Things can get worse: How mismanagement of a crisis response strategy can cause a secondary or double crisis: the example of the AWB corporate scandal

Abstract

Purpose

The purpose of this paper is to highlight the circumstances in which a crisis response strategy can compound a crisis, especially a corporate scandal, as evidenced by the case of AWB Limited, where the organisational damage of the “cover‐up” escalated the scandal further and caused additional damage to the company.

Design/methodology/approach

The AWB case study provides a unique insight into the application of theories and research on crisis and reputation management and the specific challenges and risks of corporate scandals.

Findings

As a specific form of crisis, corporate scandals can easily descend into a secondary or “double crisis” if incorrectly managed, or even mismanaged.

Research limitations/implications

The paper shows that the information provided to the Australian Government's Royal Commission and other documents relating to the management of the scandal by the company further embarrassed AWB and exposed the inappropriateness of the original defensive apologia crisis response strategy pursued by the company.

Practical implications

The AWB case study provides an opportunity for alignment with the crisis response theories of Coombs and De Maria, based on the evaluation of the initial failed response strategy and the more appropriate response eventually undertaken by the company.

Originality/value

The paper offers the additional insights of the author (as a former member of the management team at the company) into the documents tendered to the Royal Commission, which have not been evaluated and studied for their contribution to crisis communication and crisis management.

Citation

Karl Grebe, S. (2013), "Things can get worse: How mismanagement of a crisis response strategy can cause a secondary or double crisis: the example of the AWB corporate scandal", Corporate Communications: An International Journal, Vol. 18 No. 1, pp. 70-86. https://doi.org/10.1108/13563281311294137