Uber Crisis Management Case Study

Crisis Management: Research on the Uber Crisis. Please use these five crisis stages. 1. Sleeper/red flag spotting stage, 2. Big bang stage, 3. Lingering cloud, 4. Clean-up and resolution and 5. Learning stage. Using the five crisis stages, please analyze this crisis by citing what happened in each stage. As of now, what stage is the Uber crisis in today? What are the impacts of crisis?
What are the common responses to crisis?
Why plan for business crisis?
What are some of the harsh realities of crisis situations?
Were the consequences of poor crisis management?
How does crisis management interrelate with strategic management and the process and operations of the organization?
What is the impact of organizational culture on crisis management?
Why is it important to have a crisis communications strategy?
Please provide recommendations. Please provide 3-4 resources/references.

Abstract

A crisis is an inevitable phenomenon in any society. The uncertainty and unexpectedness that surrounds occurrence of a crisis pose detrimental impacts to an organization and its stakeholders. To reduce or prevent adverse effects of a crisis, organizations should develop a well-structured crisis management process. The five stages of the crisis management process include Sleeper/Red flag/Spotting, Big Bang, Lingering cloud, Clean up the resolution, and Learning. There are other models that can be used in the event of a crisis. Uber Technologies Inc. presents a scenario that the underlying crisis management activities in each of the five stages can be exclusively applied. Early this year, an executive employee at Uber was implicated in claims of sexual assault, a scenario that escalated into a public relations and human resource crisis. The discussion at this moment analyzes steps by the company’s management to address the crisis. Recommendation developed at the end of this study is the important effective management of the crisis at Uber, as well as other institutions that may be conditioned into such occurrences.

Introduction

            Uber Technologies Inc. is a private company, with its headquarters in San Francisco, USA, that offers e-commerce services in car hire. The company was founded in 2008. Since then, Uber Technologies Inc. has grown in its operations beyond San Francisco, linking car drivers to users in North, Central, and South Americas, as well as Europe, the Middle East, Africa, and the Asia-Pacific. Despite its significant contribution in revolutionizing the transport industry, Uber Inc. has experienced a long lasting and dynamically changing crisis.  Organizational crises are inevitable. In the business environment, there are several sources and categories of crisis.  An admirable and important feature is for an organization to create and execute a comprehensive plan for responding to a crisis once it occurs. In this study, a detailed and systematic analysis of the Uber crisis is explained.  Under the five stages of the crisis process, the study develops a paradigm for understanding on how to plan, respond, and communicate in the event of a crisis.

The Five Crises Stages

            Crisis is a term used to define unexpected occurrences that threaten the realization of a certain objective. Organization crisis, as it is in the case of Uber, tend to impact normal operation, long-term and short-term goals and objectives of an organization. Other essential elements of an organizational crisis include a negative impact on stakeholders (Coombs & Holladay, 2012).  For a private entity, the range of involved stakeholders is narrow. However, the effects of a crisis to secondary stakeholders such as the government results in actions that affects the reputation and operations of an organization. To prevent or limit the effects of a crisis, organizations have developed crisis management models. The subject has attracted several studies. Hence, the existence of several models. Five Stages Models breaks down into the Sleeper/Red flag/Spotting, Big Bang, Lingering cloud, Clean up the resolution, and Learning stages.

Sleeper/Red flag/Spotting Stage

            This is the initial stage of a crisis management. At this stage, the crisis has not occurred, described as the warning or prevention stage. The spotting stage assumes varying periods as the actual threat has not occurred (Coombs & Holladay, 2012). Organizations are prone to the diverse nature of crises. Hence, there is a likelihood that the spotting stage may not comprehensively address crisis prevention. An important aspect in the spotting phase includes organizational preparedness and crisis management planning. Establishment of proper crisis communication channels is a significant element at this stage. Primary stakeholders like employees and suppliers ought to be aligned with management strategies for preparation and planning for unexpected occurrences. The ultimate objective of this stage is to identify a crisis before the occurrence.

            Uber Inc.’s initial response to the looming crisis is a great concern in the corporate world. Judging from the company’s public relation crisis management, there is a reason to argue that the company is underprepared in determining and addressing potentially harmful events.  On February 2017, a former employee in the company published a blog and a tweet, with claims of sexual harassment and incompetence in the organization’s human resource department (Newcomb, Pau, & Esnestein, 2017). Unprecedented responses from the company’s CEO suggested a lack of a properly structured plan for dealing with situations that may result in an organizational crisis. Evidently, the company suffered a bruised reputation and legal engagements. 

Big Bang Stage

            The commencement of the big bang stage is marked by the occurrence of a trigger that will lead to a crisis. Early realization of this stage is an indication of better preparation in the initial stage in determining and recognizing a situation that may result in a crisis. A responsive organization will indefinitely communicate to its stakeholders using the established mechanisms, admitting occurrence of the crisis and providing or seeking ways of responding as discussed in Coombs (2014). If the crisis only impacts the internal organization environment, communication is accomplished among its members. The big bang stage attracts analysis of the immediate damage caused by the crisis.

            In internet and technology driven business environment, related public crises are more likely to escalate in a more responsive rate. Failure of Uber’s company CEO to appropriately respond to the former employee’s tweet resulted in an explosive reaction from it’s the general public. It is at that point that the organization viewed the incidences as an actual crisis. The initial response to the scenario indicates that the company is poor in recognizing a crisis. 

Lingering Stage

            The lingering step is also described as the chronic stage.  Following the crisis recognition phase, there is a likelihood that an organization will go through a period of self-doubt, as well as self-analysis (Coombs & Holladay, 2012). The current business environment is more likely to expose an organization into this stage. Self-doubt is characterized by the inability to precisely determine the role of an organization in occurrence, escalation as well as management of the identified crisis.  The lingering stage is very critical as it influences the next stages of crisis management. The lingering stage is primarily associated with crisis response measures like dealing with stakeholders through social media and offering assurance on the protection of the core values and objectives of the organization. This phase should not last long as it may promote the magnitude of the crisis, depending on the prevailing conditions.

            A lingering stage in a PR crisis is best described as the quality and validity of information as a response.  In response to claims of sexual harassment and improper practices within the company’s human resource department, Uber released a denial statement. In reference to public relation, the company’s CEO suggested less concern for the employee welfare and more affection to Uber’s reputation. The response suggested a lagging response towards protecting the company’s endangered reputation (Fisher, 2017). Failure to offer an apology to such claims, especially when they result to an actual investigation is a clear sign of unpreparedness to organizational crisis.

Clearing Up Stage

            The clearing stage is primarily categorized as the last set of crisis response actions. The success of this stage is determined by the extent unto which preparation and planning activities in the spotting stage are executed (Coombs & Holladay, 2012). The primary objective of the clearing up stage is to reduce the adverse impacts of the crisis to the organization and stakeholders. If well executed, a proper response may improve the general state of the entity. The organizational improvement includes a better reputation, stronger brand and a safer workplace for employees. Typical responses to a crisis include public apologies, a public inquiry, independent investigation, changes in organizational structure, tailoring of the organizational environment and provision of incentives to customers, as a means of admitting mistakes that can be avoided in future.

            Uber’s execution of the clearing up stage about the claims of sexual harassment is insufficient. The company failed to imply to the general public that a proper investigation was being carried out. The CEO did not offer a sound apology to the victim (Newcomb, Pau, & Esnestein, 2017). However, with the involvement of high profile individuals in the investigation, the company showed concern, respect, and care for its employees.

Learning Stage

            In the case of Uber Technology Inc., the learning stage in crisis management is very important. The PR crisis that resulted from the claim of sexual harassment has been followed by other scenarios, like a video recorded argument between the company CEO and Uber car driver. The organization is stuck in the learning stage. Recurrences of crisis and their poor management is an indication that the team has failed to learn from its past mistakes effectively. 

Impacts of The Crisis

            The Uber crisis that originated from sexual harassment of a female worker has tainted the company’s reputation. One clear impact of the crisis is a continued teardown of the company’s values. The interaction between organizational culture and values is two ways. The recent crisis at Uber forced the company’s founding CEO to resign. Such consequences are an aftermath of continuous deterioration of Uber ‘s organizational values. The company is currently struggling to maintain its position as the leading service provider in the industry.

Recommendations

            Following the analysis of Uber’s PR crisis, there is the need for the organization to adopt a crisis management and organizational culture recommendation. The company should institute a crisis management team that does not involve the company’s CEO. Exposing such an executive member to criticism of public relation or human resource failure is evident indication of weakness in the organizational structure. To reclaim its reputation, the company should prioritize crisis management. Uber should also adopt new strategies that are targeted at improving the organizational culture.

References

Coombs, T. (2014). Ongoing Crisis Communication: Planning, Managing, and Responding. SAGE Publications,

Coombs, T., & Holladay, S. J. (2012). The Handbook of Crisis Communication. John Wiley & Sons.

Fisher, A. (2017, February 22). Seven lessons from the Uber crisis. Retrieved from http://mediafirst.co.uk: http://mediafirst.co.uk/our-thinking/seven-lessons-from-the-uber-crisis/

Newcomb, A., Pau, & Esnestein. (2017, Feb 21). Uber’s Handling of Susan Fowler Scandal Will Determine Its Fate. Retrieved from www.nbcnews.com: http://www.nbcnews.com/tech/tech-news/uber-s-handling-susan-fowler-scandal-will-determine-it-fate-n723596

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