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PR Scandals and financial consequences

We would like to see our company as being protected from the harms of the very competitive financial world. But the truth is, the slightest slip-up can have disastrous consequences for the company if it is not handled right. And bad publicity is one thing, as you can give it a positive spin and perhaps make it work to your advantage. But when you lose consumer trust, you are in trouble.

One of the cases that I’ve been most intrigued about, and that we often talk about as an example for this, happened in the fast food industry. A vicious rumor was spread that a renown fast food chain used worms as an ingredient in their burger paddies. Initial reaction from the company’s Public Relations team was outrage, as the rumors were entirely false and tabloids just decided to run with them. But soon it was all that people talked about, and the company’s refusal to get dragged into the discussion was proving a bad idea. So the company decided to open its doors and show everyone how the manufacturing process took place, and had experts analyze the contents of their burgers to prove that they had no traces of worm in them. But by then it was too late, as the public had already associated the name of the company with “worm meat”. But in a flash of PR genius, the company arranged for someone who was an expert on using worm meat to talk about how healthy, nutritious and, most importantly, low-fat worm meat is. And the scandal died out entirely.

But sometimes, you just need to bite the bullet, and that is often the case with lawsuits. For example, the scandal with the DePuy asr hip recalls will probably only have one outcome: the company will settle in court and pay the people that were fitted with their faulty equipments a generous fee and hope that the people forget about it soon.