Total Recall: A Contingency Event Case Study:

Contingency event;

“a contingent event; a chance, accident, or possibility conditional on something uncertain: He was prepared for every contingency”, It’s time for change…start building your core competences. Dictionary.com Unabridged, Based on the Random House Dictionary.

Company X have been preparing for and experiencing disasters and emergencies for as long as it has existed. Over the years, their processes have focused largely on maintaining quality, reliability and brand reputaion.

Simply put, their robustness was based is the ability to carry on mass producing without compromsing the above.

While reports of sudden contingency events in Company X can be traced back many years, events leading up to the two latest recalls involving product defects in two years later – and consequence knock-on effects that Company X’s problem with sudden contingency events attracted national attention.

Company X has announced a recall for a total of around 8 million products around the world in connection with product defect problems with its best-selling systems and other hybrid products.

As with previous recalls Company X hoped the issues surrounding the sudden contingency events would subside with minimal fuse.

From the events we can comfortably deduce that ineffective communication and untimely dissemination of accurate information has greatly compounded the recall issue. Company X’s perception of their market position having overtaken a market leader as world’s number one manufacture, in terms of their quality, reliability and brand reputation could have lead to complacency and has truly exacerbated events that their own robust contingency plans should have taken care of.

Inability to deal with the issues as they occurred and effectively applying lessons learnt and experiences into ongoing practical response strategy would have alleviated the need to have a massive recall with relentless media pressure and speculations.

The issue of the various sudden contingency events 7 years later seems to the dominant factor in their crisis. It looks like Company X’s strive for global dominance could have shifted their focus from quality and reliability to mass productions, cost cutting exercises and safety concerns. In its delayed response from the initial incidents, it became difficult for them to predict and analyse future risks therein.

There were no shortage of internal information about the defects, but the reality-based effects were purely speculative thus working against Company X’s preparedness and quality management processes.

What they did not put into consideration as events unfolded were the knock-on effects of the economic downtown and the shifts in owners of the global automobile industry?

With governments taking part ownership in the industry sector, differing pressure and interest groups have become the key players in the industry and there has been a turn in the playing fields with the heavy handedness and unpredictability of a bureaucratic nature.

In view of these external and endogenous forces Company X should have been more open and responsive to the media and governmental pressure groups. Company X should have been proactively consulting at all levels of the stakeholders engagement, prioritising events in tandem to get a detailed analysis of the situation in order to put in place an effective plan for communication management and recovery.

What should have been most important to Company X?

To protect its brand reputation, quality and reliability record in a reasonable time scale. This would have been crucial and could have underpinned the tenets that lay at the root of effective communication response, recalls and recovery plans.

Concurrently, Company X should have considered all possible events that could have a potential impact on its operations be it political, economic, natural, technological, criminal and / or malicious to analyse its business readiness to protect its reputation, brand image, quality and reliability against the risks in term of security impact.

With an estimate loss of $millions in share market in a day and compensations estimated to be around $millions as well, Company X have a momentous task in re-establishing themselves as lead and rebuilding their brand image of exceptional quality, reliability and environmentally friendly automobile. To date there has been up to catastrophic incidents linked with Company X since 2000.

The reputation impact and predicament comes with a significant human effect and huge financial impact in the ensuring lawsuits.

Two attorneys – are joining forces in a bid to sue Company X’s pants off.

“Two attorneys stating that, as a result of these recalls, Company X product and systems owners lost the use of them, and sustained, among things, economic losses and severe emotional distress. The complaint charges Company X with breach of implied warranty and negligence, and seeks compensatory, punitive and exemplary damages for the class, as well as equitable and declaratory relief. It also asks the Court to enjoin Company X from implementing any fixes in the contingency events of the subject without approval from the necessary legislative authority.”

Company Y hit by its own recall fears, to recall their products and systems made in a outsourced factory it shares with crises-struck Company X.

According to a leading national publication, Company Y, Europe’s second-­biggest products and systems maker, yesterday announced a recall of similar products and systems manufactured at its plant in the mentioned outsourced factory amid concerns they may have faulty products and systems. Woe from foe!!!

We are yet to see the end of this great contingent event, Start Your Contingency Event Plan – Here and Now!

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