Management Communication
‘Only 1% of my business….’
…but 100% of the problem.
Until 3 months ago News Corps was the most powerful news organisation in the world. It owns Fox News in the United States which is the voice of Conservative America, as well as the Wall Street Journal and Daily Post. In Europe its subsidiary News International (NI) controls Sky Broadcasting (BSKYB) which in turn has a virtual monopoly of broadcasting of sport in the UK , it owns The Sun, the tabloid newspaper whose support has decided the election for the last 30yrs and the New of the World the most profitable newspaper in the UK, as well as the Times and Sunday Times. In Asia it owns the Star Network.
In July of this year the News of the World was closed after 168yrs, the Chief Executives of the European and American subsidiaries that control NC’s interests have resigned. The Director of Communication for the British Government has resigned and been subsequently arrested for phone tapping and police bribery. Many senior executives at News International have been arrest as result of police investigation, resigned or been sacked. Many of the police officers responsible for the investigation into News Internationals journalistic activities have either resigned or been removed (or even got jobs with NI).
The owner of NI, Rupert Murdoch and his son, James Murdoch, the CEO of NI, have been dragged before parliament to explain their newspaper’s journalistic activities and links with politicians and the London Police.
The British Prime Minister is implicated in a cover-up, both indirectly through his close connections to NI and directly by employing Andy Coulson the editor of the News of the World during the phone hacking years.
Finally (for the time being), News Corps has had to withdraw a bid to take over 100% ownership of Sky Broadcasting of which they already 30% and face investigation by the FBI for criminal activities.
What is even more surprising is that this crisis is a result of journalistic practices that took place 8 yrs ago and have been investigated twice by the police with nothing found to be amiss. Even the main protagonists are no longer working for News International.
Even though a senior NI executive back in 2003 admitted to criminal activity when questioned by parliament. Was News International too powerful to be investigated by the police? The answer is probably yes.
An example of the links between the London Police and News International is the way the senior police officer who investigated NI ended up working for them as a columnist.
It was not only the police who treaded carefully when dealing with NI; Members of the British Parliament lived in fear of News International.
Tom Watson MP speaking at the debate on News International
So why in the space of 3 months did the crisis have such a profound and long-lasting impact on News Corp.
Here’s is part of the answer. NB James Murdoch has subsequently been accused of lying in regard to how much information he knew when authorising out of court settlements for victims of phone hacking & News International have withdrawn their bid for BSKYB
The anatomy of the crisis that NC are involved in is an extreme example of poor crisis management involving, as with much crisis management, cover-up, blaming of third-parties, misinformation and corporate arrogance. They never dealt with the real issues, whether it was because they felt they didn’t need to or couldn’t, as it would compromise their competitive advantage, and the current crisis is the consequence of this strategy.
The Key Questions are:
- What were the issues the have created this crisis?
- How did NI deal with these issues?
- Why and how did these issue become a crisis, after such a long period of time? Why did NI get away with it for so long?
- How did NI originally deal with the crisis and how has their approach changed (and why)?
- How did NI use Corporate Communication as part of their Crisis Management strategy?
- What impact has this had on their reputation and business performance?
Resources
There are countless articles, discussions and videos on the internet regarding this story. And the story is still evolving. Arrests are still being made and new information is coming to light. This is the biggest scandal since Watergate and it’s impact on government, policing and corporate governance in the UK, and worldwide, is impossible to estimate at this time. Below are some suggested resources to get you up to speed with the story and provide extensive information for this case study. Here are some links to resources which will assist you.
Background
Timeline of events dating back to 2005
http://www.nytimes.com/interactive/2010/09/01/magazine/05tabloid-timeline.html?ref=europe
There are many information depositories on this crisis the best is from The Guardian who broke the story.
http://www.guardian.co.uk/media/phone-hacking?INTCMP=ILCNETTXT6921
This video gives a good summary of the position in 2010 before the scandal broke and outlines the problems with the explanation given by NI of the ‘one rogue reporter’ scenario, which was finally dismissed after a parliamentary investigation of journalistic practices at The News of the World.
http://www.guardian.co.uk/media/video/2010/feb/23/alan-rusbridger-phone-hacking
An insight as to the reason’s behind NI unwillingness to deal with the issues is here.
http://www.guardian.co.uk/media/video/2010/sep/09/news-of-the-world-phone-hacking-newsoftheworld1
Finally, an authoritative view of Murdoch’s influence on journalism and wider aspects of his influence
Management Communication
An important part of these events are the management communication that comes directly from Rupert Murdoch. Here is part of the testimony of the CEO of the worlds largest media corporation to the British Parliament.
Here is what Rupert Murdoch’s biographer thinks of the impact of this crisis and the future of NI/News Corps
http://www.guardian.co.uk/commentisfree/video/2011/aug/09/michael-wolff-rupert-murdoch-video
Read Full Post | Make a Comment ( None so far )Leading From The Court Room
One of the aspects of corporate communication that students find difficult is to differentiate is the difference between organisational communication and management communication. Frequently the difference is explained as organisational communication being externally communicated and management communication being internally focused.
This is to an extent true.
However the Management Communication is about leadership and leaders can often communicate to their internal stakeholders through external communication means, raising moral and showing affective leadership skills.
Leaders such as Branson and Jobs use these tools to augment internal communication and in a crisis this is particularly true. Of course a crisis creates strange situations and normally faceless bureaucrats and anonymous corporate leaders come blinking into the sunlight as we saw during the spectacular collapse of the American car industry when the three CEO appeared in public together like three Howard Hughes clones. (Extra points for students who can name all three CEOs of Ford, Chrysler and General Motors!!!)
How these leaders present themselves and how they communicate has a big impact both externally and internally. A leader can bring stability and direction to a crisis accelerating its resolution or exacerbate it. Lets’s look at two recent examples of two anonymous CEOs dragged into the public eye by a crisis and see the different way they communicated and try to draw some conclusion as to the impact of their performance in the public glare.
Let take BP CEO, Tony Hayward and Head of Toyota, Aiko Toyoda. Both are faceless leaders who had to break cover to defend their organisation and show leadership in front of politicians, public and the press alike in front of a Congressional Hearing, and in doing so set the tone of how each company was going to deal with their individual crisis. And in doing so communicate to their own organisation at the same time.
Starting with the last first. This is Toyoda in front of a Congress hearing into the reported problems that Toyota were having with their breaking system, which reportedly resulted in a number of deaths.
Though at the time there was great concern over the future of Toyota and the long term and its world leading position in the car market Toyota has not suffered any long term damage to their reputation and business performance. The key to Toyoda’s performance was he was serious, sorry and intent, plus his authority was unquestioned.
In contrast lets take a look at Tony Hayward CEO of BP when put in a similar position. Another faceless CEO, hampered by a history of failing to deliver on past promises and with the clear suspicion that he would be the scapegoat and soon departed from BP; therefore pretty much a whipping boy for the politicians eager to perform for the cameras.
a pretty unimpressive performance, little leadership, clarity and energy to deal with the crisis particularly as it came on the back of this statement
and followed a typical passing the buck episode, that is indicative of a badly managed crisis. During a previous hearing concerning partner organisation of BP, involved in the construction and management of the oil well. We have this shameful performance. At least get your story right before you enter Congressional Hearing.
And of course this then ends in ridicule.
Clearly Toyoda was more impressive and there is little co-incidence that Toyota has bee quicker to re-establish its business performance whilst BP has continued to have problems and is continuously under the microscope with regards to safety, the latest being excluded from bidding for lucrative but inaccessible oil fields in the Arctic.
As a caveat, what do we make of this, Is this the behaviour of a leader?
Read Full Post | Make a Comment ( None so far )
Graeme Lindsay
Corporate Reputation Resource Centre 