What's your impression of what took place in this scenario?

Fundamentals of management 9th edition Pizza, Politics, andPapa

DQ39

Pizza, Politics, and Papa

Papa John's pizza founder John Schnatter has built a companywith over 4,000 units in the chain. His brother describes himas "always on." And there's no doubt that Papa John ispassionate about pizza and passionate about his business. Despite his wealth (a net worth estimated at a quarter-billiondollars-yes-billion with a B!), he's still motivated to spend sixto seven days a week working to expand his pizza powerhouse, thethird-largest pizza chain behind Pizza Hut and Dominos. Schnatter insists that the company's success isn't just due tohim. He credits his hard-working employees with upholding thecompany's mission of delivering quality pizza and providing greatcustomer service. And he says, of course, that good solidstore-level management and execution has been important, also.

No one could ever say that Schnatter hasn't worked hard to buildhis business and to be a productive, active, law-abiding citizen.However, when Schnatter was quoted in late fall 2112 as saying thathe would have to cut employees' hours to avoid having to pay fortheir health insurance under the new mandated Patient Protectionand Affordable Care Act, he immediately became the target ofcomedians and alternative publications. The only problem- hereally hadn't said that at all. A comment that he had madewas misconstrued and spread via the media and online chatter as"accepted truth." But then in January 2013, in a New YorkTimes op ed article, Bill Maher made reference to the "filthy-richfounder of Papa John's" cutting employees' hours to avoid payingfor health care. Although Schnatter seemed to have it all, hewas now faced with losing control of his reputation and his image. so what had Papa John said? And what needed to be hisnext step?

This whole thing begs with a seemingly benign question. Ananalyst had asked Schnatter during an earnings call what impact thehealth care act would have on the company's bottom line. Schnatter replied that he didn't think that the effect would bethat big of a deal, costing the company more than a dime but lessthan a dime and a nickel. Although Schnatter didn't supportthe new law, he said his company was " about as ideal as you canget' to absorb the costs..." His response was a serious answer to aserious question. However, that's when the right-wing andleft-wing media began blowing everything out of context. Histeam debated weather to respond to the negative comments but chooseto "lie low" and let the news die down on its own. Schnatterthought the whole ordeal was over until another reporter from adifferent newspaper asked him if Papa Johns was going to cutemployees hours to keep workers part-time, thus not having to payfor their although Schnatter tried to change the subject, thereporter persisted in asking if franchise owners would cutemployees' hours from being classified full-time. Schnatterresponded, It's what I call common sense. It's what I calllose-lose." The headlines left a "misimpression" that thecorporation - not the franchises- was going to cut employees' hoursand that Schnatter and Papa John's customer service phones wereoverrun with angry callers. The company's Facebook page wasinundated with negative comments. And Twitter was ablaze withmostly nasty comments. Schnatter had to take action. Aprofessional public relations specialist was called in. Herecommended that Schnatter just "correct the record." Fortunately, the reporter had taped his comments and therecording bore out Schnatter's story. Schnatter and the PRspecialist wrote a rebuttal piece to run under Schnatter'sname in the Huffington Post. This article stated that PapaJohn's already offers insurance to its part-time and full-timeemployees--although only six percent of in-store workers havesigned up, not an unusual percentage for an industry that hiresbasically young workers who are often covered by their parents'health plans. The biggest corporate threat, however, camefrom a UK market research firm referring to a study that impliedPapa John's reputation had been damaged by the wholediscussion. The hired PR person repeatedly responded tomisleading articles, asking reporters to not only report thederogatory stuff, but the positive stuff as well. Eventually,nearly every news outlet corrected the record.