Great West Casualty V. Estate of G. Witherspoon - Case Study Example

Institute Great West Casualty V. E of G. Witherspoon Mr. A.C Zacaro, the C.E.O and chairperson of Old Republic International Corporation. FROM: management consultant DATE: April 24, 2012 SUBJECT: Memo on communication strategy regarding Great West Casualty V Estate of G. Witherspoon Case. This memo addresses the litigation issue against the estate of Mrs. Witherspoon because of an accident that led to her demise and caused by one of the company’s clients. The memo makes recommendations on a communication plan that Great West Casualty will use in addressing the litigation case. The company requires advice on how best to address the problem in light of heightened media coverage and criticism. The memo provides a brief summary of the details surrounding the case, looks at the implication the case has on Great West Casualty and ultimately on Old Republic International. Finally, the memo will offer recommendations and an action plan needed to handle the situation. Background information Gertie Witherspoon was on her way to work on July 1 1998 at 4:30 AM when one of her tires on her automobile blew out and the car careened into a roadside ditch. With her car disabled, Witherspoon decided to walk along US route 71 near Adrian Missouri. Still shaken from the accident, Witherspoon attempted to cross the highway to reach for help. At that moment, two trailers, each moving at a speed of 70miles side by side spotted the small figure as she crossed the highway. The truck drivers tried stopping the vehicle but could not avoid hitting her and she died on the scene. In the weeks following the incidents, Mrs. Lang, the only daughter to Mrs. Witherspoon sought more information on the death of her mother. However, all she got was indifferent information from the highway patrol and the owner of the truck company. Frustrated, Lang rang the adjuster at Great West Casualty to ask for more information regarding the case. However, according to the adjuster, there was no fault on the part of their client, Vernon County Grain and Supply. The adjuster pronounced the case closed prompting Lang to seek out help from an attorney. Believing that the family was preparing to sue the company, the claims representative at Great West Casualty filed a suit on behalf of the company against the estate of Mrs. Witherspoon. Five months later, Mrs. Lang received notice of a legal suit filed against her family for damages on the truck that hit her mother. Specifically the claim sought $2886 on the account of property damage caused to the trucks due to negligent actions of Gertie Witherspoon. The story first caught the attention of media in December 18 1998 when a journalist working for Kansas City star and an acquaintance of Mrs. Lang wrote a brief article elaborating the life of Mrs. Witherspoon. Mrs. Lang received the claim, as she was the acting executor of her mother’s estate. When the legal file arrived, Barbara Shelly, the journalist at Kansas City star wrote a second story elaborating the accident and the action taken by the insurance company. Wall street journal picked the story on January 15 1999 and reported it. This marked the beginning of Great West Casualty problems, as the journal capture a wider audience hence posed a threat to the future of the company. Discussion Mrs. Witherspoon just had an accident at the time she was crossing the road meaning she was truly dazed and not acting negligently as the company claimed in the lawsuit. Because she had suffered an accident, it would rule out claims of carelessness, as she was distressed. In light of these facts, it is probable that the company would not succeed in court. This is not taking into consideration the intangible and unforeseeable cost the company is likely to incur in the end in terms of damaged company image, which would far outweigh the damages demanded by the company form the Witherspoon family. Poor communication strategy: problems for Great West Casualty did not begin when Mrs. Lang went to the media. From the brief background information, the problem started when Lang telephoned the company adjuster and was not much help to her. Mrs. Lang was looking for the way forward, and trying to find out what rights the family was entitled to. Instead, the adjuster did not avail any information and instead proclaimed that the truck company was not in any way responsible. The adjuster’s approach to the issue was not inviting and gave an indication that great west casualty was least bit concerned about the death of Mrs. Witherspoon. It would have been better if the adjuster had showed signs that the company was looking to solve or improve the situation. This is an indication that the company needs to revise the corporate communication strategy. Employees interacting directly with the clients and other related parties should receive proper training (Eunson 67). In addition, the insurance industry experiences many lawsuits hence it is essential to control corporate communication to the degree that it is possible (Riel & Fombrun 110). This does not mean that Old Republic has to take over Great West Casualty, rather the entire company communication department should aim to work together to avoid bad publicity. Non-proactive employees and inflexible policy: the second problem for the company is non-proactive employees and inflexible policies. The action taken by the legal team was to protect their clients against a possible lawsuit as indicated by the family. However, the path taken by the legal department employees demonstrates a lack of initiative and pro-activeness on the part of Great West Casualty employees. Each case is unique and needs proper review before taking any action. The employees at Great West Casualty did not look at the special aspects of the case. They did not stop to collect complete information before filing the suit. To them, they are more interested on doing things as stipulated in the company books and meeting deadlines. This lack of initiative and pro-activeness is the reason why the company has attracted negative media attention and criticism. Had the employees looked at the situation more carefully, they would have realized that Mrs. Lang was only consulting with an attorney and not looking to file suit against the company. Secondly, the company policy should ensure flexibility that allows employees to work around it when circumstances demand for it (Goodman &Hirsch 4). Goodman &Hirsch note that granting employees some degree of autonomy and enacting policies that support them in their line of work would go a long way in avoiding such situations. According to Stoldt, Stephen & Branvold, when employees feel that by not adhering to company policies, they risk punishment or reprimand, they are not likely to take personal initiative in handling cases. Company policies should support the mission, vision, culture and structure of an organization (22). In the current environment with advances in technology and globalization, flexibility is very important (Goodman &Hirsch 4). For this case, if the company is to remain competitive and relevant to their clients, policies should also be flexible. It is also important that multiple people are involved in the decision making process particularly when communicating legal procedures (Fearn-Bank 45). From the details surrounding the incident, as much as legal action was to protect the client and the company, the people responsible misunderstood the facts an indication that hasty decision making. This resulted into the current situation facing the company. Inefficient communication and public relation department: the communication department at Great West Casualty is severely understaffed with one person functioning as an entire department. Lack of adequate staff made it impossible for the company to notice the story while it was still at the local media level. The fact that the chairperson had to learn about the case from the wall street journal demonstrates gaping hole in the company’s communication and PR department. One week had lapsed before wall street journal got to the story and yet within this time the department had not heard anything. It is impossible for one person to handle all the communications of the department and at the same time is on the lookout for what the media is publishing regarding the company. Without support staff, the communication department is hardly functional. Communicating the company’s side effectively is important; however, caution is important. The situation is now a crisis and would be unwise to give the public, the media and shareholders another reason to lash out on the company (Fearn-Bank 3). A public statement and a course of action will be prepared addressing the problem that Great West Casualty and Old Republic will use in the future to prevent such a situation from happening again. Recommendations The following steps should be taken with immediate effect. It has been several months since the incident happened hence the need to act immediately before the situation gets out of hand and there are no more solutions to the problem. 1. It is my recommendation that management contact and instructs Great West Casualty to drop the lawsuit against the estate of Witherspoon. This is because there are fewer chances the lawsuit would succeed in the court of law. In addition, I have learnt that old republic would have no problem covering any claims filed by the trucking company. Pursuing the lawsuit would be insensitive but dropping the lawsuit would be the first step towards the right direction. 2. The next step would be to contact the public relations department and ask them to draft a public statement expressing the company’s sympathy on the family’s loss (Griese 123). Griese recommends that the public statement should apologize to the people and the apology should be sincere and not play down the offence (123-24). A sincere apology will do more than playing down the situation could for Great West Casualty and ultimately Old Republic. The department should also respond accordingly to the media, meeting their every need, as they are responsible for relaying company information to the public. 3. The third recommendation is organizing the communication department. Old republic comprises several subsidiaries and it is important that they all read from the same script (Eunson 78). The organization of corporate communication should be in such a way that there are employees responsible for maintaining direct and continuous communication with subsidiary companies. It is also the responsibility of these employees to ensure they are aware of any legal action intended by subsidiary companies to prevent such a situation from happening again. It communication of the communication strategy to subsidiary companies is paramount (Eunson 78). Hiring new staff will take some time but management should ensure adoption of these strategies as soon as possible. 4. The company should also follow up with the Witherspoon family and provide any answers to any of their queries. The follow up will ensure that Mrs. Lang will not pass on any negative comments or opinions to current and potential clients as this would damage the company’s image despite efforts take to repair it. 5. After effecting proper damage control, it is important that the company monitor public opinion of the company in the following months (Riel & Fombrun 56). The situation happened over a period of several months, and it is going to take roughly the same amount of time before the company regains complete public trust (Riel & Fombrun 56). For this reason, Old Republic and Great West Casualty should follow up on how the public views the company and take any measures needed along the way in restoring company image to its former glory. 6. The management should stress to the public relations department on the importance of this strategy, as it will determine the company’s well being. For this reason, a lot of seriousness should is emphasized in handling the situation. It is also important that subsidiary firms understand this new communication strategy. Necessary steps should also be taken to ensure it is received and by the right people. Professional Business letter Great West Casualty, Company address, 24 April 2012. Mrs. Joyce Lang, Address, Dear Mrs. Lang: The reason for writing this letter is to express my sincere apologies for the loss of your mother, Mrs. Gertie Witherspoon and lack of corporation from Great West Casualty. I would also like to apologize for the lawsuit filed against your family seeking damages for the trucks involved in the incident. I understand your hurt and disappointment with the company in handling the situation. We also appreciate the inconvenience that lack of corporation from the company might have caused you and your family. When I reviewed your file, it was clear to me that you were only seeking guidance from your attorney on your rights in as far as the situation was concerned. It was never your intention to file a suit against the company as was earlier presumed by some of our junior staff. The one possible explanation I could give in regard with the lawsuit is that the legal department has recently had a few key staff changes. In an attempt to ensure that they execute their job correctly according to company regulations and meet deadlines, they might have failed to conduct further investigation on the matter before taking it to court. There is no doubt that the lawsuit must have shocked you and the family not to mention the distress brought upon your family in having to relive the loss of your mother. Consequently, the lawsuit must have appeared as very insensitive on the part of the company seeing as it was clearly not the fault of Mrs. Witherspoon that the incident happen. In an attempt to take care of our clients, we overlooked your side of the story. To make amends for the way the company handled your case, I have directed the legal department to withdraw the lawsuit against your family with immediate effect. I have also directed the communication and public relation department to prepare a public statement explaining the facts as they happened and offer an apology to your family and the public. I promise you that thorough investigation in the future and no filing of lawsuits until all facts are considered. The company has also introduced in service training to our staff to ensure they are fully equipped with information for better customer service. I can assure you that this will never happen again as it is the priority of this company to sustain and protect our reputation by protecting our clients and any third party that may be involved. It is also the aim of the company to ensure that all individual rights are upheld regardless of their association with the company. To make up for any inconveniences that the company might have caused, we offer to pay for your car and health insurance for your family for the next one-year starting may 2012. Therefore, you will receive refunds for any payment done before hand. Mrs. Lang, I would like to assure you that your case is the first of its kind and not typical of Great West Casualty. We are committed to providing coverage to our clients and upholding the rights of each party involved. Again, I apologize for the inconvenience regarded to your family. If you have any more queries regarding the matter, please feel free to contact me through our company official line or email address. Yours in service Manager, legal department Works cited Eunson, Baden. Communication in the Workplace. Hoboken: John Wiley & Sons, 2012. Internet resource. Fearn-Bank, Kathleen s. Crisis Communications: A Casebook Approach. New York: Taylor & Francis, 2010. Print. Goodman, Michael B, and Peter B. Hirsch. Corporate Communication: Strategic Adaptation for Global Practice. New York: Peter Lang, 2010. Print. Griese, Noel. How to Manage Organizational Communication During Crisis: A Seminar Guide and Primer of Best Practices for Public Relations Professionals. Tucker GA: Anvil publishers, 2002. Print. Riel, C. B. M. & Fombrun, Charles J. Essentials Of Corporate Communication: Implementing Practices for Effective Reputation. New York: Routledge. 2007. Print. Stoldt, G C, Stephen W. Dittmore, and Scott E. Branvold. Sport Public Relations: Managing Organizational Communication. Champaign, Ill: Human Kinetics, 2006. Print. Read More