Case Analysis: Exxon and Hewlett-Packard

Case Analysis: Exxon and Hewlett-Packard

Week Two Case Analysis: Exxon and Hewlett-Packard

        Perhaps few corporate disasters are as well known as the Exxon Valdez oil spill of 1989 and the negative press which surrounded it.  The core of the problem was a large tanker running aground and creating an incredible environmental disaster in its wake. “The resulting rupture caused a spill of 260,000 barrels, the largest spill ever in North America, affecting 1,300 square miles of water, damaging some 600 miles of coastline, and killing as many as 4,000 Alaskan sea otters” (Seitel, 2010, p. 101). Fort he company, this situation was only made worse when evidence was brought to light that the captain was legally drunk at the time of the accident. The issues at hand were; dealing with the cleanup, making sure that the public was kept abreast of the situation and making amends in order to repair Exxon's damaged reputation. Sadly, none of these problems were addressed as well as they should have been.

        For Hewlett-Packard, a very different situation cast them in a negative public light. While not quite as damaging or notorious, quite a bit of controversy surrounded decisions made by the company's chair, Patricia Dunn, which came to light in 2006. Dunn had hired a team of people to spy on associates of the company, including their longest-serving board member George A. Keyworth II (Seitel, 2010, p. 121). The team hired to investigate these associates obtained phone records by illegal and unethical methods. Despite suspicions that Keyworth was leaking sensitive company information, accessing private phone records was still a serious invasion of privacy. Needless to say, once this information came to light, Dunn had a lot of explaining to do. She was subsequently charged with four felonies and a full investigation was launched, which resulted in Dunn and two other executives resigning (Seitel, 2010, p. 122). The main issues here are dealing with the scandal, identifying how it was allowed to happen and preventing future violations of privacy, as well as trying to repair HPs former public reputation as an ethical business.

        Exxon's situation was devastating on a few levels. The accident not only affected the company's reputation, but it also had a huge negative impact on the environment. In addition to the incident itself, more damage was done based on the way it was handled by the company. First, the initial reaction to the accident showed a lack of concern on behalf of the company. Rather than traveling to Alaska to evaluate the situation in person and make statements to the public, Chairman Rawl stayed put in New York. He chose to delegate cleanup efforts to other executives instead of handling the situation himself. Next, communication between was insufficient, at times even Rawl himself was often left unaware of the current situation in Alaska. Additionally, news agencies were unable to report on events in a timely manner which, led to speculation that the disaster was being covered up (Seitel, 2010, p. 101). Lastly, attempts to deal with public opinion were severely lacking. Rawl delayed public announcements for a week and refused to take responsibility for the problem. Later advertising campaigns to regain public favor were seen as a self-serving attempt to glaze over the damage that was done. As a result, Exxon's reputation, and the reputation of the entire oil industry, were severely damaged Seitel, 2010, p. 101).