Analysis
Denny's
Challenger
Jack in the Box
Tylenol
Union Carbide
Analysis
Case
Study: Jack in the Box E. coli crisis
On
January 15, 1993, the Washington State Health Department alerted Robert
Nugent, president of Jack in the Box, that the E. coli outbreak they had
been informed of two days earlier, was at least partly attributed to hamburgers
purchased at Jack in the Box restaurants (Sellnow and Ulmer, 1995). "Within
a month, three children in the Seattle area, all under three, died of
E. coli 0157:H7 poisoning - the strain linked to Jack in the Box"
(p. 138).
One child had eaten at Jack in the Box, it was thought another was infected
by a child who became ill after eating at Jack in the Box, and a cause
for the third child's infection was unknown. In total, 400 people were
infected with the bacteria in Washington State, Idaho and Nevada. "As
a result of this crisis, the Jack in the Box fast-food chain was not only
in danger of losing sales, the company's very existence was threatened
by the crisis as well" (p. 138).
Primary Evidence. From the beginning of the crisis, Jack in the
Box emphasized they were not solely responsible for the outbreak, pointing
to the fact that customers not only ate at Jack in the Box, but other
establishments as well. Although not accepting blame for the crisis, Jack
in the Box tried to bolster their credibility by announcing in their first
press release, January 18, 1993, they had taken measures to ensure all
their menu items were prepared in accordance with an advisory issued by
the Washington State Department of Health (Sellnow and Ulmer, 1995).
It wasn't until January 21 that Jack in the Box took some responsibility
for the crisis by announcing that the source of the problem was, in fact,
contaminated meat. They explained they were reluctant to speculate before
results from state tests came back which now indicated the problem was
due to contaminated hamburger. Jack in the Box now pointed the finger
at their meat supplier.
Robert Nugent also pointed the finger at the Washington Health Department
and their apparent lack of passing out information in regards to new regulations,
he also addressed corrective action the company was taking. His January
21, 1993 memo announced Jack in the Box would increase cooking times so
the internal temperature of all hamburger products would exceed the new
state regulations, check all grills to insure proper operating temperatures,
and retrain all grill personnel on proper procedures.
Jack in the Box, on January 22, 1993, pledged "to do everything that
is morally right for those individuals who had experienced illness after
eating at Jack in the Box restaurants as well as their families"
(Sellnow and Ulmer, 1995, p. 146). Jack in the Box dropped their criticism
of the Washington State Health Department's information distribution procedures
February 12, 1993, and further emphasized their explanation of corrective
measures (Sellnow and Ulmer, 1995).
Waiting a week to talk with the media is what really hurt the company's
reputation. "At the time I thought they were being unfair,"
says Nugent. "It seemed to me they were more interested in placing
blame than in really understanding what happened here" (p. 157).
The story was prevalent for weeks, filled with accounts of organ damage
and hospitalized kids. Foodmaker did not comment. "We had developed
an attitude about PR that was something like, 'Keep our mouth shut and
if you want to talk with the press, have them call us,'" recalls
Nugent (p. 157). Faced with negative publicity for a month, Robert Nugent
replaced his public relations firm with President Jimmy Carter's former
press secretary, Joseph (Jody) Powell, who helped turn things around.
Secondary Evidence. Although officials at Foodmaker Inc., Jack
in the Box's parent company, claimed they first learned of the potential
contamination on January 17, their initial response to destroy 20,000
pounds of potentially contaminated meat; to switch meat suppliers; to
set up a toll-free number for complaints; and to raise cooking temperatures
was seen as a positive move. (Soeder, 1993).
Not so positive though was the fact that they didn't publicly accept responsibility
for the food poisonings until the crisis was nearly a week old, and they
partially blamed suppliers and state health officials. They also sought
full recovery of losses and damages from their meat supplier, Vons. In
response, the supplier issued this statement: "While we expected
Foodmaker to sue its suppliers, we continue to be confident that Vons
processing did not contaminate the meat. Health authorities have made
it clear that proper cooking would have prevented this tragedy."
(Soeder, 1993).
According to Goff, (1999) "Foodmaker did the right things and did
them swiftly…But when it came to communicating with the public, Nugent
proved amazingly inept" (p. 157). Jack in the Box immediately suspended
their hamburger sales, recalled meat from distributors, increased cooking
times and temperatures, and pledged to pay all medical costs related to
the disaster. Jack in the Box also hired a Dr. David Theno, a prominent
food-safety consultant, to design an entirely new food-handling system
(Goff, 1999).
Scholarly Journals. Jack in the Box, although still not taking
responsibility for the crisis, was able to bolster their public image
by emphasizing their willingness to alter the cooking procedures used
in their restaurants and insisting their role in the crisis was speculative.
(Sellnow and Ulmer, 1995). They emphasized the fact that they were taking
actions to improve safeguards, while insisting that the crises was system-wide
rather than specific to their organization. Although they insisted their
products were not the source of many infections for which they were suspected,
they offered to pay hospital bills of those who had eaten at their restaurants
(Sellnow and Ulmer, 1995).
January 21, 1993, marked the day when Jack in the Box took some responsibility
for the crisis. In a prepared statement by Robert Nugent, he addressed
the contaminated meat and cooking temperatures, but also managed to shift
the blame away from Jack in the Box. He explained that their investigation
"traced the contaminated hamburger to a single supplier (Sellnow
& Ulmer, 1995). "He also explained that the company had taken
the 'extraordinary step' of replacing all hamburger patties in every restaurant
in Washington and Idaho - despite the fact that health officials indicated
this step was unnecessary" (p. 143).
Despite the fact Jack in the Box generated the argument of denial, the
fact remained that their product had resulted in multiple deaths, and
the public was still very skeptical. When Jack in the Box focused on external
problems that contributed to the crisis, they tried to de-emphasize internal
problems by focusing on the company's history and their compliance with
cooking regulations. "In fact, the history of our company's compliance
with those regulations is verified through numerous evaluations conducted
by federal, state and local governments" (Ulmer & Sellnow, 2000,
p. 151). In response to Jack in the Box's failure to meet higher temperature
guidelines imposed by the state, Nugent said the message had not reached
his office. If Jack in the Box grills had been at the higher state standard,
it is unlikely that the crisis would have occurred (Ulmer & Sellnow,
2000).
Discussion. The Jack in the Box crisis falls under Coomb's 'accident'
category - "unintentional and happen during the course of normal
organizational operations" (Coombs, 1995, p. 454). The crisis was
devastating to Jack in the Box in the short-term. They had projected losses
of between $20 and $30 million by March 24, 1993, resulting from the E.
coli crisis. However, by the end of the year, they were able to slow their
losses substantially.
Jack in the Box used several strategies to weather the E. coli storm.
They began with a combination of avoidance and attachment strategies.
When they issued their first press release explaining the source of the
illness was unclear; and that some, but not all of the people being treated
had eaten at their restaurant they employed two types of avoidance strategies
- denial of intention and denial of volition. They also used an attachment
strategy - bolstering - in the same press release when they announced
the extra measures they were taking to ensure all food was cooked in accordance
with a new state advisory that was issued.
They also employed scapegoating, a form of denial of volition (avoidance
strategy) when they first took some responsibility for the crisis January
21, but blamed their meat supplier for the contaminated meat. They also
used forgiveness strategies, more specifically remediation, when they
announced they would pay all the medical bills for people who became ill
during the E. coli crisis. Another forgiveness strategy, rectification,
was used when Jack in the Box announced several corrective actions they
were taking in regards to cooking temperatures.
Although Foodmaker, Jack in the Box's parent company, continued to be
in the news for years following the crisis - every time E. coli came up
the whole Jack in the Box story would resurface - the company survived.
By referring reporters to articles regarding Foodmaker's food-safety innovations,
the company regained credibility. In 1994, they instituted the fast-food
industry's first comprehensive food-safety program, the Hazard Analysis
& Critical Control Points system. Today, they are considered the leader
in food safety in the fast-food industry (Liddle, 1997) and they are the
country's fifth-largest burger chain (Goff, 1999).