LOUISVILLE: Bad business news is on the rise, with crisis PR pros struggling to stem a rising tide of stories about workplace violence and sexual harassment.
Crisis business news coverage has risen 25% over the last year, according to the Louisville-based Institute of Crisis Management. This is the third year running that ICM has recorded a global increase in crisis news stories - with an eight-year increase of 256% in stories about class action lawsuits, and 500% in stories about sexual harassment.
ICM tracks crisis news coverage in 1,500 business publications, newspapers and news services worldwide. With two weeks left in 1998, president Robert Irvine reported that executive dismissals, workplace violence, sexual harassment, whistle blowing and financial damages have fueled a rise in 'bad business news.'
Workplace violence showed the greatest increase in 1998: 61 reported incidents generated 820 individual print stories and drove the coverage up 116% on last year. Whistle blowing is up 80%, sexual harassment up 73%, and stories about executive dismissals up 54%.
The increase in these human resources oriented issues probably reflects changes in the economy, said Denise DesChenes, crisis management expert at Hill & Knowlton. 'There are three major factors creating an increasing number of HR issues,' she said. 'Consolidation within firms; mergers between corporations; and a general slowdown in the manufacturing economy.'
In the last two years H&K has experienced a rapid rise in corporations looking for assistance with crisis management, she added. 'The Supreme Court decision to make corporations responsible for their employees knowing the rules on issues such as sexual harassment, has made the companies more accountable - they have to manage these issues now.'
In terms of bad press, automobile makers were by far the worst hit, according to ICM. General Motors scored the worst coverage, due to the prolonged strike of its workers in the first half of the year. Mitsubishi suffered too, due to its ongoing sexual harassment problems. And Sunbeam also made the top five 'bad press' list with its executive shake-up.
Computer software companies were the second worst hit, with Microsoft inevitably reeling from the effects of the anti-trust suit. Third were stockbrokers suffering from stories about price-fixing, racial bias in promotions and sexual harassment. Fourth were labor unions and fifth, banking.
For the third year running, a third of the crisis events were sudden and unexpected - fires, natural disasters - while two-thirds were 'smoldering' crises. 'These start out small and internal, but when mismanaged they become major business problems,' added DesChenes.