mcdonald's crisis management case study

McDonald’s Case Study Freshest Ideas – Strategic Management, Global Marketing, etc.

Have you ever wondered how McDonald’s became world-famous for selling sandwiches and potatoes?

McDonald’s Corporation is a leader in the fast-food industry, an extremely competitive market. This article will discuss various factors that brought the restaurant chain to success. We will answer all your questions for the McDonald’s case study: strategic management, marketing, competition, crisis management, etc. Let’s start!

• 🦸 McDonald’s Facts
• 🌿 McDonald’s Case Study Ideas
• 🍔 Marketing
• 🥤 Strategic Management
• 🧸 McDonald’s Staffing
• 🍟 McDonald’s Vs. Burger King
• 🤢 McDonald’s and Obesity
• 🥻 McDonald’s in India
• 🤠 Crisis Management

🎉 McDonald’s Case Study – 50 Best Examples

🔗 references, 🦸 5 crazy facts about mcdonald’s.

We bet you didn’t know most of these facts:

• French fries are the best-selling item on the menu. No, not everyone’s all-time favorite Big Mac. But it is pretty popular too, in second place.
• US military inspired Mcdonald’s to create McDrive. Some of the soldiers on duty were not allowed to leave their cars. That is why a Mcdonald’s restaurant near a military base developed a drive-through system that spread to other branches.
• Mcdonald’s sells around 75 hamburgers in a second. More than 750 hamburgers will be in customers’ hands only before you finish reading this article.
• Some countries banned McDonald’s. Bermuda, Iran, Macedonia, Yemen, Montenegro, North Korea, Zimbabwe, Bolivia, and Iceland don’t have a single Mcdonald’s restaurant on their territories.
• McDonald’s is the biggest toy distributor in the world. The company gives kids more than 1.5 billion toys yearly, thanks to Happy Meal.

🌿 McDonald’s Case Study – Fresh Ideas

McDonald’s is an excellent research field. It’s a big and famous company with many departments and a long history. Don’t know what to begin with? Check McDonald’s case study starters below:

• Advertising campaigns.
• Pricing strategies.
• Human resource management.
• McDonald’s hiring process in 2021.
• Creative marketing campaigns.
• Ronald McDonald House Charities.
• Corporate environment.
• International markets strategies.
• Fast-food industry problem statement.
• McDonald’s financial summary.
• Food shortage in local markets.
• Benefits for employees.
• Supply chain.
• Sustainability.
• Community connection.

🍔 McDonald’s Case Study Marketing – Idea #1

Take a look at key marketing focus areas of McDonald’s:

• Quarter Pounder
• Filet O’Fish
• McDonald’s advertising The advertising budget is constantly growing and expanding to new markets. The company spent $1.62 billion on ads in 2020.
• McDonald’s branding The fast-food chain developed a string brand using red and yellow colors, “M” golden arches and copywriting. You probably know McDonald’s world-famous slogan, “I’m loving it.”
• Marketing for children segment Happy meals and marketing campaigns targeted at children made McDonald’s No1 fast-food restaurant for families.
• McDonald’s franchising model The company was one of the pioneers in franchising. It also implemented a unique quality control system and adapted menus to regional tastes.

🥤 McDonald’s Case Study Strategic Management – Idea #2

McDonald’s constantly sets new goals and reviews current strategies to maintain its position in the market. Here is what you can research:

• McDonald’s strategic objectives Apart from generating revenue, McDonald’s focuses on its mission and vision. The company aims to become its customer’s favorite restaurant with excellent service.
• McDonald’s strategic management in HR The company devotes much attention to employment and workforce management planning. McDonald’s also implements innovative technologies to automatize HR processes.
• McDonald’s strategic investments McDonald’s continues to invest in core menu positions’ marketing as they make roughly 70% of the sales. They plan to integrate more bestsellers into regional menus.
• McDonald’s strategic innovations The company prioritizes 3Ds (Digital, Delivery, and Drive-Thru) in its current growth strategy. The company works on social and digital client interactions to create a better customer experience.
• McDonald’s financial strategies McDonald’s financial goal is to maximize its revenue by offering more straightforward financial solutions to its partners. The company supports suppliers and franchisees to help local economies recover after the COVID-19 pandemic.

👔 McDonald’s Staffing – Case Study Idea #3

McDonald’s offers various jobs, from the front counter and drive-thru to top management careers. How are employees treated in McDonald’s? Let’s find out:

• 2021 measures to fight labor shortage At the beginning of 2022, McDonald’s announced that in 2021, it had significantly grown its number of employees. The reasons were wage increases, more benefits, and additional bonuses.
• McDonald’s recruiting The company uses various selection, screening, and testing techniques depending on the career a person applies to. Hiring managers have many responsibilities, as McDonald’s employs around 200,000 people yearly.
• McDonald’s human resource management There are more than 1,7 billion McDonald’s crew members around the world. McDonald’s provides training and performance appraisal.
• Career ladder in McDonald’s Based on the results of its employees, there are multiple career growth opportunities at McDonald’s.
• Diversity and inclusion in McDonald’s McDonald’s works on key factors that are equal pay, supplier and franchisee diversity, and other sustainability goals. The company implements its DEI (Diversity, Equity & Inclusion) strategy in its departments and supply chains.

🍟 McDonald’s Vs. Burger King Case Study – Idea #4

Burger King is one of McDonald’s main competitors on the market. You can compare these fast-food chains using the following aspects:

• McDonald’s and Burger King’s customer service Burger King greets each customer when they enter its restaurants. In addition, Burger King replies to unsatisfied McDonald’s customers on social media and offers their coupons.
• McDonald’s and Burger King’s pricing strategy In general, McDonald’s prices are a bit lower. But there is no significant difference in their pricing strategies.
• McDonald’s and Burger King’s menu positions Burger King offers more balanced options than McDonald’s. On the contrary, McDonald’s is the leader in the breakfast menu and has many healthy options.
• McDonald’s and Burger King’s advertising McDonald’s implements better branding decisions and consistent advertising. Burger King creates more memorable and witty TV commercials.
• McDonald’s and Burger King’s coffee McDonald’s offers better coffee with a broader menu, especially in McCafe. Burger King’s coffee is not as popular.

🤢 McDonald’s and Obesity Case Study – Idea #5

McDonald’s and other fast food generally contain many calories, leading to weight gain. This problem is especially prominent in the US, where fast food is much more popular than in Europe.

• McDonald’s responsibilities As the most popular fast-food chain, Mcdonald’s can set trends in the industry that other chains will follow.
• McDonald’s nutritional information presentation In 2022, Mcdonald’s changed its calorie legislation. You can see calorie and macronutrient information about all the menu items in all customer touchpoints.
• McDonald’s and childhood obesity The company aims to reduce the amount of sugar, salt, and fat on the Happy Meal menu. McDonald’s also promotes healthy and balanced eating habits in its ads for children.
• McDonald’s accusations Advertisements, loyalty programs, and discounts motivate people to buy more. That is why much of McDonald’s marketing is criticized because it makes people buy bigger portions and more menu items.
• McDonald’s healthy meals The restaurants offer different salads, healthy breakfasts, low-fat milk, apple dippers, and other region-specific options.

🥻 McDonald’s in India Case Study – Idea #6

Indian culture and eating habits were a challenge for McDonald’s. Now we can see that the restaurant has successfully conquered the market.

• Mcdonald’s expansion to India McDonald’s opened its first restaurant in Delhi in 1996. Before McDonald’s entered the market, Indians didn’t even consider a burger as a meal.
• McDonald’s menu in India You can find many spicy burger options, spicy fries, kebabs, pizza, and rice bowls on the menu.
• Domino’s Pizza
• Dunkin Donuts
• Burger King
• Vegetarian market Indians don’t eat beef or pork at all. Nearly half of the Indian population is vegetarian. That is why McDonald’s made adjustments to its branding and ingredients.
• McDonald’s opportunities in India Indians’ eating habits have changed over the last few years. More of them choose to eat out and eat western food.

🤠 McDonald’s Crisis Management Case Study – Idea #7

McDonald’s regularly faces controversies and scandals that they have to deal with. Here are some examples of such cases:

• McDonald’s crisis response in 2020 During the Covid-19 pandemic, McDonald’s provided financial support to its franchisees and employees. It also continued operating and ensured no delays in the supply chain.
• Steve Easterbrook lawsuit The former McDonald’s CEO was fired because of an affair with an employee. Later, the company discovered he had three other relationships with his employees.
• McDonald’s discrimination scandals Multiple sources alleged that David Fairhurst, former Chief People Officer, sexually harassed female employees. He also was forced to leave his job.
• McDonald’s transparent investigations After the scandals that involved higher management, McDonald’s implemented new policies. They include public and transparent actions and a proactive position in the investigation.
• Million-dollar nugget lawsuit A man from Florida cracked his tooth because of a bone in a nugget. Currently, he is trying to sue McDonald’s for the damage.

And here are some case study samples for you:

• Individual, Group and Organizational Concepts in McDonald’s. Discover how work culture, motivation, and group dynamics influence McDonald’s performance.
• Comparative Financial Statements of McDonald’s. In this case study, you will find an analysis of financial metrics, an explanation of McDonald’s trends, and a description of possible decisions.
• McDonald’s Business Principles: Employment Violations. The paper discusses the problems of McDonald’s business ethics, rights, and duties. There are also possible solutions to the issues.
• McDonald’s Human Resources Management Practice. This case study defines the external and internal factors that affect McDonald’s HRM, the company’s strengths, weaknesses, and opportunities.
• McDonald’s, Tesla and Apple: Segmentation, Targeting, and Positioning. The paper compares strategies these giant companies use to define and interact with their target customers.
• McDonald’s Company Marketing Practices and Strategies. Here, you will find an overview of the factors influencing McDonald’s marketing performance. There is also a detailed analysis of the company’s marketing activities and supply chains.
• McDonald’s Strategic Management of Human Resources & Innovation. Discover the approaches McDonald’s uses to work with its employees and the problems it faces.
• McDonald’s and Wendy’s International Inc.: Financial Performance. This case study compares the financial statements of the two prosperous fast-food chains.
• McDonald’s and Chipotle: Corporate Social Responsibility. Discover how the companies implement their ethical values in the internal and external environment.
• McDonald’s Company International Expansion. The paper explains, analyzes, and evaluates McDonald’s actions to conquer various markets.
• Employees Management: Restaurant Team Recruitment. In this sample, you will find information on the recruitment stages and training provided for different positions in the restaurant business.
• McDonald’s Company’s Marketing Strategies. Read about McDonald’s marketing mix, the effectiveness of the marketing strategies, and future opportunities.
• Microsoft Corporation and McDonald’s Corporation: Financial Performance. The case study’s analysis is based on calculations and explanations of the provided ratios.
• McDonald’s Accounting Information System. The topic of the case study covers the transactional cycles in Mcdonald’s, their examination and management, and problems.
• McDonald’s, Starbucks, and American International Group. The study discusses the financial performance of the companies and summarizes the figures.
• McDelivery Management. Discover the methodology, objectives, and benefits of the McDelivery project in McDonald’s performance.
• Best Buy, Starbucks, and Yum Brands: The Effect of Operations Management. The sample analyses the lean management systems and quality management systems in the food industry.
• Quality Management in McDonald’s Restaurant. Learn about the customer benefit package of McDonald’s service and the opinion of one of the managers.
• Business Ethics and Social Corporate Responsibility for McDonald’s. Here, you will explore the role of CSR, customer satisfaction, responses, policies, and loyalty in the fast-food industry.
• McDonald’s Corporation’s Talent Management Program. The case study digs into the history of the techniques Mcdonald’s implements to maintain and motivate their employees.
• Food Industry: McDonald’s Company. The paper provides information about the elasticity of the fast-food market goods and services and McDonald’s competitiveness.
• McDonald’s Company Case Analysis. Read about the significance of operations strategy and the perspectives Mcdonald’s uses.
• McDonald’s Company HR Management Practices. Exploring this case study, you will find out how Mcdonald’s manages diverse employees and the HR planning methods it implements.
• Strategic Planning Process in McDonald’s Company. The paper evaluates the current McDonald’s strategies using SWOT analysis and marketing research.
• McDonald’s Strategic Management and Analysis. The case study offers different approaches to assess McDonald’s strategic management, including SWOT, PESTEL, and Porter’s five forces.
• McDonald’s Organization: Operation Management. Discover the roles of human resource and job design, supply chain management, just-in-time practices, and more.
• McDonald’s: Marketing Mix Segments. This paper tells us about the 4Ps of the marketing mix in McDonald’s, its market segmentation, and its pricing strategy.
• Industry Analysis on the Global Fast-Food Industry. The case study sample provides an overview of the current state of the fast-food market, competition, and competitive forces.
• McDonald’s Corporation’s Porter’s Five Forces Analysis. Read the extensive analysis of the market entry ease, competition, substitutes, suppliers, and buyers.
• Marketing Analysis: McDonald’s Company. The study refers to several articles that discuss the impact of customer-centering business processing, relationship, and service.
• McDonald’s Coffee Spill Heard Around the World. In this paper, you’ll discover more about one of the most famous lawsuits in the restaurant business that led to changes in the industry.
• Mcdonald’s vs. Wal-Mart’s Strategic Choices. The case study describes the companies’ strategic decisions and evaluates their causes and effects.
• McDonald’s Company Operation Management. Learn the operation management concept and its role in McDonald’s service and business processes.
• McDonald’s Company’s Strategic Management. The paper analyzes the implemented strategies and suggests different growth strategies.
• McDonald’s Company Human Resource Strategy. Find out how the company’s mission, vision, and goals connect with human resource approaches.
• Kentucky Fried Chicken (KFC): Strategic Management. This sample describes and analyses one of McDonald’s key competitors, its internal environment, and strategy changes.
• Business Strategy Analysis McDonalds. The paper covers various aspects of business strategies’ directions, from marketing and store formats to community involvement.
• Mcdonald’s Marketing Strategies in the UAE. Discover how McDonald’s managed to expand to UAE and the opportunities and challenges it faced.
• U.S. Fast Food Industry: Economic Growth. The study includes an analysis of economic factors that led to fast food market expansion and the challenges of this process.
• McDonald’s Corporation’s Business Ethics. In this paper, you’ll find a description of the organizational communication standards in the internal and external environment of the company.
• Mcdonald’s Company: Human Resource Functions. This paper discusses McDonald’s HRM practices, including recruitment, selection, training, and performance evaluation.
• McDonald’s Company Information System Performance Managing. Discover various approaches to analyzing information technologies that operate in McDonald’s.
• Wendy’s Fast-Food Restaurant: Marketing Research. The sample explores the fast-food industry, customer profiles, and market segmentation.
• McDonald’s Company’s SWOT Analysis. The case study uses McDonald’s strengths, weaknesses, opportunities, and threats to identify problems and offer solutions to them.
• Mcdonald’s: Financial Analysis. In this case study, you will find several approaches to analyzing financial activities, financial appraisal methods, and financial statement evaluation. Download this PDF file to be updated on the current situation.
• Multinational Corporations in Different Countries. This sample is a comparative strategic analysis of McDonald’s and KFC on the international market.
• Mcdonald’s Entering Estonia Case Analysis. Discover the peculiarities of the Estonian market and the course of action McDonald’s took to expand there.
• Lord of the Fries: Business Analysis. Lond of the Fries is an Australian fast-food chain that offers vegetarian and vegan food to its customers.
• Marketing Research at McDonald’s. This paper analyses the role of marketing research in McDonald’s in different areas, such as competition in the market, customer satisfaction, and investment decisions.
• McDonald’s Company Performance Measurement. Read about the performance measurement systems and models used in McDonald’s.
• What is Human Resources
• McDonald’s Marketing Strategy: The Rise Of The Golden Arches
• McDonald’s Financial Information
• McDonald’s Workforce Grew in 2021 Despite the Labor Shortage
• Commitment to Quality: Our Sustainability Goals | McDonald’s
• Tom Watson urges McDonald’s to cancel ‘danger to health’ campaign | McDonald’s | The Guardian
• How McDonald’s conquered India – BBC News
• McDonald’s vs. Burger King: What’s the Difference?
• McDonalds Does Crisis Management the Right Way

AstraZeneca Analysis – Competitors, Management, Sustainability & More

Walmart case study | best case study topics.

Brought to you by:

McDonald's Corporation

By: Frank T. Rothaermel, John Kim

McDonald's newly appointed CEO Chris Kempczinski, who assumed office on November 4, 2019, is the protagonist of the case. With $21 billion in sales (in 2019) and 45,000 restaurants globally (thereof…

• Length: 20 page(s)
• Publication Date: Nov 4, 2019
• Discipline: Strategy
• Product #: MH0065-PDF-ENG

What's included:

• Teaching Note
• Educator Copy

$4.95 per student

degree granting course

$8.95 per student

non-degree granting course

Get access to this material, plus much more with a free Educator Account:

• Access to world-famous HBS cases
• Up to 60% off materials for your students
• Resources for teaching online
• Tips and reviews from other Educators

Already registered? Sign in

• Student Registration
• Non-Academic Registration
• Included Materials

McDonald's newly appointed CEO Chris Kempczinski, who assumed office on November 4, 2019, is the protagonist of the case. With $21 billion in sales (in 2019) and 45,000 restaurants globally (thereof 27,000 in the United States), McDonald's remains the largest quick-service restaurant (QSR) chain. Attempting to be "everything for everybody," McDonald's fell victim to being "stuck-in-middle," without a clear strategic position. Kempczinski must confront several challenges if he is to return the company to its former glory, including: 1) How to balance the need to introduce new items while addressing "menu bloat"? 2) How to re-establish the reputation for quality products? 3) How to appeal to Millennials? 4) How to upgrade the customer experience through all channels and locations (in-store, delivery, and drive-through)? 5) How to reignite growth?

Learning Objectives

Vision, Mission, and Values; Core Competency; Business Model; Business Unit and Corporate Strategy; Industry and Competitor Analysis

Nov 4, 2019

Discipline:

Geographies:

United States

Industries:

Real estate industry, Restaurants and food service industry

McGraw-Hill Education

MH0065-PDF-ENG

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

McDonald’s: Reclaiming Its McJob Glory Case Study

Introduction, macdonald case study summary, recommendations.

Human resource is the most valuable asset of an institution. This is merely because in absence of the work force, implies no production in the industries, or offering of services. This in turn results that the institutions would have to fall. Consequently, it is of great importance to manage human resource effectively. Walker points out that emergent strategies blend the benefits of the formal planning approach with the realisation of behavioural realities in organizations, which encourages such things as strategic learning and grass-roots management (Walker, 1992, p. 72).Human resource management is a function mostly undertaken by the human resource department in a company. Human resource management is a task facet within an institution that mostly involves itself with hiring, compensations and salaries, training, motivation of workers, performances appraisals, directing and managing people employed within an institution. In today’s dynamic environments HRM calls for one to be smart enough especially when it comes to recruitment and attracting the best candidates to your organisation. This is the trickiest area of human resource management, as with liberalism of labour, it is very uncertain on the part of the institutions to retain their best quality.

MacDonald is faced with crisis of attracting top-flight candidates in the market in their company through their entry positions known as McJobs. They are planning to hire more workforce of about 50,000 store level employees on April 19. However, they have the problem of negative perception of their McJob and competition from Starbucks, which of late has been the one stop employee for most the workers in spite of the hard employment times. Over the years, the job has lost its former glory among people and its good reputation built over the years is slowly declining both within the company, but the adverse effects are being witnessed in the outside public.

These effects have also been brought about by some publications that associated MacJobs negatively, implying they are not well remunerated and are of lower status. McDonalds were both displeased with these publications in the year 2003 and tried to stop them, but the publishers went ahead to tarnish the perception people would later half to be employees with McDonalds. This has gone to the extent that McDonald addresses these issues and achieves their goal of employing workforce for the summer period when they will be having more work to be done. They have embarked on the redefinition of the McJob from a low paying job that requires little skills and provides little opportunity for advancement to a job that is stimulating, rewarding and offers skills this they hope will recast back confidence in the entry-level jobs of their company.

In the effort of the company to redefine and reclaim its Macjob glory has endowed itself with several approaches. The MacDonald has realised that for effective change it has to start from within, as evidenced from the management team going out of their normal day-to-day tasks to pass a positive McJobs message. They achieve this through career advancement while in McDonalds this is aimed at reducing if not eliminating the prejudices and misjudgements in the minds of people concerning McJobs. In addition to achieve their goal they saw it being wise to undertake campaigns and promotions so as to sensitize, reach and inform as many people as possible on the paramount issue. The main message during these promotions was the great extent to which an employment opportunity at McDonalds would offer any promising candidate. They also cemented their arguments with claims that these benefits are available to the employees currently employed. These campaigns have their supporter and those who disagree from within the company. Ron Paul is among those who disliked and he claimed that all the efforts aimed at the redefinition of the MacJob would amount to nothing in the end. On the other hand, Paul had a contrary view that the company had more in its docket to frame the MacJob with and could not stalled in its quest to convince people out there that it had and offers more better opportunities than its competitors, and more so the chance to be responsible as a restaurant manager.

The company in order to estimate and get a better view of the state of how their image as an employer was distorted conducted a survey from within. They enquired to know if they were satisfied, working at McDonalds and again what was the contributing factor in the company that made them feel comfortable while being an employed. To their amazement they found out that majority of employees were very happy with working with them, although from the environment outside the company these same jobs had below average perception. This was a clear signal that employees of McDonalds like their work and the company in general. The company sales may have dropped and business is better although sales figures could have decreased due to the reason that we are in recession and most people opt for cheaper goods and services that is more of cheaper food when they are taking meals. It has of late been very clear in most countries that the company has operations in that since the inception of the policy of three Fs there has been the perception that McDonalds is the best employer compared to the rest.

The company has all the best intentions in the end to clear off the bad perception. This is mainly due to the fact as employment chances are due to rise, the company may experience high staff turnover with most of them moving to better paying jobs. It is inevitable that Job turnover will go upwards as the conditions of the economy stabilizes and we are clear the recession period. It is worrying that the company restaurant is very high which implies employees in these restaurants do not stay more than twelve months before they leave for better positions. There are also some advertisement and research information, which goes to worsen the company image in the outside public. Most of the senior management are aggravated by this and are of the opinion that it is of high important to spread the good news of the benefits and the better working conditions and terms provided by the company. This at least will be of beneficial in creating a good public image as well as contributing in redefining MacJob.

It is worthwhile from the above case for MacDonald in future to be wise enough to have and be conducting continual assessment in regards to the market. This is because without such they will ever be resulting to same scenario where they lose more in advertising and campaigns.

The company should have their salaries and wages being reviewed according to the market rates. Moreover, the MacJobs allowances should be structured to attract talents into Macdonald. This can be achieved through market research for market salaries and wages of all individuals.

MacDonald should consider social responsibility tasks or project participation so as not to lose touch and good relation and perception from its environment; on the other hand, the company should shy away from cyclical hiring of staffs i.e. during summer time. This should be encouraged to put a stop a scenario whereby

The company should also strengthen their human resource development with more qualified employees who have new and more advanced procedures to evaluate and recognise such crisis as bad reputation early enough before their effects takes toll on the company. Who are in a better position and capable to correct or address the matter amicably.

Human resource department in an institutions is necessary since it foresees different needs of the employees, thus they are the links between the Management of the organisation with the employees. They conduct HRM is their sole tasks. Concerning McDonalds the steps they have undertaken towards redefining Macjobs will bore result since they have assessed themselves clearly known where they are and their goal. This is the first solution to any problem, determining the root cause. Human resources management is increasingly being used and applied by several institutions to reveal the interconnections between human resources management with the cultural evolvement and planning. HRM is the new application being used by several organisations to understand the various facets of interactions points of the companies with the environment.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2022, January 9). McDonald's: Reclaiming Its McJob Glory. https://ivypanda.com/essays/mcdonalds-crisis-case-study/

"McDonald's: Reclaiming Its McJob Glory." IvyPanda , 9 Jan. 2022, ivypanda.com/essays/mcdonalds-crisis-case-study/.

IvyPanda . (2022) 'McDonald's: Reclaiming Its McJob Glory'. 9 January.

IvyPanda . 2022. "McDonald's: Reclaiming Its McJob Glory." January 9, 2022. https://ivypanda.com/essays/mcdonalds-crisis-case-study/.

1. IvyPanda . "McDonald's: Reclaiming Its McJob Glory." January 9, 2022. https://ivypanda.com/essays/mcdonalds-crisis-case-study/.

Bibliography

IvyPanda . "McDonald's: Reclaiming Its McJob Glory." January 9, 2022. https://ivypanda.com/essays/mcdonalds-crisis-case-study/.

• Vulnerable Coastal Areas Preservation Strategies
• "The Yellow Wallpaper" and The Laugh of the Medusa
• Literature Analysis of Faulkner Journeys
• "A Catalog of Biases in Questionnaires" by Choi and Pak
• Netezza-IBM and Boeing-Conquest Acquisitions
• Enron: Corporate Debacle
• Sony vs. Hackers: PS3 Jailbreak
• The Fall and Rise of Fiat

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

McDonald’s and the Challenges of a Modern Supply Chain

Three lessons.

Recently, McDonald’s, the world’s iconic largest food service provider, has been (forgive the cliché) through the grinder. Poor performance has led to the departure of its CEO and plenty of critical attention in the business pages . Part of this story relates to the provenance, or origins, of its products: Chains that provide more upmarket “fast casual” dining such as Panera, Chipotle, and Shake Shack have brands that speak of freshness, health, and trustworthy sourcing.

• Steve New teaches operations and supply-chain management at the University of Oxford’s Saïd Business School and is a fellow of Hertford College.

Partner Center

Lessons Learned from 06 PR Crisis Management Case Studies

In the world of business and public relations, crises are an unfortunate reality that organizations may face. 

These crises can pose significant threats to an organization’s reputation, customer trust, and bottom line. 

Effective crisis management is crucial in mitigating the damage and navigating through challenging situations. 

In this compilation of PR crisis management case studies, we examine notable incidents from various industries and explore how organizations responded to these crises. 

By delving into these real-world examples, valuable insights can be gained to better understand crisis management strategies and the impact they can have on an organization’s reputation and future success.

Let’s dive in six PR crisis management case studies to learn more about this 

Case Study 1: Nike’s Lance Armstrong Doping Scandal 

The Nike’s Lance Armstrong doping scandal is a significant PR crisis that unfolded in the sports industry. Lance Armstrong, a former professional cyclist sponsored by Nike, was accused of doping, which refers to the use of prohibited substances or methods to enhance athletic performance. This scandal had several implications for Nike as a sponsor and faced significant backlash.

The Lance Armstrong doping scandal was a PR crisis for Nike because it directly involved one of their high-profile sponsored athletes. As a result, Nike’s brand reputation and credibility were at stake, as the scandal raised questions about the integrity of both the athlete and the company.

The controversy also had the potential to alienate Nike’s customer base and damage its image as a promoter of fair play and ethical sportsmanship.

To address the crisis, Nike took several PR actions:

• Termination of Sponsorship: Nike made the decision to terminate its sponsorship contract with Lance Armstrong following the doping revelations. This action demonstrated a clear break from the athlete and his actions, signifying Nike’s commitment to maintaining a clean and ethical brand image.
• Public Statements: Nike issued public statements expressing disappointment and concern over the doping scandal. They condemned the use of performance-enhancing drugs and emphasized their commitment to integrity and fair competition. These statements aimed to distance the company from the controversy and reassure the public of Nike’s commitment to ethical practices.
• Collaboration with Anti-Doping Organizations: Nike collaborated with anti-doping organizations, such as the United States Anti-Doping Agency (USADA), to support their efforts in combating doping in sports. This collaboration served to align Nike with the fight against doping and to showcase their commitment to clean and fair competition.
• Transparency and Accountability: Nike took steps to promote transparency and accountability in their sponsorship deals. They revised their sponsorship contracts to include stricter clauses related to doping, emphasizing the importance of athletes’ adherence to anti-doping regulations. This action aimed to demonstrate Nike’s commitment to promoting clean sports and deterring unethical practices.

By terminating the sponsorship, issuing public statements, collaborating with anti-doping organizations, and promoting transparency, Nike aimed to manage the PR crisis caused by the Lance Armstrong doping scandal. These actions were intended to distance the company from the controversy, uphold its brand values, and restore trust among customers and the public.

Case Study 2: McDonald’s “Hot Coffee” Lawsuit

The second PR crisis management case study focuses on the infamous “Hot Coffee” lawsuit involving McDonald’s. In the early 1990s, a customer filed a lawsuit against McDonald’s after suffering severe burns from spilled hot coffee purchased from one of their drive-thru locations.

The incident gained substantial media attention , and McDonald’s initially faced criticism and negative public perception. The company was accused of serving excessively hot coffee and failing to take responsibility for the incident.

However, McDonald’s later adjusted its response strategy, settling the lawsuit and implementing changes to prevent similar incidents. They revised their coffee temperature policies, ensuring safer serving temperatures, and began placing warning labels on their cups.

Additionally, McDonald’s embarked on a public education campaign to clarify the facts of the case and dispel misconceptions. McDonald’s demonstrated a proactive approach to crisis management by taking responsibility, implementing changes, and engaging with the public through education campaigns and media relations

After the “Hot Coffee” lawsuit crisis, McDonald’s took several PR actions to address the situation and improve public perception. 

Here are some of the actions they implemented:

• Settlement: McDonald’s chose to settle the lawsuit rather than engaging in a lengthy legal battle. This decision helped demonstrate their willingness to take responsibility for the incident and mitigate any negative publicity associated with a prolonged legal process.
• Policy Revisions: McDonald’s revised its coffee temperature policies to ensure safer serving temperatures. By adjusting the temperature at which coffee was served, they aimed to prevent future incidents of burns and address concerns raised during the lawsuit.
• Warning Labels : McDonald’s began placing warning labels on their coffee cups to inform customers about the potential risks associated with hot beverages. This step aimed to improve consumer awareness and reduce the likelihood of accidents or lawsuits stemming from burns caused by hot coffee.
• Public Education Campaign: McDonald’s launched a public education campaign to provide accurate information about the “Hot Coffee” case and dispel misconceptions surrounding it. The campaign sought to address any misunderstandings and offer clarity on the facts of the incident, aiming to rebuild trust and restore public confidence in the company.
• Media Relations: McDonald’s engaged with media outlets to share their perspective, highlight the changes made in response to the incident, and emphasize their commitment to customer safety. By actively participating in media relations, McDonald’s sought to shape the narrative surrounding the crisis and convey a more positive image.

Case Study 3: Tesla’s Autopilot Accidents 

The second PR crisis management case study revolves around Tesla’s Autopilot feature and the accidents associated with its use. Tesla’s Autopilot is an advanced driver-assistance system designed to assist drivers with certain aspects of driving.

However, there have been incidents where Tesla vehicles using Autopilot have been involved in accidents, raising concerns about the safety and reliability of autonomous driving technology.

In response to these accidents, Tesla has implemented several PR actions to manage the crisis:

• Emphasizing Driver Responsibility: Tesla has consistently emphasized that Autopilot is not a fully autonomous driving system and that drivers must remain attentive and ready to take control of the vehicle at all times. They have stressed the importance of hands-on driving and have provided guidance to users on how to properly use the Autopilot feature.
• Software Updates: Tesla has made continuous software updates to improve the safety and functionality of Autopilot. These updates have included enhancements to the system’s capabilities, such as improved object detection, collision avoidance, and lane-keeping features. By actively addressing the technology’s limitations and making regular updates, Tesla aims to enhance the safety of Autopilot and prevent future accidents.
• Transparency and Data Sharing: Tesla has been transparent in sharing data related to Autopilot accidents and improvements in the technology. They have released quarterly safety reports detailing accident statistics and comparing the safety of Tesla vehicles with traditional vehicles. By providing data-driven information, Tesla seeks to demonstrate the safety benefits of Autopilot and address any misconceptions or concerns surrounding the technology.
• Public Education and Advocacy: Tesla has engaged in public education campaigns to raise awareness about the capabilities and limitations of Autopilot. They have conducted outreach programs, hosted events, and collaborated with organizations to educate drivers, regulators, and the general public about autonomous driving technology. By actively advocating for the safe and responsible use of Autopilot, Tesla aims to foster a better understanding of the system and promote its benefits.

Through these PR actions, Tesla is working to manage the crisis associated with Autopilot accidents. By emphasizing driver responsibility, making software updates, sharing data, and engaging in public education, Tesla aims to address concerns, enhance safety, and maintain public trust in their autonomous driving technology.

Case Study 4: Nestlé’s Baby Formula Controversy

In the 1970s and 1980s, Nestlé faced a significant crisis related to the promotion of its infant formula products in developing countries. The company was accused of aggressive marketing tactics that discouraged breastfeeding and led to infant health issues due to improper formula preparation. Nestlé faced widespread boycotts, protests, and international pressure. 

The company responded by adopting the WHO/UNICEF International Code of Marketing of Breast-Milk Substitutes, improving labeling, and investing in education programs to promote proper nutrition practices.

During the 1970s and 1980s, Nestlé encountered a severe PR crisis surrounding the promotion of its infant formula products in developing countries. The controversy arose due to allegations of aggressive marketing practices that undermined breastfeeding, resulting in infant health problems stemming from improper formula preparation. Nestlé faced extensive boycotts, protests, and international scrutiny for its actions. 

To address the crisis, Nestlé took several PR actions:

• Adoption of WHO/UNICEF Code: Nestlé responded by adopting the WHO/UNICEF International Code of Marketing of Breast-Milk Substitutes. This code established guidelines to regulate the marketing and promotion of infant formula, ensuring that companies refrain from misleading or aggressive tactics that could discourage breastfeeding.
• Labeling Improvements: Nestlé made efforts to improve the labeling of its infant formula products, providing clearer instructions on proper preparation and usage. By enhancing product labeling, Nestlé aimed to promote safe and appropriate feeding practices for infants.
• Education Programs: Nestlé invested in education programs to promote proper nutrition practices and raise awareness about the benefits of breastfeeding. These programs aimed to educate healthcare professionals and mothers in developing countries about the importance of breastfeeding and the appropriate use of infant formula when necessary.

By adopting the WHO/UNICEF Code, improving product labeling, and investing in education programs, Nestlé aimed to address the concerns raised during the crisis, promote responsible marketing practices, and support breastfeeding as the optimal infant nutrition method. These PR actions aimed to rebuild trust and mitigate the negative impact of the controversy on the company’s reputation.

Case Study 5: Facebook’s Cambridge Analytica Scandal. 

The Facebook Cambridge Analytica scandal was a significant PR crisis for the social media giant.

The scandal involved the unauthorized access and misuse of personal data of millions of Facebook users by the political consulting firm Cambridge Analytica.

This breach of trust and privacy had far-reaching implications and raised concerns about Facebook’s data handling practices, user privacy, and the potential influence on elections.

The Cambridge Analytica scandal was a PR crisis for Facebook due to the following reasons:

• Breach of Trust: The scandal undermined the trust that users had placed in Facebook to protect their personal data. The unauthorized access and misuse of user information violated the expectations and privacy of millions of users, leading to widespread outrage and concerns about data security.
• Negative Public Perception: The scandal received extensive media coverage, resulting in a tarnished public perception of Facebook. Users and the general public questioned the company’s commitment to user privacy, its handling of personal data, and its overall ethical standards.
• Regulatory Scrutiny: The Cambridge Analytica scandal triggered investigations by regulatory authorities worldwide, including the U.S. Federal Trade Commission (FTC) and the European Union. The regulatory scrutiny further escalated the crisis, potentially exposing Facebook to legal repercussions and hefty fines.

To manage the crisis, Facebook implemented several PR actions:

• Apologies and Acknowledgment: Facebook’s leadership, including CEO Mark Zuckerberg, publicly apologized and acknowledged the mishandling of user data. They took responsibility for the breach and expressed their commitment to addressing the issue and regaining public trust.
• Transparency and Communication: Facebook increased transparency by providing regular updates and sharing information about the steps taken to address the issue. They communicated openly about the changes made to data privacy policies, user controls, and third-party access to data.
• Stricter Data Controls: Facebook implemented stricter data controls and restrictions to enhance user privacy and data security. They made changes to the platform’s data access policies, limiting third-party developers’ access to user data and enhancing user consent mechanisms.
• Cooperation with Authorities : Facebook cooperated with regulatory authorities during investigations, providing information and engaging in discussions to address concerns related to data privacy and security. They worked to comply with regulatory requirements and implement necessary changes.
• Ad Campaigns and Educational Efforts: Facebook launched ad campaigns and educational efforts to raise awareness among users about data privacy, security settings, and the importance of informed consent. These initiatives aimed to empower users with knowledge and tools to control their privacy on the platform.

Through these PR actions, Facebook aimed to regain public trust, address privacy concerns, and demonstrate a commitment to user data security. The company recognized the severity of the crisis and took proactive measures to improve data practices, enhance transparency, and communicate openly with users and regulatory authorities.

Case Study 6: Chipotle’s Food Safety Crisis

The Chipotle food safety crisis was a significant PR crisis for the popular fast-casual restaurant chain. The crisis occurred in multiple instances between 2015 and 2018 when several outbreaks of foodborne illnesses, including E. coli, salmonella, and norovirus, were linked to Chipotle restaurants. This series of incidents resulted in numerous cases of customer illness, negative media coverage, a decline in sales, and a loss of customer trust.

The Chipotle food safety crisis was a PR crisis for several reasons:

• Public Health Impact: The outbreaks of foodborne illnesses associated with Chipotle restaurants posed a direct risk to public health. The safety and well-being of customers were compromised, leading to severe illnesses and potential long-term health consequences. The crisis heightened concerns about food safety practices within the company.
• Media Attention and Reputation Damage: The outbreaks received extensive media coverage, which amplified the negative impact on Chipotle’s reputation. The media reports highlighted the incidents, their scale, and the potential causes, contributing to a loss of customer confidence and damaging the company’s image as a provider of fresh and safe food.
• Legal and Financial Ramifications: The food safety crisis resulted in legal implications for Chipotle, including lawsuits from affected customers and investigations by regulatory authorities. The financial consequences were also significant, with a decline in sales, decreased stock value, and increased costs associated with implementing food safety measures.

To address the crisis, Chipotle took several actions:

• Crisis Management Team : Chipotle established a dedicated crisis management team to lead the company’s response efforts. This team coordinated communication, implemented food safety protocols, and collaborated with external experts and authorities to address the crisis effectively.
• Enhanced Food Safety Practices : Chipotle implemented comprehensive food safety measures and protocols to prevent future incidents. This included increased testing of ingredients, improved employee training on food handling and safety, and stricter adherence to hygiene standards throughout the supply chain.
• Communication and Transparency : Chipotle adopted a proactive approach to communication, providing regular updates and being transparent about the actions taken to address the crisis. They publicly acknowledged the issues, apologized to affected customers, and shared information about the enhanced food safety practices implemented.
• Rebuilding Trust: Chipotle launched marketing campaigns and initiatives aimed at rebuilding trust with customers. These efforts focused on emphasizing the company’s commitment to food safety, showcasing the steps taken to address the crisis, and reinforcing the brand’s core values of sourcing high-quality ingredients.
• Collaboration with Experts: Chipotle collaborated with food safety experts and external consultants to gain insights, conduct thorough audits, and receive guidance on best practices for food safety. This collaboration helped strengthen their efforts and demonstrate their commitment to continuous improvement.

Key Take Aways from PR Crisis Management Case Studies

Here are five key takeaways from the PR crisis management case studies mentioned earlier to effectively manage a PR crisis:

Swift and Transparent Response

It is crucial to respond quickly and transparently when a crisis occurs. Acknowledge the issue, take responsibility, and communicate openly with stakeholders, showing a commitment to addressing the problem. In the age of instant communication and social media, news and information spread rapidly. By responding swiftly, an organization can take control of the narrative surrounding the crisis. It allows them to provide accurate information, address concerns, and shape the perception of the crisis before it gets distorted or amplified by external sources.

Prioritize Stakeholder Trust

Rebuilding trust with stakeholders, including customers, employees, and the general public, should be a top priority. Focus on actions and initiatives that demonstrate accountability, transparency, and a commitment to resolving the crisis. When stakeholders trust an organization, they are more likely to continue supporting it, even during challenging times. Prioritizing stakeholder trust can help maintain customer loyalty, employee commitment, investor confidence, and the support of other key stakeholders.

Proactive Communication

Maintain open lines of communication with stakeholders throughout the crisis. Provide regular updates, share accurate information, and address concerns promptly. Proactive communication helps control the narrative and minimizes the spread of misinformation.During a crisis, stakeholders may feel anxious, confused, or fearful. Proactive communication allows organizations to reassure stakeholders by providing updates, clarifying the situation, and offering guidance. It helps alleviate concerns, dispel misconceptions, and provide necessary information to help stakeholders make informed decisions.

Public Education

Public education is an effective way to build trust and credibility with stakeholders. By providing educational resources and transparent information, organizations show their commitment to keeping stakeholders informed and empowered. This builds trust, strengthens the organization’s reputation, and fosters a positive perception among stakeholders. By investing in public education, organizations demonstrate their commitment to the well-being and interests of stakeholders. This helps foster loyalty and support even beyond the crisis, contributing to ongoing positive relationships.

A dedicated PR Team

A dedicated PR team brings specialized expertise in crisis communication. Their knowledge and experience ensure that the organization’s response is strategic, effective, and aligned with the overall PR goals. Consistent and coordinated messaging is crucial during a crisis. A dedicated PR team ensures that all communication, both internal and external, is aligned and consistent. They develop key messages, train spokespeople, and oversee communication channels to ensure that accurate and unified information is disseminated to stakeholders and the public.

Final words 

The case studies discussed provide valuable insights into the various challenges faced by organizations and the PR actions they took to manage their crises.

Learning from these PR crisis management case studies, organizations should develop robust PR strategies, establish crisis response teams, and regularly review and update their protocols. By being prepared and proactive, companies can minimize the impact of a crisis and emerge stronger on the other side.

Remember, managing a crisis is not just about damage control; it is an opportunity for growth, learning, and demonstrating resilience. With careful planning, decisive actions, and a commitment to transparency and improvement, organizations can navigate PR crises successfully and emerge with their reputation intact

About The Author

Tahir Abbas

Related posts.

Resilience Tested: Toyota Crisis Management Case Study

Benefits of Change Management for Individuals

Essential KPIs for Effective Crisis Management

• Search Menu
• Browse content in Arts and Humanities
• Browse content in Archaeology
• Anglo-Saxon and Medieval Archaeology
• Archaeological Methodology and Techniques
• Archaeology by Region
• Archaeology of Religion
• Archaeology of Trade and Exchange
• Biblical Archaeology
• Contemporary and Public Archaeology
• Environmental Archaeology
• Historical Archaeology
• History and Theory of Archaeology
• Industrial Archaeology
• Landscape Archaeology
• Mortuary Archaeology
• Prehistoric Archaeology
• Underwater Archaeology
• Urban Archaeology
• Zooarchaeology
• Browse content in Architecture
• Architectural Structure and Design
• History of Architecture
• Residential and Domestic Buildings
• Theory of Architecture
• Browse content in Art
• Art Subjects and Themes
• History of Art
• Industrial and Commercial Art
• Theory of Art
• Biographical Studies
• Byzantine Studies
• Browse content in Classical Studies
• Classical History
• Classical Philosophy
• Classical Mythology
• Classical Literature
• Classical Reception
• Classical Art and Architecture
• Classical Oratory and Rhetoric
• Greek and Roman Epigraphy
• Greek and Roman Law
• Greek and Roman Archaeology
• Greek and Roman Papyrology
• Late Antiquity
• Religion in the Ancient World
• Digital Humanities
• Browse content in History
• Colonialism and Imperialism
• Diplomatic History
• Environmental History
• Genealogy, Heraldry, Names, and Honours
• Genocide and Ethnic Cleansing
• Historical Geography
• History by Period
• History of Agriculture
• History of Education
• History of Emotions
• History of Gender and Sexuality
• Industrial History
• Intellectual History
• International History
• Labour History
• Legal and Constitutional History
• Local and Family History
• Maritime History
• Military History
• National Liberation and Post-Colonialism
• Oral History
• Political History
• Public History
• Regional and National History
• Revolutions and Rebellions
• Slavery and Abolition of Slavery
• Social and Cultural History
• Theory, Methods, and Historiography
• Urban History
• World History
• Browse content in Language Teaching and Learning
• Language Learning (Specific Skills)
• Language Teaching Theory and Methods
• Browse content in Linguistics
• Applied Linguistics
• Cognitive Linguistics
• Computational Linguistics
• Forensic Linguistics
• Grammar, Syntax and Morphology
• Historical and Diachronic Linguistics
• History of English
• Language Acquisition
• Language Variation
• Language Families
• Language Evolution
• Language Reference
• Lexicography
• Linguistic Theories
• Linguistic Typology
• Linguistic Anthropology
• Phonetics and Phonology
• Psycholinguistics
• Sociolinguistics
• Translation and Interpretation
• Writing Systems
• Browse content in Literature
• Bibliography
• Children's Literature Studies
• Literary Studies (Asian)
• Literary Studies (European)
• Literary Studies (Eco-criticism)
• Literary Studies (Modernism)
• Literary Studies (Romanticism)
• Literary Studies (American)
• Literary Studies - World
• Literary Studies (1500 to 1800)
• Literary Studies (19th Century)
• Literary Studies (20th Century onwards)
• Literary Studies (African American Literature)
• Literary Studies (British and Irish)
• Literary Studies (Early and Medieval)
• Literary Studies (Fiction, Novelists, and Prose Writers)
• Literary Studies (Gender Studies)
• Literary Studies (Graphic Novels)
• Literary Studies (History of the Book)
• Literary Studies (Plays and Playwrights)
• Literary Studies (Poetry and Poets)
• Literary Studies (Postcolonial Literature)
• Literary Studies (Queer Studies)
• Literary Studies (Science Fiction)
• Literary Studies (Travel Literature)
• Literary Studies (War Literature)
• Literary Studies (Women's Writing)
• Literary Theory and Cultural Studies
• Mythology and Folklore
• Shakespeare Studies and Criticism
• Browse content in Media Studies
• Browse content in Music
• Applied Music
• Dance and Music
• Ethics in Music
• Ethnomusicology
• Gender and Sexuality in Music
• Medicine and Music
• Music Cultures
• Music and Religion
• Music and Culture
• Music and Media
• Music Education and Pedagogy
• Music Theory and Analysis
• Musical Scores, Lyrics, and Libretti
• Musical Structures, Styles, and Techniques
• Musicology and Music History
• Performance Practice and Studies
• Race and Ethnicity in Music
• Sound Studies
• Browse content in Performing Arts
• Browse content in Philosophy
• Aesthetics and Philosophy of Art
• Epistemology
• Feminist Philosophy
• History of Western Philosophy
• Metaphysics
• Moral Philosophy
• Non-Western Philosophy
• Philosophy of Science
• Philosophy of Action
• Philosophy of Law
• Philosophy of Religion
• Philosophy of Language
• Philosophy of Mind
• Philosophy of Perception
• Philosophy of Mathematics and Logic
• Practical Ethics
• Social and Political Philosophy
• Browse content in Religion
• Biblical Studies
• Christianity
• East Asian Religions
• History of Religion
• Judaism and Jewish Studies
• Qumran Studies
• Religion and Education
• Religion and Health
• Religion and Politics
• Religion and Science
• Religion and Law
• Religion and Art, Literature, and Music
• Religious Studies
• Browse content in Society and Culture
• Cookery, Food, and Drink
• Cultural Studies
• Customs and Traditions
• Ethical Issues and Debates
• Hobbies, Games, Arts and Crafts
• Lifestyle, Home, and Garden
• Natural world, Country Life, and Pets
• Popular Beliefs and Controversial Knowledge
• Sports and Outdoor Recreation
• Technology and Society
• Travel and Holiday
• Visual Culture
• Browse content in Law
• Arbitration
• Browse content in Company and Commercial Law
• Commercial Law
• Company Law
• Browse content in Comparative Law
• Systems of Law
• Competition Law
• Browse content in Constitutional and Administrative Law
• Government Powers
• Judicial Review
• Local Government Law
• Military and Defence Law
• Parliamentary and Legislative Practice
• Construction Law
• Contract Law
• Browse content in Criminal Law
• Criminal Procedure
• Criminal Evidence Law
• Sentencing and Punishment
• Employment and Labour Law
• Environment and Energy Law
• Browse content in Financial Law
• Banking Law
• Insolvency Law
• History of Law
• Human Rights and Immigration
• Intellectual Property Law
• Browse content in International Law
• Private International Law and Conflict of Laws
• Public International Law
• IT and Communications Law
• Jurisprudence and Philosophy of Law
• Law and Politics
• Law and Society
• Browse content in Legal System and Practice
• Courts and Procedure
• Legal Skills and Practice
• Primary Sources of Law
• Regulation of Legal Profession
• Medical and Healthcare Law
• Browse content in Policing
• Criminal Investigation and Detection
• Police and Security Services
• Police Procedure and Law
• Police Regional Planning
• Browse content in Property Law
• Personal Property Law
• Study and Revision
• Terrorism and National Security Law
• Browse content in Trusts Law
• Wills and Probate or Succession
• Browse content in Medicine and Health
• Browse content in Allied Health Professions
• Arts Therapies
• Clinical Science
• Dietetics and Nutrition
• Occupational Therapy
• Operating Department Practice
• Physiotherapy
• Radiography
• Speech and Language Therapy
• Browse content in Anaesthetics
• General Anaesthesia
• Neuroanaesthesia
• Browse content in Clinical Medicine
• Acute Medicine
• Cardiovascular Medicine
• Clinical Genetics
• Clinical Pharmacology and Therapeutics
• Dermatology
• Endocrinology and Diabetes
• Gastroenterology
• Genito-urinary Medicine
• Geriatric Medicine
• Infectious Diseases
• Medical Oncology
• Medical Toxicology
• Pain Medicine
• Palliative Medicine
• Rehabilitation Medicine
• Respiratory Medicine and Pulmonology
• Rheumatology
• Sleep Medicine
• Sports and Exercise Medicine
• Clinical Neuroscience
• Community Medical Services
• Critical Care
• Emergency Medicine
• Forensic Medicine
• Haematology
• History of Medicine
• Browse content in Medical Dentistry
• Oral and Maxillofacial Surgery
• Paediatric Dentistry
• Restorative Dentistry and Orthodontics
• Surgical Dentistry
• Medical Ethics
• Browse content in Medical Skills
• Clinical Skills
• Communication Skills
• Nursing Skills
• Surgical Skills
• Medical Statistics and Methodology
• Browse content in Neurology
• Clinical Neurophysiology
• Neuropathology
• Nursing Studies
• Browse content in Obstetrics and Gynaecology
• Gynaecology
• Occupational Medicine
• Ophthalmology
• Otolaryngology (ENT)
• Browse content in Paediatrics
• Neonatology
• Browse content in Pathology
• Chemical Pathology
• Clinical Cytogenetics and Molecular Genetics
• Histopathology
• Medical Microbiology and Virology
• Patient Education and Information
• Browse content in Pharmacology
• Psychopharmacology
• Browse content in Popular Health
• Caring for Others
• Complementary and Alternative Medicine
• Self-help and Personal Development
• Browse content in Preclinical Medicine
• Cell Biology
• Molecular Biology and Genetics
• Reproduction, Growth and Development
• Primary Care
• Professional Development in Medicine
• Browse content in Psychiatry
• Addiction Medicine
• Child and Adolescent Psychiatry
• Forensic Psychiatry
• Learning Disabilities
• Old Age Psychiatry
• Psychotherapy
• Browse content in Public Health and Epidemiology
• Epidemiology
• Public Health
• Browse content in Radiology
• Clinical Radiology
• Interventional Radiology
• Nuclear Medicine
• Radiation Oncology
• Reproductive Medicine
• Browse content in Surgery
• Cardiothoracic Surgery
• Gastro-intestinal and Colorectal Surgery
• General Surgery
• Neurosurgery
• Paediatric Surgery
• Peri-operative Care
• Plastic and Reconstructive Surgery
• Surgical Oncology
• Transplant Surgery
• Trauma and Orthopaedic Surgery
• Vascular Surgery
• Browse content in Science and Mathematics
• Browse content in Biological Sciences
• Aquatic Biology
• Biochemistry
• Bioinformatics and Computational Biology
• Developmental Biology
• Ecology and Conservation
• Evolutionary Biology
• Genetics and Genomics
• Microbiology
• Molecular and Cell Biology
• Natural History
• Plant Sciences and Forestry
• Research Methods in Life Sciences
• Structural Biology
• Systems Biology
• Zoology and Animal Sciences
• Browse content in Chemistry
• Analytical Chemistry
• Computational Chemistry
• Crystallography
• Environmental Chemistry
• Industrial Chemistry
• Inorganic Chemistry
• Materials Chemistry
• Medicinal Chemistry
• Mineralogy and Gems
• Organic Chemistry
• Physical Chemistry
• Polymer Chemistry
• Study and Communication Skills in Chemistry
• Theoretical Chemistry
• Browse content in Computer Science
• Artificial Intelligence
• Computer Architecture and Logic Design
• Game Studies
• Human-Computer Interaction
• Mathematical Theory of Computation
• Programming Languages
• Software Engineering
• Systems Analysis and Design
• Virtual Reality
• Browse content in Computing
• Business Applications
• Computer Security
• Computer Games
• Computer Networking and Communications
• Digital Lifestyle
• Graphical and Digital Media Applications
• Operating Systems
• Browse content in Earth Sciences and Geography
• Atmospheric Sciences
• Environmental Geography
• Geology and the Lithosphere
• Maps and Map-making
• Meteorology and Climatology
• Oceanography and Hydrology
• Palaeontology
• Physical Geography and Topography
• Regional Geography
• Soil Science
• Urban Geography
• Browse content in Engineering and Technology
• Agriculture and Farming
• Biological Engineering
• Civil Engineering, Surveying, and Building
• Electronics and Communications Engineering
• Energy Technology
• Engineering (General)
• Environmental Science, Engineering, and Technology
• History of Engineering and Technology
• Mechanical Engineering and Materials
• Technology of Industrial Chemistry
• Transport Technology and Trades
• Browse content in Environmental Science
• Applied Ecology (Environmental Science)
• Conservation of the Environment (Environmental Science)
• Environmental Sustainability
• Environmentalist Thought and Ideology (Environmental Science)
• Management of Land and Natural Resources (Environmental Science)
• Natural Disasters (Environmental Science)
• Nuclear Issues (Environmental Science)
• Pollution and Threats to the Environment (Environmental Science)
• Social Impact of Environmental Issues (Environmental Science)
• History of Science and Technology
• Browse content in Materials Science
• Ceramics and Glasses
• Composite Materials
• Metals, Alloying, and Corrosion
• Nanotechnology
• Browse content in Mathematics
• Applied Mathematics
• Biomathematics and Statistics
• History of Mathematics
• Mathematical Education
• Mathematical Finance
• Mathematical Analysis
• Numerical and Computational Mathematics
• Probability and Statistics
• Pure Mathematics
• Browse content in Neuroscience
• Cognition and Behavioural Neuroscience
• Development of the Nervous System
• Disorders of the Nervous System
• History of Neuroscience
• Invertebrate Neurobiology
• Molecular and Cellular Systems
• Neuroendocrinology and Autonomic Nervous System
• Neuroscientific Techniques
• Sensory and Motor Systems
• Browse content in Physics
• Astronomy and Astrophysics
• Atomic, Molecular, and Optical Physics
• Biological and Medical Physics
• Classical Mechanics
• Computational Physics
• Condensed Matter Physics
• Electromagnetism, Optics, and Acoustics
• History of Physics
• Mathematical and Statistical Physics
• Measurement Science
• Nuclear Physics
• Particles and Fields
• Plasma Physics
• Quantum Physics
• Relativity and Gravitation
• Semiconductor and Mesoscopic Physics
• Browse content in Psychology
• Affective Sciences
• Clinical Psychology
• Cognitive Neuroscience
• Cognitive Psychology
• Criminal and Forensic Psychology
• Developmental Psychology
• Educational Psychology
• Evolutionary Psychology
• Health Psychology
• History and Systems in Psychology
• Music Psychology
• Neuropsychology
• Organizational Psychology
• Psychological Assessment and Testing
• Psychology of Human-Technology Interaction
• Psychology Professional Development and Training
• Research Methods in Psychology
• Social Psychology
• Browse content in Social Sciences
• Browse content in Anthropology
• Anthropology of Religion
• Human Evolution
• Medical Anthropology
• Physical Anthropology
• Regional Anthropology
• Social and Cultural Anthropology
• Theory and Practice of Anthropology
• Browse content in Business and Management
• Business Strategy
• Business History
• Business Ethics
• Business and Government
• Business and Technology
• Business and the Environment
• Comparative Management
• Corporate Governance
• Corporate Social Responsibility
• Entrepreneurship
• Health Management
• Human Resource Management
• Industrial and Employment Relations
• Industry Studies
• Information and Communication Technologies
• International Business
• Knowledge Management
• Management and Management Techniques
• Operations Management
• Organizational Theory and Behaviour
• Pensions and Pension Management
• Public and Nonprofit Management
• Strategic Management
• Supply Chain Management
• Browse content in Criminology and Criminal Justice
• Criminal Justice
• Criminology
• Forms of Crime
• International and Comparative Criminology
• Youth Violence and Juvenile Justice
• Development Studies
• Browse content in Economics
• Agricultural, Environmental, and Natural Resource Economics
• Asian Economics
• Behavioural Finance
• Behavioural Economics and Neuroeconomics
• Econometrics and Mathematical Economics
• Economic Systems
• Economic Methodology
• Economic History
• Economic Development and Growth
• Financial Markets
• Financial Institutions and Services
• General Economics and Teaching
• Health, Education, and Welfare
• History of Economic Thought
• International Economics
• Labour and Demographic Economics
• Law and Economics
• Macroeconomics and Monetary Economics
• Microeconomics
• Public Economics
• Urban, Rural, and Regional Economics
• Welfare Economics
• Browse content in Education
• Adult Education and Continuous Learning
• Care and Counselling of Students
• Early Childhood and Elementary Education
• Educational Equipment and Technology
• Educational Strategies and Policy
• Higher and Further Education
• Organization and Management of Education
• Philosophy and Theory of Education
• Schools Studies
• Secondary Education
• Teaching of a Specific Subject
• Teaching of Specific Groups and Special Educational Needs
• Teaching Skills and Techniques
• Browse content in Environment
• Applied Ecology (Social Science)
• Climate Change
• Conservation of the Environment (Social Science)
• Environmentalist Thought and Ideology (Social Science)
• Natural Disasters (Environment)
• Social Impact of Environmental Issues (Social Science)
• Browse content in Human Geography
• Cultural Geography
• Economic Geography
• Political Geography
• Browse content in Interdisciplinary Studies
• Communication Studies
• Museums, Libraries, and Information Sciences
• Browse content in Politics
• African Politics
• Asian Politics
• Chinese Politics
• Comparative Politics
• Conflict Politics
• Elections and Electoral Studies
• Environmental Politics
• European Union
• Foreign Policy
• Gender and Politics
• Human Rights and Politics
• Indian Politics
• International Relations
• International Organization (Politics)
• International Political Economy
• Irish Politics
• Latin American Politics
• Middle Eastern Politics
• Political Methodology
• Political Communication
• Political Philosophy
• Political Sociology
• Political Theory
• Political Behaviour
• Political Economy
• Political Institutions
• Politics and Law
• Public Administration
• Public Policy
• Quantitative Political Methodology
• Regional Political Studies
• Russian Politics
• Security Studies
• State and Local Government
• UK Politics
• US Politics
• Browse content in Regional and Area Studies
• African Studies
• Asian Studies
• East Asian Studies
• Japanese Studies
• Latin American Studies
• Middle Eastern Studies
• Native American Studies
• Scottish Studies
• Browse content in Research and Information
• Research Methods
• Browse content in Social Work
• Addictions and Substance Misuse
• Adoption and Fostering
• Care of the Elderly
• Child and Adolescent Social Work
• Couple and Family Social Work
• Developmental and Physical Disabilities Social Work
• Direct Practice and Clinical Social Work
• Emergency Services
• Human Behaviour and the Social Environment
• International and Global Issues in Social Work
• Mental and Behavioural Health
• Social Justice and Human Rights
• Social Policy and Advocacy
• Social Work and Crime and Justice
• Social Work Macro Practice
• Social Work Practice Settings
• Social Work Research and Evidence-based Practice
• Welfare and Benefit Systems
• Browse content in Sociology
• Childhood Studies
• Community Development
• Comparative and Historical Sociology
• Economic Sociology
• Gender and Sexuality
• Gerontology and Ageing
• Health, Illness, and Medicine
• Marriage and the Family
• Migration Studies
• Occupations, Professions, and Work
• Organizations
• Population and Demography
• Race and Ethnicity
• Social Theory
• Social Movements and Social Change
• Social Research and Statistics
• Social Stratification, Inequality, and Mobility
• Sociology of Religion
• Sociology of Education
• Sport and Leisure
• Urban and Rural Studies
• Browse content in Warfare and Defence
• Defence Strategy, Planning, and Research
• Land Forces and Warfare
• Military Administration
• Military Life and Institutions
• Naval Forces and Warfare
• Other Warfare and Defence Issues
• Peace Studies and Conflict Resolution
• Weapons and Equipment

• < Previous chapter
• Next chapter >

19 What Happened to Old McDonald’s? A Case Study in Brand Management and Strategy Management

• Published: June 2022
• Cite Icon Cite
• Permissions Icon Permissions

McDonald’s, the seemingly invincible fast-food giant and stalwart of American business, has been an ironclad money-making machine for decades now. Sure, they’ve had their issues with bad press concerning the negative health effects of their food, but otherwise the company is as sure to post profits quarter after quarter as anyone. At least that’s been true until recently, as it appears that McDonald’s has hit a bit of a snag. Starting out with just one burger stall in 1948, the fast-food chain’s emphasis on quick service and a standardized menu has helped it to grow to more than 35,000 outlets across the world. It has been profitable: after a wobbly period in the early 2000s, the firm’s share price went from $12 in 2003 to more than $100 at the end of 2011. But now McDonald’s has lost its sizzle. Global sales have been declining at least since last July. When the company announces its annual results on 23 January, analysts think it will reveal its first full-year fall in like-for-like revenues since 2002. What’s gone wrong?

Signed in as

Institutional accounts.

• GoogleCrawler [DO NOT DELETE]
• Google Scholar Indexing

Personal account

• Sign in with email/username & password
• Get email alerts
• Save searches
• Purchase content
• Activate your purchase/trial code
• Add your ORCID iD

Institutional access

Sign in with a library card.

• Sign in with username/password
• Recommend to your librarian
• Institutional account management
• Get help with access

Access to content on Oxford Academic is often provided through institutional subscriptions and purchases. If you are a member of an institution with an active account, you may be able to access content in one of the following ways:

IP based access

Typically, access is provided across an institutional network to a range of IP addresses. This authentication occurs automatically, and it is not possible to sign out of an IP authenticated account.

Sign in through your institution

Choose this option to get remote access when outside your institution. Shibboleth/Open Athens technology is used to provide single sign-on between your institution’s website and Oxford Academic.

• Click Sign in through your institution.
• Select your institution from the list provided, which will take you to your institution's website to sign in.
• When on the institution site, please use the credentials provided by your institution. Do not use an Oxford Academic personal account.
• Following successful sign in, you will be returned to Oxford Academic.

If your institution is not listed or you cannot sign in to your institution’s website, please contact your librarian or administrator.

Enter your library card number to sign in. If you cannot sign in, please contact your librarian.

Society Members

Society member access to a journal is achieved in one of the following ways:

Sign in through society site

Many societies offer single sign-on between the society website and Oxford Academic. If you see ‘Sign in through society site’ in the sign in pane within a journal:

• Click Sign in through society site.
• When on the society site, please use the credentials provided by that society. Do not use an Oxford Academic personal account.

If you do not have a society account or have forgotten your username or password, please contact your society.

Sign in using a personal account

Some societies use Oxford Academic personal accounts to provide access to their members. See below.

A personal account can be used to get email alerts, save searches, purchase content, and activate subscriptions.

Some societies use Oxford Academic personal accounts to provide access to their members.

Viewing your signed in accounts

Click the account icon in the top right to:

• View your signed in personal account and access account management features.
• View the institutional accounts that are providing access.

Signed in but can't access content

Oxford Academic is home to a wide variety of products. The institutional subscription may not cover the content that you are trying to access. If you believe you should have access to that content, please contact your librarian.

For librarians and administrators, your personal account also provides access to institutional account management. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more.

Our books are available by subscription or purchase to libraries and institutions.

• About Oxford Academic
• Publish journals with us
• University press partners
• What we publish
• New features  
• Open access
• Rights and permissions
• Accessibility
• Advertising
• Media enquiries
• Oxford University Press
• Oxford Languages
• University of Oxford

Oxford University Press is a department of the University of Oxford. It furthers the University's objective of excellence in research, scholarship, and education by publishing worldwide

• Copyright © 2024 Oxford University Press
• Cookie settings
• Cookie policy
• Privacy policy
• Legal notice

This Feature Is Available To Subscribers Only

Sign In or Create an Account

This PDF is available to Subscribers Only

For full access to this pdf, sign in to an existing account, or purchase an annual subscription.

The Most Useful Crisis Management Examples: The Good, Bad, and Ugly

By Andy Marker | August 19, 2020

• Share on Facebook
• Share on LinkedIn

Link copied

Review crisis management examples to learn from others’ experiences with this comprehensive collection of case studies. Examples are organized by theme, and include crisis management successes and failures.

In this article, find crisis management examples organized by best practice , five of the costliest crises ever (and what was learned) , and examples of companies that have built the world’s most valuable brands by safeguarding their reputations.

What Is Crisis Management?

Crisis management refers to the practice of preparing for negative incidents, minimizing their damage and disruption, and getting an organization back on track as quickly as possible. Crisis managers anticipate likely threats and develop strategies to cope with their impact. To read more about crisis management please visit our "The Essential Guide to Crisis Management" article.

Effective Crisis Management Examples

Effective crisis management occurs when an organization employs skillful planning and a proactive response to avert a crisis entirely, limit its severity and duration, or turn it into an opportunity. These examples feature organizations that responded with transparency and agility.

CPG Product Crisis Management Example: Tylenol Product Tampering

In 1982, seven people in the Chicago area died after taking Tylenol capsules poisoned with cyanide. The tampering was believed to have occurred when someone injected the chemical into capsules and returned them to store shelves. The deaths remain unsolved, but the way Johnson & Johnson handled the episode has become a teaching case study for effective crisis management at Harvard Business School and elsewhere. In 2003, Fortune magazine named James Burke, the company’s CEO at the time, as one of history’s greatest CEOs for the way he handled the scare. 

Below are some highlights of Johnson & Johnson’s handling of the crisis:

• Fast and Decisive Action: According to a book on the case by Harvard Professor Richard Tedlow, on the afternoon of the first two deaths, the company halted all product advertising, sent 450,000 messages to hospitals, doctors’ offices, and other stakeholders, and established toll-free hotlines for consumers. At a cost of more than $100 million, the company recalled all products from store shelves — one of the first nationwide recalls — even though government officials felt that doing so was excessive. Additionally, Johnson & Johnson issued warnings to consumers not to take its pain reliever. 
• Honesty and Integrity: Despite evidence that the poison was introduced via store shelves, Johnson & Johnson did not try to evade blame. As a result, Burke was praised for his honesty. His integrity stood out in the context of the post-Nixon era and the unforthright handling of the Three Mile Island nuclear disaster. The company became a pioneer in developing tamper-proof packaging, and eventually moved away from capsules to a more tamper-resistant caplet. Burke was candid in expressing regret that the company had not done so right away. 

In less than a year, Tylenol regained its market share and sales leadership, and according to a BrandSpark study, it continues to rank highly for consumer trust.  

For a comprehensive look at crisis management in the Tylenol deaths, see this profile of Burke’s leadership and analysis of Johnson & Johnson communications .

Healthcare Crisis Management Example: Global Pandemic

While the global pandemic that began in late 2019 challenged many organizations, the calamity also highlighted examples of strong crisis management. 

The Cleveland Clinic Abu Dhabi operates as a U.S. medical center in the United Arab Emirates. The hospital faced COVID-19 early in its migration beyond China. The clinic responded quickly in order to both expand its emergency capacity and continue providing care for cancer and transplant patients, as well as for those with other complex needs. 

Dr. Rakesh Suri, CEO of Cleveland Clinic Abu Dhabi, says that forming a crisis management team (that included individuals from all levels of the organization) was a critical step, as doing so enabled the hospital to act with agility. The medical center also coordinated with other local hospitals to maximize resources and play to each institution’s strengths. 

The executive team took extra steps to take care of staff, including talking honestly about their emotional challenges and providing sleeping rooms, meditation space, online workouts, nutritious food, counseling, and childcare. 

An in-depth case study on the hospital surfaced several lessons, including the importance of preparing for worst-case scenarios, leaders empowering their teams to solve problems innovatively, encouraging candor, proactively engaging all stakeholders, and taking care of physical and mental well-being. 

In business, companies had to pivot quickly as the pandemic changed the marketplace. A 2020 Harvard Business School study of 350 senior executives in China who faced the crisis early found some key commonalities among those who managed effectively, including the following:

• Improve decision-making by moving away from the hierarchical model.
• Collaborate in new ways with customers, suppliers, regulators, and even competitors.
• Support remote work by changing company culture to prioritize trust and results over command-and-control and physical presence. 
• Ask employees to self-select for challenging assignments in order to get maximum ownership and motivation. 
• Embed new learning and innovative digital strategies that arise in a crisis into your organization’s muscle memory.

Examples of Bad Crisis Management (and What They Teach Us)

In contrast, examples of poor crisis management are usually marked by fundamental errors in preparation or execution of an emergency plan — and sometimes both. Often, these problems compound, which only multiplies the scale of the crisis. 

This is especially true in so-called black swan events — incidents that are extremely rare, have severe consequences, and are generally perceived in hindsight to have been obvious to happen. Since the likelihood of a black swan event occurring is low, leaders may dismiss the risk (if they are even conscious of it). But, the grave consequences of black swan events can pose a much larger threat.

Following are real-world examples of weak crisis management and the lessons crisis managers can take from them.

Natural Disaster Crisis Management Example: Hurricane Katrina

In August 2005, Hurricane Katrina hit the U.S. Gulf Coast and flooded New Orleans, causing more than $100 billion in property damage and killing more than 1,800 people. Even though the hurricane began as a natural disaster, the scale of the catastrophe was man-made. Various analyses of the response, including a report by Congress, focused on weak aspects of the crisis management and highlighted the following important lessons:

• Preparation Is Key: In 2006, a study by the Army Corps of Engineers found that the levees built to protect New Orleans from flooding were incorrectly engineered, poorly built, and insufficiently funded. Additionally, government officials who were aware of the storm forecast did not make provisions to evacuate residents who did not have cars or could not afford bus fare, which left tens of thousands of vulnerable people stuck in the city. The government also didn’t position enough emergency supplies in New Orleans ahead of the storm.
• Train Your Crisis Team: The Federal Emergency Management Agency (FEMA) was led by officials who were political appointees and had no experience in disaster management. A congressional review found that agencies handling the response were unsure of their roles and responsibilities. Government agencies failed to learn from a drill of a similar hurricane hitting New Orleans the previous year. 
• Simplify Communications and Decision Making: Federal and local crisis managers struggled to communicate due to equipment failure and incompatible technologies. Confusion among different levels of government paralyzed decision making. Ultimately, the crisis plan was too complex — with 29 federal agencies playing a role, duties were unclear and too much red tape hampered efforts. 
• Act Quickly but Not Rashly: About $2 billion spent by FEMA in Hurricane Katrina was wasted or fraudulently claimed, according to a New York Times analysis. In many ways, this was a symptom of a poorly planned and executed crisis response. For example, FEMA ordered $100 million in excess ice that truckers shuttled around the country for weeks while the agency tried to figure out where it should go (after storing it for two years, the government melted the ice). Additionally, the agency spent $7.9 million to renovate a former army base as a shelter in Alabama that only 10 people stayed at (the shelter closed within a month). Half of the mobile homes ordered as temporary housing — at a cost of $430 million — went unused.

For in-depth case study of Hurricane Katrina crisis management, see “Katrina and the Federal Emergency Management Agency: A Case Study in Organizational Failure. ”

Industrial Disaster Crisis Management Example: Bhopal Gas Leak

In 1984, a toxic gas leak from a Union Carbide India pesticide plant in Bhopal, India killed up to 30,000 people from immediate and long-term effects (according to estimates) and injured about 575,000. The accident is one of the world’s worst industrial disasters. 

The leak was caused by the introduction of water into a chemical tank, which resulted in a heat-generating, runaway reaction. Several inquiries found evidence of company negligence, but an internal analysis blamed employee sabotage. 

Researchers have written extensively about the accident, and some of the lessons cited are universally helpful in crisis management, including the following:

• Rehearse Emergency Procedures: The plant did not have an emergency plan, and plant operators did not know how to handle an emergency. No effective public warning system or public education about the risks were in place. 
• Prioritize Crisis Readiness: The company reduced training and staffing at the plant to save costs. Supplies of gas masks were inadequate, and several plant safety mechanisms were either deactivated or faulty. Additionally, several experts found that there weren’t enough operators for the unit to function safely. On the night of the accident, the supervisor delayed investigating an initial small leak until after a crew break, rather than being proactive. 
• Share Information: A U.S. Union Carbide plant found earlier in the year that a runaway reaction in the chemical tank could happen, but they didn’t communicate it to the India plant. When the leak occurred, plant staff did not inform senior managers or local authorities. Most of the information on the chemical involved, including how to treat exposure, was proprietary and was not disclosed. So, public health authorities and hospitals in Bhopal did not know immediately what victims had been exposed to (and therefore couldn’t provide the best antidotes).   

For in-depth case studies on the Bhopal accident, see Union Carbide Corp.’s site dedicated to the tragedy, as well as “ An Analysis of the Bhopal Accident” and “ The Bhopal Disaster and Its Aftermath .”

Five of the Most Costly Corporate Crises and Their Lessons

In addition to the human toll, a crisis can also be financially devastating for a company and its shareholders. Aside from direct costs, businesses may face fines, damage claims, legal settlements, damage to brand value, exodus of key revenue-generating staff, competitive disadvantages, and stock price declines. 

Social media has compounded these effects. A study by Pentland Analytics that compared corporate crises in 2000 and 2018 found that social media amplified damage, doubling the loss of shareholder value (from a 15 percent to a 30 percent decline in the first year after a crisis). 

The most costly crises have multi-dimensional financial impacts. Following are some examples of calamities that caused extensive financial damage to the companies.

1. Example: BP Deepwater Horizon

In 2010, BP’s Deepwater Horizon oil-drilling rig in the Gulf of Mexico exploded, killing 11 employees and causing an oil leak that lasted for three months. This is the biggest oil spill in U.S. history. 

The oil spill devastated the environment and tourism. Damage to the environment has been long-lasting — one study valued the impact at $17.2 billion . The spill also caused billions of dollars in negative economic impact on tourism in the region. Meanwhile, the financial toll for the company included the following costs:

• Through early 2020, BP paid about $70 billion in clean-up costs, legal settlements, and fines.  
• In the two months after the spill, the company’s shareholders lost $105 billion as its stock price plummeted. 
• For a time, the company’s survival was in question. Its bonds crashed in value, and the company had to stop paying dividends for three quarters.
• In the United States, the BP brand faced a backlash from consumers, and BP gas stations saw sales drop 10 to 40 percent in the immediate aftermath of the spill.
• BP had to reduce its business spending for years, which analysis said put it behind competitors such as Shell, whose brand value rose 24 percent that year, according to Interbrand. BP dropped from the second-largest global oil company in 2010 to fourth, where it has remained.

Crisis Management Lesson: Create a Safety Culture Studies have attributed the accident to a series of human mistakes and technical failures in the context of a high-risk corporate culture and weak regulatory supervision . The studies noted overconfidence on the part of BP, based on many years of not having an offshore well blowout in deep water. They also cite a lack of planning for low-probability, high-impact oil spills.

Operators and managers grew accustomed to normalizing signs of potential trouble and ignored weak signals of looming disaster. Alarm systems on the rig were suppressed, and crucial equipment was not properly maintained. The Center for Catastrophic Risk Management at the University of California Berkeley blamed the absence of a safety culture and shortsighted prioritization of the bottom line. According to the center’s report, BP “forgot to be afraid.”

2. Example: Wells Fargo

For 14 years, until the practice was exposed in 2016, hundreds of thousands of Wells Fargo employees opened customer accounts without consent to meet sales targets and generate fees for the bank. The financial consequences included the following:

• The bank paid more than $7 billion to settle government investigations and private lawsuits. 
• Wells Fargo lost business from the state governments of California and Illinois, as well as from the cities of Chicago, Philadelphia, and Seattle, among others who cited the illegal behavior as the reason. 
• In response to the scandal, in 2018, the Federal Reserve imposed a limit on the bank’s growth, putting Wells Fargo at a competitive disadvantage and costing it an unknown amount of potential increase in customers and loans.
• The company lost $220 billion in stock market value in the two and a half years after the enforcement action. The stock hit a 10-year low in May 2020, faring far worse than its peers.  
• The bank has racked up heavy expenses related to the crisis, including legal fees, investigation costs, and spending on an ad campaign aimed at restoring consumer trust.

Crisis Management Lesson: Live Up to Your Company Values to Avoid Scandals According to the government, Wells Fargo executives were aware of the abuses as early as 2002, but failed to act despite espousing a culture of integrity. The executives imposed such aggressive sales targets for staff that many employees said they felt they had no choice but to engage in the illegal practices. The government is pursuing some individual executives for their roles. 

For an in-depth discussion, you can read the full report issued by the U.S. House of Representatives .

3. Example: Equifax

In 2017, Equifax, a credit reporting bureau, suffered a data breach that gave hackers access to sensitive personal information for 147 million consumers. The incident was the most expensive data security breach to date. In 2020, four members of China’s People’s Liberation Army were indicted in the United States in the breach. 

• The company had $1.7 billion in legal settlements, fines, fees for consultants, lawyers, and investigators, and the cost of providing credit monitoring and identity protection to consumers. 
• In the week after Equifax disclosed the breach, the company lost $5.3 billion in market valuation as its stock price declined 31 percent. 
• For the first time ever, a credit rating agency downgraded its outlook on a company over cybersecurity concerns. A credit rating downgrade increases a company’s borrowing costs. Moody’s dropped its rating on Equifax to negative from stable in 2019, two years after the breach, citing continued high costs related to the hack. Moody’s further projected that the spending would continue to hurt Equifax’s profitability. 

Crisis Management Lesson: Take Crisis Prevention and Planning Seriously A congressional investigation found that relatively basic mistakes at Equifax led to the breach. For example, the attack occurred through a server vulnerability that was a known issue. Equifax had previously notified its system administrators to patch the issue, but the person responsible for the point of entry did not get the message because Equifax’s email list was out of date.

An expired digital certificate allowed malicious network activity to stay hidden. Proper data governance protocols, which limit user access to sensitive information, were not in place — this allowed the attackers to run about 9,000 queries to find the consumer data. The attack lasted about 76 days before it was discovered.

The company’s public response contained many missteps (including directing consumers to a website that had bugs, according to IT experts) and as such, did not inspire confidence. For example, the site asked consumers, who had just had personal information stolen via Equifax, to enter most of their Social Security numbers to find out if they were included in the hack. The company mistakenly tweeted a phishing link for the response website four times instead of the correct URL, according to Wired magazine. 

Crisis management experts said Equifax lacked comprehensive prevention and response plans and faulted the company’s slow disclosure. (Equifax discovered the breach in July 2017 but did not reveal it until September 2017.) Given the sensitivity of the information in their database, Equifax should have had much more robust preparation, experts said.

For details on crisis management planning, see “ Step-by-Step Guide to Writing a Crisis Management Plan .” You can also use one of these free disaster recovery planning templates to help get your business back on track.

4. Example: JP Morgan Chase

In 2012, a trader in JP Morgan Chase’s London office, nicknamed the London Whale, ran a portfolio of esoteric derivative investments. The trader was part of a team whose mandate was to hedge the bank’s operating risks. But, the whale’s investment strategies turned out to be flawed, and the size of these transactions was so great that they affected world credit markets. The whale’s trades ultimately lost money on a massive scale, and the company sustained the following financial impacts:

• Investment losses of $6.2 billion.
• JP Morgan Chase received fines of more than $1 billion by U.S. and British regulators.
• Senior executives were stripped of $75 million in compensation after an internal investigation.
• The company had to pay one hundred and fifty million to settle a shareholder class action lawsuit.
• A loss in stock market value of $14.4 billion in the two days after disclosing the problem.
• The company’s reputation as a careful risk manager was also damaged. In 2012, research company Interbrand found that the value of JP Morgan’s brand had dropped 8 percent, to $11.5 billion. 

Crisis Management Lesson: The C-Suite Needs to Stay on Top of Risk When he realized the full potential for disaster, the London Whale, whose real name is Bruno Iksil, suggested that the company immediately take a loss on the positions. This move would have resulted in much less financial damage. 

But, according to a U.S. Senate report, his managers began to conceal the magnitude of losses. They produced a shadow spreadsheet and hoped the investment positions would turn around, which resulted in mounting losses.

Reviews of the episode found that risk-management practices for the division were less rigorous than for other areas of the bank. First, the bank ignored warning signs from its risk metrics and then changed the risk standards (so the warning signs went away), according to a company report. 

Although people internally realized the potential extent of losses, bank management downplayed them in public. In 2012, CEO Jamie Dimon dismissed the incident as a “complete tempest in a teapot,” the Senate report said, a position he would later reverse.

The bank‘s investigation found that there was too little scrutiny of the London activities by its top management. In the aftermath, the bank strengthened risk management and made the review team more independent to address the group-think mentality that limited questioning of the investment strategy, JP Morgan said. The episode sparked calls for tougher regulation.

5. Example: Facebook

In March 2018, a whistleblower told two newspapers that a British firm called Cambridge Analytica had bought data about 87 million users and their friends without their consent from Facebook. The company used the data to build voter profiles that Cambridge sold to election campaigns, including Donald Trump’s presidential run. 

The episode sparked a scandal over user privacy at Facebook, the biggest of many. CEO Mark Zuckerberg was called to testify before Congress. The company faced investigations by regulators in the United States and Britain, as well as lawsuits from several jurisdictions. 

The financial repercussions included the following:

• The U.S. Federal Trade Commission imposed a $5 billion fine against the company — the largest ever. The FTC said Facebook’s behavior violated a previous consent decree with the agency. The Securities and Exchange Commision fined the company $100 million and British regulators fined 500,000 pounds. 
• Engagement on Facebook dropped by 20 percent in the months after the scandal, a metric that affects the company’s ad revenue.  
• Facebook users’ confidence in the company dropped 66 percent in the weeks after the scandal broke and Zuckerberg testified before Congress, according to a Ponemon Institute survey. Some users quit Facebook (including 3 million Europeans) in the subsequent months over privacy abuses. The hashtag #DeleteFacebook began trending on social media, and public support for tighter regulation of social media grew. 
• Growth in Facebook revenue and users dropped in the quarter after the Cambridge Analytica affair. The company’s stock valuation lost $130 billion in two hours after the news, weakening the social network’s forecast further. 
• Facebook sustained a drop in brand value of 6 percent (about $2.9 billion) for the year to $45.2 billion, according to Interbrand.

Crisis Management Lesson: Apologize When You are Wrong U.S. investigators found that Facebook violated consumer trust by allowing a third party to collect users’ personal data without their knowledge. The data collectors also violated Facebook policies that required deleting the data. 

Facebook CEO Zuckerberg was silent for five days before issuing a statement acknowledging that mistakes had been made. Facebook users heavily criticized the response, prompting Zuckerberg later to say, “I’m sorry” in media interviews. IT experts said the response was slow and underwhelming. 

Critics faulted Facebook for technical decisions that resulted in app developers being able to access information about users’ friends, saying safeguards were inadequate. Commentators such as Tufts University cybersecurity expert Susan Landau also criticized Facebook for not taking legal action against Cambridge Analytica and for failing to inform users whose data was taken until well after the news broke. 

The company placed full-page newspaper ads, made changes to data-handling practices, and implemented other reforms, but consumer trust remained damaged. Analysts said Facebook’s gestures, including its lack of apology, rang hollow and came too late.

Best Crisis Managers Safeguard Their Brands

Protecting your reputation is an important aspect of crisis management, and conveying authenticity and empathy is paramount when anyone is harmed.

Reputation research firm RepTrak found in a 2020 survey of 80,000 consumers globally that corporate responsibility (made up of workplace quality, governance, and corporate citizenship) accounts for 41 percent of its reputation. (For details on how and when to apologize, see “ Models and Theories to Improve Crisis Management .”) 

Corporate reputation is an important influence on consumer behavior. RepTrak data shows a company with an excellent reputation activates willingness to buy among 79 percent of consumers, compared to 9 percent for companies with poor reputations.

Companies that maintain strong reputations through the decades are typically examples of strong risk and crisis management. But that is not to say they have necessarily avoided all calamities: sometimes, these organizations have faced a pivotal crisis and turned it into an opportunity to achieve long-term reputation strength.

Reputation is the primary determiner of brand value, which is a company asset that can be worth billions. Interbrand found that the value of the top 10 global brands in 2019 was collectively almost $1 trillion.

Top 10 Most Valuable Global Brands*

• Apple: $234.2 billion 
• Google: $167.7 billion
• Amazon: $125.3 billion
• Microsoft: $108.9 billion
• Coca-Cola: $63.4 billion
• Samsung: $61.1 billion
• Toyota: $56.2 billion
• Mercedes: $50.1 billion
• McDonald’s: $45.3 billion
• Disney: $44.4 billion

*Source: Interbrand, 2019

Crisis Management Examples by Best Practice

Crisis case studies help illustrate best practices and how companies apply them. The following examples show how crisis management leaders and laggards performed on fundamental best practices in specific situations.

Crisis Management Best Practice: Form a Crisis Team

While you should have a designated crisis management team, you may also need smaller teams focused on particular issues. Cross-functional teams are often especially effective. Free team members from their normal duties while they are handling the crisis, remove constraints, and give them the resources they need, such as specialized external experts. When the crisis is over, review the team’s performance. (For more about crisis management teams, see “How to Build and Effective Crisis Management Team.”

Example: When Volkswagen faced a crisis over its diesel-emissions scandal, Oliver Larkin, group head of investor relations, told IR Magazine that the company “immediately put in place a task force team, with representatives from the communication side but also from the technical side and the legal side evaluating the information as it was coming through – and those people were working 24/7.” The group’s focus was on messaging, VW’s reputation, and relationships with major investors, and other responsibilities were put aside. Specialists, who were situation consultants, also joined the effort.

Crisis Management Best Practice: Have a Plan

Hopefully, your crisis management plan includes a communications plan that you’ve detailed in advance. But if not, or if you overlooked anything relevant to the crisis at hand, do some quick planning at the beginning of the crisis. Make sure to plan for social media, and draft holding statements. To learn how to write a plan, read “ Step-by-Step Guide to Writing a Crisis Management Plan .”

Examples: In a case study of what not to do, Amazon faced negative attention around its 2019 Prime Day shopping promotion. Staff around the world protested over alleged poor working conditions and abusive company policies. Actions leading up to and on the day sparked media coverage, calls for legislative action, and late-night TV segments. Amazon did not comment publicly, defying public relations best practices. PR experts speculated the company did not have a crisis communications plan to mitigate the damage. 

As an example of strong crisis communications, the American Federation of Government Employees, the union representing 700,000 employees of the U.S. federal government, responded to the coronavirus crisis with a multi-pronged communications plan. The goal was to draw attention to concerns over a shortage of protective gear and testing, policies, and short-staffing.

The union sued the federal government for hazard pay, and then targeted individual agencies by publicizing the plights of their staff to the media with press releases, TV appearances, and a daily newsletter. Internally, the union sent daily email alerts and digital campaigns to local leaders, weekly updates to members, mass texts, and memes to get the word out.

Crisis Management Best Practice: Pick the Right Spokesperson

Choose an individual who has the knowledge and training to address the crisis and is in a position of authority. You can coach the right person on working with the media, but putting a representative who lacks expertise in front of the cameras will backfire: your organization will come across uninformed or incompetent.

Example: During the coronavirus pandemic, Dr. Anthony Fauci, Director of the National Institute of Allergy and Infection Diseases for more than 30 years, brought expertise to his role as explainer in chief to the American public. 

He conveyed the importance of citizens staying home with clear and consistent messaging, and he deftly handled complex questions about science from the media. He gave interviews on social media, podcasts, sports shows, digital news sites, as well as traditional media, to reach all demographics, including teenagers.

Crisis Management Best Practice: Be Present

In a serious crisis, leaders should always be on site, either at headquarters or the location that makes the most sense. Cancel business trips, and return from vacations.

Example: In early 2020, wildfires burned more than 20 percent of Australia’s forests and killed 26 people. During the disaster, Australian Prime Minister Scott Morrison faced an outpouring of anger from citizens and intense media criticism after secretly taking a Hawaiian vacation and having his staff deny it. 

The prime minister’s representatives refused to disclose his location, igniting a social media storm and dominating media coverage. Then, an Australian tourist shared a photo he snapped with the leader on a Hawaiian beach. The government had to backtrack, which caused huge embarrassment and a scandal about the cover-up.

Crisis Management Best Practice: Respond Quickly

Issue a statement within the first hour of a crisis and publish frequent updates. Keep customers and other stakeholders informed about progress. If you’re unsure about frequency, err on the side of too much communication, rather than too little.

Example: In 2018, after switching delivery companies, Kentucky Fried Chicken (KFC) suffered supply problems that caused a shortage of chicken at its U.K. restaurants. The company was forced to close more than two-thirds of its locations. 

Even though the crisis response group initially had little information about the problem, the team quickly acknowledged the issue publicly. Within hours the team explained what had happened, how it was being addressed, and when it would be solved.

“Our instinct was that we had to face the issue head on: a chicken restaurant without chicken. Not ideal,” a spokeswoman for KFC told Raconteur at the time. “We were responding live as we received new information. We acted fast in assessing the issue and working out the best approach.”

In a negative case study, General Motors in 2014 did a series of vehicle recalls due to faulty ignition switches that affected 30 million cars. The company ultimately paid about $4.1 billion in repair costs, victim compensation, and fines.

But perhaps even more damaging was the revelation that the automaker had known about the problem for at least a decade , at one point blaming the fault on short drivers and heavy key chains. The resulting publicity and congressional hearings harmed GM’s reputation, and one senator described the company as having a “culture of cover-up.” 

Use a crisis communications strategy template to help you assign important responsibilities and build a process and response plan in the early stages of a crisis. For all other crisis management templates please visit our template article . You can also learn about step-by-step instructions on how to build a strong crisis management strategy , including free templates and tips from experts.  

Crisis Management Best Practice: Be Compassionate

Respond empathetically to show that your organization cares about people. Fear of lawsuits often causes companies to resort to carefully parsed legal language or circumspection. While minimizing liability is important, showing your human side goes a long way to winning goodwill and defusing anger, which often is a motivating factor in lawsuits. 

Example: In 2019, Boeing responded to news that its 737 MAX airplane had caused two crashes and killed 346 people due to faulty software by insisting the aircraft was safe and that there was no engineering or technical problem. 

The CEO blamed poor pilot training. Governments around the world grounded all the planes. Crisis communications experts criticized Boeing’s handling as slow, legalistic, and lacking empathy. Moreover, they noted that Boeing’s stated values include acting with the highest ethical standards, taking personal responsibility, and valuing human life above all else, and that these should have guided its response.

Crisis Management Best Practice: Speak the Truth

Be upfront and transparent, and don’t hide behind euphemisms or jargon. The truth will eventually become clear, and obfuscating will only cause further mistrust and resentment.

Example: In a negative case study, United Airlines forcibly removed a 69-year-old doctor from an overbooked flight leaving Chicago in 2017. Security officers dragged him off the plane. A passenger captured the scene on video and bystanders reported the officers threw the man against an armrest. The doctor later said he lost two teeth and had a concussion and broken nose. 

United CEO Oscar Munoz told employees by email the passenger had been “disruptive and belligerent.”  In a public statement, he said the airline had to “re-accommodate” the man, a euphemism for the procedure of removing a paying passenger from the flight so an airline employee could have the seat.

The video of the doctor’s rough treatment went viral on social media and showed that the doctor had not acted out as Munoz claimed. United faced a wave of public anger, and its stock lost $1.4 billion in value. Munoz later apologized and promised the incident would not happen again, but his planned promotion to United’s chairman was canceled.

Crisis Management Best Practice: Focus and Move Ahead

Give the crisis full attention, but do not lose sight of your future. Whenever possible, align your crisis response actions with the long-term vision and overarching goals of your organization.

Example: In early 2020, Delta Air Lines (like all carriers) faced a catastrophe as a global pandemic virtually eliminated demand for airline travel. While challenges persisted, the airline began working toward regaining financial stability. 

CFO Paul Jacobson, who crafted and led Delta’s financial crisis response to the Sept. 11, 2001 attacks, canceled his announced retirement to help rebuild the airline. To accomplish this task, Jacobson used strategies such as securing emergency government aid and deferring long-term capital spending.

Crisis Management Best Practice: Communicate Clearly

Present information openly and in a way that others can understand. Recognize that personal perspective influences how everyone interprets information. Don’t hide from bad news.

Example: In 1986, the Space Shuttle Challenger disintegrated little more than a minute into flight, killing all seven crew members. Investigations found the cause was the failure of an o-ring seal in a solid rocket booster that allowed pressurized burning gas to escape and cause structural disintegration.

Poor communication and decision-making were determined to be major contributing causes to the disaster. The investigating commission found the launch should not have been approved. They cited a lack of effective communication between the decision-makers and the engineers, the absence of a formal communications channel which isolated management, and selective listening. The panel found the decision to proceed with the launch was based on incomplete and misleading information.

Crisis Management Examples by Type: Social Media, Product Problems, and More

Crisis management case studies are especially instructive when you compare how two organizations coped with relatively similar problems. The following examples are organized around crisis type, including social media crises.

Examples of Social Media and PR Crisis Management

Social media has enabled users to spread negative or embarrassing information about a brand in a nanosecond. Companies need to monitor social media actively and act quickly to address public relations problems. Unflattering episodes can go viral, severely damaging a company’s reputation.

Examples of Good Social Media Crisis Management

The most effective uses of social media to address company crises are typically characterized by speed and, when appropriate, humor — although companies should also address underlying issues. 

• Example: Popeye’s In 2019, Popeye’s debuted a fried chicken sandwich that consumers praised on Twitter, comparing it favorably to rival Chick-fil-A’s offering. Chick-fil-A responded with a tweet promoting its sandwich as “the original.” Popeye’s shot back cheekily, “Y’all good?” The retort ignited the so-called “chicken-sandwich wars,” which Popeye’s won as Americans flocked to its stores.
• Example: Red Cross In 2011, the American Red Cross defused a crisis over a rogue tweet with humor. A staff member mistakenly sent a personal tweet to the organization’s account: “When we drink we do it right #gettngslizzerd.” As the tweet started to spread, Red Cross defused the PR nightmare with this tweet acknowledging the error: “We’ve deleted the rogue tweet but rest assured the Red Cross is sober and we’ve confiscated the keys.” A beer brand mentioned in the original tweet responded by asking its fans to donate to the Red Cross.
• Example: Tide In 2018, teenagers uploaded to social media videos of themselves eating Tide laundry detergent pods, which are poisonous, in the “Tide Pod Challenge.” Rather than trying to ignore the controversy, manufacturer Procter & Gamble swung into action by lobbying social media platforms to remove the videos, mounting a communications campaign, and placing its own video of NFL player Rob Gronkowski urging people not to swallow the pods on social media and broadcast television.

Examples of Bad Social Media Crisis Management

Crises can start or worsen on social media when brands display insensitivity or are slow to react to growing negative engagement. Following are some examples of companies that mishandled social media.

• Example: Gillette In 2019, razor maker Gillette sought to promote the values of the #MeToo anti-sexual harassment movement with a video that it placed on YouTube and in ads. After a century of promoting men who use its products as alpha males and virile, the company in the video first showed men bullying and mansplaining, and then contrasted them with empathetic men who stop others from bad behavior toward women. Despite some scattered praise, the video got twice as many dislikes as likes on YouTube, and calls for a Gillette boycott arose. Twitter users bashed the company for negatively stereotyping men and shaming its customers.  
• Example: Tinder In 2015, dating app Tinder responded to a negative article about it in Vanity Fair magazine with a 31-tweet rant. The tweets were defensive, included profanity, and a claim that the app had helped people in North Korea meet dates. The overreaction made Tinder the butt of jokes and drew negative attention to the company. 
• Example: Applebee’s In 2013, a waitress at restaurant chain Applebee’s posted a customer’s receipt on Reddit (with the name visible). The customer had written a critical comment about an automatic 18 percent tip added to the bill for a big party. Applebee’s said on Facebook, “We wish this situation hadn’t happened.” Thousands of negative comments flooded in every hour. The story went viral, and Applebee’s response was panned by PR experts as pouring gasoline on the fire. The company’s social media team answered Twitter comments by copying and pasting its corporate policy statement, which users perceived as a snarky response. Then, failing to keep up with the flood of reaction, the company disabled user posts on its Facebook page. Next, the team posted an update with the corporate statement, hiding the previous statement and more than 20,000 comments. Users perceived the tactic as deleting their posts, which enraged them.

Examples of Crisis Management Involving Product Problems

Product crises can be especially damaging for companies because their sales and brand are likely to suffer. Effective crisis management can ensure that the fallout is minimized. Poor crisis management can make it worse.

Examples of Good Crisis Management of Product Problems

Companies that manage crises caused by faulty products well show concern for customers, take responsibility for the issues, and respond decisively with improvements.

• Example: Mattel In 2017, toy maker Mattel recalled nearly 2 million toys that were tainted with outlawed lead paint. The act angered parents and attracted regulator attention. The problem stemmed from a contract manufacturer that used paint not authorized by Mattel. Within a few days, Mattel identified the factory, halted production, and launched an investigation. The company voluntarily expanded its review and made two more product recalls, even adding an unrelated problem. The company imposed stringent new tests on products before they could be sold, changed suppliers, and put its own staff in contract manufacturing plants. Mattel communicated consistently and repeatedly apologized. The company won praise for its swift and honest response, and the company now enjoys a reputation of trustworthiness.
• Example: Samsung In 2016, Korean electronics company Samsung faced a crisis when its Galaxy Note 7 smartphones exploded due to a battery problem. Sales slumped as airlines banned passengers from carrying the phone on board. Samsung responded by immediately taking accountability, being transparent about not immediately knowing the cause, and vowing to determine the problem. The company put 700 engineers on the problem and opened the research to third parties. When the problem was identified, the company communicated the issue clearly and introduced quality assurance and safety features. Samsung also launched a campaign aimed at tying its brand image to a larger purpose and improving its culture. In the next year, Samsung’s brand value rose 9 percent, according to Interbrand, and its Galaxy S8 yielded record profits the following year.

Examples of Bad Crisis Management for Product Problems

Examples of poor crisis management by companies over product issues are often marked by slow acknowledgement or even denial.

• Example: Takata Japanese auto parts maker Takata produced car airbags that exploded and were linked to at least 14 deaths. Governments recalled some 70 million airbags by 2017. Studies of the problem found design and engineering flaws. Before the extent of the problem became clear, Takata did not want to face embarrassment or prosecution. A senate report found that the company manipulated test data and did not adequately address safety concerns. The report concluded the company’s safety culture was broken. Takata ultimately went bankrupt with an estimated $15 billion in liabilities for recall and other costs.
• Example: Nike In 2019, U.S. star college basketball player Zion Williamson sprained his knee when his Nike shoe broke, little more than 30 seconds into a highly anticipated game. The crisis quickly gained the name “shoegate” in the media. The company’s stock dropped $1.1 billion the next day, social media buzzed with jokes and jabs, and commentators described the incident as a brand failure. While the incident did not inflict long-lasting damage on the company, Nike was panned for waiting for three hours to issue a response. They stumbled by minimizing it as an “isolated incident,” while media reports pointed out four other recent similar shoe malfunctions.

Improve Your Crisis Management Tactics with Real-Time Work Management in Smartsheet

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

• Reputation Risk Management
• Critical Event Management
• Security Risk Management
• Workplace Safety Management
• In Case of Crisis 365 Platform Overview
• Threat Intelligence & Social Listening
• Issues & Incident Management
• Role-based & Actionable Playbooks
• Microsoft Teams Integration
• News and Events

Three Recent Crisis Management Case Studies That We Can Learn From

It’s been a wild and fascinating period recently in the world of crisis management. Let’s take a look at three highly visible crisis management case studies from 2018, looking in particular at what we can learn from them:

United Airlines customer service failures

What Happened

It’s close to a year ago that videos shot by fellow passengers of Dr David Dao being forcibly removed from United flight 3411 blew up on social media and, very soon thereafter, the mainstream media.

It started when airline staff in Chicago asked passengers for four volunteers to give up their seats to make room for United employees headed to Louisville. No-one volunteered.

Four passengers were then directly asked to remove their luggage and vacate their seats. Three complied, one did not.

Staff insisted and Dr Dao continued to stay in his seat. Then airport police were called.

That’s when the events unfolded that have been seen millions of times on video .

A passenger with a bloodied face, who had paid for his seat, being forcibly dragged down the aisle as he yelled complaints.

Next morning, United CEO Oscar Munoz issued a statement justifying what happened, describing it as ‘re-accommodating the customers’. Munoz also sent an email to United staff commending the actions of the crew.

More recent mishaps with United Airlines’ treatment of traveling pets has both reminded people of the Dr Dao incident and focused yet more attention on United’s continued failure to build a customer-focused culture.

What We Learned

This was a perfect illustration of the need for speed .

It took United a day to respond, and even then their response was inadequate, betraying any understanding of the role of social media in reporting and magnifying failures in company customer services.

By Monday morning the story of what happened on flight 3411 had been told and viewed by millions. It took United several days to finally respond in a way that acknowledged the seriousness of what happened and how it made the airline look in the eyes of customers and regulators.

It was too late.

The damage to the reputation and business of United lingers to the present day – refreshed by the unfortunate incidents with the pets.

Equifax and the Data Breach

On July 29 2017 Equifax discovered a massive data breach which affected the personal information of up to 143 million Americans, including social security numbers and driver licenses. The company believed that the hack had taken place several weeks earlier, even as early as mid-May.

Equifax waited until September to make a public announcement of the problem.

The data thieves knew where to target. Equifax is one of three nationwide credit-reporting companies that track and rates the financial history of U.S. consumers. The companies are supplied with data about loans, loan payments and credit cards, as well as information on everything from child support payments, credit limits, missed rent and utilities payments, addresses and employer history, which all factor into credit scores.

Subsequent events only made the situation worse:

• The website and consumer telephone lines set up by Equifax so that people could get information and sign up for credit protection were overwhelmed and it took weeks to get them working effectively.
• It was reported that three executives sold nearly $2m in shares after the breach was discovered but before being publicly revealed.
• Equifax subsequently twice upped its estimate of the numbers of consumers impacted – by 2.5 million in October 2017 and by 2.4 million in February 2018.

This is why we build crisis preparedness plans .

A data breach must have been very high on the potential risks that Equifax faced. Given their business, any data loss is serious.

A plan would have had laid out the crisis team, how they should work together, the steps to take, the initial messaging and statements – and the process for escalating the response as it got worse.

Nothing in Equifax’s slow motion and bungled response suggested it had anticipated and planned for such an event.

KFC and the shortage of chicken

In February 2018, KFC had to close more than half of its 900 stores in the United Kingdom because of a shortage of…chicken.

The social and mainstream media enjoyed the irony of a chicken shop without any chicken and went to town on the story.

The cause was a delivery problem after the chain switched its contract to DHL which said that due to ‘administrative problems’ a number of deliveries were cancelled or delayed.

Loyal customers vented on Twitter and took their families to McDonalds. Some even complained to their local politicians.

Then KFC, even while struggling to get the restaurants re-opened, managed to switch the narrative entirely.

It ran an apology advertisement that was extremely funny (especially to the brand’s core younger consumers) while taking ownership of the problem.

The company was widely applauded by customers and the media for its deft handling of the situation and became the poster child for how well to handle a crisis.

Among the key elements in a best-in-class crisis response plan are:

• An understanding of the brand’s key stakeholder, particularly the core consumers. Who are they? Where are they? What are there key considerations? What’s likely to be on their minds when the brand is facing challenges.
• An understanding of the brand’s promise and ‘voice’. How is it positioned? What’s likely to support or break the trust in the brand in how it responds to a crisis.

KFC’s clever, authentic and borderline obscene response showed it deeply understood both these factors.

It knew its audience (young, hip and irreverent) and it followed through in exactly the kind of tone and language that was consistent with how the brand was positioned in other, more positive marketing.

The result was a swift abatement of the criticism for the closed stores – and the sound of widespread applause for a model crisis response.

Crisis Management Pillars: Building Alignment With Stakeholders

Five Most Common Gaps in Crisis Management

In Case of Crisis Goes On The Road

Why Institutional Discrimination is Keeping Crisis Managers Awake at Night

• In Case of Crisis 365 Overview

• Terms of Service
• Privacy Policy

Popular Keywords

Resilience Refined: Elevating Crisis Management Through Situation & Insight

• Case Studies
• Current Page

Our team of experts implemented a multi-faceted solution to bolster the client's workforce safety and security agenda. We began by facilitating Leadership Alignment, convening 15 key stakeholders to grasp the significance and complexities of crisis decision-making. Through Practical Application, stakeholders were equipped to apply their knowledge of policies and procedures effectively. We reinforced business continuity  through a comprehensive approach aimed at enhancing organisational preparedness. Additionally, we emphasised continuous improvement, recognising the value of conducting annual assessments and expanding exercises internationally.