Chapter 5 Strategic Management and Corporate Public Affairs SUGGESTED ANSWERS TO DISCUSSION QUESTIONS Students should recognize that their answers to these discussion questions should be well reasoned and supported with evidence. Although some answers will be more correct than others, students should be aware that simplistic answers to complex questions, problems, or issues such as these will never be “good” answers. How does corporate public policy intersect with the strategic management process, and why is it important for firms to integrate their public policy stance into their overall strategic approach? Corporate public policy is an integral part of the firm’s overall strategic management process. Strategic management is concerned with the firm’s identification of corporate purpose and positioning in its operating environment, which is determined by the firm’s top management. The company’s public policy, or its position regarding public, social, global and ethical issues, is a significant part of its overall purpose and position in its operating environment. Therefore, the firm’s public policy must be a component part of its strategy in order to proactively address the myriad of issues that can and will confront the firm in these areas. How does the enterprise-level of strategy in corporations address social, ethical, and public issues, particularly in terms of the role of boards of directors and the implementation of governance structures such as committees focused on public policy, ethics, and social audit? The enterprise (or societal) level of strategy is the one most directly concerned with social, ethical, and public issues. This is the level that asks, and attempts to answer, what role the business plays in society and what the firm stands for. This level encompasses the strategic thinking that is necessary to address social, ethical and public issues. Corporate governance is an important topic at this level, as boards of directors should provide leadership for the firm’s enterprise-level strategy. This strategy often is manifested not only in a firm’s stated vision, mission, values statements and/or codes of conduct, but the implementation and effectiveness of such items. Furthermore, this strategy also includes the extent to which firms employ board and senior-level committees, including, among others, public policy/issues committees, ethics committees, governance committees, social audit committees, and corporate philanthropy committees. What are the key steps in the strategic management process as outlined in the textbook, and how do these steps interact with each other rather than being strictly sequential? The textbook presents six steps in the strategic management process (which boards and top management are responsible for activating): (1) goal formulation, (2) strategy formulation, (3) strategy evaluation, (4) strategy implementation, (5) strategic control, and (6) environmental analysis. It is important to note that these steps are interactive and not sequential. Although listed last, environmental analysis provides “raw material” for each of the other steps. What role does a social audit play in assessing a firm's social efforts, goals, and programs, and how does it contribute to strategic control within the organization? Moreover, how can companies ensure that their social audits are conducted rigorously and effectively, particularly in aligning actual performance with stated standards? Additionally, what distinguishes a social audit from other types of reports, such as CSR reports or corporate citizenship reports, and what factors have contributed to the increasing popularity of such reports in contemporary business environments? A social audit is a systematic attempt to identify, measure, monitor, and evaluate the firm’s performance with respect to its social efforts, goals, and programs. It can operate as a tool for strategic control by comparing the results of the firm’s efforts to its social goals, assuming of course, that the firm has included setting social goals in its planning process. To the extent that the firm’s actual performance doesn’t meet its stated standards, a firm can take corrective action to bring the two into alignment. Many companies currently issue reports describing their social performance, but these are not social audits as their methodology often is less rigorous. These may be called, among other things, CSR reports, social performance reports and corporate citizenship reports. The goal of these reports is to make various stakeholders aware of a firm’s various social programs and activities. Social performance reports have become popular as (1) society has come to expect firms to document their achievement in these areas, (2) the reports can increase the competitive position of a firm, and (3) globalization drives the issuance of such reports. How do the functions and responsibilities of public affairs (PA) and public relations (PR) departments within corporations differ, and what factors contribute to the ongoing overlap and confusion between these two disciplines? Public affairs (PA) focuses on the formalization and institutionalization of corporate public policy, which includes governmental relations, corporate communications and issues and crisis management. The Public Affairs Council defines PA as “the management function responsible for interpreting the corporation’s noncommercial environment and managing the corporation’s response to that environment.” Public relations (PR), on the other hand, usually focus on communications with external publics. There is confusion because PA, the more recently developed department, often evolved out of the PR office. There has been significant overlap in the past, and their separate identities are still forming. Further, confusion also exists because some (1) public relations executives changed their titles, but not their functions, to public affairs and (2) public affairs departments embrace public relations as part of their responsibilities. What factors contribute to the growth of international public affairs, particularly in the context of multinational corporations' expanding global operations? The easy answer to why international public affairs is growing is because global business operations are increasing rapidly. As multinational corporations enter more and more international markets, they must be ready to deal with many different issues simultaneously. In addition to corporate expansion into new markets, the following also have contributed to the expansion of international public affairs: changes in sales in existing markets, changes in CEO priorities, changes in regulatory burden, and acquisition of new business units. What are the key differences between a collaborative/problem-solving strategy and an individual/adversarial external affairs strategy in corporate governance, and how do these strategies impact the long-term relationships with stakeholders and corporate social performance? A collaborative/problem-solving strategy emphasizes long-term relationships with stakeholders and finding mutually beneficial solutions to problems. An individual/adversarial external affairs strategy emphasizes the primacy of the firm over its stakeholders, and generally denies claims against it, leading to adversarial relationships. The collaborative model is much more effective, as evidenced by the corporate social performance rankings of companies who employ the collaborative model versus the rankings of those companies who employ the individual/adversarial model. 8. What strategies does the textbook suggest for inculcating a perspective of Political Activity (PA) management throughout an organization, and how does the order of importance of these strategies contribute to their effectiveness? Because PA management is very complex and has far-reaching effects on the firm, it makes sense to inculcate a PA perspective throughout the organization. The textbook suggests four strategies for doing this: (1) make PA truly relevant to managers, (2) help managers develop a sense of ownership in PA, (3) show how PA makes a difference, and (4) make it easy for managers. I have listed the four strategies in my order of importance. Proper motivation is a necessity for managers to get involved in PA—making it relevant to them and getting them to “own” the issues goes a long way toward that goal. If managers are properly motivated, making it easy for them becomes less important. However, if the PA system appears nebulous and too difficult to implement, those attempting to implement PA strategies will meet resistance and resentment from coworkers. Consequently, ease of implementation of PA strategies cannot be overlooked. GROUP ACTIVITY Divide students into groups of four to five students. Have each group review the current social performance report of a different company. Students should compare the current social performance report with the most recent social performance report issued by the company prior to the current report. Students should determine what the company is trying to achieve with the issuance of its corporate social performance reports. Students should compare the two reports to determine whether the company is merely reporting on its activities or showing improvement and actions taken toward stated goals. Students should prepare a short presentation for the class indicating the successes and failures of the company with regards to social performance. Students also should assess whether the company is effectively integrating corporate public policy as part of its strategic management process. Here's how you might structure the students' group activity: 1. Group Formation: •Divide students into groups of four to five. •Assign each group a different publicly-traded company and provide them with access to the company's current and previous social performance reports. Ensure that the companies chosen are known for their corporate social responsibility efforts and have publicly available social performance reports. 2. Review of Social Performance Reports: •Instruct each group to review the current social performance report of their assigned company. •Have them compare it with the most recent social performance report issued by the company prior to the current one. 3. Analysis of Objectives: •Students should determine what the company is trying to achieve with the issuance of its corporate social performance reports. Are they merely reporting on activities or showing improvement and actions taken toward stated goals? 4. Comparison of Reports: •Instruct students to compare the two reports to identify any trends, changes, or improvements in the company's social performance initiatives. •Have them assess whether the company has made progress towards its stated social responsibility goals or if there are any areas where it has fallen short. 5. Preparation of Presentation: •Each group should prepare a short presentation for the class. •The presentation should highlight the successes and failures of the company with regards to social performance based on their analysis of the two reports. •Students should also assess whether the company is effectively integrating corporate public policy as part of its strategic management process. 6. Presentation to the Class: •Allocate time for each group to present their findings to the class. •Encourage discussions and questions from other students following each presentation. 7. Reflection and Discussion: •Conclude the activity with a discussion on the importance of corporate social responsibility and how companies can improve their social performance. •Encourage students to reflect on what they've learned from analyzing the social performance reports and how it might impact their views on corporate responsibility and sustainability. This activity provides students with a hands-on opportunity to analyze real-world corporate social performance reports, assess the effectiveness of companies' social responsibility initiatives, and critically evaluate their integration into strategic management processes. INDIVIDUAL ASSIGNMENT Distribute the following instructions to each student: Visit the Public Affairs Council’s website at http://pac.org/. Review the Council’s various areas of expertise. Select an area of expertise and, in a written memorandum, explain why it is a public affairs issue. Review a news story under your selected area of expertise and describe what impact, if any, the issue addressed in the story will have on business’s strategy with regards to public affairs. Here's how you might structure the individual assignment: Individual Assignment: Exploring Public Affairs Issues Objective: The objective of this assignment is to explore a specific area of expertise within public affairs and analyze a news story related to that area, assessing its impact on business strategy with regards to public affairs. Instructions: 1. Visit the Public Affairs Council’s website at [http://pac.org/](http://pac.org/). 2. Review the Council’s various areas of expertise, which encompass a wide range of public affairs issues. 3. Select one area of expertise that interests you the most. 4. In a written memorandum, explain why the chosen area of expertise is a significant public affairs issue. Provide background information, context, and any relevant examples to support your explanation. 5. Find a recent news story related to your selected area of expertise. The story should be from a credible source and discuss a specific issue within the chosen area of expertise. 6. Describe the impact, if any, that the issue addressed in the news story will have on businesses’ strategies with regards to public affairs. Analyze how companies might need to adjust their approaches, policies, or advocacy efforts in response to the issue. Submission Guidelines: • Your memorandum should be well-written, clear, and concise. • Include relevant details and examples to support your analysis. • Cite your sources properly, both for the chosen area of expertise and the news story. • Ensure proper formatting and organization of your memorandum. Deadline: [Insert Deadline Here] Grading Criteria: Your assignment will be graded based on the following criteria: • Clarity and depth of explanation regarding the chosen area of expertise as a public affairs issue. • Analysis of the news story's impact on business strategy in relation to public affairs. • Use of relevant examples and evidence to support arguments. • Overall coherence, organization, and quality of writing. Note: Feel free to reach out if you have any questions or need further clarification. This assignment allows students to delve into specific areas of public affairs, analyze real-world news stories, and consider the implications for businesses and their public affairs strategies. Chapter 6 Issues Management and Crisis Management SUGGESTED ANSWERS TO DISCUSSION QUESTIONS Students should recognize that their answers to these discussion questions should be well reasoned and supported with evidence. Although some answers will be more correct than others, students should be aware that simplistic answers to complex questions, problems, or issues such as these will never be “good” answers. What factors should students consider when determining the most critical stage of the issues management process, and how does the effectiveness of each stage impact the overall success of a company's issues management strategy? Students will obviously differ in their selection of the “most important” stage of issues management. Whichever stage they select, they should be able to provide a list of logical, relevant reasons for their selections. Better answers will recognize that all of the stages are important to effective issues management. If there is a breakdown in any one of the stages, the whole process suffers. Many students may note that prioritization of issues is the most important stage, as corporate America can fail to have a successful issues management process if they get bogged down in all the possible issues that could confront the company. Effective use of corporate resources requires a company to rank those issues that are most likely to occur and have a major impact on the company. However, if a company fails to formulate and implement an appropriate response to specific issues, the entire company could face financial ruin. What are some examples of issues and crises that companies have faced in recent years, and how have these events impacted their stakeholders and the broader business environment? It should be interesting to see what types of issue categories students identify. Some that come to mind are environmental issues, natural disasters, technology and terrorism. Some specific crises not listed include Toyota’s massive recall of certain automobiles, BP’s Deepwater Horizon oil spill, and Hewlett Packard’s dismissal of its CEO (Mark Hurd) following allegations of sexual harassment and financial malfeaseance. What are some examples of forces within each category that could potentially shape issues management and crisis management strategies, as discussed in the chapter on Issues Management and Crisis Management? Again, it will be interesting to see what students come up with for answers to this question. Examples for each force category might include: Events – technological unemployment (machines replacing workers) Authorities/Advocates – Robert F. Kennedy, Jr. (Environment) Literature – The Divine Right of Capital (reform of corporate governance) Organizations – MoveOn.org (liberal political group using the Internet) Political Jurisdictions – State of Arizona (immigration law) 4. What key factors contributed to the management of the crisis at Malden Mills following the devastating fire in 1995, and how did the company navigate through the acute and chronic crisis stages? Additionally, what lessons can be learned from Malden Mills' experience regarding crisis management, particularly in terms of maintaining relationships with workers, managing debt, and addressing long-term sustainability issues? Furthermore, how did the ultimate restructuring and renaming of the company reflect the resolution of the crisis and its impact on the organization's trajectory? One crisis is the fire that occurred at Malden Mills on December 11, 1995. Malden Mills is the company that invented fleece. The fire destroyed virtually the entire plant in a single night. Because the fire was completely unexpected, there was no prodromal stage. The acute crisis stage took place as the fire burned—fortunately, no one was killed, although a few workers were injured. For Malden Mills, the chronic crisis stage was, in some ways, short-lived, and in other ways, still lingers today. Because of the owner’s commitment to rebuild the plant, his excellent relationship with his workers, and tremendous goodwill generated by the company’s ethical business dealings, the plant was completely rebuilt in about a year. However, because of a heavy debt load from rebuilding the plant, and failure to patent the process for making fleece, Malden Mills filed for bankruptcy in 2001. While the company emerged from the 2001 bankruptcy, it filed for bankruptcy again in January 2007. In February 2007, it was revealed that the assets of Malden Mills would be sold to Chrysalis Capital Partners, and the name of the company was changed to Polartec, LLC. The immediate crisis of rebuilding the plant and producing material took place quickly, as mentioned above. At the end of the day, this crisis was resolved when the assets of the company were sold and the company was renamed. 5. How do the responses of Sandler O’Neill and Sidley Austin Brown & Wood LLP to the 9/11 attacks illustrate the importance of crisis management preparedness, particularly in distinguishing between crises with varying degrees of predictability and control, such as ethical scandals versus terrorist attacks? An excellent example of the effects of the 9/11 attacks is the story of Sandler O’Neill. A small investment banking firm with offices in the World Trade Center, Sandler O’Neill lost most of its employees, all of its equipment, and many of its records of transactions in process. Because of its reputation as an honest firm and good working relationships with its customers and competitors, Sandler O’Neill was back in business within a few months, and closed all of the deals in which it was involved prior to 9/11. A 2002 Fortune cover story paints a compelling picture of the crisis that this firm endured, and its efforts to recover from it. One way that the firm is preparing for future terrorism is by renting space in a nondescript office building that is unlikely to be a target. As evidenced by 9/11, terrorism is a likely crisis for which business must prepare. The difference between preparing for terrorism and ethical scandals is the degree of control. If a firm keeps close watch on its board, top management and employees, it is more likely to foresee ethical scandals that could arise. Terrorism, on the other hand, requires individuals to conceive of possibilities that may have never occurred in the past. Consequently, the potential for terrorist attacks requires management to use unlimited imagination to create emergency plans in anticipation of such a calamity. While this is a large task, it is possible. The law firm Sidley Austin Brown & Wood LLP had such a crisis plan in place on 9/11 and managed to account for all but one of its employees by the morning of September 12th. Further, they had backup tapes and systems for their computer network and had a forward thinking insurance policy in place. As a result, the firm was able to move quickly after 9/11 to continue business operations. GROUP ACTIVITIES Group Activity 1 – Moving Too Fast Divide students into groups of four to five students. Ask students to review the following: “Imagine that you are a member of top management at Toyota. The company has been notified that problems with the gas pedals in certain vehicles could lead to sudden and unexpected acceleration. Government officials believe that approximately 90 people have died from unintended acceleration.” Students should prepare a written memo to the company’s CEO addressing how the company should handle the crisis. Specifically, students should address (1) corporate strategy with respect to any recall, (2) any product modifications, (3) corporate response to injured parties, and (4) the communications the company will use in connection with this event. The instructor may want to review outstanding ideas presented in the memos with the entire class. Further, the instructor may want to note how the company actually handled this crisis (specifically noting that the company quickly employed crisis communications and instituted a massive recall and system for repairs). Here's how you might structure the group activity and provide a sample answer: Group Activity 1: Handling a Crisis at Toyota Objective: The objective of this group activity is to simulate a crisis management scenario at Toyota, where students will work together to develop a response strategy addressing key issues related to sudden unintended acceleration problems in certain vehicles. Instructions: 1. Divide students into groups of four to five members. 2. Provide students with the following scenario: • "Imagine that you are a member of top management at Toyota. The company has been notified that problems with the gas pedals in certain vehicles could lead to sudden and unexpected acceleration. Government officials believe that approximately 90 people have died from unintended acceleration." 3. Instruct each group to prepare a written memo addressed to the company’s CEO outlining how Toyota should handle the crisis. Each memo should address the following key areas: • Corporate strategy with respect to any recall. • Any product modifications that may be necessary. • Corporate response to injured parties. • Communication strategies the company will use in connection with this event. 4. Allocate sufficient time for groups to discuss and brainstorm ideas, and then prepare their written memos. 5. Once completed, each group should present a summary of their memo to the class, highlighting their proposed strategies and rationale. 6. After all groups have presented, discuss outstanding ideas and strategies as a class. 7. Provide insight into how Toyota actually handled this crisis, emphasizing their swift implementation of crisis communications and massive recall efforts. Sample Memo to Toyota CEO: [Date] [CEO's Name] Toyota Motor Corporation [Address] [City, State, Zip] Dear [CEO's Name], Subject: Response Strategy for Unintended Acceleration Crisis As members of top management at Toyota, we are deeply concerned about the recent reports regarding problems with the gas pedals in certain vehicles, which have led to sudden and unexpected acceleration incidents. We understand the gravity of this situation and have developed a comprehensive response strategy to address the crisis effectively. 1. Corporate Strategy Regarding Recall: • We recommend implementing an immediate and comprehensive recall of all affected vehicles to ensure the safety of our customers. This proactive approach demonstrates our commitment to prioritizing consumer safety above all else. The recall should be communicated transparently and effectively to all stakeholders. 2. Product Modifications: • In addition to the recall, we propose conducting a thorough investigation into the root causes of the unintended acceleration issue. Based on our findings, necessary modifications should be made to the affected vehicles to prevent future incidents. This may include redesigning or replacing faulty components and implementing enhanced safety features. 3. Corporate Response to Injured Parties: • We acknowledge the severity of injuries and loss of life resulting from unintended acceleration incidents. As part of our corporate responsibility, we must provide full support and compensation to affected individuals and their families. This includes offering financial assistance for medical expenses, compensation for pain and suffering, and ensuring access to legal resources for fair resolution. 4. Communication Strategies: • Effective communication is essential in managing this crisis and rebuilding trust with our stakeholders. We recommend adopting a transparent and empathetic communication approach, providing regular updates on the recall process, product modifications, and corporate actions taken to address the issue. Additionally, we should actively engage with the media, regulatory agencies, and consumer advocacy groups to convey our commitment to safety and accountability. In conclusion, we believe that by swiftly implementing the proposed response strategy, Toyota can mitigate the impact of the unintended acceleration crisis and reaffirm our dedication to ensuring the safety and satisfaction of our customers. Sincerely, [Your Name] [Your Position] [Your Contact Information] This group activity allows students to engage in critical thinking and decision-making processes, simulating real-world crisis management scenarios faced by corporations like Toyota. Group Activity 2 – Emergency Planning Divide students into groups of four to five students. Distribute your college’s or university’s emergency plan and/or emergency procedures. Ask students to identify whether the procedures are practical and useful. Ask students to consider whether any revisions to the plans and/or procedures are necessary. Finally, group leaders should assess whether students were familiar with the plans and procedures prior to distribution of the documents. This in itself is a measure of success of the plans and procedures, as implementation of such plans and procedures prove difficult when students and faculty do not know the steps that they should take in certain events. Students should develop a proposed emergency plan and/or emergency procedures document for your university and may use the current plans and procedures as a starting point. Here's how you might structure the group activity and provide guidance for the students to develop a proposed emergency plan or procedures document for their university: Group Activity 2: Evaluating and Improving Emergency Planning Objective: The objective of this group activity is to assess the practicality and usefulness of the college or university's existing emergency plan or procedures and propose revisions or enhancements as necessary. Instructions: 1. Divide students into groups of four to five members. 2. Distribute copies of your college or university's emergency plan or procedures document to each group. 3. Instruct students to review the document carefully and identify whether the procedures outlined are practical and useful in various emergency scenarios. 4. Ask students to consider the following questions during their review: • Are the procedures clear and easy to understand? • Are the emergency contact information and protocols up to date? • Does the plan cover a wide range of potential emergencies, including natural disasters, accidents, and security threats? • Are there specific guidelines for evacuation, sheltering in place, communication, and coordination with emergency responders? • Are roles and responsibilities clearly defined for faculty, staff, and students? 5. Encourage students to discuss any shortcomings or areas for improvement they identify in the existing plan or procedures. 6. Group leaders should assess whether students were familiar with the plans and procedures prior to distribution of the documents. This will help gauge the effectiveness of the current emergency preparedness efforts. 7. Instruct each group to develop a proposed emergency plan or procedures document for your university, using the existing plans and procedures as a starting point. 8. Each group should present their proposed plan or procedures to the class, highlighting the revisions or enhancements they have made and explaining the rationale behind their recommendations. 9. Facilitate a discussion among the class to compare and contrast the proposed plans, identify common themes, and determine areas of consensus for potential implementation. Sample Evaluation Criteria for Proposed Emergency Plan or Procedures: • Clarity and comprehensiveness of the plan or procedures. • Inclusion of specific guidelines for various emergency scenarios. • Appropriateness of roles and responsibilities assigned to faculty, staff, and students. • Effectiveness of communication protocols and coordination with emergency responders. • Feasibility of implementation and practicality in real-world emergency situations. Note: Encourage students to collaborate and leverage their diverse perspectives and experiences to develop comprehensive and effective emergency preparedness strategies for their university. This group activity empowers students to critically evaluate and improve their college or university's emergency planning efforts, fostering a culture of proactive risk management and preparedness within the campus community. Group Activity 3 – Troubled Waters Divide students into groups of four to five students. Ask students to review the following: “Imagine that you are a member of top management at a company that owns several rental properties along the Gulf shore in Louisiana and Alabama; you just learned that an oil drilling platform has exploded and that thousands of barrels of oil are spilling into the Gulf of Mexico. The company responsible has indicated that it could take several weeks to stop the leak.” Students should prepare a written memo addressing how the company should handle the crisis. Specifically, students should address how they will ensure the company’s ongoing viability and responsibilities to upcoming renters (if any). The instructor may want to review outstanding ideas presented in the memos with the entire class. Further, the instructor may want to note how gulf coast businesses handled the BP oil spill crisis (specifically noting that many companies filed claims with BP, their insurance companies, took out loans and / or instituted litigation against BP). Here's how you might structure the group activity and provide a sample answer for the students: Group Activity 3: Crisis Management in Response to an Oil Spill Objective: The objective of this group activity is to simulate a crisis management scenario for a company that owns rental properties along the Gulf shore in Louisiana and Alabama, following an oil spill in the Gulf of Mexico. Instructions: 1. Divide students into groups of four to five members. 2. Provide students with the following scenario: • "Imagine that you are a member of top management at a company that owns several rental properties along the Gulf shore in Louisiana and Alabama. You just learned that an oil drilling platform has exploded and that thousands of barrels of oil are spilling into the Gulf of Mexico. The company responsible has indicated that it could take several weeks to stop the leak." 3. Instruct each group to prepare a written memo addressed to the company's leadership team, outlining how the company should handle the crisis. Each memo should address the following key areas: • Ensuring the company's ongoing viability in the midst of the crisis. • Responsibilities to upcoming renters, considering the impact of the oil spill on the rental properties. 4. Allocate sufficient time for groups to discuss and brainstorm ideas, and then prepare their written memos. 5. Once completed, each group should present a summary of their memo to the class, highlighting their proposed strategies and rationale. 6. After all groups have presented, discuss outstanding ideas and strategies as a class. 7. Provide insight into how Gulf coast businesses handled the BP oil spill crisis, emphasizing various approaches such as filing claims with BP, working with insurance companies, obtaining loans, and instituting litigation. Sample Memo: Crisis Management Plan for Gulf Shore Rental Properties [Date] [Company Leadership Team] [Company Name] [Address] [City, State, Zip] Dear [Company Leadership Team], Subject: Crisis Management Plan in Response to Gulf Oil Spill As members of top management at [Company Name], we are deeply concerned about the recent oil spill in the Gulf of Mexico and its potential impact on our rental properties along the Gulf shore in Louisiana and Alabama. We have developed a comprehensive crisis management plan to address the immediate challenges and ensure the company's ongoing viability. 1. Ensuring Ongoing Viability: • We propose conducting a thorough assessment of the potential damage to our rental properties caused by the oil spill. This includes evaluating any direct impact on property structures, amenities, and environmental conditions. • Simultaneously, we will review our financial resources and explore options for securing additional funding to mitigate the financial implications of the crisis. This may involve working with our banking partners to secure loans or lines of credit to cover immediate expenses and sustain operations during the recovery period. 2. Responsibilities to Upcoming Renters: • We recognize the importance of maintaining transparent communication with upcoming renters regarding the situation and its potential impact on their rental experience. We will promptly notify renters of any changes to their reservations, including possible cancellations or alternative accommodation arrangements. • Additionally, we will implement flexible booking policies to accommodate renters who wish to modify or cancel their reservations due to concerns about the oil spill. This includes providing full refunds or rescheduling options without penalty. In conclusion, we believe that by implementing the proposed crisis management plan, [Company Name] can effectively navigate through the challenges posed by the Gulf oil spill while upholding our commitment to ensuring the satisfaction and safety of our renters. Sincerely, [Your Name] [Your Position] [Your Contact Information] This group activity provides students with a practical scenario to apply crisis management principles and develop actionable strategies for addressing the challenges posed by an environmental disaster like an oil spill. INDIVIDUAL ASSIGNMENT (Note: This Assignment also may be used in conjunction with Chapter 15) Distribute the following instructions to each student: Research how BP initially handled the Gulf oil spill when the Deepwater Horizon drilling platform exploded in April 2010. Specifically, note how the company dealt with the clean-up process, those directly impacted by the spill (individuals, businesses, local and state governments), the federal government, and its own shareholders and employees. Compare BP’s response to BusinessWeek’s five-step model for handling a crisis. Based on this comparison, evaluate BP’s crisis response. What did the company do right? What should it have done differently? What ongoing obligations does BP have to the environment as a stakeholder? Individual Assignment: Evaluation of BP's Response to the Gulf Oil Spill Research Overview: Your task is to research how BP initially handled the Gulf oil spill when the Deepwater Horizon drilling platform exploded in April 2010. Specifically, focus on BP's response to the clean-up process, impact on individuals, businesses, local and state governments, the federal government, and its own shareholders and employees. Comparison with BusinessWeek's Five-Step Model: 1. Preparation: • Assess how well BP was prepared for such a crisis before it occurred. Did the company have contingency plans and crisis management protocols in place? 2. Response: • Evaluate BP's immediate response to the oil spill. How quickly did the company mobilize resources for clean-up efforts and containment? Did it communicate effectively with stakeholders? 3. Containment: • Analyze BP's efforts to contain the spill and minimize its spread. What measures did the company take to stop the flow of oil and prevent further environmental damage? 4. Recovery: • Examine BP's actions to support those directly impacted by the spill, including affected individuals, businesses, and communities. Did the company provide adequate compensation and support for clean-up and restoration efforts? 5. Learning: • Consider how BP addressed the root causes of the oil spill and implemented measures to prevent similar incidents in the future. Did the company learn from its mistakes and improve its safety and environmental practices? Evaluation of BP's Crisis Response: • Identify what BP did right in its response to the Gulf oil spill. Highlight any effective strategies or actions taken by the company. • Identify areas where BP could have improved its crisis response. Discuss any shortcomings or mistakes made by the company and suggest alternative approaches. • Consider BP's ongoing obligations to the environment as a stakeholder. Discuss the long-term environmental impact of the oil spill and what responsibilities BP has in terms of restoration and mitigation efforts. Conclusion: Provide a summary of your evaluation, highlighting key strengths and weaknesses of BP's crisis response and discussing the company's ongoing obligations to the environment. Submission Guidelines: • Your analysis should be well-researched and supported by evidence from credible sources. • Ensure clarity, coherence, and organization in your writing. • Cite your sources properly using a recognized citation style. Deadline: [Insert Deadline Here] Note: Feel free to reach out if you have any questions or need further assistance with your research and analysis. This assignment challenges students to critically evaluate BP's response to one of the most significant environmental disasters in recent history, providing an opportunity to apply crisis management concepts and assess real-world corporate behavior in a crisis situation. Solution Manual for Business and Society: Ethics, Sustainability, and Stakeholder Management Archie B. Carroll, Ann K. Buchholtz 9780538453165
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