Executive summary
Organizations continue encountering increasing numbers of crises that are a big threat to the overall performance of the firm. Multinational corporations are at high risks of experiencing crises because they involve long chains of management and sometimes managing every activity becomes a challenge. The discussion below analyzes a scenario of a bribery scandal involving a retail clothing manufacturing company based in New Jersey. The scandal happened in Egypt between organization's logistics managers and Egypt custom officials. Strategic crisis management process is required to address the issue to maintain the good reputation of the company while avoiding breaching the company's ethical and legal rules. The crisis management team came decided to pay the money to the customs officials to retain the reputation of the company.
Considerations:
Alternative decisions
In the scenario, the most appropriate decision would be to pay the extra money demanded by the Egypt custom officials to allow them to release the withheld cargo so that the company may continue with the production process. According to Volkov (2012), in corruption-associated cases, the crisis management plan involves a rapid response to the problem to allow the company stays ahead in case of any accusation.
Impact of decisions on different stakeholders
The main stakeholders affected by the head of operation's decision are the Board of Governors at a retail clothing manufacturing company, Customs officers in Egypt, the New Jersey government, manufacturing department in Egypt and company clients. The decision will have both negative and positive impact on the company's Board of Directors. On the positive side, the company can continue with its operations without interruptions. Second, the decision helps maintain the company's reputation because increased holding of the container would attract the attention of the media. On the other hand, the decision affects the company by going against ethical legislations. However, there is room for an excuse since the company lacks a bribery policy; it is unethical to pay bribes to any government official for any favor.
On the other hand, the decision affects the customs officers in Egypt negatively by relating them to corruption. The officials stand a chance of facing the law for engaging in corrupt activities. Finally, the State of New Jersey will suffer the consequence of allowing its companies to engage in illegal activities of corruption. The company is likely to face a big penalty from state officials if recognized.
The decision also affects clients because they can get their orders on time. On the other hand, the implication of the bribery allegations will most likely keep clients away from the organization.
Individuals involved in the decision-making process
The primary personnel involved in the decision-making process are the head of manufacturing operations in Egypt, head of logistics, and customs officials. These people represent stakeholders engaged in the decision-making process towards managing the crisis.
Timeline
Reputation management
Crisis acts as tests of a company’s reputation because it affects internal and external stakeholders. The effect may be immediate or take months and even years. Communication serves as the most effective tool for managing the reputation of the company when faced with a crisis (Weiner, 2006). The crisis management team should communicate all instances that led to the crisis and the decisions made and how they were the best to keep the company's reputation.
References
Volkov, M. (2012, August 29). Crisis management plans. Corruption, Crime, & Compliance.
Retrieved March 15, 2016, from, http://blog.volkovlaw.com/2012/08/crisis-management-plans/
Weiner, D. (2006). Crisis Communications: Managing corporate reputation in the court of public
opinion. Invey Business Journal.
