Crisis Management at Odwalla, Inc.

Paper Summary:

This paper explains that although most small companies would never have survived an E. coli crisis, Odwalla weathered the storm and is now the subject of a best practice studies on crisis management. The author points out that Odwalla was not innocent and committed major management errors: Significant flaws in its safety procedures, poorly maintained citrus-processing equipment, an insular culture without a clear system of corporate checks and balances, no internal oversight procedure and a board of directors comprised of business friends of its founder. The paper reports that some of the crisis management included the company accepted full responsibility for the crisis, in all interviews with the media, expressed sympathy and regret for all those affected and promised that the company would pay all medical costs.

From the Paper:

"Most importantly, Odwalla took steps to stop the problem that had caused the E. coli contamination in the first place. The company admitted that its neglect of pasteurization had been wrong and moved quickly to introduce a process called "flash pasteurization" which could guarantee that E. coli had destroyed while maintaining better flavor that pasteurization. Odwalla also invested $1.5 million in new safety procedures within a year of the recall. Today, the company adheres to a Hazard Analysis and Critical Control Points program that exceeds FDA requirements, tests every batch of juice for purity, performs daily microbiological tests, and leads the charge for higher government standards across the juice industry. While Odwalla's public relations campaign was a success, it's important to remember that the company was guilty of criminal charges of selling tainted apple justice and was fined $1.5 million, the largest ever assessed by the FDA. Odwalla accepted responsibility for the poisonings by portraying itself as unaware of the health dangers of unpasteurized juice, but this doesn't appear to be the case. Nonetheless, the public responded favorably to Odwalla's highly lauded crisis management tactics."

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