Case Study 5

NEUTRALIZING THE CONCORDIA EFFECT!

Communication has become crucial in Costa Cruises (the Italian cruise com owned by Carnival Corporation). In recent events, the Costa Concordia keeled off the Italian coast near the island of Giglio in Tuscany, Italy, in January 2012 Costa Allegra was hit by fire and drifts in the Indian Ocean a few weeks later.

Captain Schettino's preliminary abandoning of the Costa Concordia as well as his denial is turn onboard the sinking ship brought into question the competence of the company crew as well as the effectiveness of recruitment procedures. After a few days of company stressing that the complete responsibilities of the accident were attributed to the captain, Costa Cruises decided to suspend all social media activities as a sign of respect for the victims and as an attempt to prevent inappropriate comments. However, the lack of disclosure and the distorted information coming from other media aroused contrasting reactions by customers, some of whom expressed solidarity and closeness to the victims as well as to the company, and others who were upset and frustrated by the company's silence.

Later, in collaboration with the communication agency Burson-Marsteller, Costa Cruises decided to launch an exceptional communication campaign to defend the company's reputation and market share in the highly competitive and global cruise market. This time, the strategy was based on a complete disclosure of all rescue operations on social networks. Here are some examples of the actions undertaken:

Continuous updates via social media on the rescue, recovery, and safety operations as well as on the assistance provided to the guests and their families in order to document the status of relief efforts;

Information on the strategy for the removal of the wreck;

The reduction of the environmental impact of the accident; and

Diligent communication of the protection of the island's eco-system (seriously threatened by heavy fuel oil).

The news of a friendly and successful negotiation for settling the initial compensation package for passengers of the shipwreck was promptly communicated with official press releases. The announcement of new safety measures was given during a ceremony celebrating the delivery of the company's new $665 million flagship Costa Fascinosa. Indeed, the number of bookings reserved four months later, showing all increase of 25 percent from what they were at the same time the year before was a big sigh of relief for Costa Cruises' executives.

QUESTIONS

1. Beyond possible human errors and tragedy responsibilities, what do you think of this situation from the perspective of managing communications?

(5 Marks)

2. Why do you think Costa's executives decided to silence communication on social media? Was this an appropriate strategy?

(5 Marks)

3. How would the management handle a better communication at the early stage of the incident?

(5 Marks)

4. The increase in the number of bookings seems to corroborate the success of the latter communication strategy of a complete disclosure on social media. Discuss the communication management implications.

(5 Marks)