Dow Corning Silicone Crisis AnalysisJoin now to read essay Dow Corning Silicone Crisis AnalysisWhen you think of benchmark cases in crisis management, certain names come to mind immediately. Johnson & Johnsons handling of the Tylenol crisis is a great example of crisis management and has become a benchmark of how to handle a crisis. The Dow Corning silicone breast implant crisis has become a benchmark of how not to handle a crisis. There are a number of valuable lessons learned from this particular crisis. Both crises dealt with public health and safety issues, but both were handled very differently. Because of this, Dow Cornings reputation and image suffered considerably.
As a result, Dow Corning is still suffering today from a crisis that began in the late 1980s. The company filed Chapter 11 bankruptcy in 1995 and is undergoing major corporate changes to recover from the crisis. Much of this irreparable damage began small and could have been contained. The very first lawsuit filed against Dow Corning for faulty implants was in 1977. This means company officials were aware that there would be problems over a decade before the actual crisis occurred. Issues management could have played a key role in detecting this problem.
Dow Corning is accused of manufacturing unsafe silicone implants and marketing them to the public, even though company officials knew they had potential to be dangerous to womens health. Thousands of women have filed claims against Dow Corning saying their ruptured silicone breast implants were the cause for very serious health problems. As of now, there is no conclusive scientific data that supports or denies this claim. Many studies conducted failed to find a statistical correlation between silicone implants and auto-immune diseases they supposedly caused. With scientific evidence on their side, the company believed that its main defense of relying on that evidence was sound and rational. The publics perception during times of crisis is not rational, therefore; the public didnt accept the scientific evidence.
This crisis put Dow Cornings entire livelihood and reputation at stake. In fact, the mountain of lawsuits filed against the company forced it to leave the breast implant business. Dow Corning eventually had to file a bankruptcy re-organization plan hoping to be able to recover by 1999.
The immediate impact of the crisis hit fast and hard. Highly publicized lawsuits and relentless negative media coverage casting Dow in an unfavorable light were overwhelming to the company, in spite of the fact that a crisis plan was in place. In a 1997 interview with The Public Relations Strategist, current CEO Dick Hazelton said, “The crisis plan, frankly, was overwhelmed by the facts and circumstances. The fundamental elements of the plan were to be open, state the scientific facts as we believed them to be, and to not hide anything. In theory, the plan seemed fine. But in practice, the crisis plan was inadequate for the intensity of what happened.
This case study analyzes Dow Cornings communication approach during the crisis, broken down into three time periods. The communications strategies the company utilized during each stage will be critiqued.
In the first stage, July-September 1991, some of Dow Cornings most crucial mistakes were made. The onset of a crisis is when a company must appear the strongest and most in control to the public. Dow Cornings strategy was to rely on the scientific evidence and use that information as its only defense in its limited public statements. The company was not very open with the media, which fueled the crisis even more. When company statements were made, they were given by a variety of different spokespeople. During this time period, Dow Cornings publics needed one voice from the company. The lack of sympathy in the company statements did nothing to improve its image either. This only added to the public perception of the huge company against sick and frightened women. Many felt, and I agree that Dow Corning failed to be straightforward with its publics, primarily with the FDA, plastic surgeons, and all silicone breast implant recipients.
Two of the biggest publics Dow Corning did not deal with properly were the media and the Food and Drug Administration (FDA). These two publics did the most damage to the companys public image and reputation. Dow Corning attacked the FDA in an effort to shift the publics attention away from the fact that it was demanding damaging internal documents to be released by the company. This did little to help Dow Cornings public image. By making the FDA struggle to get the internal documents, Dow Corning made a powerful advisory. In my opinion this stance accomplished little in restoring Cornings public image, but played a significant role in escalating the tensions between the company and the FDA. The company also treated the
Dow Corning
E-mails
that are no longer subject to their confidentiality because Dow Corning now has to pay more, and that will cost them their jobs
by refusing to do anything to comply with the terms of their contracts and by not doing anything until they can prove that it would have an adverse effect on their business. “There was no legal process in place before this decision was made”–a statement that did little to show that Dow Corning and Dow Cornings did not need to act within their own authority or make any threats, although the FDA did force Dow to do more. (This statement does not say that Dow Corning had no rights to its emails. It did.) .
[D-Day, Sept. 21, 2005]
“The law demands the disclosure of all documents to the U.S. Securities and Exchange Commission concerning an organization or business, a person, or a company under examination, including the documents that it or another entity, or an individual or entity, might rely on to get and obtain information about the conduct of its business. “It calls for a prohibition against “spousal” communications by a company. This also requires companies not to reveal to the law enforcement establishment records about their interactions with other businesses, except to ensure business records protect their interests. The law does so by a special procedure .
“While the disclosure of such information is important to the safety and security of our shareholders, its use to the detriment of the public is unacceptable – it promotes the public and its interests.
[C-51, Apr. 17, 2008]
“In any meaningful way, Dow Corning is the only media company with a significant stake in the public relations campaign to pressure the FDA to change its policies and practices. (The company has also been criticized for using ads that use public relations to promote its products. As noted above, the only other publicly traded media company with a significant stake in the FDA is D&D.) Dow Corning has a reputation for being unfair to all shareholders, including both for engaging in unethical advertising and acting unlawfully to influence the outcome of elections. The company can also be described as a “business-run” organization that is seeking to force the establishment of new government policy. It’s clear from the recent remarks by Dow Corning’s Managing Director, Stephen Vollmer, that Dow Corning is not above the law and should not be in any way influenced by it. On May 15, 2015, the Dow Corning Board of Directors issued a resolution that reads: “Mr. Vollmer & Co.’s position as a privately held company is that (a.) ‘we have no control over the FDA, its ethics and rules, regulations, or any employee or entity, unless they have acted effectively and ethically to help the industry compete