The basic idea of corporate social responsibility (CSR) advocates for the “triple-bottom line”: economic, environmental, and social accountability (A.K.A. people, planet, profit). In today’s society, corporate business models and their approach to CSR has taken on a darker image in the mind of an evolving public mindset. Moral outrage has been shown to translate into consumer behavior because it can affect the calculation of self-interest. In other words, when companies engage in unethical or insensitive behavior, the public responds swiftly, and without mercy. This “vote with your dollar” trend encourages corporate entities to engage in self-regulation as a business decision, instead of viewing it as an ethical decision.
If there is any indication of the value of self-regulation for corporate entities, it’s the recent public relations (PR) crises that major US corporations have experienced. In April alone, Fox News has found itself the middle of yet another sexual harassment scandal, this time centered on Bill O’Reily, not even a year after former founder and CEO, Roger Ailes faced similar allegations; United Airlines came under fire for their treatment of a passenger who refused to give up his seat; and Pepsi faced immense backlash after a controversial commercial that was deemed “tone-deaf” by the public.
In basic Crisis Communication Theory, there are three routes a company can take when faced with a crisis: deny involvement, diminish the role they played, or deal with the situation head on.
Bill O’Reilly and Fox Chose to Deny
Amidst allegations of sexual harassment, Bill O’Reilly has consistently maintained his innocence: “The worst part of my job is being a target for those who would harm me and my employer, the Fox News Channel. Those of us in the arena are constantly at risk, as are our families and children. My primary efforts will continue to be put forth an honest TV program and to protect those close to me.”
The official statement released at Fox denied responsibility as well:
“21st Century Fox takes matters of workplace behavior very seriously. Notwithstanding the fact that no current or former Fox News employee ever took advantage of the 21st Century Fox hotline to raise a concern about Bill O’Reilly, even anonymously, we have looked into these matters over the last few months and discussed them with Mr. O’Reilly. While he denies the merits of these claims, Mr. O’Reilly has resolved those he regarded as his personal responsibility. Mr. O’Reilly is fully committed to supporting our efforts to improve the environment for all of our employees at Fox News.”
Despite the fact that The O’Reilly Factor had been one of Fox’s most popular programs, Fox made the decision to cancel the show, while offering O’Reilly a generous exit package. While some view this decision as a form of corporate social responsibility, it’s important to note that Fox’s decision to cancel The O’Reilly Factor came after over fifty advertisers pulled their ad dollars out of the popular cable television show, citing moral reasons as the basis for their decision.
The lesson: Corporate social responsibility plays a role in making strategic business decisions.
United Airlines CEO, Oscar Munoz, Diminishes the Role of United in Passenger Debacle
After shocking video footage of a United Airlines passenger being forcefully removed from a flight following his refusal to give up his seat went viral, United Airlines found itself in yet another public relations nightmare. The company tried to distance itself from the situation at first, pointing out the fact that a police officer - not a United employee - removed the passenger, thus diminishing the company’s role in the altercation.
The reputation repair strategy began with a statement from Oscar Munoz, United Airlines CEO: “This is an upsetting event to all of us here at United. I apologize for having to re-accommodate these customers. Our team is moving with a sense of urgency to work with the authorities and conduct our own detailed review of what happened. We are also reaching out to this passenger to talk directly to him and further address and resolve this situation.”
This statement was met with even more public outcry, this time about his use of the word “re-accommodate,” which people felt further diminished the seriousness of the event.
The lesson: Be honest and take responsibility for the company’s actions.
Pepsi Decides to Deal
Pepsi took a different approach to their own public relations crisis that occurred after Pepsi released an advertisement that featured Kendall Jenner diffusing tensions with the police during a a march reminiscent of the Black Lives Matter movement. Like many other companies engaging in cause-related marketing, Pepsi intended to target young people and appeal to the emergent activist culture… and unfortunately failed.
The statement from Pepsi struck a different tone than United Airlines and Fox, concisely outlining their intent, their apology, and what they plan to do to deal with the situation:
“Pepsi was trying to project a global message of unity, peace and understanding. Clearly, we missed the mark and apologize. We did not intend to make light of any serious issue. We are pulling the content and halting any further roll out.”
Although many were appalled by the advertisement, it may not have been as detrimental to the company as one would think. Stock prices for Pepsi are actually up, perhaps in part due to their effective crisis management strategy.
The lesson: Have a basic understanding of the underlying nuances of an issue before aligning a brand with it.
Courtney Lukitsch, who runs Gotham PR in New York, recently talked to The Guardian about these PR nightmares, saying they were “perfectly avoidable”: “They broke all the rules of PR for beginners: Always be 10 steps ahead, don’t say anything you don’t want broadcast, make sure you have the emotional intelligence to understand how your audience feels and, when in crisis, take responsibility.”