Snow Brand’s lack of internal communications was one of the reasons for its downfall.
Internal communication between employees, managers, executives, directors and the president were basically nonexistent. During the crisis “information channels were extremely complicated within the company” (Snow Brand 13). There was chaos between all of the plants because they were unsure which one was in charge of calling the shots. As well, the poisoning and inspection of the Osaka plant was withheld from executives and directors at the stockholder meeting. They were not informed of the situation until the following day.
The president of the company remained outside the communication loop for the most critical part of the crisis. Ishikawa was not present for the decision making process and was not updated by any of the executives. He was not informed of the executive decision, on June 29, to recall products in Western Japan, until one hour later. Similarly, the president was unaware of the contamination in the valves of the milk products line discovered during the equipment inspection two days earlier. Ishikawa heard this information for the first time from the Osaka plant manager during the second press conference on July 1. In complete shock, the president revealed to the public that he was displeased because this important information did not reach him. He also admitted to the public that the company was in complete chaos and resigned from his position on July 5.
Internal communications, or lack there of, were very disorganized and chaotic, which, in combination with other factors (which will be discussed later), lead to the downfall of Snow Brand.
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That is shocking that the president of the company did not know about the poisioning for a few days and that he was unavaiable during the crisis. Did the president resign from his position after this crisis? Internal communication is so important to the functioning of a company and this case certainly illustrates what companies are not to do!
ReplyDeleteThis case was in 2000. Could you imagine what would happen if the company was that slow today?
ReplyDeleteYou have some interesting posts on your blog which I picked up from someone who is following you and placed a link on Twitter. Have you considered "Tweeting" your blog posts so folks on Twitter can follow them directly?
ReplyDeleteBill
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In my working career, I personally experienced a crisis and yes you are right when you said that there will be a chaos if there is no person who is able to be the spokesperson. In my case, on of the media member has contacted a Junior Executive (Finance Department) in my organization, and that person has been informing the media with a negative message. This has lead to a chaos situation for us in the Corporate Communication Department.
ReplyDeleteThe Corporate Communications Department or the PR Department will have to take the lead in any crisis management. Firstly, they should have appointed a spokesperson who can be anyone in authority either the Executive Chairman, Director, COO etc…the rule of the game is there must be a person to be the contact person between the company and the media. Secondly, they will then have to select few key personnel to be in a “special task force” team in overcoming the issue. The Corporate Communications Department or the PR Department will be the gatekeeper for any news to be disseminated out from the company.
Exactly!! You make some very good points Shebley! Overall, the company was poorly organized which led to mass confusion, false information being released to the public and eventually their downfall. A proper cisis contingency plan and crisis management plan would have probably saved the company but instead it developed a horrible reputation amongst the public and will forever be known as the worse case of food poisoning in Japanese history! What a way to go!
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