Kodak Going Bankrupt - The Need of Communication During Crisis

Kodak Going Bankrupt The Need of Communication during Crisis
Corporate Communications Kodak Going Bankrupt The need of Communication during Crisis
Project submitted to
MANIPAL UNIVERSITY- DUBAI CAMPUS
In the partial fulfillment of the requirement for the degree of
M.A. in Media and Communications By
Feroz Khan Shaikh
Id no: 2010MAMED1006 Under the guidance of
Mr. Joseph Nalloor
Manipal University- Dubai
1 | P a g e Feroz khan Shaikh / MA Media & Communications Id no: 2010MAMED1006
Introduction
Every organization faces challenges from time to time. Whether such a crisis is due to a financial downturn, internal changes, or a public scandal, effective communication in difficult times is essential. The UK and many other countries of the world recently experienced a serious and lengthy economic slump.
During the financial crisis, people were regularly assaulted with a constant barrage of bad news, making it difficult for even the most optimistic types to remain positive. Even those who remained employed during the slump often felt threatened, overworked, and neglected. Work survivors were often required to work longer hours, cutting back on spending, making do with fewer resources, and possibly doing the work of two or three employees (Coombs 2000: pp. 37-41).
In such depressed environments, managers are faced with the daunting task of inspiring others to remain positive and productive during the slump. By keeping employees informed, managers can address anxiety and ensure workers are focused on meeting business objectives (Coombs 2000: pp. 37-41).
During the 120 years of history, Kodak has continued to be among the leading companies in patents, and occupied the top spot in U.S. for many years. However, with the advent of digital photography, the company has suffered losses. Eastman Kodak Co. was filed for bankruptcy a company that remained one of the best known companies in the United States, is now facing huge crises in the industry. However, Kodak has been provided with an option to find buyers for its 1,100 digital patent, and redesign their business while continuing to pay its 17,000 workers. The board and the entire executive team unanimously believe that this is a necessary step to save the future of Kodak (kodak.com).
Kodaks one-time rival Fujifilm moved into LCD screen technology and even adapting its chemicals for the pharmaceuticals industry. But, Kodak continued to keep film at the heart of its business in the mistaken belief that it should continue to base itself around its business heritage. And the leadership of chairman and CEO Antonio Perez is sure to become a text book case for future leadership and development aspirants, of a company which could not keep with time and technology. (Lesson in Leadership Flash, Bang, Wallop goes Kodak)
In the last five years, Kodak had used large patent litigation against rivals such as Apple Inc, Research in Motion Ltd and Taiwan's HTC Corp as a means of trying to generate income. Patents may be sold during the bankruptcy process. Since 2003, Kodak has closed 13 plants and 130 laboratories, and 47,000 positions were eliminated. Now, the company must finish the transformation by tackling more with the cost structure and pulling effectively money from nonstrategic assets. In this essay, we will be discussing that what steps are necessary to be taken by Kodak in this scenario and how Kodak is trying to deal with these crises. It will be explained with the help of eight steps of communication during crisis.
Communicating During the Crisis 1. Get Control of the Situation The first step of communication during the crisis is to define the problem or issue that the employees or management of the company is facing in order to understand the situation. As a result, if the company will know the issue, then it could find the necessary information for getting control over the situation (Coombs 1999: pp. 25-36). In the event of a ciris, your role as an employee communicator is to tell them honesty what is happening to the company, and what does that mean to their jobs; address rumours, try to be candid with employees as much as you can.
In the case of Kodak, an old-line technology company was unable to adapt to the fast-pace and vicious competition of the digital age. The company needs to understand the situation in order to solve the issue effectively.
2. Gather As Much As Info As Possible Once, the company knows that the problem exists, and it needs to be solved in order to survive in the competitive environment the company should make steps for gathering as much information as possible (Paul 1994: pp. 212-217). For this purpose, Kodak must ask the question that what led to the bankruptcy. It is either the increasing competition in the industry, or it can be because of the changing demands of the customers. The company will need to find information that why the problem has occurred? Also, how can it be solved in order to improve its position in the market? If the company does not have adequate information, it would become a victim of the situation. This is the case of Kodak that it has gone bankrupt because of insufficient information about the issue. Assessing the crisis situation is, therefore, the first crisis communications step the company cannot take in advance.
3. Set up a Centralized Crisis Management Center A small team of senior executives at Kodak should be identified to serve as your organization's Crisis Communications Team. Ideally, the team will be led by the organization's CEO, with the firm's top public relations executive and legal counsel as his or her chief advisers. If the in-house PR executive of Kodak does not have sufficient crisis communications expertise, he or she may choose to retain an agency or independent consultant with that specialty. Other team members should be the heads of major organization divisions, to include finance, personnel and operations.
4. Communicate Early and Often Kodak must handle the crisis in a hurry; although it has already gone bankrupt. Therefore, it should now handle it under constant pressure and stress. When a crisis occurs, employees are often the first affected by the event. However, companies forget to inform them. The same is the case at Kodak employees got to know about the bankruptcy from news and television, which undermined their confidence and sense of belonging.
That is why, the company adopts a clear and internal information very early to reassure, mobilize and from the internal membership and support. For a coherent and effective communication, Kodak must communicate with the employees during the present crisis in the following ways (Tyler 1997: pp. 51-73): 1. inform the authorities 2. inform local partners and advocacy groups (consumers, patients, residents, environmentalists) 3. write press releases 4. write the first documents of defense 5. lead spokesman of the company 6. monitor and summarize the comments of the media about the crisis
5. Understand the Media Mission in a Crisis
In the modern world, the media in general and television in particular are the relay policies to the public. They inform people about government programs, social projects, major decisions concerning the lives of citizens and the nation as a whole. The role of television in the practice of good governance is more important than maintaining a real sensitivity in times of crisis (Coombs 2000: pp. 37-41).
There should be a power capable of crystallizing the political and social climate between the requirement for public authorities to ensure transparency and honesty in the dissemination of news related to a crisis and people's desires to be informed of what is happening around them and express an opinion.
In these times of crisis, television acts as a tool of mass communication to fulfill the need of information among people and above all acts as an intermediary between citizens and government. Television is undoubtedly the best platform for expression of opinions because of its large audience and its proximity compared with the press or radio.
6. Communicate Directly With Affected Constituent The best known and most time consuming contact is constituent problem solving, commonly called casework in the English-speaking world. In performing such services, legislators function as ombudsmen between companies and government agencies (Paul 1994: pp. 212-217). In the case of Kodak, the company can get a loan from the government to improve its current situation. However, for that it will need to provide proper and appropriate planning for the future development of business. For this purpose, the company must plan and develop a schedule that how will it proceed in this time of crisis. For instance, as the needs of the customers are growing and changing rapidly, the company must plan to introduce new products and services that can cater the changing demands of customers.
7. Remember That Business Must Continue A disastrous situation should not be a surprise or a threat to disaster managers and emergency responders; otherwise emergency management could be considered mismanaged; instead of crisis management there will be a management crisis. Management science offers the person in command a framework for making decisions and for bringing these events under control. Often, the events of a disaster move rapidly and can be extremely traumatic for those who are unprepared. Disaster managers often do not get a second chance. If a decision is wrong, the manager and the victims have to accept its consequences. Therefore, the company must continue its operations.
8. Make Plans to Avoid Crisis Immediately The following plan must be made to avoid crisis immediately by Kodak: It is important to recognize that the emergency managers will be closely watched by their colleagues and the staff they manage. Their quality of management and attitudes, while they are under extremely stressful conditions in an emergency can inspire others to greater performance or do the precise opposite. Their positive example under such situations may speak volumes and can be more effective than countless training sessions (Tyler 1997: pp. 51-73).
Through pre-scheduling, the organizations concerned could work and function almost normally and continuously. This can be achieved through special training of the emergency managers for disaster response. The programs should continually strive to use the information and knowledge of experts and managers in order to be developed and expanded using their updated skills and abilities. Initiating scenario-based simulations for the emergency managers are also necessary. These activities should be planned, to be performed regularly or in intervals such as twice a year. It has been proved that these kinds of actual drills have a great impact on what managers learn and how they react in the time of crises.
Conclusion To conclude, Kodak must perform under the present crisis with proper management and support of the whole organization as a team. For this purpose, the company must first identify the crisis itself because it is also a challenge to understand the nature of the crisis. After which, the company can make a plan to overcome it; however, it will first need to understand the crisis and the reasons behind it to come to a solution.
References
Coombs, W. T. (1999). Ongoing crisis communication: Planning, managing, and responding, Thousand Oaks, CA: Sage, pp. 25-36 Coombs, W. T. (2000). Designing post-crisis messages: Lessons for crisis response strategies, Review of Business, 21, pp. 37-41 Kodak, About Kodak. Retrieved on 23rd January, 2012 from: http://www.kodak.com/ek/US/en/All_Kodak_Services/All_Kodak_Products_Services/About_ Kodak.htm Lessons in Leadership Flash, Bang, Wallop goes Kodak,2011 Paul A. Argenti. (1994). Corporate communication, Irwin, Business & Economics, pp. 212-217 Tyler, L. (1997). Liability means never being able to say youre sorry: Corporate guilt, legal constraints, and defensiveness in corporate communication, Management Communication Quarterly, 11, pp. 51-73

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Kodak Going Bankrupt The Need of Communication during Crisis

MANIPAL UNIVERSITY- DUBAI CAMPUS

In the partial fulfillment of the requirement for the degree of

M.A. in Media and Communications By

Feroz Khan Shaikh

Id no: 2010MAMED1006 Under the guidance of

Mr. Joseph Nalloor

Manipal University- Dubai

1 | P a g e Feroz khan Shaikh / MA Media & Communications Id no: 2010MAMED1006