Sears Case Study Sears, One of America\'s

Sears Case Study

Sears, one of America's oldest retailers, was beset with a scandal involving the rebilling and illegal reaffirmation of millions of dollars in accounts that had filed for, and been granted bankruptcy. The CEO, Arthur Martinez, found out that these violations had been occurring regularly for almost 10 years. As businesses have learned from the Tylenol, Jack in the Box, and Odwalla scandals, the best defense in a situation like this is to go on the offensive. Martinez should immediately call a press conference so that the word of the issue comes from him. He should apologize and let the public know that he has convened a special committee not only to address the issue, but to ensure that Sears will be compliant with the law. Further, instead of being fined by the government, Martinez should direct that any illegal payments collected from consumers be returned with interest. Apologizing and acting proactively will help retain his credibility and let the public and law enforcement, know that Sears is not hiding anything.

Part 2 -- Ron Culp is a Senior VP for Public Relations and Governmental Affairs. His communication plan should be dual: first consumers at large through media (newspaper, television, etc.) and then to governmental agencies to assure them that the situation is under control and will be addressed.

Part 3 -- Most audiences want to hear first that the CEO of Sears is aware of the problem and has taken steps to rectify the situation. Consumers want to know that Sears is honorable and ethical, the clients involved want to know that they will be reimbursed, and governmental and legal officials want to know that steps are being taken to immediately comply with the law.

Part 4 -- The solution is fairly simple; it is legal for Sears to establish a repayment program with bankrupt consumers and offer a settlement; but these signed offers must be filed with the appropriate bankruptcy Court. Sears should include within the policy though, a strict procedure that allows a bankrupt client not to reaffirm, and then outline appropriate steps that are legal. Martinez also needs to send a memo via email and do a promotional campaign of his own that lets employees know that there are no circumstances in which management should be kept in the dark -- dissension and bad news are part of the business cycle. Problems, in fact, cannot be handled unless management knows about them.