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Executive Summary

Executive Summary

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Published by Natt
An analysis of Taco Bell E.coli outbreak 2006, focusing on communication and ethics
An analysis of Taco Bell E.coli outbreak 2006, focusing on communication and ethics

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Published by: Natt on Feb 01, 2010
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09/14/2013

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Executive Summary
This report is to study the response of Taco Bell to E.coli outbreak from November toDecember 2006 affecting people in six US states. Crisis management becomes an importantrole to deal with the outbreak which involved communication strategy and many decisionsrelated ethical issues. Taco Bell was left with a major control challenge of convincing itscustomers that its foods are safe to consume although the cause of the outbreak remains anunknown. Many of Taco Bell’s reactions in this crisis were efficient and ethic, like thecompany hired a private laboratory and cooperated with health government officials on theinvestigation. Taco Bell showed their responsibility by temporary closing its restaurants, paying customers’ medical bill. These potentially reflected the company ethical concerns. Nevertheless, Taco Bell did not perfectly response to the crisis in terms of communication and ethical aspects. Online media was approach too slow. Besides, there werecommunication barriers on the commercial advertising because of representative. Taco Bellalso rejected to appear on public TV news; therefore, public might think that organisation isguilty and trying to hide something. It was a lack of ethic that Taco bell showed their concernon profit more than customers’ safety by quickly re-opening the restaurants when source of E.coli was still mysterious.Five key stakeholders, namely shareholders, customers, suppliers, franchises andgovernment are identified potentially involving this outbreak. They received different impactsfrom this crisis. Shareholders withdrew investment. Many customers avoided having TacoBell’s foods. Some suppliers may lose deal with Taco Bell impacting its workers. Franchiseswere involved in prosecution. Government sent investigation teams on this outbreak. All of these impacts could be influenced by ethic.Recommendations are based on the analysis to improve Taco Bell reputation which relateto communication and ethical issues. During crisis phase, immediate response should beapproach along with using all available public media. They should also slow down re-openingrestaurant and wisely feeding information to the public. Post-crisis phase suggestions includefunding related research, educating people and improving food quality policy.
 
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1) Introduction
Taco Bell, a subsidiary of Yum Brands Inc is a leading Mexican style fast foodrestaurant and one of the high earning profits in each year. Late of the year 2006, Taco Bellrestaurants had been hit the sanitizing crisis. There were many responses to its crisis aimingto solve the problems and recover company’s reputation. The purpose of this business reportis to analyse the situation which basically bases on the study of Taco Bell written by Johnson,Vanderwerff, Howenstein and Fromm (2007). Finally it will present the possiblerecommendations which Taco Bell should take into account. The discussion will generallyfocus on communication and ethical issues but this will not essentially intend to discuss on business or marketing issues.
2) The Crisis: E-coli outbreak November -December 2006
 Negative image on Food quality have been collected since 1999. In 2006, Escherichiacoli (E.coli)
 
was epidemic beginning from 17 November at New Jersey and acknowledged toTaco Bell on 25 November. To response the crisis, communication strategy is a key successto win back its stakeholders. Some responses from the Taco Bell involved ethical issues. Inthis crisis also impacted many stakeholders such as shareholders, customers. Investigationwas organized through government and private laboratories hired by Taco Bell. There weremore than 400 confirmed cases from this E.coli outbreak. By the middle of December, theCenters for Disease Control (CDC) announced that the E. coli outbreak was over (Johnson etal, 2007).
3) Taco Bellresponses to the crisis analysis
3.1Public communicationAfter the incident of E. coli spreading out many states, Taco Bell had never rejected occurring of outbreak under their franchises. Greg Creed, Taco Bell president, released the first responses on 4 December through. Creed states that TacoBell franchises will cooperate with country health officials and voluntary closessuspected restaurants (Creed 2006a). This shows that Taco Bell indirectly acceptedthe incident and did not evade their responsibility. In the communication response tocrisis, DiSanza and Legge (referred by Durham 2010a) suggest that evadingresponsibility and corrective action can protect the company’s reputation. It can say
 
Page| 3that Taco Bell chose the corrective action to ethically response this action by tellingthe truth to the public.Moreover, Greg Creed pointing out corporation’s attention has beentransferred from the interest of the company to the health and safety of the customersand employees (Creed 2006a). It is important to note that the Taco Bell’sannouncement can meet the ethical framework of virtue theory. The term virtuetheory refers to being a good organization (Wilcox referred by Durham 2010 c). Thisis an ethical response because customers would be better to acknowledge thisincident although they could avoid having meal at Taco Bell. Therefore, people couldsee company’s first intention, whether they were possibly doing an ethical deed for  protecting Brand image.Since the incident, Taco Bell tried to use external communication channels toreassure their stakeholders. Veiga(2006) reports that Taco Bell had launchedadvertising on many newspapers to persuade customers that its food is safe. Therewere also seven releases were posted on the company’s website to report its actions.In addition, Creed (2006b) reassures by publishing the letter that Taco Bell reallydoes care its customer and have established the standards to prevent this fromhappening. All of these media could bring back Taco Bell’s reputation again and call back their customers. YUM! 2006 annual report is also another channel that was usedto reassure their shareholder.In addition, there was opening emergency free hotline to answer questions andreceive any information from their customers. Customer feedbacks are vital inmeeting their needs. Creed (2006b) say that toll-free at 1-800-TACO BELL isavailable for clarifying any concern. This is an efficient response of using another external media after crisis to clarify doubtful questions. Not only it positively affectsthe brand image but this reaction would also be able to ensure stakeholders that thecompany is responding in the right thing.3.2Shutting down the contaminated restaurantUpon the infection issue happened to the food in Taco Bell Corporation, TacoBell has been closed 60 of its restaurant in New York, New Jersey, Pennsylvania andDelaware on 4
th
December (Schmidt 2006). Responsibility and trustworthiness is a

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