Crisis management by firms advises that the firm take blame and apologize for any wrongdoing, create empathy from the consumer, solve any fundamental problem and rebuild reputation and perhaps even achieve competitive advantage.  Johnson and Johnson’s strategy when it dealt with arsenic in Tylenol bottles is the “gold standard” of this approach.     ( I used to teach this material.)  NewsCorp advised by Edelman went some way down this path.  Rupert had the most humble day ever and James frequently apologized for the hacking of Milly Dowler’s phone.  They shut down the News of the World and “cut out the cancer”.  But then tensions emerged between the incentives of the Murdochs and even NewsCorp and the classic crisis management strategy.

First, there were denials that the Murdochs knew anything about the hacking – admitting knowledge would imply there were still cancerous cells left in the NewsCorp organism and these should have also be chopped out.  The Murdochs do not want to be chopped out and hence cannot admit to any wrongdoing.  Also, if Rupert Murdoch leaves, will NewsCorp survive without the mastermind who created the mega-company?  So, blame cannot be taken by Rupert and by blood-relation James.  But someone did something wrong even if the Murdochs did not.

This leads to the second problem. The Murdochs have to blame someone for the problems that arose.  So far, they have blamed a law firm with which they deposited potentially incriminating emails.  A NewsCorp lawyer Tom Crone left and with the closing of NoTW there are may disgruntled staff.  The latter have been promised re-employment but it is not clear if this has materialized.  Finally, during testimony it emerged that NewsCorp was still paying legal fees for the private investigator at the center of the scandal and they have been forced to withdraw that support – it’s hard to get empathy from consumers if you paying the legals costs of the guy who hacked into Milly Dowler’s phone!

These two forces together mean if there is any collusion between these various players it is close to breaking down.  I guess the story will get a second wind despite the beginning of the Parliamentary summer hols.  I am not even bringing in the Coulson-Cameron angle which acts as a force multiplier for the story.

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