Why Chang Chi Foodstuff Factory Co. Failed in Crisis Management

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Founded in 1977, the Taiwanese cooking oil manufacturer Chang Chi Foodstuff Factory always has cheapest price in the cooking oil market. However, on 16 October, 2013, the firm was found to have added illegal additives to edible oils and have adulterated its ‘pure’ olive oil with fifty percent of low-end cottonseed oil. Cheng-li Kao, the chairman of the company apologized for it. However, the chairman was not honest, not well-prepared, and failed to turn everyone’s attention. When the crisis is reported by the Press, it is important to be concentrated and circumspectly solve the problems, or the reputation of the brand would easily be ruined. The best solution is to be honest while the problems are exposed. Trying to hide the truth is helpless but makes people have much more bad impression on the company. The head of Chang Chi Foodstuff Factory emphasized that the questionable product quality is the result of problematic production process monitoring, not intentional deception. People doubted about the explanation, the media kept digging—more scandals were revealed: Food and Drug Administration examined and found other oils, including chili, peanut, sesame, sunflower, completely not match their advertised ingredients. It seemed that there would be more and more problems waiting to be exposed and the chairman intentionally deceived people. It proved that lying is the worst way to manage crisis and time cannot bring problems away but making them even more complicated and impossibly deal with. Being honest is the most efficient way to solve the problem. Being honest is good, and it is also part of damage control. Without doing sand table before press conference and estimating potential losses, it is not possible to properly respond the public and handle coming claims. Keeping silence or dodging question wouldn’t dispel consumers’ doubts. Lies will cause even

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