Ethics - the Heart of Leadership

Question: Discuss how you believe the Targets former CEO leader handled the crisis. Answer: Introduction Target is one of the most important retail companies in the United States positioning itself just behind Walmart. The company made its way to the highest earning division in the 1970s. The growth of the company had been immense before the crisis that made the company lose many of its loyal customers. The present report would deal with the crisis that the company had to undergo in the year 2013 leading to considerable decrease in the sales (Target.com, 2016). Gregg Steinhafel, the then CEO of the company could have taken the responsibility to use proper communication strategies to resolve the issues. He could have proved himself as one of the best leaders with the necessary communication strategies and interaction (Avolio Yammarino, 2013). This would have helped the company to retain the face value in the market along with the retention of the loyal customers. Targets former crisis In the history of retail industry there have been several thefts and data breach, which has led to customer dissatisfaction (Walters, 2014). However, with respect to this the one faced by Target Corporation has been most coordinated. The strategies that were opted by the thieves were strong enough to affect 40 million customers of the company. The techniques used called skimming has been of great use to the thieves to hack all the necessary information of the customers. This included their personal information like name, mail id and phone numbers (Target.com, 2016). Owing to the above-mentioned scenario target agreed for a settlement of $39 million with the U.S. banks. Banks lost the trust of the valuable customers because of the data breach where information was collected from the debit and credit cards. The consequence led Target to pay the heavy amount against a class action lawsuit. Targets Communication strategy Targets communication strategy during the data breach has been one of the learning experiences for many of the other retail companies around the world. The organisation did not make use of consoling language that they are with the affected customers (Perlroth Harris, 2014). However, they actually tried to help their visitors with the statement that came from the mouth of a lawyer that ensured the responsibility of the company. Social media is one of the major fronts that have been used by the company to let know the customers and reassure them (IvanauskienÄ— VolungÄ—naitÄ—, 2014). However, one of the issues that could have been dealt by the company includes more interaction that is integrated and steps to curtail the frustration of the customers (Daft, 2014). In case of the issue of shipping debacle of Amazon the organization took the initiative to return the shipping fees to all its customers. Gregg Steinhafel informed the customers of Target regarding the unauthorized incident. However, the message was too sharp to the customers. The company and especially the CEO of the company could have been more apologetic that would have helped the organization to gain the trust of the visitors (Perlroth, 2013). The other issue that has been found in the communication strategy of the company includes the fact that the organization did not take the necessary step to inform the customers immediately. They waited for few days before disclosing the crisis to the customers. Situational Crisis Communication Theory Situational Crisis Communication Theory or SCCT comprises of three core elements. This includes the understanding the crisis situation, effective response strategies that is related to the crisis of the company and finally bridging the gap between the crisis situation and the response (Perlroth Harris, 2014). Target could not understand or deal with the first core element of the theory. The intension of the company was fair however due to poor technological advancement the crisis situation could not be curtailed by the company completely. However, as per the second core element the company agreed to pay the necessary amount to the U.S banks (Hayes, 2014). The response was given by the lawyer and Target took the initiative to interact with its customers. However, in this regard the third core element was not maintained by the company (Ciulla, 2014). Target being one of the best retail stores could not offer the customers compensation or off in their other purchase. The message that w as shared by Gregg Steinhafel was very direct and sharp that could not reach the customers effectively. Gregg Steinhafel being the CEO and the leader of the company cannot establish the interaction and the coordination with the valuable customers. The company due to the release of the formal statements could not effectively use SCCT (Avolio Yammarino, 2013). The company only provided 10 percent reduction on any purchase as an endeavour for the breach. This was negligent in terms of the security of the customers that was at stake. The theory could have been used Target for placing their preventable cluster (Weiss Miller, 2015). This includes dealing with the crisis responsibility and the different attributions. Clusters could have been dealt with responsible interaction and response (Hovav Gray, 2014). Recommendation Enhances and prompt communication- Target lost the opportunity to let know the customers about the crisis when it first broke. In such condition the company turned out to be at fault for not revealing the information to the customers. It might be recommended in this context that the company must take this as a learning lesson and try to figure out issues that might hurt the sentiments of the customers. Brian Cornell must make use of ideas like SCCT handling the crisis effectively. Updated security technology- Brian Cornell must try to create an updated security system. This would help in gaining the trust of the customers. It is of great essence for the firm to use upgraded version of technology. This will help the organization to store personal data of the customers as well as valuable information of its operational activities. Security forms the core for every business organization. Therefore, the organization can opt any form of secured technology that will serve its purpose. In addition to this, the competitors or any other third parties cannot steal or hack any information from its internal system. The customers will feel secured while shopping and it will also help to increase the sales of the firm. Effective PR team- Most of the modern business organizations uses an effective PR team in order market and advertise its products and services. Therefore, Brian Cornell needs to appoint an effective PR team in order to cater new segments of market in an effective manner. In addition to this, it can be inferred that the primary roles and responsibilities of a PR team is to create brand awareness and also help the organization to increase percentage of sales and profit. On the other hand, the organization will incur costs due to appointment of an effective PR team, however, thgis cost will be easily recognized within the first two years. Investment in the prevention of the security breach- The organization needs to invest in the prevention of the security breach. Security issues can be a serious concern for every modern business organization. As most of the organization operate on the basis of online transactions, therefore, security plays a crucial and effective role. In addition to this, it can be also inferred that if the company invests a large amount in security, then it will be beneficial for them in the long run. Rebuilding the trust- The long-term objective of Brian Cornell needs to be rebuilding the trust of the firm. It can be inferred that due to breach of data and theft, the organization has lost the faith of the customers in all their market segments. Therefore, it is of great essence for the firm to influence their customers and get back their primary customer base. The trust of the customers can be re-built through effective PR strategy and minimizing the security issues. In addition to this, the organization can also opt for an effective promotional campaign to promote their new security system. This will influence their customers and the retail organization to gain a considerable amount of market share. Presenting the issue before hand Brian Cornell needs to present any kind of issues before hand in front of all its stakeholders. In addition to this, it can be also inferred that he must take active steps to resolve them effectively. Being the CEO of the firm, Brian Cornell needs to be in front of the media and let people to focus on his company. He may also bring expert lawyers to speak in case of any kind of issues. Conclusion From the above analysis of the retail organization Target, it can be concluded that security issues play a key role on the eyes of customers in case of every industry. Due to negligent of security, the organization had lost a major portion of their customers. Based on this, several recommendations have been given top the firm to gain their loyal chunk of customers back towards them. Being the CEO of the organization, Brian Cornell needs to take active steps to minimize all the issues and regain the trust of the customers. This will further help the organization to sustain in this competitive business world. References Avolio, B. J., Yammarino, F. J. (2013). Transformational and charismatic leadership: The road ahead. Emerald Group Publishing. Ciulla, J. B. (2014). 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