Exxon Valdez Case Study Analysis Of A Business

Background: An oil tanker from Exxon which named Exxon Valdez happened oil spill crisis on Friday, March 24, 1989. At that moment, Exxon was ranked in the top five largest companies in America. Its CEO was Lawrence G. Rawl. He disliked publicity and the media. The captain for Exxon Valdez on that night was Joseph Hazelwood. He was considered to be an experienced captain. However, he left his post when the oil tanker headed for Bligh Reef. Third Mate Gregory Cousins who was in charge of Exxon Valdez waited too long to get the order about turning direction for the oil tanker, as a result; the tanker had run aground on the rocks with ripping open a huge hole in its hull.

Problem: After the oil tanker hit reef, it leaked massive crude oil in Prince William Sound. Prince William Sound was abundance of sea life. As a result, the crude oil spill not only polluted the environment around Alaska, it also had a negative impact on sea life in Sound. Besides that, people had a fear to travel to Alaska.

Situation Analysis: The strength for Exxon to handle the crisis was that Exxon was such a big company that it could afford the loss and compassion for the oil spill. Don Cornet clearly realized and analyzed the situation and looked ahead to a long-term future. The weakness was Exxon did not have a public relation manager in the company before the oil spill happened. It would make Exxon hard to early find the prodromes and shortly prevent the crisis. The opportunity for the company to cope with the crisis was Exxon had already set up animal rescue centers on Veldez. It was easy for Exxon to save the sea life. The threat for the company to handle the crisis was that the corporate culture was not good. On one hand, the CEO—Lawrence G. Rawl did not like publicity and the media. It hindered the communication between Exxon and the public. On the other hand, the employees thought the company cut the crews and made employees worked too long. This would made the public reconsidered about Exxon and damaged the image of Exxon.

Strategies: After the crisis happened, different departments in the Exxon had done lots of measures to handle the crisis. They were:

  1.  The immediate strategy was to clean the crude oil up as quickly as possible and recover normalcy to Alaska.
  2.  Iarossi fired the captain of Exxon Veldez—Hazelwood.
  3. Cornet set up a media center in Valdez for reporters and photographers.
  4. Don Cornet reported the situation to the head of public affairs and swiftly arrived at the Alaska.
  5.  Iarossi held a press conference.
  6. CEO Rawl refused to go to the site and thought “technologically obsolete.”
  7. Cornet asked Mason to handle the bad effect on the tourism industry and sea animals.
  8.  Manson referred a public relations agency in Anchorage to help cope with bad impact on the seafood industry in Alaska.
  9. The media tours and guidelines were planed to the Exxon animal rescue centers.
  10.  News conferences were held to convince public that Alaska’s tourism industry was not affected by the spill.
  11. Exxon funded an advertising campaign to encourage Alaska’s tourism.

Consequences: After the crisis struck, the different strategies in the company received different responds from the public. They were:

  1. When Irsossi blamed Captain Hazelwood and Third Mate Cousins, some Exxon employees thought that the corporate also had its own problems. The over fatigue to work for the company was responsible for the accident.
  2. When CEO Rawl did not care about the crisis, the media, the fishermen, the environmentalists, and the public were angry.
  3. Customers canceled their Exxon credit cards.
  4. When Alaska Governor Cooper attended to the news conferences and mentioned the beautiful Alaska, people believed him and release the fear to travel to Alaska

My Comments: When the oil spill happened, Don Cornet showed regret to publics. Iarossi fired Captain Hazelwood for his fault. Third Mate Cousins was blamed by publics. It well explained Apologia Theory, especially redefinition. Exxon never committed the company’s guilty. It seemed that the fault came from Hazelwood. If Hazelwood kept his post, the oil spill would not have happened. Exxon communicated to its public that it did not “intend” to commit the misdeed. However, the textbook also referred that employees complained about working too long and leading to human fatigue. I think there are really some problems on their corporate culture. A company who has a strong corporate culture would consider every employee to be their members. If Exxon thinks like this, it will commit their fault without casting the most responsibility to Captain Hazelwood. Besides that, Exxon should apologize for the public, not only showing their regret. The image restoration theory is also applied in this case. For example, when Exxon considered the negative impact on Alaska’s tourism, they held news conferences and advertising campaign to restore its image. I think it is a correct method to handle this part of the crisis. Cornet set up a media center for reporters and photographers in Valdez. Exxon invited Alaska Governor Cooper to be their external public speaker to attend the news conferences, the public trusted his speech. These two strategies shows that Exxon tends to form alliances with media and external groups to make them feel like they are the part of the company. Besides that, I appreciate that Exxon opened the animal rescue center for the media and community. Exxon realized that they should not only do what is right. It also must tell its public that it is taking appropriate action. From this case, I think that oil companies should think about the oil spill crisis. Moreover, they also have to consider something that seems impossibly happen. A crisis a company determines to be impossible only because it has never happened before can happen tomorrow. Therefore, a company has to make a crisis communication plan. When facing a similar crisis, I will recommend that CEO in the company to be the speaker. He is the most credibility with publics and the media. He should realize the importance of public relations. Once the crisis strikes, the speaker has to report the fact of crisis and take measures to hand the crisis during the “golden hours”.

Like this:

LikeLoading...

Related

This entry was posted in Uncategorized. Bookmark the permalink.

This chapter presents oil spill accident, which occurred a few minutes after midnight on March 24, 1989, when the crew of the Exxon Valdez grounded the vessel on a reef located in Alaska's Prince William Sound, puncturing the cargo hold in eight places. In the ensuing hours, over 11 million gallons of crude oil escaped from the tanker, contaminating one of the world's most pristine areas. The severity of the spill, coupled with an ineffective response effort, resulted in an environmental and economic disaster. Members of the Valdez crew, the parent company, and other organizations all contributed to this outcome. Consequently, in the decades following the spill, wildlife and the environment remain damaged. While many of the affected animal populations have shown signs of recovery, some, like the harbor seal, Pacific herring, and harlequin duck, have not. To guard against the occurrence of such disasters in the future, a number of changes in legislation, port procedures, and industry practices have occurred. Moreover, after the spill, the Valdez was towed to San Diego, where it received $30 million worth of repairs. The ship was subsequently renamed the SeaRiver Mediterranean.

0 comments

Leave a Reply

Your email address will not be published. Required fields are marked *