Company’s ability to effectively anticipate and mitigate a plausible crisis is directly linked to its success and sustainability, since the possibility of crisis-related challenges emergence is comparatively high and its effects may be devastating. Crisis management is an approach “to prevent or lessen the negative outcomes of crisis and thereby protect the organization, stakeholders, and industry from harm” (Coombs, 2015, p. 5). The current paper aims at analyzing the organizational crisis communication response plan of EOS Company in the conditions when its reputation is being challenged by customers’ suits and low-quality claims that gained publicity.
Overall, the organizational crisis communication response strategy is insufficient. As a result, poor interaction with stakeholders leaves many questions unanswered, which hinders the process of reputation rebuilding. None of the crisis management stages effectively addresses the emerged issue. Hence, the initial response is partially adequate. Specifically, the initial (and the only response) is denial. Analyzing the ways in which it is conveyed to public, it is necessary to mention that the statement possesses a clear and precise appropriate message. Consider an example, EOS states “we firmly believe this lawsuit is without merit, and we will continue to create new and exciting products that delight our customers” (Jones, 2016). Such effect is achieved by constructing easily comprehensible claim that comprises simple and concise words. Moreover, the appropriate delivery of the initial response is predefined by timeliness, since company’s reaction was comparatively fast. In addition, the target audience is precisely identified in a message, and consists of “customers and fans” (Jones, 2016). According to Coombs (2014), such approaches are benevolent for creating an efficient crisis communication response. However, these are the only strong sides of EOS’s crisis management strategy.
The fact is that a dialog with stakeholders is absent. In particular, EOS does not respond to any accusations with the valid arguments that can be verified. For instance, one of the evoked issues is that “the company bills its products as all-natural, but there are ingredients derived from items the FDA classifies as allergenic” (Jones, 2016) with the component being shea butter (Jones, 2016). The accusation suggests that there is unethical inconsistence between the actual components of lip balms and those that are indicated in a label. Besides, the firm is accused in adding not all elements in the list of ingredients (Jones, 2016). In other words, the lack of information implies purposeful deception. Nevertheless, this invective remains unanswered, whereas remaining silent is a malevolent crisis management strategy. Considering the rationale, a label with ingredients is not improved and EOS does not address the situation other than stating that all components are being verified in a laboratory. The name of laboratory is not vocalized. Moreover, there is no explanation regarding the absence of warning that shea butter may cause allergy. Therefore, one can rightfully deduce that EOS’s crisis communication response obviously lacks transparency and adequate reaction.
In addition, company’s crisis response assimilates an initial response and reputation repair stage, since both approaches are represented with the same message. In this respect, EOS actively utilizes social media for communicating its crisis mitigation message. Nevertheless, it is not mentioned at the company’s official site. Besides, the text of a message is copied from Facebook to Twitter, which implies the lack of tenacity in constructing a dialog with clients. For example, the company should have placed the report that could visually prove the allergy-neutral components of products. Such lack of communication may be alarming for shareholders and employees, since their financial stability and reputation are directly linked to EOS’s success in addressing the above-described challenges. Overall, the detected omission suggests poorly developed crisis management strategies, which is connected with the absence of a proper leadership.
Moreover, EOS does not define a spokesperson and the message is conveyed from the company’s name. Such generalization is negative for a firm’s image as it is another argument that points to the insufficient pre crisis and crisis response techniques. Stakeholders need to know who is responsible, who answers to accusations, and what credentials he/she has. The absence of this information deteriorates company’s reputation.
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Without a doubt, inadequate crisis management response resonates with violated corporate ethics of the analyzed business. In particular, the emerged crisis inevitably affects financial sustainability of EOS. As a result, the neglected necessity to create an effective crisis management plan is the way to omit financial responsibility towards employees, investors, and communities, since all these categories may experience related financial loses. Besides, insufficient communication implies poor ethical responsibility, since concealing the component and the absence of allergy warning are unethical practices.
Furthermore, in a case if the claimed harm of lip balms is proven in the future by one of clients, it will inflict a legal responsibility upon a company. Such possibility may have a direct negative impact on employees and shareholders, and mediated effect on communities as they share responsibility for adverse skin reactions. Considering the involvement of all groups of stakeholders, it is improper to address crisis respond message exclusively to the customers. In such case, the limited audience assumes the neglect of responsibility towards other stakeholders, even though ethical responsibility towards clients is also compromised by ineffective communication strategies.
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In addition, Coombs (2014) educates that one of reputation repair methods is attacking the accuser, when “crisis manager confronts the person or group claiming something is wrong with the organization”. This strategy could have been more effective than the denial that is currently implemented by EOS. Considering the rationale, there is no mentioning about any valid arguments that the company’s lip balms cause the claimed severe skin reactions. In other words, the company should ask to prove with medical reports that those clients who claim negative skin reactions tell the truth and that it is supported with the proper medical tests. Instead, the company utilizes a denial strategy, which conveys the message that there is no crisis, when it obviously exists. Besides, as was mentioned above, this claim is not proven with any valid arguments. Therefore, it can hardly be considered seriously.
Summing up the above-mentioned, it is worth noting that EOS’s crisis communication response plan is underdeveloped. First of all, it is not elaborated to anticipate the occurrence of crisis, which could have been achieved by conducting transparent and fair communication with customers. The neglect of such approach causes crisis that negatively affects financial sustainability of a company and its stakeholders. Hence, the emerged crisis continues being omitted by publicly communicating the denial of guilt. The initial response to invective is relevant, but its value is significantly reduced by the absence of consistency. In its turn, it is connected with the fact that reputation repair stage is combined with the initial reaction. The fact that makes the situation worse is that the audience is limited to customers. Besides, the company does not provide any irrefutable evidence that can be sued to dispel accusations in unethical practices. Moreover, it is necessary to mention that post crisis phase is not identifiable. The consistency of the denial of guilt is present throughout all the time of crisis. However, all above-identified malevolent and insufficient communion practices also remain unchanged. Thus, it is natural to conclude that due to the poor crisis communication response EOS is expected to experience financial loses. This situation is deteriorated with the related lack of corporate ethics, which negatively impacts all stakeholders.