Lessons Learned from Organizational Crisis: Business Ethics and Corporate Communication

Abstract

A timeline and communication blunders along the way to the eventual demise of the second largest general insurer in Australia in the early 2000's is the focus of this article. The response of corporate executives in the midst of the collapse as well as the resulting public criticism are dissected. The strategy of secrecy, lies and unethical behavior are highlighted as having accelerated the company's implosion. The authors warn against strategies of denial, evasion of responsibility, attempting to reduce the offensiveness of the wrong, corrective action and finally, taking responsibility. The article delves deeply into the timeline of HIH's downfall, providing specific incidents and corporate executive's responses to those and how those responses negatively affected the public's view of the company and its leaders. The article implore's readers to recognize and acknowledge the criticality of swift and transparent response at the onset of a crisis, which sets the stage for the public's response throught the remainder of the crisis. Any misstep at this stage is nearly impossible to recover from.