TESCO Communication Case Study on Horsemeat Scandal 2013 (Case Study Sample)

TESCO Communication Case Study on Horsemeat Scandal 2013
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Introduction
Firms are increasingly dependent on intangible assets like brand image and corporate reputation to remain competitive in the global marketplace (Lev, 2004). These intangible assets can be severely damaged by negative signals released to the wider public and financial market due to poor performance (Clark, 2005). In the case of food manufacturers and retailers, consumer trust is arguably the single most important intangible asset. The 2013 horsemeat adulteration scandal provides the most recent illustration of how this can undermine stakeholder confidence and thus corporate image.
This essay, therefore, draws full attention on the horsemeat scandal to investigate the role of sustaining a positive corporate reputation and thus shielding grocery retailers from reputational damage. Focusing on the TESCO's market, the paper also explores the corporate identity and own crisis response of Tesco. The description of corporate disclosure vehicles chosen for analysis, methodology and analysis of the findings are also areas of focus in the thesis.
Theories and Strategies Used To Analyze the Case
Theories
1 Image discourse theory (Benoit)
Image discourse theory is an approach that is believed to be useful for understanding the crisis Tesco faced, and, therefore, helpful for the interpretation of the communication strategies the company is engaged. Principal scholar in crisis communication theory William L. Benoit advocates for image discourse theory as suitable method in critical evaluation of messages produced by corporations in crisis (Benoit, 1995).
2 Situational Crisis Communication Theory
The analysis will is based on Timothy Coombs' (2015) Situational Crisis Communication Theory in which he argued that the very first crisis response is critical in determining the stakeholders perception of the company. Seeing that Coombs (2015) explains that an organization's instant crisis response is critical. TESCO Company after realizing the error they publish a full page of apology on a newspaper to the public (Stupples, 2014).
3 Massey's Organizational Image Management Theory
The theory provides a theoretical grounding for detecting the degree of perceived crisis risk from the company perspective; whereas concerning the interplay between organizational strategies and consumer responses, Benoit (1995) gives the theory. Restoration of company image can be addressed through some crisis communication strategy: denial, evasion of responsibility, reducing offensiveness of the event, corrective action and lastly, mortification. That is, according to the theory.
Strategies
* Corrective Action Strategy
In the corrective action plan, accused actor makes a promise for correction of the arisen problem through demonstrating the willingness to restore the problem.
* Mortification Strategy
Mortification follows the formula ‘confess and begs for forgiveness.' Depending on how sincere the audience perceives the message to be, the offensive act might be excused (Benoit, 1995).
Literature Review
Tesco has over 660 million potential consumers that give up to over US$500 billion for retail spending. As an international retailer, it has close to half a million workers working in 12 countries, serving about 75 million customers each week. From a communications standpoint, a crisis is a business or organizational problem that is exposed to public attention that threatens a company's reputation and its ability to conduct business (Jagodzinski, 2006). In a crisis, the organization’s competence or honesty is under attack because some or all of the communication about the threat is outside the organization’s control (Lattimore, Baskin, Heiman, & Toth, 2007; Swanson, 2012).
In the 2013 crisis, nearly 200 beef products sold in the EU were found to contain horsemeat, but the scale of the supply chain made investigating the source of the contamination extremely challenging (Miller, Driver, Velasquez, & Saunders, 2014). The proportions in which meat is produced disassembled and ground up, distributed, and reassembled from thousands of animals allowed the horsemeat to mingle with beef unnoticed. Only DNA testing could sort one being from the other. The Tesco burgers that tested positive for horse DNA were all made by Silvercrest factory, in the border area of Ireland (Miller, Velasquez, & Saunders, 2014).
The Case
Phase 1
On 15th and 16th January; Food Safety Authority (FSA) of Ireland reports positive findings of horsemeat in tests done on selected beef products. On 17th/18th January, Silvercrest Food Plant in Ireland, producer of detected contaminated products suspends production. On 23rd January, Meanwhile, TESCO deals with the withdrawal of waffle product sold under the own label (Novinky, 2013). On the 27th January, Attention is drawn back by informing the audience of Tesco's decision to drop Irish supplier Silvercrest due to illegal imports of meat from Poland as well as Tesco's decision to initiate own product testing for horse DNA (Palata, 2013).
On 8th February, National Press coverage of Horse Meat Scandal returns with the announcement of 100 percent of horsemeat content found in Lasagna Bolognese (Busco, 2013). 13th February: Blame assigned to Polish meat producers' shifts back to Britain; TESCO's representative, Jan W. Novak, makes use of the media attention and addresses customers with repeated offer for product returns. (Koubova, K. 2013)
Phase 2
18th February, a warning is issued about the local supplier signaling that horsemeat contaminated lasagna. (Trecek, Horacek, 2013). Moreover, on the 20th February, earlier initiated domestic frozen meat product testing conducted by Czech Agriculture Food Inspection Agency (CAFIA) reveals 60 percent horsemeat content in the product offered by Tesco supermarkets (Novinky 2013; Spackova, I. 2013a).
Phase 3
20th March of 2013 TESCO comes up with positive horse DNA findings of product sold under own label by Salami Herkules Company. On 21st meanwhile, CAFIA initiates administrative proceedings against Tesco about Nowaco lasagne product; company's affair publicity sheds light on its reputation. 22nd is the issuing over Herkules salami (Spackova, 2013).
Analysis of Applications of the Strategies and Theories in the Case
It would have been ideal to regain the trust of customers by the mere dismissal of a single supplier, but also highly improbable. The situation of reoccurring adulterated product in the offer of the company that claimed to hold up to the set of highest standard requirements blaming it on someone else have brought TESCO back in high levels of offensiveness and responsibility. TESCO admits minor share of responsibility (mortification). Fiasco in own supplier choices as presented in an article by Swinford. The style in which the decision is passed across is consistent with the Facebook post what we found (Humby, Hunt, & Phillips, 2008).
The degree of offensiveness spans from life-threatening situations as deaths and serious injuries to trivial issues like discrimination. Horsemeat crisis offers different possible levels of attributed offensiveness (Humby, Hunt, & Phillips, 2008). Some customers may perceive the whole situation as an act of mislabeling of food products. Others might consider the act not offensive at all or respond neutrally.
Tesco needs to listen carefully to the signals from outside and evaluate with caution, which role to choose. About the offensive act, Tesco makes use of bolstering (Benoit,1997), Pointing out close cooperation with the authorities and supplier; careful consideration of the situation with equally prompt decision to take the products off sale are used to present the company in a better light in front of the audience.
Even though over-communication dominates the discourse, a sign of defeasibility, under evading responsibility strategy by Benoit (1997) is detected: offering an excuse for the lack of information the company disposes of to avoid the questioning that they might be unable to withstand now, literally signals buying time.
By choosing the bold approach to finding the underlying cause of the whole thing and inviting the audience to follow the investigation, more sympathetic attitudes of the audience in company's involvement in HMS are expected to be formed. Besides, by accusing the suppliers as responsible, attempt to retain the goodwill and secure the customers on TESCO's side is noticeable.
Corrective action formed the backbone of the general strategy at the beginning taking justice into own hands, but subsequent series of unfortunate events turned it into making major promises to win back the lost consumer trust (Worthington, & Britton, 2015). There was an apparent use of mortification although it was complemented by many other strategies and the ladder was set higher, it, therefore, resulted in full confession to maintain the safety of the company from being perceived as unreliable in the consumers' perception as they were failing to keep up with own promises.
Conclusions
Indeed, an old idiom ‘Shutting the stable door after the horse has bolted' is exact (Fronz, 2011): TESCO is far from being considered innocent victim in HMS according to the audience and although the reactions in discussions might seem prevailing as jokes on company's account (Giles, 2015). It may appear as it is expected by many consumers that TESCO shall take the guilt rather than shift the blame on suppliers as in their perception.
Recommendations for Further Research
Although the primary focus of thesis was on the central and market strategically, in the context of Horse Meat Scandal, it concerned the issue of meat adulteration, and so the food risk perception concept along the customer trust co...