Posted: September 19th, 2020

Scandal Management Post 1 & 2 Replies

Post 1

As seen in the impact of the COVID-19 crisis on the oil and gas industry, companies like BP should invest in alternative energy with more focus than before. This is because the COVID-19 crisis, which has slowed down production and travel, has drastically reduced the demand for oil around the world. The pandemic has brought about mixed impacts for different industries. For instance, companies like Amazon, which had invested heavily in e-commerce, have made huge profits because of the pandemic’s spike in online purchases. Also, the electric car giant, Tesla, has emerged as the most valuable automobile manufacturer in the United States, indicating a sharp increase in electric cars’ popularity. The increased use of hydrogen-based vehicles in innovation-friendly countries such as Israel and the increased research on longer-lasting lithium batteries that are encouraging the production of electric cars by multiple automobile makers indicates the gradual decline of the oil industry. The global shift from oil-based fuels to renewable energy, just like the shift towards driverless vehicles, is likely to put the oil and gas industry in a precarious situation. Therefore, it is suitable for the BP Company to make continuous adjustments towards low-carbon energy products while taking advantage of the pandemic’s low demand to effect organization-wide changes. This way, the company is likely to achieve its goal of net-zero emissions even before 2030. Thus, BP is right to present itself as a company that is keen on reducing its carbon footprint and making adjustments towards green energy, considering that climate change is a crucial subject in modern business. Today’s consumers prefer doing business with climate-friendly companies, a requirement that BP must comply with to remain profitable.

Post 2

Scandal management is vital to companies that intend to manage the potential fallout that could arise from scandals that could ruin the company’s brand. While many companies have been killed by scandals, Wells Fargo has shown tenacity and unwavering confidence in its business by surviving multiple scandals. The 2008 financial crisis demonstrated that financial institutions are extremely vulnerable to bad press, considering that a rumor that banks could be mishandling its customers’ accounts could trigger a bank run. However, like scandal-prone Coca-Cola, Wells Fargo has shown consistent, good performance in stocks and revenue generation despite spikes in public outroar over its practices.

However, the company is walking on a tight rope and risks potential collapse if it is it to keep up its rogue business practices. The company may have already lost customer trust and could gradually lose a massive bulk of its clientele to trustworthy competitors. The proven accusations that the company mistreated its customers to meet its sales targets also revealed that its management was putting questionable pressure on employees to meet unrealistic expectations. Thus, the company’s public relations strategy needs to focus on proving to stakeholders that both employees and customers are treated with respect and dignity and that the company will not willingly engage in unethical practices in the future. While the $3 million settlement could;d be manageable to the company at the moment, such practices could also attract lawsuits from other employee groups and customers who may have been affected by one or more of the company’s unethical business practices. In the long term, it is not profitable for the company to spend a substantial percentage of its revenue on legal fees, settlements, or government funds.  Even more expensive could be the damage to Wells Fargo’s reputation.

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