By Joseph Patterson,2014-08-03 10:13
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crisis management

    English for Business and Finance (EN1033A/1043A) Year 2 Semester 2

    ELC, Xi’an Jiaotong-Liverpool University

    Doc 8D: Case Study Jack in the Box

     In January 1993, tragedy struck when the deadly E.coli virus was traced to Jack in the Box's Pacific Northwest restaurants. The 300 or so food poisoning cases reported in the previous week were linked to undercooked beef at the hamburger chain's shops. Jack in the Box not only survived this horrific crisis, they have since experienced an unprecedented revival. What makes this story unique, however, is not the company's crisis-management tactics, but how it transformed this crisis into an opportunity to remake its entire corporate culture and reawaken a near-comatose brand. Jack in the Box is now considered an industry leader in safety and health procedures, not because of great spin control, but as a result of changes throughout the company.

     Jack in the Box initially did not handle the public relations crisis very well. It took two days after the health department had traced the bad meat to a supplier before the company addressed the public and had removed all meat from its restaurants. Jack in the Box officials did not take immediate decisive action to shut down all the stores for a few days and teach employees how to properly grill hamburgers.

     After the incident, the company developed the most comprehensive and multi-dimensional food safety system in the fast-food industry. Called HACCP (hazard analysis critical control points), the program consisted of “farm to fork” procedures that included microbial meat testing by Jack in the Box suppliers and in-restaurant grilling procedures to ensure fully cooked hamburgers. The U.S. Department of Agriculture (USDA) has since called the program the industry model. The success of the food safety program would contribute greatly to the company's eventual recovery when ten quarters later it would post its first profits since the outbreak.

     On the second anniversary in January 1995, Jack in the Box still struggled with a negative corporate reputation resulting from the outbreak. The company often faced a hostile press that tended to reprise the blame and focus on the past event because they had little knowledge of the company's progress since. To better manage news stories about the company, corporate communications sought to improve these relationships. Through a public service campaign, they let consumers know that food poisoning incidents were prevalent with more than five million cases a year resulting in 4,000 deaths, most occurring in the home. Although USDA meat inspection regulations had been in place since 1906, these regulations have remained virtually unchanged. Without microbial and scientific procedures, the nation's meat supply is vulnerable to dangerous pathogens. In essence, the outbreak could be traced to inadequate government controls. Today, E.coli outbreaks continue to occur across the country not just in restaurants, but in homes.

     Now, reporters look at Jack in the Box as the authority on food safety. For example, when 20/20 was researching its story on food safety, the reporter was told by Jack in the Box competitors to consult Dr. Theno, Jack in the Box's vice president of quality assurance. Food bacteria are far more common than most people realize. “We begin with our suppliers,” Theno says. “If a supplier's products test positive for bacteria more than once,

    the supplier is dropped. Every day, restaurant management tests cooking systems, including cooking sample products. There are weekly inspections. As a final step, each and every cooked patty is individually checked visually by an internally certified employee before it can be removed from a grill.”

    Page 1 of 2 Doc 8D Block 3 Week 8 Source:

    English for Business and Finance (EN1033A/1043A) Year 2 Semester 2

    ELC, Xi’an Jiaotong-Liverpool University

     Another key to the turnaround was the humanizing of the chain by resurrecting the Jack

    icon and literally blowing up the company's culture the first Jack ads by Los Angeles-

    based Chiat/Day showed Jack dynamiting company headquarters. It was a necessary

    transformation that has paid enormous dividends. “Laws do not make food safe,” adds

    Theno. “Companies make it happen with extra focus and effort.”

     Although it took almost two years before sales recovered to pre-poisoning levels, Jack in

    the Box is now experiencing the most profitable run ever. Jack in the Box has a new

    culture and a new self-image.

     adapted from

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