Introduction This essay Is a case study that examines the crawls communication strategy of Carnival Corporation after the sinking of their ship Costa Concordia In January 2012. The study will explain the events of the Incident and examine the actions of the detrimental situation or event that threatens one or more important goals of the company or organization, allows only a short time for the decision making before the situation escalates and occurs as a surprise. (Herman, 1972) The world we live in is constantly experiencing crisis situations.
Some of them are caused by natural starters, such as tsunamis, hurricanes, floods or volcanoes; some have organizational source, such as terrorism, armed conflicts or food-borne illnesses; and some can be caused by an accidental event, such as a plane crash, shipwreck or an oil spill. No matter what we do or where we live, there is always a possibility that some crisis will affect us. There is no country, organization or company that is completely immune to a crisis. This explains the need for an understanding of crisis communication and the development of the crisis communication skills.
According to Combs (1999) “crisis immunization is a part of the crisis management process, which details a strategic plan and procedure for recovery for an organization that has suffered a negative impact as a result of a crisis and helps the organization to control the damaging situation”. Crisis communication can be considered a sub-specialty of the public relations profession that is created to protect an organization, company or an individual presented with a public challenge to its reputation. (Bearer, 2013) On January 13, 2012, the Costa Concordia ran aground off the coast of the island of Igloo n Italy.
The ship partially sank resulting in the evacuation of over 4,000 passengers and crew, with the loss of 32 lives. The ship, with 4252 people was on the beginning of a cruise around the Mediterranean Sea, departing from Achievement in Lazily, when she collided with a reef during a maneuver performed by the Captain in order to salute the local islanders. (Wisped – Costa Concordia disaster) The Chalked Times called this tragedy “the most significant event in modern maritime history”. (Knightly 2012) The wreck was even compared to the Titanic tragedy of 1912. Lush 012) Costa Concordia belonged to Carnival Corporation, headed by an American businessman Mackey Orison, but it was ran by Costa Crosier, Carnival’s Italian division. The disaster was closely followed by the media, and Carnival received vast amount of publicity. A crises like this is a crucial moment for any company to demonstrate good crisis communication. Carnival Corporation & Pl Carnival Cruise Line was founded in 1972 by Ted Orison, an Israeli-American businessman who was one of the pioneers of the modern cruise industry.
Carnival Corporation & Pl (in the future reference Carnival) is the world’s largest cruise ship operator. At the time of the Concordia disaster, Carnival included 10 cruise lines each operating under individual brand names. The ten brands (with corresponding geographies) are: AID Cruises (Germany), Carnival Cruise Lines (United States), Costa Cruises (Italy), Canard Line (United Kingdom), Holland America Line (United States), Bibber Cruises (Spain), P&O Cruises (United Kingdom), P&O Cruises Australia (Australia), Princess Cruises (United States), and Seaboard Cruise Line (United States).
Carnival operates a combined fleet of over 100 ships, and additionally, the company has 10 ships on order for delivery by 2016. Carnival Corporation has four operating groups in charge of their own geographical areas. Carnival Corporation controls all operations in North America, Costa Crosier is in charge of the operation in Europe, other than U. K. Which is operated by Carnival I-J, and Carnival Australia is in charge management of Carnival Corporation & Pl, led by Chief Executive Officer Mimic Orison.
Carnival attributed its success to its ability to manage brand autonomy, with each major cruise line maintaining separate sales, marketing, and reservation offices, as well as through the industry most aggressive shipbuilding program. ‘ (Carnival- Mission and History, n. D. ) Based on passenger volume, Carnival was the most popular cruise company, with an estimated 51. 6% of worldwide cruising revenue in 2011. (Market Share Statistics, 2012) As a chairman and CEO, Mimic Orison played an important role in the public profile of the company in the past.
This is a reason why the public expected him to take the helm of the crisis communication after the sinking of one of his ships. Mimic Orison Mimic Orison was born in Israel in 1949 as a son of Carnival’s co-founder Ted Orison. He started working in the sales department for his father’s growing cruise line after roping out of the University of Miami. He became president of Carnival in 1979 and focused on aggressively growing the business during the rapid growth of the cruise industry in the ass.
He became chairman 1990 and attributed for the rapid growth of the company by purchasing other cruise lines, including Seaboard, HAL, Canard and Costa Cruises. After acquiring P Cruises based in the United Kingdom, Orison created the largest global cruise company in the world, controlling almost 50% of the global passenger volume. (Biography- Mimic Orison, n. D. ) Orison has been replaced as CEO by Arnold W. Donald On June 25, 2013. Orison continued to serve as chairman of the board. (Peters and Whap, 2013) Costa Crosier Costa Crosier (Costa’) was found by Giaconda Costa if Andrea in Italy in 1854.
It was originally a shipping company mainly engaged in shipping of olive oil and fabric between Genoa and Sardinia, but by the beginning of last century, their fleet was exporting raw olive oil from the Mediterranean to foreign countries as far as Australia. Costa family still owned the company when it transited from a shipping company to a passenger cruise company in sass. First passenger-cargo ship was munched in 1948 under the name of Anna C and it was the first ship that crossed the southern Atlantic since WWW II. It had special attention because it was the first ship that offered air-conditioned cabins.
Luxury advances like this would continue to be a trademark of this cruise line in the future. Today, as Costa Cruises Group, the company is a part of Carnival group and it is one of the main operating companies with control over the operation in Europe. Costa is in charge of Costa Cruises in Italy and Bibber Cruises in Spain. Costa Cruises operated 14 ships at the time of the Concordia disaster. Wisped- Costa Crosier) Costa Concordia was built in 2004 and launched in 2006 and at that time it was one of the largest cruise ships in Italy. (Wisped- Costa Concordia) Picture 1 .
Cross-Diagram of the Costa Concordia Costa Concordia incident On Friday, January 13, 2012, the Costa Concordia set sail from Achievement (Rome), a port in Italy, with 3,206 passengers and 1,023 crew on board. The ship was on beginning of a seven days cruise with six ports ending back in Achievement. The order to perform a close sail-past of the island of Igloo, he had the manually bypass he alarms on the navigational system and the steer the ship with a five mile diversion toward the island. According to the Captain, he performed this maneuver in the past. He stated ‘l was navigating by sight because I knew those seabed well.
I had done the move three, four times’ (Mimicker, 2012) Captain later stated that when he noticed the waves breaking on the reef, he ordered the ship to be turned, but it was too late and the side of the hull collided with the reef. He acknowledged: ‘l have to take responsibility for the fact that I made a Judgment error. This time I ordered the turn too late. (BBC News Europe, 2012) At approximately 9:45 pm local time, the ship collided with El Scale, a chartered area of the reef off the shore of Igloo. The impact created a 50 meters long gash in the ship’s hull.
According to the Chief Engineer, engines and generators were under water after several seconds. The ship lost propulsion and power and stayed only on the emergency generator which is only sufficient for the most elementary lighting and communication equipment. (Page, 2012) The inertia allowed the ship to drift and sail past Igloo Porto. At 10 past 10 in the evening, the ship began to list starboard 20 degrees and turned south. A bit over half an hour after the turn, the ship came to rest at a 70 degree angle on Punt del Gabbier, partially submerged into 20 meters of water. See Picture 2 for a map detailing the ship’s final course) (Page, 2012) According to the BBC News article by Alexis Grammar (2012), at the time of the incident, passengers were mostly at dinner in the ship’s restaurants. They later reported hearing loud banging and feeling the shaking of the ship. Shortly after the collision, the officer of the watch announced over the PA that the noise is a result of an electrical failure. In this article, BBC News published a statement from one passenger described the experience, ‘The boat started shaking.
The noise – there was panic, like in a film, dishes crashing to the floor, people running, people falling down the stairs’. Up to this date, it is not certain what exactly occurred during the evacuation of the ship. It is important to mention that 600 passengers who boarded late in Rome did not participate in the mandatory evacuation drill prior to the sail away. Passengers stated that the evacuation process was chaotic and disorganized with contradictory statements made by various members of the ship’s staff.
By the time the ship finally stopped, listing caused the problem for the launch of the life boats. Some passengers Jumped in the water to escape the sinking ship. Costar’s CEO Mr.. Fish responded to the accusations that the crew was unprepared for evacuation by blaming it on the language barrier, lack of training and poor leadership by the officers and senior staff. At the end, passengers and crew were evacuated by ship’s lifeboats or helicopters. There are many contradictory statements regarding the collision, and due to a lack of official report, exact timings can be debated.
The following approximate timeline has en generally accepted: 9:45 p. M. : The Costa Concordia impacts with La Scale. – 10:10 pm: The Costa Concordia turns south. – 10:12 pm: First contact with Italian port authorities. An unidentified officer relates that the ship is simply suffering from an electrical “black-out. ” – 10:26 pm: Captain Scientists speaks to the harbor master of Port of Lovelorn, relating that his ship had taken on water and requesting a tug boat. – 10:42 pm: Port authorities are first final rest at Punt del Gibraltar at an angle of 70 degrees in 20 meters of water. 10:50 pm: Official order is given to evacuate the ship. (Page, 2012) The actions of the Captain came under immediate questioning by the public and the officials. Captain was accused of delaying the investigation in order to avoid the mandatory compensation for passengers abandoning the ship and fines that would total around в?30 million. It was reported that the Captain had three phone calls with Costa Crosier crisis management officer and it was questioned weather the cruise line ordered him to delay the evacuation and try to save the ship.
Companies’ management denied these claims and stated that the Captain’s misjudgment was the only cause of the poor evacuation process. Sardinian, 2012) Captain Esthetics was accused of committing a maritime crime under Italian law when he abandoned the ship while there were still passengers and crew trapped onboard. This was widely publicized, and also accompanied by a recording from Italian Coast Guard where one of their captains is ordering Esthetics to return back onboard and report on the condition and safety of passengers and crew.
Captain later stated that he did not mean to abandon the ship, but that he tripped and fell into a lifeboat. (Squires, 2012) In the days and weeks following the disaster, the rescue process of the passengers ND crew that remained trapped onboard received constant international media coverage. Rescue efforts were initiated immediately by Italian Coast Guard and Fire and Rescue department and lasted until January 31 when Italy’s Civil Protection agency ended the diving due to unsafe conditions for divers. At the end, 32 persons lost their lives in this tragedy.
Last two bodies were found during the salvage operation one year later. (Andean, 2013) Rescue of the surviving passengers and the victim recovery was the main goal in the days following the incident, but there was also a focus in securing the wreck and protecting the environment. Costa Concordia carried vast amounts of oil and it was threatening to Jeopardize the Tuscan Archipelago National Park, the largest marine protected area in Italy. This was one more reason for this disaster to receive additional media coverage and it represented yet another difficult task for Carnival’s crisis management.
On March 24, it was announced that all the oil had been successfully removed from the vessel. (SMITH Salvage- Costa Concordia) Picture 2. Final Sailing Course of the Costa Concordia Carnival Corporation & Pl crisis communication In the days following the disaster the absence of Carnival’s CEO Mimic Orison was universally noted and publicized by the global media. Wall Street Journal has published an article Carnival CEO Lies Low After Wreck asking “Where is Mr.. Orison”. Orison had not made a public appearance choosing to acknowledge the incident only via his Twitter account and companies statements. Esters and Lubing, 2012) It was criticized that Mr.. Orison did not travel to the site of the incident or made any public statements, relying solely on Mr.. Fiasco to be the public face and the primary communicator. Mimic Orison did not speak publicly about the disaster until almost two months later, on March 10, 2012. Button, 2012) Carnival Corporation first acknowledged the wreck via messages on Faceable and Twitter on January 13. First Italian Coast and informing the public of the rescue actions taken. (PR Newswire, 2012) From the beginning, Carnival Corporation left the management of the crisis to Costa Crosier.
They setup a web portal for the incident and provided real-time updates to the public. Costar’s CEO Pier Lugging Fiasco held press conferences to communicate with the media and the public. At his statements, Fiasco put all the blame on the Captain, stating that he had no approval from the company for the actions that caused the incident. The message that was conveyed through the media was that this incident is a result of the action of one man, and that it is indeed and accident, not a chronic problem in the operation of Costa or its parent company Carnival. (Mustard, 2012) On January 19, Carnival Corporation and Mr..
Orison announced that they would be “taking a break” from communicating via social media in order to focus on the tragedy. ‘It seemed like Carnival had no crises communication strategy for this incident and that they were struggling to gain control of an international disaster. (Page, 2012) This decision was published by the media and it was not accepted well by the readers, according to the comments and posts on various websites. The Corp. Cosmos magazine (2012) supported the decision accenting the fact that the company is doing its best and concentrating the energy on the search and rescue operation. Dunne, 2012) The lack of involvement from Carnival in the management of the incident was also widely criticized by the public. The Business insider even published an article titled Carnival Is Failing Spectacularly In The Handling Of Its Costa Concordia Crisis stating that “The company seems out of ouch with the plight of the victims” and speculating that the corporation is trying to distance themselves from their sub-brand Costa. (Basin, 2012) Overall opinion of the public and the experts on the topic of crisis management is that Carnival and Mackey Orison have failed the exam, and that their crisis management strategy was nonexistent.
Stephen Fink, a crisis management expert and author of “Crisis Management: Planning for the Inevitable”, stated in an interview with Fox Business, ‘To give them [Carnival] an ‘F acknowledges they even took the test [on crisis management], they haven’t even shown up to take the test. (Button, 2012) Financial Impact After the negotiations with the Italian consumer groups, Costa announced a compensation package for passengers of approximately U. S. $ 14 500 per person, a refund for the cruise and reimbursement for all travel and medical expenses.
This package did not cover crew, injured passengers or families of casualties who were negotiated individually. The stock market responded quickly to news of the wreck. The shares of Carnival Corporation went down almost 20% in the U. K on January 16. When the U. S. Stock market reopened on January 17 after the Martin Luther King Jar. Loudly, NYSE-listed CLC stock dropped 14% to $29. 60, which was the largest single- day drop for the company’s stock since September 2001. The decrease in Carnival’s stock price had impact on Mr.. Orison’s net worth.
The cruise industry itself olds a great safety record and it helped Carnival to go unharmed given the rarity of such accidents. The fact that Carnival operates their ships under different brand names also helped the corporation to distance themselves from Costa and it probably saved other brands from being influenced by this disaster. It is possible that the main reason behind the lack of involvement from Carnival and it’s CEO was exactly an intention to redirect the media attention away from the corporation and focus it only on the Italian sub-division.
This can however be only a speculation, as there are no evidence to sustain this theory. Even though there were no uniqueness of the poor crisis management in this case, the amount of media coverage that this incident received clearly demonstrates the importance of public relations and good crisis communication strategy. Shortly after the Concordia disaster, Carnival was hit with several other issues of different magnitudes. The biggest crisis was definitely the fire on the Triumph, causing the ship to drift without control for days.
