June 29, 2011
Case Study 1: Exxon Valdez
As our book states, Exxon was one of the five largest companies in the United States during the late 1980s. This company provides energy that helps underpin growing economics and improve living standards around the world.
The crisis is known as the Exxon Valdez oil spill. On March 24, 1989, the Exxon Valdez was headed for Long Beach California. This oil tanker was 987 feet long, and filled with enough oil to fill the Rose Bowl almost halfway to the top. This oil tanker was making its route during a time of migration which means there were many birds, fish and mammals inhabiting the area. The local pilot went off duty and Captain Joseph Hazelwood was left in command. The oil tanker was headed for Bligh Reef, an extremely hazardous area, but Captain Hazelwood had sailed this route more than 100 times. He had been the captain for 10 years, and had been with Exxon for 21. The night of the incident, Captain Hazelwood left his post and put Third Mate Gregory Cousins in charge. Although Cousins was qualified to make the turn through the Bligh Reef, he was not qualified to take command at that critical moment. The Exxon Valdez headed for the submerged rocks and ripped open a hole in the hull. 11 million gallons of oil poured out into the ocean and spread out to an area over 4 miles long. Sea life perished; over 1 million birds and 2,500 sea otters died. Seals, sea lions, pink salmon, herring, clams and worms all fell victim because of the oil spill.
A. Situation (SWOT) Analysis
- a. Strength
The company itself was a strength because it was one of the five largest companies in the United States. The consumers would have felt a sense of security when hearing from the company, and would have trusted that they were working hard to make things right.
-Negative publicity is a weakness for the Exxon Company. This kind of publicity and having a negative feeling surrounding a company is detrimental to the success of the business.
-Not having a well thought-out crisis communication plan was a weakness for Exxon. They may have thought a crisis was impossible, but that is simply not the case. If they would have been more prepared, they would have been able to handle the situation in a different manner, and possibly saved face a little better.
-This crisis had the opportunity to make national headlines. With that, the company would have had the chance to receive more support and more reinforcements to help with the clean-up efforts around the polluted area.
-Another opportunity would have been the ability to look good in the eyes of environmental interest groups. If they would have acted swiftly and saved the wildlife in a professional manner, these groups would have more respect for them and support them as well.
Since the Exxon crew did not initialize a clean-up plan right away, environmentalists did not view them in the best light. This is a threat to the Exxon Company because there are many animal rights groups and environmentalists in the United States, especially Alaska.
- Frank Iarossi dealt with the logistics of the spill, and Captain Hazelwood was fired because he had been drinking that night.
- Exxon, Atlantic Richfield, BP and other companies initially participated in the clean-up efforts.
- Dan Cornet set up a media center in Valdez.
- Brian Dunphy would not verify the extent of the damage.
- CEO Rawl would not go to the site of the oil spill.
- Teams of wildlife professionals tried setting up their equipment to help the animals.
- George Mason designed a crisis plan to help restore tourism.
- Individuals blamed various things for the cause of the oil spill. Some blamed Hazelwood, although he was never proved to be intoxicated. Others blamed Exxon’s corporate culture and said that they did not have large enough crews to be working long hours.
- Exxon took over the clean-up efforts after the initial efforts of the other companies. Four days after the spill, the fishermen were still unhappy because no effort had been made to begin clean-up.
- Some publics felt as though the media center should be in a city such as New York since a city could accommodate a larger number of people. Others felt that the media center should be at the site of the accident. They felt as though different media from the site was necessary to be shared with the public.
- This statement was not well received by the public. Not giving any information about a crisis is the worst thing a representative can do.
- The media, environmentalists, fisherman and many others were extremely frustrated and angered by this. Exxon saw a decline in credit card sales, and the media were continuously attacking the Exxon Company.
- Reporters and freelancers were continuously getting in the way of the wildlife professionals. Mason decided to enlist the help of security guards, and the area was roped off to protect the helpers and the animals. Media tours were arranged, however, which helped keep the community involved and allowed them to see what was happening first hand.
- Mason brought travel writers up to Alaska and encouraged them to travel within the state. The public believed it when people said “Alaska is beautiful.” The tourism set a new record, even with the tragedy of the oil spill.
I feel as though the Exxon Company should have reacted quicker during the initial stages of the crisis. Although this was a very embarrassing incident, they should have used the apologia theory we learned about in our book. Instead of keeping information from the public, they should have shared the information and explained the actions they were taking to make it right. The CEO should have been more involved, and a crisis management plan should have been utilized in the early stages. I believe Exxon learned a lot from this situation, and many other companies did as well.