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Discussion Questions

1. How may effective public-relations practices assist businesses in fostering more productivity among employees? 
2. What should a public-relations manager know about employee statistics such as retention, safety, and satisfaction?
3. How might public-relations practitioners justify to management the importance of maintaining open and trustworthy communication patterns across all levels of the organization?

Case Study

(Adapted from McKee and Lamb, Applied Public Relations 2nd ed. Routledge. 2009)

The Case of the Misfired Memo

Fortune magazine’s list of the 100 Best Companies to Work for in America ranked Cerner Corporation at No. 54 in January 2001, a repeat appearance for the Kansas City-based developer of health care software. Within days, the company added to its laurels with news of a record-setting fourth quarter, which capped a successful year. Cerner employees had plenty to be proud of.

Two months later, the company grabbed national attention again, but this time it was for a bad-tempered e-mail message that the company’s chief executive expected only Cerner managers would see. In the memo, he threatened to trim jobs and benefits if productivity did not rise. Someone anonymously posted the message on a public Internet site, and alarm spread not just through the Cerner workforce but also into the investment community. The stock market’s valuation of Cerner dropped by $270 million in two days, prompting a New York Times article that was headlined “A Stinging Office Memo Boomerangs.”

Here is what the CEO, Neal Patterson, put in the e-mail that he sent to some 400 managers. The message’s unusual capitalization, from Mr. Patterson’s original, draws attention to the Cerner custom of referring to the company’s 3,100 workers as “associates.”

We are getting less than 40 hours of work from a large number of our K.C.-based EMPLOYEES. The parking lot is sparsely used at 8 a.m.; likewise at 5 p.m. As managers, you either do not know what your EMPLOYEES are doing; or you do not CARE. You have created expectations on the unhealthy environment. In either case, you have a problem and you will fix it or I will replace you.

NEVER in my career have I allowed a team which worked for me to think they had a 40-hour job. I have allowed YOU to create a culture which is permitting this. NO LONGER.

Emphasizing his expectation of long workdays, Mr. Patterson noted, “The pizza man should show up at 7:30 p.m. to feed the starving teams working late.” He said that the employee parking lot should be “substantially full” at 7:30 a.m. and 6:30 p.m. on weekdays, and on Saturday mornings it should be half-full. “You have two weeks. Tick, tock,” his e-mail message warned.

Some employees were shocked and offended by the CEO’s unusually harsh language, but others simply chalked it up to his bluntly aggressive leadership style. After earning a master of business administration degree from Oklahoma State University, Mr. Patterson had worked for the Arthur Andersen auditing firm for six years. With two colleagues, he founded Cerner in 1979 to develop automated health care information systems, particularly for application in clinical laboratories. All three founders stayed active in the business, and Mr. Patterson received credit for leading the company’s remarkable growth and innovation over its first 20 years.

In information for investors, the company explained, “Cerner Corporation is taking the paper chart out of healthcare, eliminating error, variance and unnecessary waste in the care process. With more than 1,500 clients worldwide, Cerner is the leading supplier of healthcare information technology.”

Outside the company, management experts pointed out that Mr. Patterson’s e-mail memo to managers did not say what—besides long hours—he was expecting from employees. They also noted that his threats could lead to higher turnover and difficulty in recruiting.

In the financial markets, many investors were not sure what to make of the e-mail message. Some wondered if Cerner was experiencing performance problems that would affect first-quarter results, and so they reacted to the uncertainty by hurriedly selling shares and driving down the price of the stock.

A business columnist in Cerner’s hometown newspaper, The Kansas City Star, said the stock price might recover quickly, “but there is no denying that the harm done to company stakeholders has been as grave as it was unnecessary. As such, Patterson’s misstep offers an important lesson for top execs everywhere.”

Patterson himself was surprised by the firestorm that he had ignited, and he soon followed up with an apology to employees and with a message that was posted on the company’s Web site. The message acknowledged that his original complaint applied only to “a small number of associates.”

“My intent with the e-mail,” he wrote, “was to issue a direct challenge to our front-line managers to set a minimum level of work effort for every one of their team members. And that I, as the CEO, would hold them accountable for this result … My biggest concern was that it had been distributed beyond the list of managers to many, if not all, of our Cerner associates.”

In what most might see as a happy ending to an unhappy episode, Cerner again achieved record results in the first quarter of 2002. Only five weeks after Patterson’s blistering e-mail message, the company issued a glowing report on revenues and earnings and commented positively on opportunities for the remainder of the year. Nowhere in the company’s earnings announcement was there a hint of any productivity problem. Cerner’s revenues for 2002 were $752 million, an increase of 39% from the $542 million of the preceding year. Net earnings (before nonrecurring items) were $52 million in 2002, an increase of 51% from the $34 million. earned in 2001.

Although the company’s financial results continued to improve after the misfired memo, Fortune’s list of the 100 Best Companies to Work for in America did not mention Cerner again. However, Fortune cited Neil Patterson’s e-mail as the corporate world’s worst of 2001 in a year-end roundup of miscellaneous “Bests and Worsts” in business.

For public relations professionals, Cerner’s experience offered lessons in both employee relations practices and investor relations sensitivities. Moreover, it showed that successful management of different public relations functions is often highly interdependent: Material intended for employees may affect investors, and vice versa.

Questions for Reflection

1.      What are the benefits and risks of using e-mail to deliver a confidential message to a group of individuals? Would a traditional memo distributed on paper pose the same risks?

2.      What should you do if you know that a key message aimed at one important group will disturb or alienate another?

3.      How should senior managers tell rank-and-file employees that organizational performance is not satisfactory?

4.      How should rank-and-file employees express concerns to senior managers?

Information for this case was drawn from the following: the Cerner Web site at www.cerner.com/aboutcerner/newsroom_3a.asp?id=783; Burton, T., & Silverman, R. (30 March 2001), “Lots of empty spaces in Cerner parking lot get CEO riled up,” The Wall Street Journal, p. B3; Hayes, D., & Karash, J. (24 March 2001), “Harsh e-mail roils Cerner,” The Kansas City Star, p. A1; Heaster, J. (28 March 2001), “Executives, heed lesson from Cerner,” The Kansas City Star, p. C1; Stafford, D. (29 March 2001), “Shattering the illusion of respect,” The Kansas City Star, p. C1; Wong, E. (5 April 2001), “A stinging office memo boomerangs.” The New York Times, p. C1.

Discussion Questions 

1. Your text asserts that the definition of “community” is changing. According to your text, in what ways might a business or organization define its communities?
2. Should businesses and corporations engage in socially responsible business activities? Is it in their best interests to “do well by doing good”?
3. Describe three ways in which a business or nonprofit might contribute as a “good citizen” in its local community.

Case Study

(Adapted from McKee and Lamb, Applied Public Relations 2nd ed. Routledge. 2009)

Charitabulls Help Others Win at Life

Mention the Chicago Bulls, and fans across the world think of sports superstars, NBA championships, and exciting competition. But the team is using its celebrity status to win more than championship rings. The nonprofit organization, CharitaBulls, was formed in 1987 with the motto, “Helping Others Win. At Life.” The charitable foundation has contributed to local and regional causes, and its Bulls Scholars program that funds supplemental enrichment education for middle-schoolers won a Golden Trumpet for Community Relations from the Publicity Club of Chicago in 2002.

The Chicago Bulls Scholars Program was born in 1998 with a $3.5 million grant from the Bulls to the Children First Fund: The Chicago Public Schools Foundation. The program was developed after the 1997–1998 season when Jerry Reinsdorf and the Bulls community-relations staff asked the Chicago Public Schools (CPS) to identify academic needs. The Bulls Scholars program was designed to help students make a successful transition between middle school and high school.

In the program, about 1,000 students in Chicago public middle schools are chosen by their teachers to participate in after-school classes in English or algebra, which are taught by certified middle and high school teachers. By attending the course, completing assignments, and scoring well on the Chicago Academic Standards Examinations (CASE) at the end of the year, students may receive a high school credit in the subject area. The program is based on enrichment, rather than remediation.

The funding from the Bulls, which is managed by the School Partners Program, supports the costs of the teachers, texts, and technology. All of the participating middle schools received wireless technology for use in the program.

Bulls’ players and office staff visit the participating schools regularly, and each school is invited to a game during the season. Rallies are held at the United Center to encourage and reward the students who are involved in the program. At the May 29, 2002 end-of-the-year rally, Bulls head coach Bill Cartwright, players Eddy Curry and Marcus Fizer, and former Bulls John Paxson and Bob Love appeared, along with the CEO of the Chicago Public Schools. The rally was emceed by Tom Dore, the Bulls TV announcer. A Chicago-based brother quintet, STRONG, performed. The Bulls’ fan interactive team, the IncrediBulls, also entertained the student group.

On Thursday, May 22, more than 530 seventh- and eighth-grade CPS students who completed the 2002–2003 program attended the Bulls Scholars Jam. The event, held in the arena, featured addresses from former Bull Bob Love, current Bulls guard Roger Mason, Jr., and broadcaster Dore, along with entertainment by the Bucket Boys, the IncrediBulls, Benny the Bull, and live music.

Results of the program have been impressive. In 1998–1999, the average Scholar scored higher than 49% of their high school counterparts in English and 79% of their counterparts in algebra on the CASE exam. On the national Test of Achievement and Proficiency, 53% of the Scholars scored at or above grade level in reading, compared to 35% of other ninth-grade students. In math, 69% of the Bulls Scholars scored at or above their grade level, compared to the 44% of other ninth graders who did so.

In 1999–2000, 62.5% (366 of 586) of the students earned the credit. In the first year, 90.3% of the 390 students earned the credit. The Scholars in the program scored higher on achievement tests than other students in their schools, and nearly 75% earned high school credits before they were out of middle school.

The Bulls also cooperate in other educational-relations programs, such as the NBA’s “Read to Achieve” program where books are given to children, and players and family members assist with reading initiatives throughout the year. Scholarships are awarded to area seniors to attend college. Through an Adopt-A-School program, incentives are offered to encourage students to attend school and improve their grades. Financial assistance helps fund equipment for area schools. The Bulls also sponsor an annual art contest for elementary schools in area counties, and winning art appears in Bulls publications. The Bulls also support the Newspaper in Education program of the Wall Street Journal.

The Bulls’ primary objective is to create positive educational and recreational opportunities for children and young people. Other CharitaBulls beneficiaries have included Special Olympics Illinois, City Year Chicago, James Jordan Boys & Girls Club, Chicago Park District, and the Chicago Public Library. During the holidays, the Bulls sponsor food drives, a party for underprivileged children, and participate in MLK and Black History Month activities.

The organization has given more than $1 million over five years to repair and restore 140 damaged city basketball courts and has donated more than $700,000 to fund the Men’s and Women’s Chicago Bulls/Chicago Park District Late-Night Basketball Leagues that are operated at parks throughout the city. More than 1,000 players age 18 to 26 participate. Working with the Chicago Police Department, the group sponsors the Chicago Bulls/Chicago Park District Inner City Hoops League and Citywide Championships, a basketball league for children ages 9 to12.

CharitaBulls donated $4.5 million in 1994 to build a 40,000 square-foot building housing a computer center, art studio, science lab, clinic, gym, day-care center, dance and game rooms, classrooms, and more two blocks from the United Center. The building was named in memory of James Jordan, Michael Jordan’s father. The Boys & Girls Clubs of Chicago operates the center as one of its units and serves about 1,500 neighborhood children and families annually. The foundation also supports other efforts to help renovate the neighborhood around the United Center.

Perhaps not surprisingly, focus is also given to basketball programs. The Bulls work with corporate sponsors to donate more than 200 tickets for each home game to local groups to provide a way for underprivileged children and adults to attend a game. Official instructional youth summer camps were begun in 1999. Children ages 6 to14 attend camps in more than 150 community locations, working through local park districts. The camp runs more than three hours a day for a week. The Bulls and the White Sox worked together in 2001 to establish a player development facility that offers private instruction, traveling teams, leagues, and tournaments for young players.

Local park districts throughout Illinois cooperate with the Bulls to offer “2ball,”a youth skills competition played on a half-court. The one-minute competition puts two players at different locations on the half-court in a shooting competition. Some 9,000 young people participate each year.

Funds for the CharitaBulls Foundation come through contributions to the Bulls and from special events and programs including a Tip-Off Luncheon, held each October l, and FestaBulls, a sports memorabilia auction held every spring, which raises nearly $200,000 annually. Other events, such as online memorabilia auctions and in-game auctions, help support the foundation.

Sponsors also donate to the foundation in response to a variety of game-based achievements, including the number of wins, dunks, free throws, points, steals, rebounds, and so on. Fees for personal scoreboard messages have also been donated to the foundation.

Questions for Reflection

1. Why would a successful sports franchise invest time and fund-raising efforts to support education or other local community projects?
2. How do the fund-raising efforts, such as those previously described, support relationships with key stakeholders? Why would sponsors be motivated to cooperate?
3. Why would children be among a key stakeholder group for a professional sports franchise or other entertainment company?
4. Evaluate the importance of local community-improvement projects as part of ongoing community relations for a for-profit enterprise.

Material for this case was drawn from the following: the Chicago Bulls’ Web site at www.nba.com/bulls/community/communities.html, www.sportsphilanthropy.com; the Publicity Club of Chicago’s Web site at www.publicity.oprg/trumpets2000.htm, and the Web site of Public Communications Inc. at www.pcipr.com/newsroom_archive/Chicago Bulls. Other background was provided through fact sheets and releases by Public CommuniCations Inc. of Chicago.

Discussion Questions 

• How does business-to-business (B2B) communication differ from traditional consumer relations practice? How is it similar?
• What is a consumer, and what is consumer relations? Is consumer relations only a concern of for-profit organizations? Why or why not?
•  “Consumers … are likely the most voluntary of all stakeholders. … Conversely, sometimes they comprise the most loyal group of stakeholders …”

Assuming these statements from your text are true, how must public-relations practitioners communicate with members of this key public? What should characterize the communication?

Case Study

(Adapted from McKee and Lamb, Applied Public Relations 2nd ed.. Routledge, 2009)

Tire Tread Troubles Drive Firestone into Crisis of Confidence

Viewers who watched KHOU-TV’s Monday night news on February 7, 2000 saw the first public report on a possible relationship between Firestone tire failures and rollovers of Ford Explorer sport utility vehicles (SUVs). Anna Werner, reporting for the CBS affiliate in Houston, said she had identified more than two dozen accidents involving Fords with Firestone tires that resulted in 30 deaths. Investigators’ records said the tread had peeled off Firestone Radial ATX tires on the Explorers.

In her news report, Ms. Werner said that Firestone had expressed full confidence in its tires and that Ford had suggested driver error, perhaps in the form of under-inflation, as a possible cause. Before that first February report aired, correspondent Werner had visited the National Highway Traffic Safety Administration (NHTSA) in Washington, D.C., the federal agency responsible for reducing deaths, injuries, and economic loss resulting from traffic accidents. NHTSA officials told her they had no evidence that Firestones were implicated in a disproportionate number of Explorer rollovers.

Despite the absence of confirming NHTSA data, the KHOU news team decided its figures were strong enough to go ahead with the report.

Three days later, Firestone’s vice president of public affairs, Christine Karbowiak, sent a letter of complaint to the station and its owner, pointing out items in the report she claimed were misrepresentations or falsehoods. Subsequently, KHOU posted a copy of the letter on its Web site.

“This series,” wrote Firestone’s Ms. Karbowiak, “has unmistakably delivered the false messages that Radial ATX tires are dangerous, that they threaten the safety of anyone using them, and that they should be removed from every vehicle on which they are installed. Each of these messages is simply untrue.”

The letter noted that tread separation might result from a number of external causes, such as puncture, and would not by itself indicate a defect. The Firestone executive said the company had given the station details that could have balanced the report. Ms. Karbowiak continued: “In fact, I am advised that the failure to report such balancing information when it is in your reporter’s hands prior to the broadcast may be grounds for finding of actual malice.”

Some people thought they saw the thinly veiled threat of a lawsuit in the Firestone letter, but KHOU continued to follow up on the original report and advised worried Explorer drivers who contacted the station to call NHTSA’s toll-free number.

In succeeding months, the federal agency received 90 complaints of tread separation and on May 2, 2000, opened a defect investigation into some 47 million Firestone tires with the ATX, ATXII, and Wilderness AT model designations. NHTSA issued no news release concerning the investigation nor did it make a public announcement.

Not until USA Today published a story on August 1, 2000, did most Americans learn about the questions raised by KHOU. USA Today said NHTSA had received reports of 30 crashes and four deaths potentially related to tread separation.

Once the USA Today story was repeated on television networks and cable news channels, it stayed in the headlines for weeks—not just in the United States but also in South America, the Middle East, and Asia, where problems with Fords and Firestones also had been reported. Some news reports noted that Ford had voluntarily replaced Firestone tires for owners of many Ford pickups and SUVs in Venezuela and elsewhere even before the KHOU-TV report.

As the news media swarmed around the story, no one seemed able to explain what was causing the tread separations and rollovers. Most occurred in the summer months in locales with high year-round temperatures. Maybe heat, a natural enemy of tire life, was involved. Some observers said the Explorer’s high center of gravity caused instability, and others suggested tire quality might have suffered during chronic labor strife at Firestone’s plant in Decatur, Illinois, which produced many of the suspect tires. Others speculated that the combination of Firestone tires and Explorer engineering created the problem. No one knew for sure, and the mystery remained unsolved for months.

Before the investigation reached a conclusion, the news media’s interest warmed and cooled and warmed again as new developments periodically sparked headlines. Before year-end:

• Firestone and Ford would abandon their mutual defense posture and end up accusing each other
• Hearings on Capitol Hill would shed more light on the conflict and tempt some members of Congress to make themselves look good by making the manufacturers and regulators look bad.
• NHTSA would confirm that an insurance company researcher had told the federal agency two years earlier about possible tread separation problems on some Firestones.

Firestone began producing Radial ATX tires in 1990 to serve as original equipment on the Ford Explorer, which was introduced in March for the 1991 model year. The tire was redesigned in 1995 and 1996 and given two new model designations, Radial ATXII (pronounced a-t-x-2) and Wilderness AT. Through the 1990s, the tires were installed on millions of new Explorers, Mercury Mountaineers, Ford Ranger and F-Series pickups, Mazda Navajos, and Mazda light trucks. By summer of 2000, Firestone had made about 14.4 million tires in the three models, and an estimated 6.5 million were still in use.

After the first USA Today article, Firestone insisted that its tire performance data reinforced the company’s contention that the tires were safe and reliable, and Ford did not contradict the tire company. But when Sears Roebuck, the nation’s largest tire retailer, announced it would stop selling the Firestone Radial ATX, ATXII, and Wilderness tires on Friday, August 4, the situation began shifting.

On the same day, Ford’s chief executive, Jacques Nasser, said “We’re clearly very, very concerned about the situation … We have teams that are working around the clock. Once we know exactly what the issues are, we will act, because we feel a responsibility to our customers, for their safety and for the safety of their families.”

The following Monday, NHTSA said it had received 270 complaints about the tires, including allegations that they may have been involved in 46 deaths and 80 injuries since their introduction in 1990.

For many middle-aged drivers, the Firestone story was déjà vu. The company had barely survived a crisis in 1978 when the federal government forced it to recall 13 million Firestone 500 steel-belted radials. Though reports in 1978 linked the tires to 41 deaths, the company resisted recalling them for 18 months. Weakened by its drawn-out battle with the government and shunned by many motorists, Firestone—one of the oldest and proudest names in American motoring—was acquired in 1988 by Japan’s largest tire company, Bridgestone, which began operating as Bridgestone/Firestone Inc. In 1992, the combined operation closed its headquarters in Akron, Ohio, and moved to Nashville, Tennessee.

After Bridgestone took control, Firestone’s fortunes eventually turned around, and the company began gaining on its larger rivals—Goodyear and Michelin. Preparing to observe its 100th anniversary celebration Firestone created a special Web site tracing company history back to its earliest days and founder Harvey Firestone’s close friendship with Ford founder Henry Ford. Throughout most of the 20th century, Ford Motor Company was, in fact, Firestone’s most important customer.

The Firestone celebration was quickly overshadowed by the escalating tread separation issue. Eight days after USA Today put the problem on the nation’s news agenda, Firestone announced a voluntary recall of 6.5 million tires in a single size (P235/75R15) with the Radial ATX, ATXII, and Wilderness AT designations.

While some public relations experts were criticizing Firestone for waiting too long to address the issue, the recall plan itself created further problems. Like shoes, tires are produced in a variety of sizes, widths, and styles. All of the tire warehouses of all of the tire makers around the world did not contain 6.5 million tires in the size needed. To achieve an orderly replacement process, Firestone planned to complete it in phases, taking nine months or more.

“Because the preponderance of incidents is in the four southern states and given the limited supply of replacement tires at this time, the company will be undertaking a three-phase recall starting in Arizona, California, Florida and Texas,” Firestone announced. “The second phase for the recall will be implemented in Alabama, Georgia, Louisiana, Mississippi, Nevada, Oklahoma and Tennessee. The final phase will include the remainder of the states.”

The three-phase plan provoked an outcry from Ford owners in all 50 states, who wanted their tires replaced NOW! In response to the howls, Firestone doubled production at its U.S. plants, airlifted replacement tires from Bridgestone in Japan, and purchased tires from competitors. By the end of August, it had replaced more than a million tires. On August 31, NHTSA recommended that Firestone recall another million or so tires in a variety of sizes sold mainly as replacements on pickups and SUVs, but the tire company said it was not necessary.

Committees of the U.S. House of Representatives began hearings in September to learn more about the tread separation problems and examine the role of NHTSA in fixing it. As the hearings started, NHTSA said that it had received reports of 88 fatalities related to the tires and 250 injuries.

Appearing before a congressional panel, Ford CEO Jacques Nasser and Firestone CEO Masatoshi Ono testified about product safety and their role in protecting the public. The hearings also produced testimony from a researcher at State Farm Mutual Automobile Insurance Company who had alerted NHTSA in July 1998 to an unusual pattern of tread separation cases involving the Firestones. The early warning apparently got little agency attention at the time it was received.

In December 2000, Firestone announced the results of its four-month investigation into the tread separation problem, and they contained no surprises. John Lampe, who succeeded Masatoshi Ono as CEO, said analysis of 2,500 recalled tires pointed to a combination of factors, acting in concert, as the cause of the elevated failure rate.

By the time Firestone reported its findings, the company had replaced more than 5.5 million tires in the recall of 6.3 million. The issue of a wider recall, first raised by NHTSA on August 31, continued to simmer, but Firestone rebuffed new agency requests on the matter. Eventually, Ford took the initiative in May 2001 to replace 13 million Firestone tires on its vehicles at a cost of $3 billion. The automaker said the tires had higher failure rates. Stung, Firestone announced a few days later that it would no longer supply tires to Ford’s operations in the Americas and accused the company of clouding the issue.

”We have always said that in order to insure the safety of the driving public, it is crucial that there be a true sharing of information concerning the vehicle as well as the tires. Ford simply is not willing to do that,” Firestone CEO John Lampe said in a statement. “We believe they are attempting to divert scrutiny of their vehicle by casting doubt on the quality of Firestone tires.”

Brave words but subject to amendment. Firestone yielded five months later and recalled an additional 3.5 million Wilderness AT tires made before May 1998. NHTSA closed the defect investigation it had begun in May 2000, saying that it had received reports of 271 fatalities related to the tires under study.

Of the expanded recall, Firestone’s Lampe said, “We recognize that a lengthy confrontation with NHTSA would continue to bring into question the quality of our products and delay our ongoing work of rebuilding the company.”

In 2003, Firestone promised to spend $15 million on a three-year consumer education campaign, including the use of national media, with the goal of persuading motorists to take better care of their tires. The campaign addressed tire inflation, tire use, tire maintenance, driving safety, and car maintenance.

Firestone’s promise was a major provision in its settlement of a nationwide class-action lawsuit stemming from the recall. The company denied wrongdoing or liability and said it entered the settlement to avoid the burden of protracted litigation. The settlement did not affect hundreds of unresolved personal-injury lawsuits involving allegations about the recalled tires.

Questions for Reflection

• How should Firestone have handled its 100th anniversary celebration after USA Today published its first story on the Ford/Firestone rollover accidents?
• Firestone and Ford attempted to cooperate in the early stages of the crisis. Why did the cooperation evaporate?
• Considering the high demand for replacement tires and the impossibility of meeting the demand immediately, what alternative strategies might Firestone have considered?
• Do you think that Firestone has succeeded in restoring its reputation?

Information for this case was drawn from the following: the Firestone Web site at http://mirror.bridgestone-firestone.com/news/media_center_fr.html; the National Highway Transportation Administration Web site at www.nhtsa.gov/cars/problems/Equipment/Tires/index.html; Aeppel, T., Ansberry, C., Geyelin, M., & Simison, R. (6 September 2000), “Road signs: How Ford, Firestone let the warnings slide by as debacle developed,” The Wall Street Journal,p. A1; Bradsher, K. (1 September 2000), “Local TV uncovered national scandal,” The New York Times,p. 1; Crock, S., & St. Pierre, N. (16 October 2000), “The tire flap: Behind the feeding frenzy,” Business Week, p. 114; Eldridge, E. (11 August 2000), “Ford owners demand new tires,” USA Today, p. 1 (accessed 25 January 2001); “Firestone letter to Belo & KHOU executives,” www.khou.com/news/stories/1290.html; Grant, L., & Healey, J. (4 August 2000), “Sears stops selling tires involved in probe,” USA Today, p. 1; Rutenberg, J. (11 September 2000), “Local TV uncovered national scandal,” The New York Times, p. C17; St. Pierre, N. (8 September 2000), “The Firestone fiasco: Was the NHTSA ‘asleep at the wheel’?” Business Week, p. 98; Zimmerman, A. (12 September 2000), “News media get in line to take credit for bring about Firestone tire recall,” The Wall Street Journal, p. A4.

Discussion Questions 

1. What is the difference between news and publicity? What is the difference between media relations and news dissemination?
2. What strategic questions should affect how PR managers target traditional and new media outlets? How should traditional media relations practice change to target bloggers and other Internet users?
3. Your text asserts that there’s no substitute for a trusting relationship between practitioners and reporters. Assuming that is true, identify three characteristics or actions that would help a practitioner establish and maintain such a relationship.

Case Study

(Adapted from Lamb and McKee, Applied Public Relations. Erlbaum, 2003)

Sheikh’s Leisure Resort Project Gets Royal Treatment

Sophie Rhys-Jones had been working in public relations for 14 years when she and fellow practitioner, Murray Harkin, began talking seriously about combining resources to set up a new agency. The two were the same age, 32, possessed youthful energy and good looks, and had a lot of professional experience in common. Both had served broadcast clients and first met when Murray was promoting a program for the British Broadcasting Corporation.

Early in her career, Sophie handled publicity for Capital Radio. Later, she joined Macmillan Cancer Relief to work on fund-raising events and then went to MacLaurin Group public relations soon after it was founded in 1993. At MacLaurin, her clients included Britt Allcroft Group film productions, Chrysalis Group broadcast properties, Red Rooster Film, and radio entertainer Chris Tarrant.

Murray’s career in public relations and marketing had begun at about the same time. First, he worked on consumer and business-to-business accounts with Roger Haywood, a reputation management expert and author of books on public relations. Subsequently, Murray joined Shandwick International’s Rogers & Cowan unit, which specialized in entertainment industry clients, and then served for 3 years as a group managing director at The Entertainment Partnership.

For Sophie and Murray, the appeal of running their own shop and capitalizing on what they’d learned while producing profits for others was irresistible. In early1997, the pair formed RJH Public Relations with Sophie as chairman and Murray as managing director. They opened their first office in London’s West Kensington neighborhood.

In a short time, they had built up a respectable client list that included MG Rover Group autos, Thomas Goode china and crystal, Boodle & Dunthorne jewelers, Sotogrande’s Almenara Golf-Hotel on Spain’s Mediterranean coast, and the Banyan Tree Seychelles resort. For RJH Public Relations, the barometer of success was rising, and business was good enough to move their London offices to an upscale Mayfair address.

Sophie earned the admiration of some Britons and the envy of others when, 2 years after opening the agency, she wed Prince Edward, third son of Britain’s reigning monarch, and was styled the Countess of Wessex. Her husband had established a career in film production before their marriage. After marrying the prince, Sophie continued her daily work at RJH Public Relations as Sophie Wessex.

As the agency’s profile rose, some new business simply dropped into its lap. Out of the blue, Murray was invited to meet in March 2001 with a sheikh who was planning a new international sports and leisure resort for Dubai in the United Arab Emirates at the southern end of the Persian Gulf. The sheikh was interested in engaging RJH Public Relations and wanted more information on its capabilities.

Murray first sat down with the Arab chief in early March but reached no agreement on formalizing a business relationship. Following up on Wednesday, March 14, Sophie—who had not yet met the potential new client—accompanied her partner to the Dorchester, a legendary London hotel where the sheikh was staying, for further discussions.

She and Murray were eager to outline the agency’s capabilities and expressed strong interest in the project. If RJH Public Relations could win the assignment, the job promised to pay £20,000 (about $32,000) per month for 2 years.

During the idle chitchat that often accents business meetings as strangers warm up to each other, the conversation wandered to subjects closer to London than to Dubai. The incidental topics included British politics, public figures, and Sophie’s in-laws. On the central matters of the talks, the discussions apparently ended on a positive note.

The tone turned sour almost immediately. Just days later, the countess discovered that the sheikh was a sham and the resort project was a scam. It was an undercover sting operation set up and surreptitiously taped by a reporter for the News of the World, a tabloid owned by Rupert Murdoch. One of the sting’s goals was to obtain evidence that the countess was trading on her connections to the royal family for business purposes—a low practice for anyone near the monarchy.

The News of the World had begun its investigation in February 2001 after a resentful account manager at RJH Public Relations carried tales to the newspaper, alleging business indiscretions by Sophie and other misbehavior by Murray. Before the March 14 meeting with the countess, the tabloid’s staff had taped earlier conversations with her partner in which they probed for damaging or embarrassing revelations.

Once Sophie learned the real purpose of the Dorchester meeting, RJH attorneys moved quickly to limit potential damage by pressing legal action against the tale-telling employee and the News of the World.

The countess also contacted Buckingham Palace and talked with the Queen’s private secretary and the director of communications for the monarchy. At this point, nothing had yet appeared in the media. The two palace officials met on Wednesday, March 21, with leaders of the Press Complaints Council (PCC) to solicit advice and explore alternatives.

The PCC is an independent body that investigates complaints from the public concerning the editorial content of British newspapers and magazines. The PCC has no contemporary counterpart in the United States. The council examines complaints under the code of practice, a self-regulatory guide that applies to all national and regional newspapers and magazines. The publications’ editors drafted the code. In a typical year, about 60% of complaints concern questions of accuracy, and most of the remainder allege intrusions on privacy.

In the confidential meeting at Buckingham Palace, the PCC executives apparently gave conventional advice: Wait for publication, and then submit a formal complaint if warranted; or, contact the newspaper promptly, and try to arrange some accommodation or compromise. The second alternative was chosen.

When the palace communications director talked with the tabloid’s editor, the two agreed on a trade. In exchange for the tapes and a promise to keep material from the Dorchester meeting out of the newspaper, the tabloid could have an exclusive interview with the countess if it would permit palace officials to review the story and headline before publication.

On Thursday, March 22, a reporter for the News of the World sat down with the Countess of Wessex in Buckingham Palace for an unprecedented interview. With the palace communications director sitting nearby, Sophie Wessex answered questions about some of the most private details of her life. She talked about her fertility, the couple’s desire for children, and rumors concerning her husband’s sexual orientation.

Before the exclusive interview was published, information on the fake sheikh’s transcripts, which the News of the World had agreed to suppress, somehow got into the hands of editors at competing tabloids. When the News of the World ran its interview under the headline “Sophie: My Edward is NOT gay” on Sunday, April 1, a competing tabloid on the same newsstands carried an account of the conversations secretly recorded at the Dorchester.

One week later, the News of the World broke its promise and devoted its cover and nine more pages to the taped conversations. The verbatims included comments from Murray Harkin acknowledging a familiarity with cocaine and suggesting he knew young men who might be interested in dinner parties.

On the tapes, Sophie’s comments were less surprising though certainly indiscreet. London’s Sunday Telegraph quoted her as hinting that clients might possibly get “some kind of additional profile or benefit from being involved with us because of my situation.”

Her incidental remarks included references to Prime Minister Tony Blair and his wife that were at times flattering and at other times critical. Similarly, she commented both favorably and unfavorably on other public figures, including her brother-in-law Charles, the Prince of Wales.

In Great Britain, the royal family is expected to remain completely detached from politics and partisanship. For this reason, her comments on the national budget and the parties’ leaders represented the most notable neglect of protocol.

As many Britons were poring over the Sunday newspaper accounts of the tapes, Queen Elizabeth called the Earl and Countess of Wessex to meet with her at Windsor Castle, just outside London. Later in the day, the Buckingham Palace news office issued two statements: the first for the queen and the other for the countess.

The first said (using the original capitalization):

The Queen has discussed issues arising from this week’s media coverage with The Earl and Countess of Wessex.

Her Majesty accepts that despite the difficulties of recent days, both the Earl and Countess understandably want to try to pursue working careers and they have her full support in doing so. It is not an easy option and they are breaking new ground, but it is right in this day and age that they should be allowed to do so.

In following careers they are always open to accusations of exploiting their Royal status in pursuit of their own business interests. Both the Earl and the Countess vigorously deny that they have deliberately set out to do so. The Queen deplores the entrapment, subterfuge and innuendo and untruths to which The Earl and Countess have been subjected in recent days.

The Queen recognizes that there are and always have been real issues around ensuring, and being seen to ensure, that Royal and business interests do not conflict where members of the Royal Family pursue their own careers. Ways to address and avoid such potential conflicts of interest need to be reconsidered in light of this episode and this will be done over the coming weeks.

Whilst this is undertaken, The Countess of Wessex has suggested, and The Queen has agreed, that The Countess of Wessex should step aside as Chairman of RJH, as the issues facing the company are considered.

The statement from Sophie covered much of the same territory. She expressed both regret at causing embarrassment and appreciation for support she received from the monarch and from colleagues.

“I believe my overriding duty is to support The Queen and the Monarchy,” her statement said (original capitalization retained). “I realize fully that I am in a privileged position, and I am conscious that my conduct must be above reproach. I am deeply distressed by the carrying out of an entrapment operation on me and my business …”

As Buckingham Palace issued its two statements, RJH Public Relations issued one of its own, announcing the departure of Murray Harkin and introducing his successor. It made no reference to the reason for the resignation or the turmoil of the preceding week.

Three days later, the Institute of Public Relations (IPR), a professional association whose 6,500 members included the countess and her partner, announced an inquiry into Murray’s role in the mess. The IPR is similar to the Public Relations Society of America.

“The Institute of Public Relations confirms that it has launched a preliminary inquiry into the allegations made against Mr. Murray Harkin in a national newspaper,” it said. “The IPR has asked Mr. Harkin for a statement of circumstances surrounding the matters reported in the News of the World. The institute has received a number of approaches from members concerned that he may have breached the institute’s code of professional conduct and has brought the profession into disrepute.”

Although the London tabloids and other British media provided generous coverage of Sophie’s indiscretions, the widely respected Economist weekly newspaper offered barely a yawn in its edition of April 14, commenting: “At most, the Sophie tapes bear on the moderately interesting but minor question of whether it is possible for a moderately interesting but minor royal to work in a sensitive career such as public relations without becoming entangled, by accident or design, in a conflict of interest.”

The IPR was less charitable toward Murray. In October 2001, it expelled him after he failed to offer any answers in the institute’s inquiry into the circumstances of the meetings with the fake sheikh.

Questions for Reflection

1. Wessex was a public relations professional with 16 years of experience when she fell for the tabloid newspaper’s sting. What might she have done to prevent the embarrassment?
2. What advice would you have given the countess on preparing for the interview with the tabloid? What advice would you offer practitioners today in the age of social media and digital tabloids?
3. In editorial comment, the Economist asked whether a member of the royal family could “work in a sensitive career such as public relations without becoming entangled … in a conflict of interest.” What are the risks when members of political families are also engaged in news media professions or in public relations efforts?

Information for this case was drawn from the following: the British Monarchy’s Web site at http://www.royal.gov.uk/output/page231.asp; the RJH Public Relations Web site at http://www.rjhpr.co.uk/about.htm; Alderson, A. (8 July 2001), “Edward and Sophie glad to remain royal workers,” The Telegraph, p. 1; (14 April 2001), “Bagehot: The royal appendix,” The Economist, p. 56; Greenslade, R. (9 April 2001), “A sting in the tale,” The Guardian, p. 1; (7 April 2001), “Inside Sophie’s PR business,” BBC News, http://www.bbc.co.uk/1/hi/uk/1265452.stm; McAllister, A. (23 April 2001), “Cinderella, career gal,” Time, p. 8; Reid, T. (3 April 2001), “Royals stung by Brit tabloid’s fake sheik,” The Washington Post, p. C1; Reid, T. (9 April 2001), “British tabloid prints Sophie’s choice words,” The Washington Post, p. C2; (11 April 2001), “Sophie Wessex and Mr Murray Harkin,” Institute for Public Relations, press release; Summerskill, B. (8 April 2001), “Fallout of a royal farce,” The Observer, p. 1; and (accessed 14 August 2003), “What is the PCC?” Press Complaints Commission, http://www.pcc.org.uk/about/whatis.html.

 

Discussion Questions 

1. Your text asserts that investor relations professionals agree that companies must do a better job of informing individual investors about the plans, performance, and prospects of corporations. What tools or practices would you suggest be used to accomplish this?
2. Decisions about investments may have long-term critical consequences for individual and institutional investors. Identify three ethical principles you believe are critical for practitioners who communicate with the investors, and explain why you believe so.
3. How might public companies better ensure that information about them shared by traditional and digital media is accurate?

Case Study

(Adapted from Lamb and McKee, Applied Public Relations. Lawrence Erlbaum, 2003)

Consulting Company Gets New Name and New Owners

Accenture topped the list of the world’s largest management and technology consulting companies at year-end 2001 even though 15 months earlier no one had heard its name. Traded on the NYSE under the symbol ACN, the company’s closing price on the last day of the year was $26.92. More than 920,000 common shares of ACN were bought and sold that day, a slow session on the NYSE. Any investors who’d bought ACN 3 months earlier had doubled their money.

The story of Accenture’s origin combines sibling strife, economic prophecy, and financial rewards in a tale that might fascinate psychologists and astrologers as much as it does investor relations professionals.

In 1953, an accounting firm known as Arthur Andersen undertook its initial management consulting project by helping General Electric with the installation of the first computer for business applications. Already 40 years old when the project began, Arthur Andersen ranked as one of the largest and most influential accounting firms in the United States. Corporations hire independent accountants for professional help with taxes, financial decisions, and auditing.

Because consulting could lead to new accounting clients and offer the promise of its own growth, Arthur Andersen set up a team to identify and manage consulting opportunities in 1953. At first, the consulting business grew slowly, but it was generating more than 20% of the firm’s annual revenues by 1980 and 40% by 1988.

Like most accounting firms, Arthur Andersen was owned by its partners, and most partners earned their positions by obtaining new clients and keeping existing clients satisfied. The partners, as owners, managed the business and shared the profits among themselves. As prospects in consulting rose on a tide of growth, accountants felt pressures in pricing and litigation. Price competition sharpened as the accounting profession consolidated into a few major rivals, and lawsuits multiplied as investors held independent auditors liable for the accounting sins of the auditors’ clients.

In 1989, the entire company was restructured, acknowledging the importance and potential of the consulting business. Andersen Worldwide was created as parent of two separate and independent units: Arthur Andersen to focus on auditing and accounting; Andersen Consulting to develop its practices in systems integration, manufacturing processes, finance, and government.

The following year, the Arthur Andersen accountants set up a consulting practice within their unit despite the resentments they might expect from Andersen Consulting colleagues and the confusion it might cause among clients. Some business journalists have pointed to this event as a clear signal that the two major divisions of Andersen Worldwide were on a collision course.

For most of the 1990s, Andersen Consulting benefited handsomely from an extended period of business prosperity and technological innovation. Clients wanted the consultants’ guidance in adopting technology for corporate functions ranging from human resources to logistics, in adapting the Internet for business efficiencies, in managing the movement of raw materials and finished products in a global economy, and more.

In 1997, the strains between the consultants and auditors surfaced publicly when the Andersen Worldwide partners voted to select a new CEO. The accountants wanted someone from Arthur Andersen in the top job, and the consultants preferred someone from Andersen Consulting. At the time, the consulting division outproduced the accountants in revenue and profit and was growing faster as well, but the accountants dominated the governing board. The consultants complained that their performance subsidized the accounting division and its competing consulting business.

Under the firm’s rules, a CEO candidate needed two thirds of the partners’ votes to win, and neither of the first two candidates—one from accounting and the other from consulting—attracted enough support to get the job.

Before the end of the year, Andersen Consulting announced that it wanted to split away from Andersen Worldwide and set up operations as an independent shop. However, the partnership agreement required any seceding group to buy its freedom with a payment equal to 150% of annual revenues. For Andersen Consulting, the amount would have been about $14 billion. The consultants said that Arthur Andersen already had violated the agreement by setting up a competing consulting business.

Andersen Consulting took the dispute to the International Chamber of Commerce and asked for arbitration to settle the issue. After more than two years of argument, the arbitrator decided in August 2000 that the consultants could have their divorce. However, he required Andersen Consulting to pay the accountants $1 billion in regular installments and to stop using the Andersen name by New Year’s Day.

The consultants were delighted with the ruling but surprised to have only 4 months for the process of selecting a new name and developing a new identity program. Because arbitration had taken so long, they’d had time to consider rebranding the consulting practice as a future goal, but they had not expected to do it immediately.

With the ruling in hand, they hired a strategic brand identity firm and got busy. As part of the process, they encouraged Andersen Consulting employees to suggest names and received about 2,700 possibilities, eventually choosing one offered by a senior manager in the Oslo, Norway, office.

The new name—Accenture—suggested accent on the future. Before adopting it, they made sure that it was not already taken, had no offensive meanings in unfamiliar languages, and would be available as a Web site address: www.accenture.com. The new name was announced in October 2000, and its adoption was effective on January 1, 2001.

Replacing Andersen with Accenture in the minds of 20,000 client executives, 70,000 consulting employees, and hundreds of thousands of potential clients was a tall order. In addition, the consultants had 137 offices around the world to remark.

As soon as the new name was selected, they began a public relations and advertising campaign to create awareness of Accenture and establish understanding of its mission. The company put a $175 million budget behind the effort and by New Year’s Day had gained a wide measure of familiarity for its new name.

Eight months after emancipation through arbitration, the Accenture partners voted to begin the process that would convert the company into a public stock corporation. They hired two investment banking firms, Goldman Sachs Group and Morgan Stanley Dean Witter & Company, to lead the underwriting group that would handle the IPO of ACN shares.

In planning this initial public offering, Accenture expected to sell 115 million shares at $14 apiece in July 2001 and raise $1.6 billion. Customarily, underwriters begin work long before the date of the IPO to make sure that there are enough investors interested in the shares to ensure a successful sale on the day they become available.

To discourage aggressive promotion, the SEC imposes what’s called a quiet period on companies issuing new shares. The period begins when a company files a registration statement with the SEC outlining its offering. It ends, according to the SEC, when SEC staff “declares the registration statement ‘effective.’” Many investor relations professionals say the quiet period ends 25 days after the shares first begin trading.

During the quiet period, a company may continue to issue the kinds of news releases and other announcements that it would make in the normal course of operations, but most avoid statements that would color interpretations of a stock’s future value.

On July 19, Accenture sold its IPO at $14.50 per share through the underwriting group, and the shares’ closing price on the NYSE that day was $15.17—a gain of 4.6%. Public investors ended up with 115 million shares—12% of the company. The Accenture partners received shares accounting for 82% of the company, and employees and retired partners received 6%.

Months later, shareowners could appreciate even more the company’s unexpected race through the name development process and its heavy push to boost awareness of the Accenture identity and mission. The Andersen name was tarred by scandal, and Arthur Andersen began folding its operations after client Enron Corporation was disgraced by financial disclosures and accounting irregularities.

In 2001, the PRSA gave its Public Relations Professional of the Year Award to James E. Murphy, Accenture’s global managing director of marketing and communications. It honored his work in managing the rebranding project.

QUESTIONS FOR REFLECTION

1. What kinds of public relations activities would you have used to create and build awareness of the new name?
2. Why are companies careful about what they say during the SEC-mandated quiet period?
3. If Andersen Consulting had been allowed to keep using the Andersen name after it split from Andersen Worldwide, would you have recommended changing it when the Arthur Andersen auditors were tainted in the Enron scandal?
4. What public relations considerations are important when public companies adopt new corporate names through mergers, acquisitions or strategic decisions?

Information for this case was drawn from the following: the Accenture Web site at http://www.accenture.com; (1 September 2002), “Accenture Ltd,” Hoover’s Company Profiles; Barker, R. (9 July 2001), “Accenture partners take the cake,” Business Week, p. 116; (10 December 2001), “Accenture’s Murphy wins PRSA accolade,” Investor Relations Business, p. 1; Brown, K. (27 October 2000), “Andersen Consulting chooses Accenture,” The Wall Street Journal, p. B6; Fattah, J. (June 2001), “A giant’s rebirth,” Adweek Magazine’s Technology Marketing, p. 44; and McMaster, M. (March 2002), “What’s in a name?” Sales and Marketing Management, p. 55.

Discussion Questions 

• Your text asserts that the relationships nonprofit organizations have with members or volunteers may be the most tenuous and the most necessary of all stakeholder relationships. Why?
• Explain how and why organizational mission is so critical to the success of public relations efforts for nonprofit organizations.
• Ethical concerns shape relationships between nonprofits and their clients, their volunteers, their donors, and their members. Identify three ethical principles you believe are critical for practitioners who represent nonprofits, and explain why you believe so.

Case Study

(Adapted from Lamb and McKee. Applied Public Relations: Cases in stakeholder management. Mahwah, NJ: Lawrence Erlbaum Associates, 2003)

Colossal Fossil Dominates Chicago’s Field Museum

Museums face powerful rivals—sports, movies, theme parks, and others—in the competition for family leisure time. To grab families’ attention, museums need irresistible attractions and the showmanship to spotlight them. The Field Museum of Chicago showed how to provide both in planning its permanent exhibit of Sue, the world’s largest and best-preserved Tyrannosaurus rex fossil. In the first hours after Sue was unveiled on May 17, 2000, more than 10,000 visitors filed past the fossil.

The first day’s success rewarded years of hard work. The bones were discovered by Sue Hendrickson, a self-taught paleontologist for whom the fossil was named, in the Black Hills of South Dakota in August 1990. A six-member team of fossil hunters spent 17 days extracting the remains from the hillside where they’d rested since Sue the Dinosaur took her last breath 67 million years ago. The skeleton included 90% of a complete set of 250 bones. Adult humans have 206.

Eventually, the unassembled skeleton was scheduled for sale at Sotheby’s auction house in New York in October 1997. Nine serious competitors entered the bidding, including the Field Museum. The Field was established in 1893 as the Columbian Museum of Chicago and was renamed in 1905 to honor its first major benefactor, retailing icon, Marshall Field. Its threefold mission focuses on public education in natural science and natural history, collections in those same areas, and basic research in biology and anthropology.

Realizing that a successful bid could exceed the museum’s resources, Field president John McCarter enlisted the support of two major corporate sponsors, McDonald’s and Disney, in July 1997. The three organizations were natural partners for the effort because all three focus their public relations programs on families with young children. In return for financial help, the two companies would receive exclusive rights to full-size replica casts of the skeleton. At Sotheby’s, the bidding started at $500,000 and ended eight minutes later when the Field group won with an offer of $7.6 million. Including Sotheby’s commission, the total cost was $8.4 million.

Once the Field acquired the bones and moved them to Chicago, a team of 10 experts began the two-year process of cleaning, inspecting, repairing, and preserving them. The two years gave the museum and Sue’s corporate sponsors time to develop public relations plans that would build anticipation ahead of the unveiling ceremony and gain maximum visibility in the days following it.

In June 1998, the museum opened the McDonald’s Fossil Preparation Laboratory where visitors could watch experts preparing the bones for mounting. In Florida, a second preparation lab was opened at DinoLand U.S.A. in the Walt Disney World Resort’s Animal Kingdom Park.

Nine months later, the museum’s Web site introduced an interactive Web camera, the SueCam, that Web users worldwide could use to follow the progress of the restoration. Although visitors could monitor the preparation of individual bones, the skeleton itself was assembled in secrecy to save the surprise of the exhibit’s final appearance for the unveiling ceremony on May 17.

Six months before the unveiling, a press kit provided reporters with the background they would need for opening-day news stories as well as for features in advance of the exhibit’s formal introduction. The kit included:

• A main news release briefly describing the fossil’s discovery, the ceremony and Sue herself, supplemental exhibits, the scientific study of dinosaurs, and the sponsors’ participation.
• A second release on McDonald’s plans for two identical traveling exhibits that would take Sue replicas on a nationwide tour.
• A science backgrounder on what paleontologists already had learned from analysis of Sue and what more they hoped to learn from the study of fossils.
• A schedule with details on the unveiling and additional special events that would take place on the weekend immediately following the opening-day ceremonies.
• A fact sheet on the exhibition (e.g. subject, location, hours, museum admission fee).
• A second fact sheet on Sue the Dinosaur (e.g. 41 to 45 feet long, seven-ton estimated live weight, one-quart brain cavity, gender undetermined).
• A timeline tracing Sue from birth to death in the Cretaceous Age to her debut in 21st-century Chicago.

In advance of the unveiling, the museum also provided the media with a full-color image of Sue alive and in the flesh, showing sculptor Brian Cooley’s recreation of the dinosaur’s hungry face based on educated speculation concerning her musculature and hide.

Disney timed the theatrical release of Dinosaur, its computer-animated/ live-action movie, to coincide with the opening events. A special screening was sponsored by the museum on the first Friday following the unveiling. Advertising and promotion of the movie in the weeks leading up to the museum ceremony also raised public anticipation of the new exhibit.

The unveiling ceremony itself was scheduled for 6 a.m. CDT on Wednesday, May 17—early for family attendance but ideal for television networks’ morning shows, which reach millions of potential visitors. Despite the hour, the sunrise ceremony attracted big crowds. Dinosaur fans also watched the ceremony from home via the SueCam on the Field Museum Web site.

Describing the opening event, CNN said, “The 41-foot-long T. rex inspired instant awe from thousands who packed the Chicago museum for the unveiling of ‘Sue,’ one of the most talked about and debated dinosaur finds in history.”

Noting the build-up for the debut, CBS News said: “With Hollywood-style razzle-dazzle, the reassembled skeleton went on display Wednesday for the first time. In advance of the opening at Chicago’s Field Museum, dinosaur logos were plastered on T-shirts and city buses.”

McDonald’s public relations agency, Burson-Marsteller, estimated that media coverage of the event resulted in 750 million impressions worldwide.

From 10 a.m. to 3 p.m. on opening day, the museum offered a variety of interactive programs for visitors, from preschoolers on up, to engage them in learning more about paleontology and to turn the day into something more than a brief or long look at Sue. On the following Saturday and Sunday, the schedule included more events supporting the new exhibit, including a lecture by the paleontologist who was lead researcher on Sue, a performance of “Tyrannosaurus Sue: A Cretaceous Concerto” by the Chicago Chamber Musicians, a puppet theater showing the evolution of dinosaurs, and more.

The following month, Disney erected its full-size replica of Sue at DinoLand U.S.A. in Orlando, Florida, and McDonald’s opened the first of its two traveling Sue exhibits in Boston at the Museum of Science.

For McDonald’s, participation in the Sue project had a national objective of strengthening existing links to kids, families, and educators, and it had local objectives of boosting restaurant traffic during tour promotions and making “deposits” in “community trust” banks. Analysis of news reports indicated that McDonald’s got the credit it had wanted—a generous company willing to give back to the community.

The traveling exhibition was a complete show. It included a 45-foot-long replica of Sue as well as interactive anatomical models that enabled visitors to manipulate the jaw, neck, tail, and forelimbs of a T. rex. Dinosaur fans could touch casts of bones and models of Sue’s 12-inch-long teeth, see videos explaining the fossil’s restoration, and more. The tour schedule included major metropolitan areas and smaller cities, such as Atlanta; Hays, Kansas; Honolulu; Los Angeles; Muncie, Indiana; and Seattle. McDonald’s arranged for fossil hunter Sue Hendrickson to visit some of the cities on the tour, starting with Boston.

To take Sue’s story into classrooms, McDonald’s distributed the Colossal Fossil Education Program to more than 60,000 elementary schools in the United States. It included a 10-minute video, in-school lessons, and take-home activities exploring the science that led to Sue’s discovery and that guided the skeleton’s restoration. Burson-Marsteller said that 95% of the teachers they surveyed rated the overall program good or excellent.

In some news reports on Sue, journalists described two related issues that concerned natural scientists and others:

• The commercialization of museum exhibits through corporate sponsorship.  
• The sale of fossil trophies to the highest bidder.

One paleontologist expressed concern to CBS that consumerism could put unhealthy short-term pressures on scientific decision making that could have long-term consequences for the accumulation of knowledge. Another pointed out that the auction of fossils could put highly important finds into the hands of private collectors and make them unavailable for scientific examination.

However, some curators countered that corporate sponsorship enables museums to purchase geological specimens that they could not afford otherwise, and corporate objectives would invariably involve public display. Companies participate primarily to earn the goodwill of customers and other important publics. Often, the sponsors not only provide the money to acquire new exhibits but also promote them to raise awareness, encourage attendance, and win community respect.

For the Field Museum, a spike in attendance was one measure of success of the Sue exhibit. For all of 2000, the museum welcomed 2.3 million visitors, up 50% from the preceding year. The Field’s director of exhibitions and education programs estimated half of the increase was attributable to Sue, the world’s most complete T. rex and Chicago’s most attractive museum exhibit of the year.

The Field Museum continues to focus attention on Sue. Visitors to the Web site, http://www.fieldmuseum.org/at-the-field/exhibitions/sue-t-rex, find extensive information about the fossil. Children may build flip booklets from pictures on line, send Sue e-cards, and order Sue-focused products. Information about where the sponsored traveling exhibit will be showing is available.

Questions for Reflection

• Why would McDonald’s and Disney agree to help finance a bid of almost $8 million for a dinosaur fossil? How would they expect to benefit?
• The unveiling of Sue was held at 6 a.m. CDT to lure coverage by the TV networks’ morning shows. Would you have scheduled a more family-friendly time?
• Families with membership in the Field Museum receive special benefits, such as free general admission and free or discounted admission to special exhibits. How might the Field have involved member families in the Sue celebration?
• Some critics saw dangers in corporate sponsorship of museum exhibits. What are the risks?

Information for this case was drawn from the following: The Field Museum Web site at www.fieldmuseum.org; Conklin, M. (4 December 2000), “Building momentum from the bones up,” Los Angeles Times, p. F8; Kinzer, S. (5 November 2002), “Museum’s goal: Save the world’s wild places,” The New York Times, p. E1; (16 May 2000), “Massive T. rex invades Chi-town,” CBS News, www.cbsnews.com; (accessed 27 June 2002), “McDonald’s Sue T-rex sponsorship,” The Holmes Report, www.holmesreport.com; (18 May 2000) “Monstrous T. rex is unveiled in Chicago,” Los Angeles Times, p. 16; Randolph, E., & Goldman, J. (5 October 1997), “Museum snaps up T. rex in historic sale,” Los Angeles Times, p. A1; (17 May 2000), “Sue, the biggest T. rex, makes her public debut,” CNN, www.cnn.com/2000/NATURE/.

Discussion Questions 

1. Your text asserts that public relations practitioners must understand the regulations that govern their organization’s activities and anticipate how the rules might affect their plans. Assume that you are the director of corporate communication for Delta Airlines. From the list offered in your text, identify two of the federal agencies you think rank as the most important for you in terms of governmental relations, and explain why you think they would be the most important.   
2. What are the values of public/private coalitions in sharing information or building support for public initiatives?
3. The sphere of public affairs within governmental entities faces special regulation under U.S. law. It may also call for special attention to ethical performance. Identify three ethical principles you believe are critical for practitioners who represent elected public officials or agencies, and explain why you believe so.

Case Study

(Adapted from Lamb and McKee, Applied public relations. Lawrence Erlbaum, 2005)

‘Powerful’ Campaign Seeks to Promote Healthy Bones

You care about your hair. You care about your clothes. You even care about your nail polish. Don’t you think you should care about your bones? They need plenty of foods with calcium and lots of physical activity every day to stay strong. So, have some frozen yogurt or juice with added calcium. You know, girl, hairstyles come and go, but your bones are for life.

—Spokescharacter Carla

By age 20, the average woman has acquired 98% of her bone mass, so nutrition and exercise habits from childhood and adolescence are critical to developing bone density and strength. Yet The Institute of Medicine estimates that only 10% of girls 9 to 13 years are getting the recommended intake of calcium, and according to a National Youth Risk Behavior Study, nearly half of high school girls don’t reach the recommended goal of engaging in vigorous physical activity at least three times a week.

To address this need, the U.S. Department of Health and Human Services’s Office on Women’s Health, the Centers for Disease Control and Prevention, and the National Osteoporosis Foundation have joined together to develop the 5-year National Bone Health “Powerful Bones, Powerful Girls” Campaign. The coalition also partnered with the Girl Scouts of the USA and with Girls Inc.

Public relations counselors from the Porter Novelli agency teamed with the coalition to develop the campaign. Porter Novelli International serves clients in 56 countries offering assistance in consumer, corporate/public affairs, health care, and technology practices. Its campaign won an honorable mention for 2003 Public Sector Campaign of the Year from PRWeek.

Their research found that girls associate good health with happiness, activity, energy, and self-esteem. Physical activity is believed to increase social interaction, strength, and energy. The goal for the multiyear campaign was to educate and encourage young girls to establish lifelong healthy habits, especially increased calcium consumption and physical activity. In addition to girls 9‑12, the campaign targeted adults who influence girls, including parents, teachers, coaches, youth-group leaders, and health care professionals.

The campaign also used print and radio advertising aimed at girls and their parents. A seven-city tour was also held. The tour offered events such as the 1-day “Powerful Bones, Powerful Girls” sports day at the Navy Pier in Chicago where varied sports clinics for girls were held.

News releases during the 2001winter holiday season offered tips on how girls could reach daily calcium goals by eating holiday treats such as roasted almonds with pudding made of low-fat milk; hot cocoa; cheddar cheese cubes; broccoli with ranch dressing; and fresh fruit. Recommended “power-packed” presents included soccer balls, jump ropes, tennis rackets, or basketballs; sassy sneakers or workout gear; a set of dumbbells or hand weights; and gift certificates for dance or martial arts classes.

A major communication tool for the campaign was the Web site, at www.cdc.gob/powerfulbones, which featured the campaign’s spokescharacter Carla, who appears on all materials. On the site, Carla identifies herself and the campaign:

It’s me, Carla. Like my name? Well, Carla means “strong,” and I’m all about being strong. Not like a pumped-up body builder or anything, but being strong and powerful all the way around. You know, like doing your best in school and helping out your friends and parents.

There’s a lot to being a powerful girl. You need to have smarts and your own sense of style, and do your part to take care of yourself and others! A big part of that is making sure you have strong, healthy bones. That’s right—bones. Ya’ know, the things that keep you from being just a big glob of skin! To be strong, bones need a lot of calcium and certain types of weight-bearing physical activity when they’re growing. Hang with me to find out why and how to build strong bones. I promise you’ll have fun with the cool games and info on this site. So, let’s go!

The site explains that Carla loves low-fat or nonfat milkshakes, almonds, fruit, and grilled-cheese sandwiches. Along with snack recipes and ideas and list of fitness activities, it offers a variety of animated games, along with a pop-up tour of the human skeleton, and some poetry from Carla. A calendar and a journal that allow girls to track their calcium intake and physical activity can be downloaded through the Web site.

Porter Novelli sought to measure the impact of the campaign by tracking information dissemination and attitude change, although tracking the impact of a campaign that echoes messages girls may have heard in school, from their physicians, or from their parents for many years may be difficult. A baseline survey was conducted at the beginning of the campaign, and a follow-up survey will be administered at the end of the campaign. Through the advertising and media coverage, the campaign generated 8.5 million print media impressions and more than 540,000 estimated radio audience impressions by 2003.

Questions for Reflection

1. What are the benefits of a public/private coalition for health or other public information campaigns? What are the risks?
2. Government-sponsored communication campaigns aimed at young people may raise ethical questions. Identify two guidelines you would suggest using in order to maintain ethical communication. Does the PRSA and/or IABC Code of Principles offer any principles that could be applied to this situation?
3. What are the advantages and disadvantages of using an animated spokescharacter?
4. Assume you are the information specialist working at the Centers for Disease Control and are questioned about the use of federal funds to support this campaign. How would you justify this type of government speech?

Information for this campaign was drawn from the following: the Web sites at www.cdc.gov/powerfulbones; www.4woman.gov/owh/pr; www.girlpower.gob/adultswhocare/acrosscountry/eventdetail.asp; www.nof.org/powerfulbones/; www.porternovelli.com/PNWebSite/PNW; and http://content.health.msn.com/content; and Krause, C. (14 December 2001), “Powerful bones, powerful girls: Holiday snacks and gift ideas to help girls build strong, healthy bones,” U.S. Newswire.

Discussion Questions

• Some have argued that activists “stimulate” organizations to develop excellent public relations departments. From what you know about the purposes and practices of activists, do you agree or disagree with this assertion?
• Your text asserts that “activism contributes to the processes of public life.” Do you agree or disagree? Why?
• As a practitioner representing an activist group, are there limitations to the publicity or communication tactics you would choose to use? If so, what are they, and why would you impose the limitations?
• As a practitioner representing an organization that activists are opposing, are there limitations to the publicity or communication tactics you would choose to use? If so, what are they, and why would you impose the limitations?

 

Case Study

(Adapted from Lamb and McKee, Applied Public Relations. Lawrence Erlbaum, 2005)

Passionate about Policies to Protect Poultry

Men and women in chicken costumes hobbled on crutches and hoisted signs outside KFC restaurants around the world in 2003 to protest the chain’s animal welfare practices. Organized by People for the Ethical Treatment of Animals (PETA), the activists tried persuading KFC, once known as Kentucky Fried Chicken, to force its poultry suppliers to improve conditions in which chickens are raised and transported.

PETA contended that KFC purchased chickens from farms where the birds were mistreated and often injured through carelessness. KFC insisted it was a leader in adopting animal welfare standards.

The cast of characters in PETA’s street theater at KFC restaurants varied from location to location. In Charleston, South Carolina, a large yellow chicken paraded with two companions, one of whom carried a sign depicting a deranged Colonel Sanders, icon of Kentucky Fried Chicken, attacking a chicken. In Bangalore, India, a seven-foot-tall white leghorn rooster, flanked by white-jacketed Indians bearing anti-KFC messages, held a sign that read “Go vegetarian.” In Johnson City, Tennessee, a woman wore a revealing showgirl’s chicken costume, replete with stack heels and fake-feather headdress, to attract the attention of pedestrians and passing motorists. She carried a sign that said “KFC Boils Chickens Alive.”

In city after city from country to country, the scene was similar. Louisville received special attention from the animal rights group because the Kentucky city is KFC’s corporate home. PETA scheduled an appearance by one of its “crippled chickens” in August at a restaurant less than five miles from the KFC president’s office and within walking distance of Colonel Sanders’ final resting place in Cave Hill National Cemetery.

PETA, founded in 1980 by Ingrid Newkirk and Alex Pacheco, is headquartered in Norfolk, Virginia. The organization says it “operates under the simple principle that animals are not ours to eat, wear, experiment on, or use for entertainment. PETA educates policymakers and the public about animal abuse and promotes an understanding of the right of all animals to be treated with respect.”

PETA itself has earned respect from many individuals who give the organization credit for raising public awareness of animal welfare and lowering the level of mistreatment in the entertainment industry, research laboratories, livestock operations, and elsewhere. Even some managers in companies that have been PETA targets acknowledge that reforms would have been difficult without pressure from the activists.

However, some PETA campaigns also have stirred reactions ranging from ridicule to outrage. In early 2000, PETA targeted college students in its antimilk campaign and used the slogan “Got Beer?!” as a parody on the dairy industry’s “Got Milk?” campaign. PETA says milk is not a healthful food, and beer is better for the body from a nutritional standpoint.

A Los Angeles Times columnist complained, “People for the Ethical Treatment of Animals has reached a new low. The animal rights organization is asking college students to replace milk in their diets with beer.”

Lighten up, the activists responded, saying, “PETA got a rise out of everyone from dairy farmers to Mothers Against Drunk Driving [MADD] with its tongue-in-cheek advisory to college kids that milk is so bad, nutritionally speaking, that even beer is better for you! MADD was mad, despite the fact that we made it clear that we only used beer for comparison purposes because no one thinks of beer as a health food.”

New York Mayor Rudolph Giuliani was not smiling when PETA used his image, after adding a milk mustache, in another parody of the dairy industry campaign in 2000. On the billboard next to the mayor’s image, PETA asked: “Got Prostate Cancer? Drinking milk contributes to prostate cancer.”

Mr. Giuliani, who had been diagnosed with prostate cancer, said he was considering a lawsuit against PETA. An apology from Ms. Newkirk, the organization’s president, soon arrived at the mayor’s office. Separately, the American Cancer Society indicated that the cause of prostate cancer is not well understood.

The anti-KFC campaign also has its critics. Outside the South Carolina restaurant where PETA activists were on duty, a customer with KFC sack in hand told a Charleston Post and Courier reporter, “Chicken is born to be killed and eaten.” Another heckler yelled from his car, “I love to skin chickens.”

In Texas, the Amarillo Globe-News commented on a local activist who picketed in a chicken outfit, “These campaigns do little to advance PETA’s agenda, but accomplish a lot in firing up the opposition.”

KFC is the world’s leading restaurant in the chicken category. Established by Colonel Harland Sanders in 1952, it has more than 11,000 restaurants in 80 countries and territories and serves about 8 million customers each day. In the United States, it is four times the size of its nearest competitor.

KFC is one of five quick-service restaurant chains operated by Yum! Brands. The others are Pizza Hut, Taco Bell, Long John Silver’s, and A&W All-American Food. In 2002, Yum!’s revenues exceeded $7.7 billion, and net income was $583 million. In total sales, only McDonald’s was larger among quick-service restaurant corporations. KFC has been particularly successful outside the United States and accounts for about two thirds of Yum!’s international revenues.

The antagonism between PETA and KFC boiled up from what had initially been a polite exchange on animal welfare practices expressed in correspondence between the two organizations in April 2001. Five months later, KFC’s newly formed animal welfare advisory council met for the first time. Through phone calls and letters, PETA continued to press KFC and its corporate parent, Yum! Brands Inc., for more changes and also provided information on chicken treatment to shareholders at the Yum! annual meeting in May 2001. The letters and phone calls continued, and PETA returned to the Yum! annual meeting in May 2002.

Over succeeding months, the tone of the exchanges turned sharper, and PETA announced in January 2003 that it was launching a campaign against KFC. It issued this news release (original punctuation and capitalization retained) under a heading that said:

PETA Launches Worldwide KFC Campaign

Company Stonewalls on Animal Welfare Reforms

Louisville, Ky. — After nearly two years of failed negotiations and following victories over McDonald’s, Burger King, and Wendy’s—all of which bowed to PETA pressure to reduce cruel treatment of animals raised and slaughtered for food—PETA has declared its latest campaign target: KFC, owned by Yum! Brands, Inc. PETA will formally launch the campaign by unveiling new “Kentucky Fried Cruelty” posters, leaflets, stickers, and more and will show broadcast-quality footage of abusive animal treatment by KFC suppliers at a news conference on January 7 near the company’s Louisville headquarters.

Date: Tuesday, January 7 / Time: 11 a.m. / Place: Seelbach Hilton, 500 Fourth St.

PETA attempted to negotiate with Yum! Brands executives for 21 months prior to the campaign launch, but despite assurances made long ago by Senior Vice President Jonathon Blum that KFC would “raise the bar” on animal welfare, the company refuses to eliminate the worst abuses.

Among the improvements that PETA wants KFC to implement are the following: replacing crude and ineffective electric stunning and throat-slitting with gas killing; phasing out the forced rapid growth of chickens, which causes metabolic disorders and lameness; increasing the space allotted per bird; adding minimal enhancements, such as sheltered areas and perches in order to provide chickens with some semblance of their natural environment; and implementing automated chicken-catching, a process that reduces the high incidence of bruising, broken bones, and stress associated with catching the chickens by hand.

“KFC has shortchanged the chickens, leaving us no choice but to turn up the heat,” says PETA Director of Vegan Outreach Bruce Friedrich. “McDonald’s, Burger King, and Wendy’s responded to consumer pressure; KFC would do well to follow their lead.”

News conferences are also planned in London and Toronto. For more information, please visit KFCCruelty.com.

The following day, KFC issued a short denial. It said that the restaurant chain was committed to the well-being and humane treatment of the poultry it purchases from suppliers. The company’s statement said that its suppliers:

• Must follow guidelines set by KFC and its animal welfare advisory council.
• Must allow unannounced audits at poultry facilities throughout the year.
• Will face termination if they fail to remedy deficiencies uncovered by the audits.

On May 1, 2003, KFC announced that it would adopt comprehensive poultry farm standards developed by animal welfare experts under a commission from the National Council of Chain Restaurants and the Food Marketing Institute. It also said it was asking federal farm and labor authorities to examine PETA’s suggestion for the use of gas in killing chickens as a replacement for existing methods.

The announcement included a reminder that KFC did not own or operate poultry farms or processing plants but purchased chickens from 18 different suppliers operating 52 facilities.

The following day, PETA said it was angered by KFC’s hypocrisy and promised to park its “Reality TV” truck outside the home of the KFC president on Monday evening, May 5. PETA warned that it would use the truck’s large screens to show video of the treatment chickens receive before they end up at KFC.

The activists repeated their demands for KFC suppliers to phase out rapid-growth practices, increase space for each bird, provide enhancements like shelter and perches, adopt automated chicken-catching technology, and replace the electric-stun and slit-throat death process with gas killing.

On Wednesday, the KFC president flew to Norfolk for a 3-hour meeting with PETA’s Newkirk. KFC declined to provide details of the meeting to the news media, but PETA issued a news release on Thursday, May 9, indicating the adversaries were closer to agreement. It said that KFC had agreed to provide chickens with a 30% increase in living space and to install cameras in slaughterhouses to discourage abuse of chickens. In return, PETA promised to suspend protests in Louisville and halt some other campaign activities.

On the KFC Web site (www.kfc.com), the company published its farm-level welfare guidelines, spelling out standards for poultry suppliers in eight categories of activity that ranged from staff training to transportation. To protect the chickens’ welfare, the KFC farm-level guidelines required:

• Documented training for employees who handle live birds.
• Programs to assure monitoring of climate control systems.
• Proper diet and watering systems.
• Shelters with a clean and well-ventilated environment.
• Written health plans prepared in consultation with a veterinarian.
• Room for chickens to move freely to obtain feed and water.
• Twice-daily inspections of the birds and their environment.
• Measures to protect birds from injury or weather extremes during transportation.

In a parallel document, KFC published poultry welfare guidelines that included many of the farm-level standards but also addressed the birds’ inevitable death. According to the guidelines, suppliers must ensure that chickens are stunned insensible prior to slaughter and that death itself is executed quickly.

A PETA representative attended the Yum! annual shareholder meeting on May 15 and spoke to commend the company for KFC’s industry leadership. When the activist pushed for more changes, an unpleasant exchange of words with the Yum! CEO cooled the warm compliments.

Seven weeks after praising KFC, PETA filed a lawsuit in California, asking for a permanent injunction to prevent KFC and Yum! from making what the suit called false statements about animal welfare practices. In the complaint filed with the Superior Court of California, PETA described its “international campaign to expose the intense suffering endured by these chickens” in the KFC supply system. The complaint said:

The defendants have responded to PETA’s campaign largely with public relations statements that are at best grossly misleading and, in numerous instances, entirely false. PETA brings this action to prevent the defendants from continuing their unlawful practices in deceiving consumers on factual issues about their methods of raising and killing chickens so that consumers will be able to make informed choices about whether to support these companies by purchasing from them.

PETA dropped its lawsuit two months later after KFC agreed to change the wording used to describe the treatment of chickens on its Web site and in telephone scripts of customer service representatives. Soon after, KFC’s president resigned, and another was appointed to take her place.

As the seasons rolled along, men and women in chicken costumes hobbled on crutches and other activists hoisted signs outside KFC restaurants in Waco, Texas; Miami, Florida; Norman, Oklahoma; Frankfort, Kentucky; Rockford, Illinois; and other cities from coast to coast. They carried signs reading: “Kentucky Fried Cruelty – We Do Chickens Wrong” and “The Colonel’s Secret Recipe: Live Scalding, Painful Debeaking, Crippled Chickens.”

Many of PETA’s previous targets could confirm that the organization is patient, persistent, and passionate about its causes. Pernicious is the adjective some would use.

Questions for Reflection

• PETA has organized many campaigns against restaurants. Virtually all have agreed to make some of the changes requested by PETA. In almost all those cases, however, the companies have insisted that they do not respond to coercion. Why do the companies make what appears to be a contradictory statement?
• As a vegetarian organization, should PETA have explicitly disclosed its goals in this campaign?
• KFC does not own or operate poultry farms. Should consumers—and activists—hold the company accountable for the practices of its suppliers? What about other companies and their suppliers?
• A Texas newspaper has said that PETA’s tactics do more to energize its opponents than to win friends for its positions. Do you agree? If so, why? If not, why not?

Information for this case was drawn from the following: the PETA Web site at http://www.peta.org/; the KFC Web site at http://www.kfc.com/about/animalwelfare.htm; Becker, E. (6 January 2003), “Group says it will begin a boycott against KFC,” The New York Times, p. A7; Becker, E. (7 July 2003), “Animal rights group to sue fast-food chain,” The New York Times, p. A11; Becker, E. (2 September 2003), “Rights group for animals drops lawsuit against KFC,” The New York Times, p. A2; (10 July 2003), “Editorial: Amarillo’s animal magnetism continues to attract PETA,” The Amarillo Globe-News, p. 18; Garber, A. (21 July 2003), “Fur flies as PETA sues KFC,” Nation’s Restaurant News, p. 1; Gartland, M. (16 March 2003), “PETA protests poultry purchases,” The Post and Courier, p. 1; Howington, P. (8 July 2003), “Animal-rights group sues KFC,” The Courier-Journal, p. C1; Moore, B. (14 March 2000), “PETA pushes beer to save cows,” The Los Angeles Times, p. 2; and Rizzo, P. (3 September 2000), “PETA issues apology to Mayor Giuliani,” The Los Angeles Times, p. 16.

Discussion Questions 

1. Your text asserts: “Americans sometimes believe that what works at home will surely work in other countries.” Based on your reading and your knowledge of public relations, do you agree that what works at home will be successful in other locations? Why or why not?
2. Your text suggests that language itself may be a barrier to effect global communication. Identify two ways in which public relations practitioners could overcome these barriers.
3. How should public relations managers address anti-American feelings they may encounter when working with international clients or in international settings? Offer three suggestions.

Case Study

(Adapted from McKee and Lamb, Applied public relations 2nd ed. Routledge, 2009)

Bayer Drug Recall Strains International Relationships

The Bayer name means aspirin to most consumers, but production of the pain reliever represents a small fraction of the German company’s global business. Headquartered north of Cologne in Leverkusen, the Bayer Group is a chemical industry giant, producing products in three business areas: health care, crop science, and plastics and polymers. Its worldwide 2007 revenues exceeded €32 billion (about $47 billion), and employees numbered about 106,000.

The company’s health care products include over-the-counter medications such as Bayer aspirin and Alka-Seltzer tablets as well as prescription drugs such as Cipro antibiotic. Cipro gained attention in 2001 when it was used to treat U.S. Postal Service workers and others who had been exposed to anthrax in acts of bioterrorism.

In 1997, the U.S. FDA approved a new Bayer drug, Baycol, that physicians could prescribe to help patients lower the level of cholesterol in their blood. High cholesterol levels can cause the formation of plaque in arteries and lead to heart attacks.

In Europe, the same drug, under the name Lipobay, received approval in 1997 from the British Medicines Control Agency, whose licensing authority is accepted by countries in the European Union through a process called mutual recognition. Baycol was a member of a class of drugs called statins, a popular therapy for individuals with high cholesterol. Other pharmaceutical companies, such as Merck and Pfizer, already were producing statin drugs.

Because heart disease is the leading cause of death in industrialized nations and high cholesterol contributes to heart disease, the market for drugs that lower cholesterol has attracted pharmaceutical companies. It is a big and profitable category. Though four or more therapies are available, the statin class of drugs is widely used. According to some sources, the number of individuals using statins exceeds 8 million in the United States alone. Depending on an individual’s prescription, a 1-month supply of Baycol might cost about $75.

Bayer was pleased with the results of its new drug from the outset. The number of physicians prescribing it grew rapidly, suggesting that it had the potential to reach blockbuster status—generally regarded as annual sales of $1 billion.

However, problems began to mount 2 years after Baycol’s approval. Bayer told the FDA in December 1999 that it had detected a troubling rate of rhabdomyolysis among Baycol users in the United States. Rhabdomyolysis (often called “rhabdo”) is a disorder involving the release of toxins from muscle deterioration into the bloodstream. Symptoms include muscle pain and weakness. In some cases, rhabdo can lead to kidney damage and even death.

Baycol users were more likely to develop rhabdo if they were taking the prescription in combination with Lopid—a cholesterol drug made by Pfizer—or were using the highest approved Baycol dosage (0.8 milligrams). In January 2000, the first rhabdo death of a Baycol user in the United States was reported.

Bayer changed Baycol’s label to warn against concurrent use with Lopid and sent a letter to physicians outlining the risk. In June 2000, Bayer changed the label again to limit use of the highest approved dosage. About 1 year later, Bayer shared information on rhabdo reactions to Lipobay with European regulators, and they acted in June 2001 to require the same warnings adopted earlier in the United States.

On August 8, 2001, Bayer announced that it had decided to voluntarily withdraw Baycol from the market in the United States and Europe. By that date, Bayer had learned of 31 deaths among Baycol’s 700,000 American users.

Lipobay users had died in Europe as well, but no tally was immediately available because no single European agency was responsible for monitoring the safety of drugs once they were licensed for use. In Spain, health officials said that three people had died from rhabdo; in Germany, the total was five. Later in August, Bayer confirmed 52 deaths worldwide and 1,100 cases of rhabdo side effects. In Japan, the drug remained available until September because Pfizer’s Lopid was not distributed there.

Some European government officials were highly critical of Bayer’s procedures for sharing information on the discovery of risks linked to Baycol/Lipobay. Seven weeks before withdrawing the drug, Bayer had given the British Medicines Control Agency (MCA) a study on severe side effects in Baycol users who also took Lopid. After the drug’s withdrawal was announced, the German health ministry in Berlin, about 350 miles from Bayer’s world headquarters, complained that it had not received the study given to the British MCA in London. It called Bayer’s information-sharing policies unacceptable.

A New York Times article quoted an official at the Federal Institute for Medicine and Medical Products, Germany’s counterpart to the FDA, as saying: “It isn’t the job of the MCA to be postman for the European Union.”

When journalists raised questions about the year-long delay in warning European healthcare authorities about the risks, a Bayer spokesman explained that Europeans were less likely to combine the cholesterol drugs, and fewer problems were detected.

In the United States and Europe, the withdrawal of the Bayer drug triggered three distinct

reactions:

1. Pharmaceutical companies promptly produced public relations programs to assure physicians and patients that the statin class of drugs was safe.
2. Public policy advocates called for improvements in systems to track drug safety and alert health care officials and their patients to problems.
3. Plaintiffs’ attorneys began seeking compensation for Baycol/Lipobay users who suffered the side effects of rhabdomyolysis.

As cardiovascular patients learned about the Baycol withdrawal, competing pharmaceutical companies feared that their statin drugs would lose users to other types of medication. With Bayer’s drug out of the picture, the makers of Lipitor, Pravachol, Zocor, and other statin drugs acted to protect their existing statin business and to appeal to Baycol users. According to Pharmaceutical Executive magazine, Pfizer teamed up with the American Heart Association and Prevention magazine in a public relations campaign to reassure statin users and their physicians about safety and efficacy, and Bristol-Myers Squibb offered Baycol users a month’s trial supply of its statin drug.

Some individuals and organizations were alarmed that drug safety problems could go undetected for years and unresolved for an even longer period. Baycol was on the market for more than 4 years and had millions of users worldwide. Advocates called for changes in the systems used in the United States, Europe, and other nations to find pharmaceutical problems more quickly. Commenting on the issue, Business Week said:

The system for tracking the safety of prescription drugs after they hit the market is inadequate. The FDA spots those problems mainly through voluntary reporting by physicians when patients have bad reactions. But by the FDA’s own estimate, no more than 10 percent of these reactions ever get reported. “We know how many suitcases were lost last year by the airlines,” says Dr. Raymond L. Woosley, vice president for health sciences at the University of Arizona. “But, we don’t know how many people have been harmed by prescription drugs.”

For Bayer, the biggest immediate threat following the withdrawal announcement came from a flood of litigation filed by plaintiffs’ attorneys on behalf of Baycol users who said the drug had caused them to suffer rhabdomyolysis. By the time the first case came to trial in February 2003, the number of lawsuits had reached 7,800. A Bayer attorney insisted that most of the plaintiffs had not experienced any adverse effects from using Baycol.

Even so, investors’ fears about the potential liability had helped push the price of Bayer common stock down to $13.37 on February 25, 2003, as the trial began. The price had been $33.09 on January 24, 2002, when Bayer shares first began trading on the NYSE as American depository receipts (securities issued in the United States to represent shares of a foreign company).

The initial case—heard in Nueces County Court in Texas—involved an 82-year-old resident of Corpus Christi and began with Bayer committing an embarrassing public relations faux pas. On the day before jury selection was to begin, the public relations vice president for Bayer’s U.S. health care operations sent a letter about the impending proceedings to 2,100 local residents. The letter reminded residents that Bayer employed 2,000 people at its Texas operations.

“As you hear and see reports of the trial,” the letter said, “I hope that you will keep an open mind to the efforts that Bayer made to give fair redress to this gentleman and, on a much broader scale, the tremendous contributions that our company has and continues to make to the health and welfare of millions of people worldwide.”

A Bayer attorney told the Nueces County judge that the letter had been intended for members of the Corpus Christi Chamber of Commerce, and its wider distribution was a mistake that resulted from miscommunication within Bayer. At least one prospective juror received the letter. The district attorney considered filing jury-tampering charges against the Bayer public relations executive but decided against it.

At trial, the plaintiff’s attorneys tried to show that Bayer had known about the risks of Baycol long before withdrawing it and failed to adequately warn physicians and patients of the dangers. The plaintiffs suggested that the drug’s success and profitability interfered with the corporation’s conscience. At the time of withdrawal, Baycol was Bayer’s third-best-selling drug.

Bayer countered that it met its responsibilities to the regulatory authorities, health care professionals, and patients. It pointed out that it forwarded data on side effects to the FDA promptly, strengthened the warnings in the prescribing information, and eventually withdrew the drug voluntarily.

The jury verdict cleared Bayer in the Corpus Christi case on March 18, 2003. The company had been working to resolve other cases out of court and had already paid $125 million to settle about 450 of these when it received the verdict.

Following the decision, the company issued this statement from its headquarters in Leverkusen:

Bayer said it is pleased that the jury in the Corpus Christi, Texas, USA, Baycol trial reached a verdict in its favor. The verdict validates Bayer’s assertion that the company acted responsibly in the development, marketing and voluntary withdrawal of Baycol.

Bayer will now turn its attention to the other pending Baycol cases to analyze the specific circumstances of each case and the nature of the claims. It is Bayer’s intention to pursue its policy of seeking to fairly compensate anyone who experienced serious side effects from Baycol, regardless of whether we have valid legal defenses to such claims. At the same time, where an examination of the facts indicates that Baycol played no role in the patient’s medical situation, or where a settlement is not achieved, Bayer will continue to defend itself vigorously as it did in the Corpus Christi case.

Questions for Reflection

1. Bayer notified government regulators in the United States and Europe about unexpected reactions to its high-cholesterol drug, but the company provided the warnings at different times. How would you justify the difference?
2. In Europe, no single agency has been responsible for monitoring a new drug’s safety after it is licensed for use. How does this situation affect a pharmaceutical company’s risk profile?
3. Bayer’s competitors scrambled to attract Baycol users once the Bayer drug was withdrawn. What public relations methods would you have recommended to reach former Baycol users?
4. A Bayer public relations executive’s letter to the Corpus Christi Chamber of Commerce accidentally got wider distribution. How would you explain the purpose of sending the letter to its originally intended audience?

Information for this case was drawn from the Bayer Web site at http://www.press.bayer.com/News/News.nsf/id/010005; Andrews, E. (22 August 2001), “Drug’s removal exposes holes in Europe’s net,” The New York Times, p. C1; Barrett, A. (10 September 2001), “Commentary: Drug safety needs a serious overhaul,” Business Week, p. 61; (8 August 2001), “Bayer voluntarily withdraws Baycol,” Bayer news release; (4 September 2001), “Bayer faces Baycol probe,” Cable News Network; Breitstein, J. (October 2001), “Baycol fallout,” Pharmaceutical Executive, p. 96; Fuhrmans, V., & Harris, G. (9 August 2001), “Bayer withdraws major cholesterol drug,” The Wall Street Journal, p. B2; Fuhrmans, V., Harris, G., & Winslow, R. (10 August 2001), “Bayer recall spurs Europe to wide review,” The Wall Street Journal, p. A3; Fuhrmans, V. (19 March 2003), “Jury rules Bayer isn’t liable in closely watched drug case,” The Wall Street Journal, p. B2; Petersen, M. (22 February 2003), “Judge criticizes letter from Bayer,” The New York Times, p. C14; and Simmons, M. (21 August 2001), “Left holding the pill bottle,” The Washington Post, p. F3.