I. Company’s reputation at stake.
With increasing negative media exposure resulting from Great west Company’s claims against Witherspoon’s estate, management has to take some corrective actions to overcome the crisis and to save the company’s reputation in the market. Following filing the lawsuit against Witherspoon, the company is losing its customer base and is continuously being targeted by the media. A. Background Facts
1. After Ms. Witherspoon’s car broke down, she tried crossing the freeway for help. But a truck ran into her and she died on the spot. 2. Upset and angry, her daughter Ms. Lang called the truck driver and the highway Patrol to know more about the accident, but they gave her different statements about the accident. 3. Frustrated about her attempts to know more about the accident she called the truck driver’s insurance company (Great West casualty Company) and the adjuster told her that the case is closed. 4. Assuming that Ms. Lang may file a case against the insurance company, adjuster filed a lawsuit for damages to the truck for $2,886 to Joyce Lang. 5. The whole issue was covered in local and regional newspaper. Eventually the Wall Street Journal also wrote an article on it. 6. Great West Casualty Company is a subsidiary of the Old Republic International Corporation, which is a specialty insurance company. Old Republic International has 9 subsidiaries and is regarded high in terms of innovation and corporate planning. B. Critical Issues
1. The way Zucaro found about these incidents (reading The Wall Street Journal) shows that there is a very bad communication in the company. (As very well said “A man surprised is half beaten”). 2. After talking to Ms. Lang on phone adjuster interpreted that she might file a lawsuit against Great West Republic. (Her verbal messages were complementing her tone of speaking- Angry). 3. Old Republic International has just one employee responsible for all corporate communications as well for investor relations. They are outsourcing all other forms of communication to an external Public Relation firm. 4. The mishaps in the case are due to miscommunications and this is evident. Ms. Lang has full right to know what happened to her mother and it is adjuster’s duty to provide a good customer service to Ms. Lang. 5. Great West Casualty also has just one employee, Ms. Leslie to take care of all the communication. In this case she followed a general guideline given by Old Republic International to all its subsidiaries. 6. There was no one internally who could help the adjuster dealing with this situation. And since, the claim adjuster is allowed to file a lawsuit on behalf of the company, this shows there is a lack of internal controls which has started the problem. 7. Great West Company was following their policy by filing the case against Witherspoon.
8. Both the companies do not seem to be connected internally. 9. For handling these types of cases, there is no manual/procedure in place. 10. The case is well presented by the news reporter. She is known to Ms. Lang and she covered Lang’s side of story only. But there is no response from either Old Republic Company or Great West Casualty Company. C. Consequences if solution is not found
1. If Great West Casualty continues with the suit, the company’s reputation will be damaged. 2. If Great West Casualty continues with the suit, they might lose existing as well as their potential customers. 3. If Great West Casualty continues with the lawsuit, negative media might damage their reputation in the market. II. Alternatives
A. Do not drop the lawsuit
a. Great West Casualty will be able to recover money spent to cover damages. 2. Disadvantages
a. Negative publicity will still continue to raise
b. They might lose potential new and old customers.
c. Will set an example to other firms.
d. They will lose customer’s trust....
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