New Tools Emerging in Corporate Crisis Management

By Jane Han
Staff Reporter

When the head of Samsung's strategic planning office came out apologizing Thursday, immediately after Chairman Lee Kun-hee was charged with tax evasion, it signaled the start of the conglomerate's elaborate crisis management scheme.

``Public apology is the first and one of the most important steps in managing a corporate crisis,'' said Lee Joong-dae, a Seoul-based consultant specializing in crisis management at Edelman, a global public relations firm. ``Once bad news breaks, companies must get on the case right away because the first few days and weeks are crucial to saving its image.''

A major concern circling the months-long investigation of Samsung into its illegalities was the heavy scar the case would leave on the global group's reputation, which directly impacts investments and sales.

``Samsung has its work cut out for it both inside and outside the company,'' said Lee, explaining that organizations usually tend to pay attention only to how people see them from the outside, but employee sentiment is equally important. ``Simply donating money to charity won't be enough this time.''

South Korean conglomerates, such as Samsung and Hyundai, have most commonly resorted to charitable donations as a gesture of apology amid scandals.

``The public wants to witness a real change,'' said Chung Yong-min, vice president of Communications Korea, a local PR consulting firm, which is one of the biggest providers of crisis management services to domestic and multinational clients.

He stressed that a company should deal with a given situation based on its longstanding mantra ``because that's what the audience knows them as.''

``Take Nongshim, for example,'' said Chung, ``it's motto is `a company you can trust,' but the recent rat-in-the-snack case and the manufacturer's initial handling of it didn't match its mantra.''

He exemplified Johnson & Johnson's ``Tylenol scare'' in the U.S. as one of the most successful crisis management cases.

When numerous bottles of its extra-strength capsules were infected with cyanide, the company quickly recalled more than 31 million bottles at a cost of more than $100 million.

With its effective public relations strategy, Johnson & Johnson is known to have won more trust from consumers after the ordeal than before, said Chung.

``What do people know Samsung as? What does the public want from them?'' he said. ``That's what decision-makers should find out through thorough opinion gathering.''

According to comments made Thursday by Lee Soon-dong, president of the Strategic Planning Office, that's what Samsung is set to do this weekend. However, the country's largest corporation has yet to disclose further details of its reform plans.

PR experts say although Samsung is faced with a tough matter, it has one of the best crisis management techniques.

``Managing a crisis also follows a trend, though, so companies should consider what works and what no longer does,'' said Lee, adding that the latest methods involve communicating via video, such as on YouTube.

jhan@koreatimes.co.kr

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