crisis situations

In August 2016, the state of Louisiana experienced catastrophic flooding, specifically at Baton Rouge and Lafayette areas. The flooding, rated as the most terrible natural disaster since the 2012 Hurricane Sandy, resulted in 10 deaths and destruction of property worth billions of dollars, leaving thousands of residents homeless. The situation presented a major crisis for organizations mandated with disaster response, particularly the Federal Emergency Management Authority (FEMA). Many agencies and people have criticized FEMA for not attending to the disaster with adequate urgency, as well as for its failure to warn the residents adequately prior to the storm. Such criticism often puts the reputation of disaster response organizations at stake. FEMA may be subject to greater public pressure, leading to internal reorganization and even dismissal of some officials.

In February 2016, Johnson & Johnson, a multinational firm involved in manufacturing medical devices as well as pharmaceutical and consumer packaged products, attracted the attention of the public following the verdict of a case involving one of its products with talcum powder. The judiciary ordered the firm was to pay $72 million in damages to the family of a woman whose death was linked to ovarian cancer caused by the powder. Following intense condemnation on social media, the firm faced a major public relations crisis. The verdict has immense potential to change public attitudes towards the firm's products, which could have dire consequences on the firm in terms of not only revenue loss, but also reputational damage. More importantly, the firm could face severe regulatory action due to public health and safety concerns. This is particularly true given that the verdict was the third major ruling against the firm regarding its products. There are also other similar cases in court awaiting ruling.

Samsung Electronics, a member of the South Korean business conglomerate Samsung Group, continues to recover from one of the worst crises in the history of the firm. Towards the end of August 2016, owners reported incidences of its latest version of the Galaxy Note smartphone series, the Samsung Galaxy Note 7, exploding or catching fire due to battery defects. A recurrence of the incidences led to a recall of the devices and complete discontinuation of the product. The crisis has significantly affected Samsung in terms of not only revenue loss, but also public reputation. Consumers may start perceiving Samsung phones as less safe. The negative perceptions may even trickle down to the firm's other products such as fridges, washing machines, and televisions. Indeed, the reputational damage suffered by Samsung can be seen as an advantage for the firm's major rivals, especially Apple Inc.

Wells Fargo, an American financial services firm, found itself embroiled in a major financial scandal recently. On September 8, 2016, federal authorities revealed that the firm's employees secretly created millions of illegitimate bank and credit card accounts between May 2011 and July 2015. Through the phony accounts, which have been largely attributed to the firm's over-ambitious sales program, the employees were able to hit sales targets and make the bank unwarranted fees revenue, thereby making more money. In the wake of the revelations, the firm paid fines amounting to $185 million, one of the largest corporate fines in the last five years. The scandal could significantly injury the reputation of the firm, particularly given that the firm operates in an industry where public confidence is crucial. Though the firm has since fired the 5,300 employees involved, the scandal could make both current and prospective customers consider other alternatives.

In the wake of the crisis involving assistant basketball coach Dave White, Dearborn University through the vice president of communications should take the following steps in the next 24-48 hours.

1. Provide an initial response to the situation, clearly stating that the university is aware of the situation and that more details will be issued once more information about the allegations is gathered. This can be made via the club's or the university's website as well as social media channels such as Facebook and Twitter.

2. Familiarize the management of the university with the issue and the response the university is providing publicly.

3. Request other members of staff within the university and the club to decline commenting on the issue in public.

4. Convene an immediate meeting with the communications team alongside the management of the university (especially the President) as well as the head coach and other officials of the basketball club.

5. Designate one of the club's officials as the spokesperson

6. Familiarize league officials as well as club officials, players, and players' agents with the situation and the public response to the issue.

7. Contact all relevant sources as soon as possible to obtain facts about the case, keenly anticipating questions that may be raised by the media.

8. Draft a statement to be issued to the press the soonest possible. The statement should provide assurance that more details will be provided in the next one or two days through a press conference or written statement.

9. Identify favorable media organizations and other external allies to work with in responding to the issue.

10. Develop an action plan for releasing press statements and posting social media responses.

An allegation revolving around child pornography and child molestation is a very serious and sensitive issue. The case could have severe implications on individuals, the club, and university itself. With the case gaining media attention nationwide, donors of the university and the athletic department have already indicated their desire to end their donations to the university immediately. The university may even have to fire or suspend both the head coach and the assistant coach pending investigations.