Situation Analysis
The organization I have selected to analyze for this assignment is General Motors. As they continue to deal with the issue today, GM continues to face the obstacle to regain public trust from their consumers after a faulty ignition switch scandal resulted in 31 crashes and 13 deaths (Glinton, 2014). It was later confirmed that the issue of the ignition failure had been known for a decade prior to the 2014 crisis, however an issue with GM’s corporate cultural prevented anyone on the inside to speak up about the issue. The initial recall number began at 800,000 vehicles but eventually made its way up to nearly 30 million vehicles (Valdes-Dapena, 2015). Involuntary ignition switch shut-off occurred due to the "switch detent plunger", intended to provide enough mechanical resistance to prevent accidental rotation, was inadequate (Glinton, 2014). The issue is to regain their public perception as one of the leading automotive makers in the world. GM has been known to make high quality vehicles for their consumers with the exception of a faulty ignition switch scandal in 2014.
Organization Basics
GM is a public for-profit organization. Smith defines an organization niche as a perceptual specialty, so GM’s niche would be any automotive consumer. After the issue had been located in the ignition switch, CEO Mary Barra had announced that they would not be fighting any lawsuit against them and would “do the right thing” by paying the affected consumers.
Publics
Customers
• Current and Potential: According to Smith’s typology, the consumers would be classified as customers because they receive the products and services of the organization. The public of customers wants to be able to drive affordable and dependable cars. GM can offer these needs to customer by providing accurate price points on their vehicles as well as putting the vehicles through rigorous safety tests
o Benefit Statement: GM offers their customers safe and reliable cars to get where they need to be while maintaining affordable price points.
Producers
• Personnel: Another key public in this issue would be the GM employees responsible for the faulty ignition switch and they would be classified as Producers under Smith’s typology. The personnel’s major interest is to be supported by the organization through income as well as other benefits that may be provided through their roles.
o Benefit Statement: GM offers their employees a safe working environment as well as competitive pay to ensure that all GM products are affordable to their workers.
• Financiers: Like with any company, individuals who purchase stock in an organization are seen as a crucial public being that if public perception takes a large hit, individuals will likely want to pull their money from the organization.
o Benefit Statement: GM offers their financiers the opportunity to invest in the organization to maximize their return on investment through creating quality products to their customers.
Enablers
• Media: media would also be considered a relevant public because they set the public perception of norms and standards of an organization. Their interest is to provide constituents of their services with information regarding the affairs of the organization. GM can provide this information to media outlets through press conferences and detailed summaries of what events are transpiring throughout the organization.
o Benefit Statement: GM offers media outlets prompt news releases as well as transparency in order to keep publics informed of our ongoing work to achieve our mission.
• Allies: One ally of GM would be the board of directors. The board of directors wants to ensure that GM will continue to be a leader in the automotive industry and they can do that by making sure they are taking all the proper PR actions to demonstrate to their consumers (actual or potential) that they appreciate their business and are doing whatever necessary to continue their reputation
o Benefit Statement: GM offers the board of directors the opportunity to serve as the governing body of one of the top auto companies in the world, providing input leading to safer travel for our customers.
• Regulators: The U.S. government is a key enabler for automotive companies. The government establishes policies and regulations that direct organizations. Some rules may be mandatory while other policies may influence organizations implicitly. Organizations must be adaptable to abide by these rules and regulations.
o Benefit Statement: GM offer the U.S. government full cooperation in all matters relating to the safety and wellbeing of our consumers and the American people.
Limiters
• Opponents: One of the most obvious opponents of GM could be the victims of accidents due to the faulty ignition switch. These opponents are entitled to very large payouts and could cause lots of PR issues for GM if they chose to voice their concerns.
• Competitors: A major competitor of GM would be Ford Automotive. Ford and GM have been revered as two of the leading American automotive manufacturers since the establishment of mass automotive production. They are headquartered in the same city and produce very similar lines of vehicles to one another. By the reputation of GM dwindling due to safety concerns, Ford has many potential customers to gain by advertising the safety aspects of their vehicles.
Positioning, Goals, and Objectives
Positioning Statement: The most dependable and affordable cars on the road
• This demonstrates the two major interests consumer contemplate when choosing a car to purchase
Goal 1: Be the leader in product, safety, and supplier relations
• Objective 1: to have an effect on the action of the consumer market, specifically to increase manufacturing of new and refreshed products to increase global sales volume (27 percent increase in 18 months).
• Objective 2: be to have an effect on the awareness of suppliers, specifically to improve their relationships to deliver significantly better product launches. (99 percent of global production will be on core architectures by 2020)
• Objective 3: To have an effect on the awareness of publics, specifically to appoint a leader of global safety as well as hire 35 product safety investigators (increase public knowledge by 50% by summer of 2019)
Goal 2: Regain customer trust while reclaiming General Motors’ reputation
• Objective 1: to have an effect on the action of 16+ year olds that would currently consider purchasing a General Motors vehicle (20% by June 1, 2017)
• Objective 2: to have an effect on the awareness of potential customers, specifically to increase the belief that General Motors is a safe, reliable and trustworthy motor vehicle company among 16+ year olds (40% by June 1, 2017)
• Objective 3: to have an effect on the awareness of current customers, specifically to increase motor vehicle owners’ knowledge regarding General Motors’ safety changes, improved production process and vehicle adjustments (40% by June 1, 2017)
Action and Response Strategies
GM released their first key message during the crisis saying that they would begin to recall all affected cars in the beginning of February 2014. They made the effort to be as transparent as possible to inform their publics of everything that the recall would consist of. Before the media could take control and set the narrative of the ignition crisis, GM stepped up and took responsibility to personally inform their publics about the issue and provide strictly factual information about the situation, thereby creating the initial interpretation of the crisis as being handled positively. Even with taking this preemptive strike to control the narrative of the story, GM employed a reactive approach to the ignition crisis based on the fact that they were eventually forced to respond to the situation they had created. The newly appointed CEO, Mary Barra, served as the unofficial spokesperson throughout the course of the crisis. Her message to the key publics focused on how the employees of GM had failed their customers and that the current mission was to resolve the issue created. At a town-hall style meeting held in September of 2015, Barra addressed the GM employs by stating “ We didn’t do our jobs. As part of our apology to the victims, we promised to take responsibility for our actions. So we accept the penalties being announced today because they are part of being held accountable.”(GM Media Online). She then went on by saying that GM has done everything in their power to cooperate with the government as well as changing the general culture of the automaker that led to the negligence, which caused the recall in the first place.
Message Strategies
• Vocal Commiseration: GM offered an apology to demonstrate their empathy and understanding to their key publics. An apology was essential due to the fact that GM was clearly at fault however they are accepting total responsibility. This apology demonstrates that GM believes that the continuous rebuilding of damaged relationships with their publics is crucial in regaining their prior loyalty. Condolence was used as a way of expressing the unintended nature of the crisis while communicating that they will do whatever it takes to find a solution.
• Rectifying Behavior: GM used the strategies of initiating an investigation, informing the publics of corrective actions being taken, and finally providing restitution to those affected. GM started with an internal investigation to assess the crisis and guarantee to their publics that they would abide by whatever results came from the investigation. GM’s next step was announcing the corrective action stages that would fix the damages done and prevent them from ever happening again. Finally, GM compensated the victims and customers with recalled vehicles by providing restitution through improved and safer vehicles.
Communication Tactics
• Social Media: GM took to Facebook and Twitter to provide updates on the rectifying their behavior as well as directing those impacted by the recall to direct message the GM accounts for any specific information requests. By using social media as one of the tactics, GM employed the two way symmetrical model of public relations theory to emphasize two-way communication as well as negotiating with their public to resolve the conflict.
• Press Release: sent out to all major news media outlets and displayed on the GM website. Discusses the goals and objectives for the situation as well as how they would be accomplished.
• Speech: Mary Barra testified in front of congress about the nature of the crisis as well as why the situation was not handled sooner. This tactic has been evaluated as being less successful than the rest due to Mary Barra not having the answers to multiple questions asked by congress (Healey, 2014).
Evaluation
In terms of evaluating the goals produced by GM, the objective of Goal 1 are still ongoing based on the timeline so they results are not yet ready to be evaluated. However all objectives for Goal 2 were in fact met by GM.
GM announced on April 14, 2014 that they would be cutting ties with their current VP of Global Communications as well as their VP of human resources although it was never confirmed whether or not these individuals were fired or if they resigned. GM had made a promise to their publics that they would all the parts needed to fix the faulty ignition switches by April 17, 2014 and that these parts would be distributed on the dealership level. After a journalist from CNN contacted six GM dealerships that day to report on the parts, they were told that no such parts had reached the dealerships yet. On May 16, GM agreed to pay the Department of Transportation $35 million in fines for failure to recall the cars in a timely manner (Healey, 2014). When the official trial was all said and done, GM was forced to pay $900 million to the United States, including an additional $600 million to those who survived accidents from the ignition switch malfunction (BBC, 2015). The crisis had been estimated to cost the organization $4.1 billion in repair costs (CNN Repair Costs).
The crisis developing from the faulty ignition switch impacted many lives and could have been completed avoided had GM focused their efforts 10 years prior to change their corporate culture to focus on safety over profits as well as amending their deficient internal communications. However based on the evaluation and current progress of GM’s goals and objectives, they are considered to have handled the ignition crisis positively. One the most recognized factor of handling the crisis well would be the implementation of spokesperson and at the time newly appointed CEO, Mary Barra: by invoking pathos from the key publics and discussing how she is not only an executive but also a mother, she was able to demonstrate a very human side of GM. She had been known to being graciously accessible to the media to promote GM’s new mission of transparency among their publics and her uses of the reactive strategies of rectifying behavior and vocal commiseration have been viewed as very appropriate for the situation. Nearly a year later, GM demonstrated the success of their public relations work by reaching $9.7 billion in 2015 profits, the highest the company had ever seen (Gardner, 2016). In 2014, public perception of GM had dropped to an all-time low due to an issue dealing with ignition switches in their cars. However today, public perception is even higher than it had been prior to the ignition switch scandal. According to the YouGov BrandIndex, GM’s quality score had dropped to -12, the lowest score the organization had ever seen. Three years after the crisis emerged, GM’s quality score had gone up to +14, the highest score the organization had ever seen (Hiebert, 2017). The GM ignition crisis set a precedent in crisis communication on the importance of having the right spokesperson for the best results.