Public Relations Chapter 12 Assignment 4/7/2005 B. ) The public crisis that I chose to write about is the E. coli outbreaks at several Washington, Idaho, and Nevada Jack in the Box restaurants in 1993 which led to the deaths of four young children and several hundred other customers becoming violently sick. These outbreaks were said to mostly be caused by adulterated hamburgers sold to the restaurants by one of its suppliers but it was said that the outbreak could have been prevented if Jack in the Box employees had cooked the tainted burgers at the federally required temperature of 155 degrees instead of 140. Eventually the company had to pay $55 million in legal settlements and fees, including $15. 6 million to a seven year old girl who had eaten Jack in the Box burgers twice in one week.
This was the largest single personal-injury settlement in Washington state history. Jack in the Box also had to pay a total of $44 million to franchisees and over $8 million to shareholders. I think that this event most definitely qualifies as a crisis. The outbreak fell under very close media and government scrutiny, it interfered with the company’s normal operations of business, it jeopardized the public image enjoyed by the company and its officers, and it significantly damaged to companies bottom line. C. ) Warning stage Although the outbreak came on quickly, there were warning signs that the company chose to ignore.
Documents filed in U. S. District Court in Seattle by attorneys for those injured in the epidemic show that the company knew about but chose not to follow safe-cooking standards that would have killed the E. coli bacteria in their hamburgers. The company’s reason was that cooking hamburgers at 155 degrees tends to make the burgers tough.
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That comment was in response to an employee’s concern that cooking to Jack in the Box’s standards left burgers underdone. That memo was written four months before the epidemic. There were also several customer complaints saying that burger patties were raw in the middle in several different Jack in the Box restaurants throughout the country. Health experts say that has Jack in the Box followed the state regulations that all burgers must be cooked at an internal temperature of at least a 155 degrees then the epidemic would have been prevented, but they ignored suggestions and failed to diffuse the situation.
Point of no return The point of no return for Jack in the Box was when in one week of January, 1993 over three hundred people were reporting that they had gotten very ill after eating Jack in the Box burgers. The epidemic became national news when the four children were killed by the tainted meat. By the end of that week sales in the restaurants were down 80%, the quickest drop-off in business in fast food history. Unfortunately for Jack in the Box, they didn’t handle the crisis well at all immediately. First of all, they didn’t relay information to their franchises quick enough. It took them two days after health officials traced the bad meat to their suppliers before they notified the public and closed down their stores.
They should have immediately closed down the stores and retrained workers on how to properly grill their burgers. The second mistake that they made was to try to deflect the blame off of themselves and place it all on the shoulders of their supplier, which the general public didn’t appreciate. They saw it as a company that did something wrong and was not sorry for it. Cleanup phase What is so unique about the Jack in the Box situation though is how they handled their cleanup phase.
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Within days of the outbreak, Jack in the Box called microbiologist David Then and begged him to give up his own business in food research to become vice president of quality assurance and product safety. He accepted and began to build the fast food industry’s first Hazard Analysis Critical Control Points (HACCP) program, which attempts to ensure the safety of food at every point at which bacterial contamination can occur. Besides paying out monetary damages that I mentioned earlier, they also paid for all of the medical costs of everyone that was afflicted by their burgers. They also tried to humanize their company by reintroducing their Jack icon and in their first television ad after the epidemic showed him dynamiting the company’s headquarters. This ad made customers believe that the company was willing to change and it paid big dividends with customers. Nevertheless, the swift internal changes could not stem the devastation of Jack in the Box’s reputation.
Over the next two years, they lost $138 million. But Jack in the Box stood by its franchisees, extending credit terms and buying out franchisees in the epicenter of the crisis that faced a steep recovery curve. Things return to normal Now, things have returned to normal for the restaurant chain. They have recorded gains in each of the last fiscal quarters and currently have earning per share that are very favorable when compared to other fast food companies. They have over 2500 locations in 17 states which are over a thousand more than in 1993. Jack in the box also owns Qd oba Mexican Grill, with over 200 stores; it is one of the quickest growing fast food chains.
Even more important than their financial situation, Jack in the Box is now considered the fast food restaurant chain that every other chain measures its safety practices and standards against. They have put so much emphasis on implementing their system that customers feel that they are just as safe as or even safer than any other franchises. D. ) A. Sandman tells his clients that it is in their best interest to communicate honestly and directly, to listen more and to tell the truth and to take responsibility for their actions. B.
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The bad guys are the ones that need help the most. You should deal straight and not just help them get away with it. C. Corporate offenders should handle outrage by giving a chapter and verse of what you did and then asking for forgiveness. Then they should shut up while the people they have offended yell at you. Then, they should offer up some kind of compensation and show humiliation, show people that they know they messed up.
D. Corporations sometimes intentionally close their eyes to evil, and sometimes deceive themselves into thinking that there is nothing to see. This statement kind of reminds me of the sweat shop situation in the garment industry. E. Often times in corporations a problem is not just caused by a maverick misbehaving but by the system itself. If evil systems can’t be reformed then they need to be extirpated.
E. ) I do agree with Sandman’s stance that a P. R. practitioner needs to make the process more open, collaborative, and accountable than adopting the views of the.