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Rolls Royce Internal and Crisis Communication
Events involving moral and ethical issues are bound to capture the attention of the media and the public. Companies risk losing their reputation by engaging in unethical business practices. The way that the company handles such allegations is important as it communicates what it stands for to the public. If only a few people are involved in corruption, the reputation of the entire company stands to suffer and this may deal a big blow to its brand and image. This is likely to have negative consequences. The public and the consumers will lose respect and value for the company and this may mean a decrease in sales. Suppliers and investors may not want to be associated with the company. Moreover, the company may end up losing a significant share of the market. Therefore, it is important for companies to learn how to manage crisis
Rolls Royce faced allegations of bribery and corruption after a whistleblower revealed that the company had procured the services of intermediaries to secure deals. According to the whistleblower, the company bribed the son of Indonesia’s former dictator with a Rolls Royce car and £12.9million. in exchange, the company was to get the contract to supply the country’s airline with Trent 700 engines which it manufactures. In addition, the company is accused of having bribed to obtain contracts and deals from Air China and China Eastern Airlines. The Serious Frauds Office launched investigations into the matter following the accusations. It discovered that there were matters of concern in the company’s China and Indonesia branches (Salmon).
Crisis management involves communicating with the relevant stakeholders to clear the situation on the issue and to provide more details. It also gives the company the chance to inform the stakeholders what it intends to do to resolve the situation. The stakeholders include the shareholders, the government, the media, consumers, and the public. The company reaffirms its commitment towards good business practices and it shows the public that it is serious in improving the situation. The company acted quickly following the bribery accusations. It was quick to appoint an independent investigator to look into the crisis. The company procured the services of Debevoise & Plimpton, which is an international law firm (Milmo). This was important because the company sent the message that it did not have anything to hide. The company’s decision to contract an independent investigator showed that it would cooperate with the investigations.
In addition, the company contacted the Serious Frauds office and handed over information relating to any mention of bribery and corruption. The information included any dealings with intermediaries in all the overseas markets. Companies are allowed to use the services of intermediaries in some of the overseas markets but the law requires them to report when they have done so. The company’s CEO was quick to communicate to the shareholders and the rest of the public stressing that the company does not support any unethical business practices and asserting its commitment towards ensuring that it is in compliant with the set rules and regulations (Milmo). The involvement of the company’s leadership shows the level of commitment it has towards ensuring that the investigators get all the information they need. The leaders were committed to working with the investigators. This showed that the investigations would go smoothly. In addition to this, the company reviewed its compliance procedures and it established a new code of ethics and policies concerning relations with intermediaries (Salmon). These actions highlight the company’s commitment to change its approach as a way of ensuring that its workers will take every precaution if it needs the services of intermediaries in the future.
The company realizes the importance of information technology and online communication. However, it prefers to use its website for communication purposes instead of depending on social media. Unlike other companies who take advantage of the social media, the company seems to have a different opinion. It believes that the opinions aired on social media do not have as much effect (Dunne). The company only relays the necessary message to the public by releasing statements (Salmon). However controversial this might seem in a world where businesses recognize the importance of technology, it seems to have worked for the company. The company does have a presence on social media, as interested stakeholders can reach the company through Facebook, twitter, LinkedIn, flickr, Tumblr, and YouTube channels. However, it does not use them to communicate the crisis facing the company. It releases any details concerning any allegations to the press or it includes them in the company website. This has worked for the company. Since the bribery and corruption allegations in China and Indonesia, the company has not realized any decrease in share prices, which could be explained by the incidents.
The company has communications managers in all its departments. It has a manager and director in its corporate office, civil aerospace communications, defense aerospace communications, marine communications, and nuclear communications dealing with all matters concerning communication. Its branches in Asia Pacific, Europe, North America, and South America have communication offices. In addition, it has various publications, which include the company magazine and In-depth Magazine. It is active in press releases, which concentrate on highlighting its achievements, such as any profits it has acquired or any successful contracts that it has received (Rolls-Royce, 2014).
Some crises appear suddenly and the company has to find ways of dealing with them immediately they occur. Others spread over a long period and the company has to show the measures it has been taking to stop the crisis from happening. It is important for organizations to inform the stakeholders of the need to provide more information. Companies may not be aware of all the issues involved in a crisis, especially on matters concerning whistle blowing. Some people prefer going to the media directly instead of approaching the management. The company has to ensure that it informs the interested stakeholders that it is in the process of conducting investigations as a way of raising public and shareholder confidence. Following the crisis, the company has to continue showing its commitment by elaborating the measures it has taken to prevent similar occurrences from happening in the future.
Communication is
of paramount importance in crisis management. Despite what Rolls Royce feels
about social media, the tools remain important in business. They expose the
company to a wider market and the reputation spread through the media sites can
make or break a company. Companies can take the lead in social media usage by
ensuring that they are the first in providing accurate information. This will prevent
other people from giving false information. Regardless of the methods that the
companies choose to use, they have to ensure that they communicate to the
public and inform people about their cooperation with the authorities and of
their ability to handle the situation.
Works Cited:
Dunne, Helen. “Social Media for Corporates: Essential Channel or Unnecessary Distraction?” CorpComms. 1 June. 2010. Web. 1 Dec. 2014
Milmo, Dan. “Rolls-Royce Whistleblower Speaks out over Corruption Allegations.” The Guardian. 11 Dec. 2012. Web. 1 Dec. 2014
Rolls-Royce plc. News. 2014. Web. 1 Dec. 2014
Salmon, James. Serious Fraud Office to Probe Rolls-Royce over Bribery and Corruption Allegations. 23 Dec. 2013. Web. 1 Dec. 2014