The first reaction of many businesses facing a crisis is to clam up in the hope it will pass over.
Research by academics at Ghent University in Belgium and published in the Harvard Business Review suggests that this is not the best approach.
Its research focused on reaction to corporate crises when a company self discloses against those broken by the media.
The findings suggest that the public are far more sympathetic to those companies that put their hands up and admit to their mistakes.
One wonders how, for example, the recent VW emissions scandal might have unfolded if the company had fessed up before the media machine came down on them?
Of course, every crisis is different and the facts need to be considered before a course of action is taken.
But this research seems to suggest an approach that many companies might find challenging.
When organizations first become aware of a major problem with a product or service, one with important consequences for consumers or the environment, they face a dilemma. Should they self-disclose the issue? Or should they let sleeping dogs lie? Ethically, the choice is simple. If management is aware of a problem, its moral duty is to communicate openly and honestly to all stakeholders involved. In practice, however, organizations are reluctant to communicate as long as an issue is internal in nature and the extent of the crisis seems limited.
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