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Announcements: Tuesday

Breakout—review for the final Office hours next week:

Tuesday 1:30-3 Wednesday 10-11:30, 3-5

Thursday 2-4Exam is on Friday 10-12, various rooms that

I will post on Oncourse

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Announcements: Thursday

Office hours next week:

Tuesday 1:30-3 Wednesday 10-11:30, 3-5

Thursday 2-4

Exam is on Friday 10-12, various rooms that you were told in section and that I will post on Oncourse

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G302, Week 14 Managing Controversial Issues

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Calgene

The aim: to genetically modify crops: insert genes to improve a crop in some way. $90 million was spent 1980-92.

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Calgene’s Products The FLAVR SAVR tomato, which

would not rot on the vine and so could be naturally ripened

Herbicide-resistant cotton Improved canola oil for detergents,

shampoo, margarine, and auto lubricants

Which of these would have the most political trouble?

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What you will learn today

How should you deal with activists and the press?

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The Life Cycle of an Issue

Development Felt need, Dissatisfaction

Politicization Public discussion, Intellectual leadership, Mobilization Triggering event

Legislation

Implementation

Your Ability to Influence Shrinksover Time...

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Heading off the Issue

1. Crisis Audits: identify a list of potential problems

2. Fix the problem before the pressure starts.

3. Admit responsibility

4. Co-opt the opposition

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Admit Responsibility Cut your losses Best done early---before pressure--- not late Limit the story’s lifetime

Maybe even if you’re not mainly to blame— like out-of-court settlements, or no-questions-asked returns

Like the “big bath” in accounting

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Co-opting the Opposition

Figure out their personal objectives

Get their approval by compensating them

“Substitutes” in the interest-group analysis chart

The “Danegeld” problem

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The Politics of Mass Opinion

Concentrated

Dispersed

Concentrated

Interest group politics

Entrepreneurial politics

Dispersed

Client politics

Majoritarian politics

Policy Benefits

PolicyCosts

Mass opinion is mobilized in entrepreneurial and majoritarian politics.

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Entrepreneurial Politics Political entrepreneurs are expert at

using the media to mobilize interest groups

Does your business have that expertise? Sensationalism sells the story!!! Many people forgive someone who lies

for the public interest People don’t forgive businesses that lie

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Greenpeace and Shell Should the Brent Spar be dumped

deep in the sea? Greenpeace’s situation: a drop in

contributions Greenpeace estimate: 5,000 tons

of oil sludge. Shell: 100 tons.

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Greenpeace’s spokesman:

“Joe Six-Pack won’t understand your technical details. All he knows is that if he dumps his can in a lake, he gets fined. So he can’t understand how Shell can do this.”

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Imagine you are a reporter…

Reporters must operate with tight deadlines Reporters are not experts. They rely on experts:

Government sources: The FDA, the ITC Think tanks like the Heritage Foundation and the

Brookings Institution Academics: Wisconsin and Oxford Industry sources paint, railroads, U.S. Steel

Which experts have the greatest incentives to be readily available? Are they biased? Can they be trusted?

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How to “Spin” the Press: Give Them What They Need Provide information. Give them a name and phone number of

someone to call for a quote or a fact. Always be trustworthy. Correct mistaken

statements instantly. Write the story for them! Give them

something as a starting point. Create “think tank” response (Accuracy in

Media, Center for Media and Public Affairs, the Media Institute, etc.)

Enlist a politician to push your position

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Coca-Cola Children in Belgium started

becoming nauseous after drinking Coca-Cola

Was it Coke’s fault? Even the Coke managers in Europe and the USA didn’t know

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What strategy should Coca-Cola have used?

(a) Lobby the EC regulators(b) Co-opt the opposition(c) Start advertising to influence

public opinion(d) Admit potential responsibility(e) Wait two weeks to get the facts

correct, then use one of the options above1. Did the sign-in sheet get around?

2. If you answered a question, bring up anotecard for me.

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PR Mistake 1: Not Using Your PR Department

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PR Mistake 2: Not Telling Your PR Department

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PR Mistake 3: Listening to Overcautious Lawyers

Why do you think your company’s legal staff might give you bad advice when they suggest you say nothing to the public about the crisis?

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PR Mistake 4: Putting Off the Pain

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Calgene’s Tomato Strategy Marketing channels Lobbying regulators Lobbying politicians Educating the media FDA approval

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The Unhappy Ending Calgene’s political strategy was highly successful. It

did get FDA approval. Calgene’s business strategy didn’t do so well.

Consumers didn’t find it worth paying a 200% price premium for the tomato.

Calgene sold out to Monsanto. The moral: Even with the best political strategy, a

company needs a good product produced at a low cost.

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Business Lessons Identify issues before they are

publicized. Head off problems using self-

correction or co-opting. Keep good relations with the

press and government. Make their jobs easier.

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Evaluations: Tuesday: 4960, G302

Thursday morning: 4944, G302

Thursday evening: 4954. G302