GROUP ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: Phùng Gia Linh Student ID number: 23005476

Student name: Nguyễn Thị Ánh Nhi Student ID number: 23006152

Student name: Võ Chiêu Quỳnh Student ID number: 23005933

Student name: Trần Văn Anh Sơn Student ID number: 23005676

Student name: Trịnh Phương Uyên Student ID number: 23006218

Student name: Lê Hà Vy Student ID number: 23005145

UNIT AND TUTORIAL DETAILS

Unit name: Principles of Management Unit number: MAN101

Tutorial/Lecture: Tutorial Class day and time: Thursday 08:30-10:30
Lecturer or Tutor name: Trần Thị Hương Trang
ASSIGNMENT DETAILS

Title: Written Report – Case 2 Chapter 14

Length: 2155 words Due date: 07/11/2023 Date submitted: 07/11/2023
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WRITTEN REPORT – TUTORIAL 9.2 – GROUP 5

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WRITTEN REPORT – TUTORIAL 9.2 – GROUP 5

CASE STUDY ANALYSIS

Written Report – Tutorial 8.2

Nguyen Thi Anh Nhi

Phung Gia Linh

Vo Chieu Quynh

Tran Van Anh Son

Trinh Phuong Uyen

Le Ha Vy

UEH – International School of Business | Global Pathways

MAN101: Principles of Management

Ms. Tran Thi Huong Trang

October 31st, 2023

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WRITTEN REPORT – TUTORIAL 9.2 – GROUP 5

Table of Contents
Summary...............................................................................................................................................5
Discussion Questions............................................................................................................................5
14-17. Beyond possible human error and tragedy responsibilities, what do you think of this
situation from the perspective of managing communications?.......................................................5
14-18. Why do you think the company’s executives decided to silence communication on social
media? Was this an appropriate strategy?.......................................................................................7
14-19. In the first weeks, how could the communication have been better managed by the
management?...................................................................................................................................8
14-20. The increase in the number of bookings seems to corroborate the success of the latter
communication strategy of a complete disclosure on social media. Discuss the communication
management implications................................................................................................................9
References...........................................................................................................................................10

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WRITTEN REPORT – TUTORIAL 9.2 – GROUP 5

SUMMARY

In the first few months of 2012, the Costa Cruises company suffered two catastrophic maritime
incidents in rapid succession, precipitating a public relations crisis of existential proportions. On
January 13th, their vessel Costa Concordia collided with rocks while maneuvering near the Italian
island of Giglio, resulting in the loss of 32 lives as the ship capsized. Captain Francesco Schettino
compounded this tragedy by abandoning the partially evacuated vessel, a dereliction of duty that
drew widespread condemnation. Barely eight weeks later, another Costa ship, the Costa Allegra,
caught fire while sailing in the Indian Ocean on February 27th, necessitating the emergency
evacuation of all 1266 passengers and crew at sea. These back-to-back failures understandably shook
public confidence in Costa Cruises' operational safety and emergency management protocols. With
their reputation in jeopardy, the company initially attempted to scapegoat only Captain Schettino for
the Concordia disaster. However, this narrow assignment of blame did little to allay growing
concerns regarding the firm's overarching safety culture and crisis leadership. Recognizing the
existential commercial risks posed by a sustained loss of consumer confidence, Costa Cruises'
executives took decisive action. Partnering with the global public relations consultancy Burson-
Marsteller, Costa launched an unprecedented social media communications strategy aimed at
rebuilding trust through unprecedented transparency. Continuous updates were provided regarding
search, rescue, and salvage efforts related to both incidents, as well as the status of victim support
services and environmental remediation activities. Details on forthcoming operational reforms were
also disclosed, such as stringent new training standards and emergency drills. Additionally,
announcements regarding negotiations to fairly compensate affected passengers were promptly
issued. This diligent and forthright approach proved highly efficacious. Through facing its
shortcomings openly rather than attempting to obscure problems, Costa Cruises was able to regain
the confidence of its customer base within four short months, with bookings increasing a substantial
25% above pre-crisis levels. This exemplary case demonstrates how transparency, accountability and
proactive engagement can enable even the largest organizations to successfully navigate public
relations crises of immense severity and scope.

DISCUSSION QUESTIONS

14-17. Beyond possible human error and tragedy responsibilities, what do you think of this
situation from the perspective of managing communications?

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WRITTEN REPORT – TUTORIAL 9.2 – GROUP 5

Based on the details provided about the case application ‘Neutralizing the Concordia Effect” and
Costa Cruises crisis situations, there are some outstanding perspectives on the communication
management. Firstly, the initial lack of communication and silence on social media was problematic
- it created an information void and perception of evasiveness. Being more transparent and proactive
could have helped mitigate negative reactions. However, the later social media campaign focusing on
full disclosure of rescue/recovery efforts seems like an effective pivot in strategy. Sharing timely,
accurate updates helped demonstrate concern and responsibility. Nextly, coordinating messaging
across channels was wise which provided consistency and avoided contradictory information that
could erode trust. Additionally, linking the announcement of new safety measures to the launch of a
new ship was a smart PR move to try to reassure customers. Also, settling compensation packages
quickly showed an effort to do right by victims so that communicating this widely helped rebuild
goodwill. Finally, tracking booking numbers to monitor impact was prudent - the increase suggests
the revamped communication efforts helped stabilize business. Overall, while early missteps made
the crisis response more difficult, Costa Cruises' shift to transparent, compassionate and consistent
communications across channels appears to have helped mitigate brand damage and regain customer
confidence. The situation reinforces how critical effective crisis management and communication
strategies are. After initial errors, correctly prioritized transparency, consistency and empathy in
working to maintain trust and reputation with all stakeholders.

The situation highlights how vital crisis management and communications are, and how
organizations need to be ready to adapt their strategies effectively. Through the case, there are some
functions of communication:

Communication acts to control employee behavior in several ways. As we know from Chapter 10,
organizations have authority hierarchies and formal guidelines that employees are expected to
follow. For instance, when employees are required to communicate any job-related grievance to their
immediate manager, to follow their job description, or to comply with company policies,
communication is being used to control. Informal communication also controls behavior. When a
work group teases a member who’s ignoring the norms by working too hard, they’re informally
controlling the member’s behavior.

Next, communication acts to motivate by clarifying to employees what is to be done, how well
they’re doing, and what can be done to improve performance if it’s not up to par. As employees set
specific goals, work toward those goals, and receive feedback on progress toward goals,
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communication is required for many employees, their work group is a primary source of social
interaction. The communication that takes place within the group is a fundamental mechanism by
which members share frustrations and feelings of satisfaction. Communication, therefore, provides a
release for emotional expression of feelings and for fulfillment of social needs.
Finally, individuals and groups need information to get things done in organizations. Communication
provides that information. Unfortunately, there can sometimes be a breakdown in information
sharing, leading to confusion.

14-18. Why do you think the company’s executives decided to silence communication on social
media? Was this an appropriate strategy?

The decision made by executives at Costa Cruises to enforce a state of silence regarding
communication on social media platforms can be attributed to a multitude of factors. One such factor
could have been their concern in effectively managing the crisis that had unfolded following the
incident involving the Costa Concordia, and simultaneously preventing inappropriate comments or
speculative discussions from arising on various social media platforms. Furthermore, it is possible
that the executives aimed to demonstrate a level of respect towards the victims and the gravity of the
situation by deliberately avoiding any actions that could be perceived as insensitive.

The appropriateness of this strategy is a matter that is subject to debate. Although temporarily halting
all social media activities is a commonly employed practice in crisis management, as it serves the
purpose of preventing the dissemination of misinformation while also maintaining a tone of respect,
it is important to acknowledge that there are potential drawbacks associated with such a course of
action. The lack of communication can inadvertently create a void that is filled by unverified
information and rumors, which in turn could potentially inflict further damage upon the company's
reputation. In this particular case, the absence of disclosure resulted in divergent reactions among
customers, with some expressing solidarity towards the company's decision, while others were left
feeling disgruntled by the silence exhibited by Costa Cruises.

Ultimately, the appropriateness of this strategy hinges upon the specific circumstances surrounding
the crisis and the overarching objectives of crisis management. In the case of Costa Cruises, a
subsequent shift in strategy towards complete transparency proved to be successful in effectively
managing their reputation and subsequently regaining the trust of their customers. However, it is
worth considering that a more balanced approach may have been achieved if the company had

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provided some initial information without compromising their sensitivity towards the situation at
hand.

14-19. In the first weeks, how could the communication have been better managed by the
management?

In the first weeks following a major accident, effective communication management plays a critical
role in restoring an organization's reputation and regaining its position in the competitive market.
Costa Cruises, after facing a series of problems related to communication in the aftermath of the
incident, could have better managed their communication to prevent the spread of disreputable
rumours.

One important step that Costa Cruises could have taken to manage communication more effectively
was to establish a clear and transparent channel of information. By promptly providing accurate
updates on the progress of relief efforts, the company could have alleviated concerns and prevented
the spread of rumours. This information could have been disseminated through regular press
releases, social media updates, and direct communication with stakeholders, such as passengers,
employees, and the general public. Through these channels, Costa Cruises would have been able to
reassure the public and demonstrate their commitment to resolving the situation.

In addition to social media updates, the management should have provided detailed documents
outlining the plan for removing the wreck. It might have shown its commitment to resolving the
situation by providing openness and keeping stakeholders updated on the status of the wreck removal
operation. Furthermore, the time frame, exact steps performed, and involvement of appropriate
authorities and specialists in the removal process should all have been provided in this material. This
method would have addressed any concerns and given the public clarification, promoting more trust
and understanding.

Moreover, addressing the negative environmental effects of the accident also should have been a
priority for the management. By openly acknowledging the environmental impact, the management
could have built trust with the public and shown their commitment to minimizing these effects.
Regular communication regarding the measures taken to mitigate the damage caused by the accident,
such as oil spill cleanup operations or marine life rehabilitation efforts, would have helped to

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alleviate environmental concerns. With this way, the management's dedication to preserving the local
ecosystem and their responsibility as a corporate entity can be demonstrated clearly.

Lastly, a diligent campaign to promote awareness about protecting the island's ecosystem should
have been undertaken by the management. This would involve actively engaging with the local
community, tourists, and other stakeholders to educate them on the importance of eco-protection and
sustainable tourism practices. Such communication could have been facilitated through informative
brochures, workshops, and partnerships with environmental organizations. By emphasizing the need
for eco-friendly practices, the management could have fostered a culture of environmental
responsibility and positioned themselves as advocates for sustainable tourism.

14-20. The increase in the number of bookings seems to corroborate the success of the latter
communication strategy of a complete disclosure on social media. Discuss the communication
management implications.

The remarkable increase in the number of bookings for Costa Cruises, following the implementation
of their communication strategy centered on complete disclosure via social media, illuminates the
profound impact of transparent and real-time communication on reputation management during a
crisis. This success presents a multifaceted perspective on communication management with
substantial implications.

First and foremost, it underscores the critical role of transparency in regaining public trust. By
openly addressing the Costa Concordia incident and sharing detailed information about the
company's actions in response, Costa Cruises exhibited a profound commitment to accountability
and honesty. Such transparency not only served as a means of information dissemination but, more
importantly, as a powerful symbol of integrity and responsibility, two qualities vital for rebuilding
confidence among customers and stakeholders.

The second key implication revolves around the potency of real-time updates during a crisis. Costa
Cruises' consistent stream of information on social media platforms concerning rescue, recovery,
safety measures, and environmental protection efforts served a dual purpose. It demonstrated that the
company was proactively engaged in addressing the crisis, leaving no room for doubts or
misinformation. Simultaneously, it provided a sense of reassurance to existing and potential
customers that the cruise line was taking immediate and effective action to resolve the situation.

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Moreover, the positive outcome of this strategy serves as a compelling case study in reputation
recovery. It exemplifies how open and honest communication, when thoughtfully and effectively
executed, can not only mend a tarnished image but also drive a company to flourish even in the wake
of a catastrophic incident. For Costa Cruises, it wasn't merely a restoration of reputation; it was a
reaffirmation of trust and a testament to the resilience of a well-managed crisis communication
strategy.

This case also highlights the importance of adaptability and proactivity in crisis management. Costa
Cruises initially suspended social media activities, acknowledging the gravity of the situation and the
need for reflection. Subsequently, the pivot toward complete disclosure illustrated the company's
responsiveness to the evolving dynamics of the crisis. This flexibility in communication strategies is
a valuable lesson for organizations dealing with complex, fast-moving situations.

Additionally, the ability to negotiate a friendly compensation package and announce new safety
measures during the delivery of the new flagship vessel, Costa Fascinosa, demonstrated a proactive
approach to managing the aftermath of the crisis. These actions not only addressed the immediate
concerns of customers but also had a positive impact on public relations, further reinforcing the
company's commitment to safety and customer satisfaction.

In conclusion, the resounding success of the communication strategy built on complete disclosure via
social media indicates that transparent and real-time communication, particularly in the context of a
crisis, is an indispensable tool for rebuilding trust and managing an organization's reputation
effectively. This experience underscores the significance of adaptability, proactivity, and strategic
communication in crisis management. Lastly, it serves as a potent reminder of the pivotal role played
by social media in contemporary crisis communication, enabling direct and timely engagement with
a global audience, and Costa Cruises, recognizing this potential, harnessed it to great effect.

References
Robbins, S. P., & Coulter, M. K. (2018). Principles of Management (14th ed.). Pearson.

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