The Sudden and Smoldering Crisis Phases and the Challenges for a Leader to Be Successful
newspapers and television have featured some company in crisis almost daily. The crises have ranged from corporate fraud to allegations of widespread sexual harassment or discrimination. In almost all cases, the leaders of these companies are caught off guard; yet with the world watching, they are expected to say (and do) something to manage the situation. The consequences of mishandling a corporate crisis on a firm’s reputation can linger for decades. We want to emphasize that it is often the mishandling of crises, not the crises themselves, that can have the most severe consequences for a firm. What differentiates those firms that thrive following a crisis from those that do not is the leadership displayed throughout the process.
The general response in this stage is either shock, or denial and complacency.
Before the crisis, Tylenol had managed to control 37% of the market and had reported revenue of approximately 1.2 million dollars. However, after the crisis, Tylenol market share dropped to 7% with a substantial decrease in its revenue (Effective Crisis Management 4) The publicity about the cyanide-laced capsules created a nationwide panic immediately and with the expansion of 24 hours electronic media, people were bombarded with more and more news on the subject. Aroused by such sensational news through the media, people started calling hospitals to enquire about Tylenol. A Chicago hospital was reported to have received over 600 telephone calls just on a single day.
Effective Crisis Management. “The Tylenol Crisis, 1982.” University of Florida, not dated. Web.
Kaplan, Tamara. “The Tylenol Crisis: How Effective Public Relations Saved John And Johnson.” The Pennsylvania state university, 2010. Web.