization and its stakeholders (Mazzei and Ravazzoni 320; Oliveira 255).

In the wake of the 2008 global financial crisis, for example, most companies were forced to deal with the harsh realities of employee downsizing, consumption deficits, uncertain operating environments, and substantially reduced reputation and trust relationships. Objective research studies conducted following the financial crisis show that several large business establishments were unable to weather the adverse effects of the meltdown due to the lack of effective crisis communication plans and strategies (Adebambo, Biljana, and Yan 647-648).

Although the 2008 financial crisis can be viewed as an isolated incidence, researchers continue to underscore the importance of a sound crisis communication plan that can be used by organizations in a time of crisis to minimize adverse events and ensure that they can survive in contexts where conventional management practices may be unable to deal with the prevailing situation (Ki and Brown 403-404). It is against this backdrop that this report aims to develop a comprehensive crisis communication plan for use in a steamship line company.

Company Background

Founded in 1998 and headquartered in Secaucus, New Jersey, Turkon America is a steamship line company that operates “vessels for the transportation of freight on the deep seas between the United States and foreign ports” (“Turkon America Inc.” par. 2). The company has branch offices in Norfolk (VA) and Savannah (GA) and is the first dedicated Turkish-owned steamship agency providing transportation and logistics services (operations, sales, and marketing, documentation, pricing, booking and customer service) between Turkey and the United States, North Europe, and the Mediterranean. The management team of the company oversees the daily operations of the firm and contributes substantially to the realization of its main objective, which is “to provide the highest level of service reliability and customer service supported by its schedule effectiveness and willingness to meet the versatile logistics needs of customers” (Leach 21).

The ocean carrier offers unique benefits and advantages to its customers, such as direct shipments between Turkish ports and the United States East Coast ports, personalized transactions with customers, newer ships that reduce sailing time hence ensuring timely delivery of consignments, structured and fast management and decision-making mechanisms, as well as qualified logistics teams that can handle documentation and monitor customer goods in an effective and organized manner (“Turkish American Chamber of Commerce and Industry” par. 1).

Crisis Situation

Despite all the measures that Turkon has taken to ensure the safety of consignments in transit, one of the company’s modern ships encountered unfriendly weather as it crossed the Atlantic Ocean. The storm caused some of the containers to fall overboard, resulting in heavy damage to the goods. Although this accident can be described as an isolated event as demonstrated by the fact that Turkon has operated for the last 17 years without experiencing major incidents, it nevertheless can affect the company’s reputation and customer confidence if concerted efforts are not made to address the crisis resulting from the damaged goods.

Crisis and Crisis Communication

In business contexts, the term “crisis” has been defined as “a major unpredictable event that has potentially negative results” (Kim 60). The term has also been defined as “a sudden and unexpected event that threatens to disrupt an organization’s operations and poses both a financial and reputational threat” (Kim 61). Drawing from these definitions, it is evident that the most consistent characteristics of a crisis include unpredictability, urgency, capacity to result in significant financial or reputational threats, and capability to disrupt the normal functioning of an organization. In the case scenario, the accident caused by adverse weather and the subsequent destruction of some of the containers can be described as a crisis event for Turkon due to characteristics such as unpredictability, associated financial and reputational consequences, and capacity to disrupt the normal operations of the shipping company.

Crisis communication has been defined in the literature as “the collection, processing, and dissemination of information [that is] required to address a crisis” (Kim 61). Crisis communication entails what organizations say and do after a crisis to not only minimize and contain the harm caused by substantial threats, volatility, and urgency that are characteristic of the crisis, but also to safeguard the company, stakeholders, and/or industry from potential harm. It is documented that strategic crisis communication is often “conceptualized as a managerial function aimed at organizational survival and/or achieved by cultivating positive perceptions among the stakeholders” (Olsson 116).

Consequently, it is the role of Turkon’s public relations office and other senior managers to have an effective crisis communication plan in place before the crisis as such a plan will enhance the initiation of verbal, visual, and/or written interactions between the company and its stakeholders during and after the crisis event. Such a plan must aim to explain the explicit crisis event, delineate possible consequences and outcomes, and avail specific harm-reducing information to affected stakeholders in an honest, candid, timely, truthful and complete manner (Kim 61).

Available literature demonstrates that crisis communication can perform three core functions namely: “instructive information, which informs people on how to react in terms of personal protection; adjustive information, which helps people to cope with uncertainty; and internalizing information, which refers to information that helps an organization manage its reputation” (Olsson 115). The dimensions of crisis communication include:

1. the operational component, which aims to provide people with information related to their ability to cope with the crisis at hand,
2. the strategic component, which is often preplanned and aimed at achieving long-terms organizational goals and objectives,
3. the resilience-oriented component, which aims at ensuring that stakeholders and general members of the public achieve self-sufficiency, networking and renewal,
4. the reputation-oriented component, which aims at managing the reputation and image aspects of the organization (Olsson 116).

Justification for Developing a Crisis Communication Plan for Turkon

As demonstrated in the literature, “the shipping business environment is getting more unstable, competition is increasing, profit margins are decreasing, expected service is increasing and demand is becoming more uncertain” (Niamie and Germain 2). Such an operating environment may attract unanticipated scenarios as companies compete to secure revenue, margin, and growth (Weiner 4).

In this context, shipping lines such as Turkon need to develop and implement comprehensive crisis communication plans to ensure that they are better placed to address unforeseen challenges and scenarios as they arise. Moreover, shipping companies operate in a risky business environment as demonstrated by factors such as adverse weather conditions, supply chain vulnerabilities, multi-country regulatory pressures and reputational risks (“Shipping Insights” 8-11). Such factors only serve to expose shipping companies to potentially explosive situations which may provide an enabling environment for a crisis to develop, hence the need to have a comprehensive crisis communication plan.

The Crisis Communication Plan for Turkon

Available literature demonstrates that “the crisis response type can help or hinder an organization’s reputation recovery” (Ki and Brown 404). Because Turkon is engaged in managing and repairing its own reputation which may have been damaged following the crisis, it is important for the crisis communications plan to be related to the prevailing crisis. However, due to the costs and time constraints involved in developing a crisis communication plan, it is advisable for Turkon managers to

1. develop a taxonomy of crisis types that normally affect the operations of the company,
2. develop a taxonomy of crisis responses that can be used to address the different types of crises,
3. prepare a system that can be used to match appropriate crisis responses to prevailing crisis circumstances (Ki and Brown 404).

Additionally, in developing an effective crisis communication plan, Turkon managers need to evaluate the causal dimensions of attribution, such as stability (whether the cause of the crisis occurs frequently or infrequently), external control (the possibility that outside factors or sources other than the individual or group involved had some responsibility for triggering the crisis in question), and locus or personal control (the possibility that the individual or group in question could have done something to prevent the crisis from occurring) (Ki and Brown 405). The crisis communication plan entails six stages, as discussed in the following subsections.

Avoiding the Crisis

This stage of the crisis communication plan is strategic in nature and is “often preplanned and aimed at achieving long-term organizational goals” (Olsson 116). The stage involves conducting a crisis audit with the view to identifying areas of concern in the company and those that have the potential to result in a crisis in the future.

A comprehensive crisis audit should include the following steps: making crisis planning a key component of the organization’s strategic planning; getting together and sharing ideas to analyze possible crisis scenarios; performing a SWOT analysis specifically from a crisis perspective to understand existing and potential weaknesses and threats; focusing on critical areas of concern to the organization, such as health and environmental disasters, technological breakdowns, economic and market forces, and customer or employee relationships; and narrowing the crisis-risk list to develop an adequate understanding of the most likely or probable crises that could occur and those that may have devastating consequences (Harvard Business School 65-67).

According to Coombs 3-stage model of crisis management, the activities highlighted above should fall into the pre-crisis stage of the crisis communication plan that “should focus on what sources to scan, how to collect information, and how to evaluate information for its crisis potential in order to locate and reduce risk” (Kim 66). In Turkon’s context, the company needs to collect data on possible health and environmental hazards that relate to its core line of business, such as oil spills, damage to aquatic ecosystems, adverse weather events at sea, atmospheric pollution, and occupational accidents and injuries.

The management should also develop a list of technical issues that may affect the operations of the company, such as ship breakdowns, communication systems, internet connectivity, and customer ordering systems. Additionally, the company should look into the economic and market forces that are likely to affect the shipping industry, such as new competitors, low service demand, country-specific regulations, and the operating environment. Lastly, the company should assess its relationships with key stakeholders to identify vulnerable relationships that can affect its operations at the present state or in the future.

Preparing to Manage the Crisis

This stage of the crisis communication plan entails the development of backup plans for the set of crises that have been identified as having a high probability of occurring in the future. It is a pre-crisis stage in that the backup plans are prepared before the crisis event. The first step in this stage is to recognize the risks and costs of potential crises identified in the crisis audit in terms of actual monetary costs, human health, and safety, ability to meet customers’ demands, and organizational reputation. Turkon managers should then “prioritize those risks that are most pressing and costly, and deal with them first” (Harvard Business School 71). Afterward, Turkon needs to develop a crisis plan that should encompass the decisions that are likely to be made in potential crisis scenarios, people charged with the responsibility of making these decisions, and possible unintended and undesirable side effects. An effective crisis plan should include the following steps:

1. identifying obstacles and fail points that could make the crisis worse,
2. developing a resource plan by identifying the resources needed to resolve a crisis and making a plan of how those resources can be availed when needed,
3. developing a communication plan by identifying stakeholders who need to be informed about the crisis and how the information is communicated to them,
4. distributing resource and communication plans to ensure that all relevant stakeholders have an adequate understanding of what needs to be done in the event of a crisis (Harvard Business School 73).

Informing the crisis management team, Turkon needs to ensure a clear and coherent delegation of responsibilities to avoid confusion in decision making when an actual crisis presents.

Recognizing the Crisis

Once an event occurs, Turkon’s managers and the crisis management team need to describe the event using the laid down parameters, before characterizing the size of the crisis to determine its scope and magnitude. Some of the parameters that can be used to evaluate an event include a threat to the environment, breakdown in the company’s ability to serve its customers, a threat to the organization’s reputation, harm to people or property, a threat to the health or safety of people, a threat to employees’ morale and wellbeing, loss of data, financial implications of the event, and potential for legal action against the company or individuals involved (Harvard Business School 79).

Using these parameters, Turkon will be in a position to recognize that the Atlantic Ocean event is a crisis due to its capacity to cause serious damage to property (containers), cripple the company’s ability to serve its customers, and encourage legal suits against the company as customers move to court to seek for compensation for the damaged goods.

Upon the realization that the Atlantic Ocean event qualifies as a crisis, Turkon managers should gather as much information regarding the event as possible (e.g., how long it is likely to last, how many containers were damaged, owners of the damaged containers, costs and reputation implications involved, and people who need to be informed about the event), before undertaking an evaluation of how the situation might be successfully managed (Harvard Business School 80).

Here, Turkon needs to consider its core values in deciding the right course of action to take (Weiner 4). Turkon also needs to assemble its crisis management team as quickly as possible and assign members to different roles based on the initial crisis audit. Additionally, the company needs to act as fast as possible to get key information about the accident in the Atlantic Ocean, as this will help in making the right choices and decisions. Lastly, Turkon needs to enlist the services of a trustworthy crisis management professional to assist in the formulation and dissemination of ideas, information, and decisions related to the crisis (Schoenberg 6).

Controlling the Crisis

This stage should be viewed as operational in nature as it deals “with issues related to distributing relevant information about a crisis to those most affected to ensure informed decision making on critical matters” (Olsson 116). To effectively contain the crisis and reduce reputational damage, it is important for Turkon to send senior personnel to the scene as fast as possible and also communicate critical information to key people, including affected customers, relevant environmental regulation agencies, senior management, company legal representatives, and employees. Here, Turkon’s management should demonstrate decisiveness in dealing with the crisis and compassion in addressing the needs of customers whose goods have been destroyed in the weather-related accident (Harvard Business School 84).

Because Turkon’s competitors and dissatisfied customers may use the crisis to spread damaging information and rumors in the shipping industry, Turkon needs to develop effective crisis communication strategies that could be used to get information to key stakeholders, including the company’s top management, major customers, employees, public, and the media (Harvard Business School 87). Specifically, the company needs to manage the perceptions of affected customers by using a communication strategy that will enhance their understanding of how the crisis will affect them and what they need to do.

An effective communication strategy should also be used to deal with rumors and false information about the crisis. Lastly, it is important to stick to the facts when communicating news about the crisis to avoid damaging the reputation of the company if and when the communication is proved as inaccurate. In the case scenario, email communications can be used to communicate the information directly to customers, while press conferences can be used to disseminate critical crisis information to the general public and environmental regulatory agencies. Here, Turkon’s management needs to tailor crisis messages for every different audience and also ensure timely communication of information to the relevant stakeholders and public in order to help mitigate or reduce harm (Kim 66).

A good crisis communications plan should include crisis response strategies that an organization could use to address the crisis and minimize damage to its reputation and public image. In the case scenario, Turkon could employ crisis response strategies such as diminishment posture (excusing and justification), rebuilding posture (compensation and apology), and bolstering posture (reminding, ingratiation and victimage). The diminishment crisis response strategy attempts to minimize attributions of organizational control and reduce the negative effects of the crisis, while the rebuilding strategy attempts to improve the organization’s reputation and public image (Dyer 39-40). The bolstering crisis response strategy “seeks to build a positive connection between an organization and its publics” (Ki and Brown 406).

Owing to the safety agreements and guarantees that the company has with its customers, it is important to first use the rebuilding posture that will allow it to improve its reputation by compensating the customers and apologizing to all stakeholders who may be affected by the crisis. It is also generally felt that a combination of diminishment and rebuilding crisis response strategies will help Turkon to reduce blame and get back to its everyday operations with minimal harm to its reputation and public image (Olsson 115). It is always important for Turkon to ensure that the crisis response strategies used to address this and other events can match organizational rhetoric to the level of reputational threat posed by the event.

In a crisis situation such as the one facing Turkon, managers should always ensure that they use communication tools that help “in creating community resilience by developing social capital, creating collective intelligence, coordinating responses, and initiating discussions across communities about risks and their management” (Olsson 116). Since the crisis directly affects Turkon’s customers because the storm caused heavy damage to some of the containers, there is need for the company to adopt communication strategies that aim to reduce uncertainty and provide customers with knowledge on how to act in order to minimize stress, enhance self-sufficiency, and ensure speed and accuracy in decision making.

Resolving the Crisis

This stage encompasses all the activities that are undertaken by the company to bring the crisis to an end. It underscores the importance of elements such as “managing the emotions that accompany a crisis, understanding the leader’s role, and taking effective action” (Harvard Business School 92). In managing emotions, the task for Turkon should be to address factors that may occasion stressful outcomes to customers for losing their valued goods in the accident. The company’s leaders and managers should also develop a predisposition to avoid “toxic” stress responses and utilize the power of positive stress to manage the weather-related crisis confidently and professionally. Leaders need to resolve the crisis with a clear mind, as encouraging feelings of anxiety, stress and fear can only aggravate matters (Harvard Business School 93). Consequently, Turkon leaders should develop an approach that could be effectively used to overcome stressful moments if and when they occur.

It should be the role of the leader to “discover the truth and face it by asking the right people, listening to the most reliable voices, and going to the right places” (Harvard Business School 95). In Turkon’s context, the leadership should respond to the crisis by facing the crisis with a positive outlook, maintaining vigilance by being on the lookout for new developments and information, maintaining focus on the key priorities such as ensuring the safety of crew members and the remaining containers, as well as evaluating and responding to issues that can be controlled in the crisis situation.

Lastly, in taking action to resolve the crisis, Turkon’s leadership should assume a leading position in activating the crisis plan, drawing people together and encouraging cooperation and collaboration in resolving the crisis, avoiding blame appropriation by focusing resources and personnel toward crisis resolution efforts, and doing everything possible to ensure that the crisis is resolved as fast as possible (Harvard Business School 96)

In resolving the crisis facing Turkon, the leadership needs to maintain the reputation of Turkon and also instill resilience in customers and other stakeholders who may be adversely affected by the crisis (Olsson 117). Consequently, Turkon leaders should employ reputation-oriented and organization-centered approaches to solve the crisis situation as such approaches will help in “explaining and promoting [the] organization’s framing and preferences, and in so doing strengthen its credibility and legitimacy” (Olsson 117).

It is also important for Turkon’s leadership to have the capacity to recruit individuals who could be relied upon to solve the crisis in the most effective manner. This observation points to the need for Turkon to allow its leaders to form crisis resolution teams without having to wait for formal approval, as such flexibility is fundamental in enhancing crisis response times and reducing adverse effects such as reputational damage (Schoenberg 4-5).

Learning from the Crisis

This is the last stage of the crisis communication plan and entails components such as reviewing how the crisis was handled, planning for the next crisis, and tracking the changes that have been made to the organization after the crisis to evaluate their effectiveness (Harvard Business School 101-103). In reviewing how the crisis was handled, Turkon’s leadership should focus attention on identifying the factors that precipitated the crisis and establishing whether the crisis could have been avoided if measures had been taken to ensure the weather was stable or if the company had used advanced technological tools to forecast adverse weather patterns in its routes.

If it is established that the crisis could have been avoided, the company needs to take appropriate measures (e.g., investing in technology or changing routes in adverse weather events) to ensure that such a crisis does not recur in the future. The review should also help Turkon to take steps aimed at planning for another potential crisis in the future. Such a plan is instrumental in helping the company to learn from what is already known from the crisis event.

Here, Turkon needs to collect the ideas of everyone who was involved in the crisis with the view to synthesizing the issues raised into actionable steps that could be incorporated in the company’s strategic plan (Stephens, Malone, and Bailey 392). Lastly, Turkon needs to track the changes that have been made during the post-crisis period in order to evaluate their effectiveness in reducing the negative impact of a future crisis situation (Harvard Business School 103).

Role of Public Relations in Crisis Communication

Since crises are known to damage existing relationships between the organization and the general public, public relations executives need to cultivate and maintain positive pre-crisis ties with the public as such relationships can influence how people perceive both the crisis and the organization involved (Ki and Brown 403). Turkon’s relationships with its customers, shareholders and the general public, for example, will shape how the company will respond during and after the crisis. Consequently, Turkon needs to strengthen the public relations office through adequate funding and personnel to enable it to meet its main objective of cultivating positive relationships with the public. Available literature demonstrates that “the public with positive relationships are more likely to become advocates and provide support for an organization in crisis” (Ki and Brown 407).

Additionally, Turkon’s public relations office should strive to not only enhance stakeholder satisfaction by reinforcing positive expectations about the relationships between the organization and its stakeholders, but also to reinforce the trust and commitment levels through efforts such as corporate social responsibility (CSR), progressive disclosure of important events, and ethical employment practices (Hale et al. 113; Weiner 4). Overall, it should be the function of Turkon’s public relations office to ensure all communications are handled effectively and all relevant stakeholders are duly and factually informed about the crisis. Based on the mentioned roles, it is clear that the public relations office should form a core component of crisis communication.

Conclusion

This report has used the six-stage model to develop a comprehensive crisis communication plan for Turkon. From the report, it is clear that each stage of the communication plan is important in its own right and cooperation with other stages, hence the need for Turkon leaders to ensure that all stages are implemented as a holistic plan. The importance of a good crisis communication plan has been underscored in the report, with all observations pointing to its usefulness in managing relevant stakeholders and ensuring the company can maintain its reputation and image in the face of crisis-related challenges. It is therefore important for Turkon to adopt this plan to reinforce its capacity in containing crises and minimizing damage to its reputation and status.

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