Organizational Communication in Crisis of

Diet Pepsi Syringe Scare

INTRODUCTION In the 1993 incident of syringes were found in the Diet Pepsi cans, it is
clearly showed that the company had demonstrated an effective halting from the company’s
openness with the media. While dealing and handling with the crisis, the PR team of Pepsi
focused on both their internal and external publics. It is important for an organization to have a
strong internal communication as these internal publics helps to convince the external publics of
the organization.

The internal publics of Pepsi were consists of the employees of Pepsi like executives, managers,
stakeholders, and anyone that has a say in the production of Pepsi’s products whereas the
external publics consists of the whole American population, competitors, FDA and the media.
Communications among the internal publics were strong among them and the company directed
an immediate disclosure of all facts (Anton, 2011). Internal communications is important in an
organization as it helps to build bridges among the employers and employees.

Besides it can also help them to deal better with their external public in whatever they are doing
regardless of solving crisis or as a tool of communication with its public. Pepsi then targeted the
external public differently and chose to focus on television as its media vehicle. Besides, they
also took a firm stand and said no to product recall. Alpac Bottling Company, the local canning
and distributor of Diet Pepsi was one of the external publics that were involved with the crisis
and Pepsi let the company to explain to the media that product tampering was merely impossible.

Publics do not believe that the case is over and then a documentation video was released. Pepsi
invited media to the production plant and film the process. This video then shows the process of
the sodas and that the product was virtually tamper resistant. Other techniques used by the PR of
Pepsi include 24 hours hotlines for consumers query and complaints, assigning a specialist to
work with the FDA and the legal department were also involved during the communications
process (Pepsi case, n. d. ).

Videotapes were then sent out as well as memos and the surveillance footage that reaffirmed the
Pepsi‘s innocence. As the hoax of the syringe scare goes on, a third video news release was aired
by Mr. Weatherup that shows a surveillance camera from a convince store showing a lady
purchased the product, opened it and then placed a syringe without anyone noticing.
Commissioner Kessler from FDA then help a press release on June 17, 1993 notifying the public
that the allegations scare of syringe was false (Yaxaira, 2011).

Throughout the crisis, it is clearly showed that communications between Pepsi and both its
internal and external publics was very effective as the PR department disclosed all information to
everyone as it is needed. They also convinced the external publics that on the proceedings of
their investigation on a daily basis to ensure the public that the problem is under control. In
this case study of Pepsi Syringe scare, the communication flow of the organization can be related
with Blake and Mouton’s Managerial Grid of the human resources approach.
In this approach, it maps out different leadership styles compared to other approaches as this
model concerns about both people and production. There are five prototypical management
styles subbed under this model which are impoverished management, country club management,
authority-compliances, team-management and middle-of-the-road management. All these five
management styles have to be balance in concerning about people and production.

Concern for people in this model simply relates to the degree where a leader considers the needs
of employees and team members before deciding on how to accomplish a task (Blake &
Mouton, n. d. ). This concern can be seen when the PR team of Pepsi decides on its strategies,
tools and techniques in communicating with both internal and external public during the crisis
period. The authorities also guide and brief their employees on how they should communicate
effectively with the public and customers.

Besides, the PR team of Pepsi also assigned a specialist to work with the FDA and to keep the
employees on track that what is happening throughout the period and ensure the public that the
problem is under control. Concerns for production, defined to the degree which a leader
emphasizes production effectiveness and efficiency when deciding how to best accomplish tasks
(Blake & Mouton, n. d. ). This concern can be seen when Pepsi emphasize on the
effectiveness and efficiency of their production of the product.

The authorities even invited media to film the production plant and produce a documentary video
news release to ensure the external public that product tampering is virtually impossible in the
production. Finally a surveillance video of a convince store proved that Pepsi is free from
allegations. Both of the concerns in the model can conclude that team-based communication
direction is effective in handling such situation. The communication in the organization on
handling with the crisis of Syringe found in Diet Pepsi Cans in 1993 was effective in the internal
public but was not that efficient towards the external publics.

The president of the organization along the management team explaining and updating the
employees on everything that is happening and by ensuring to the employees that the corporate
office does not think that the tampering is the happening at the plants and by confiding and
trusting in the employees abilities increased the employee’s morale at a critical time during the
crisis. Employees were treated with the highest consideration. Advisories were sent to bottlers
and managers at least once daily but often several times per day to update the situation. This
information was to be shared with employees and customers.

These actions not only displayed willingness to cooperate but also efforts by the company to give
the public any and all information it needed at different stages of the crisis progression. The 1993
crisis of hypodermic syringes reported in Diet Pepsi had effective communication results
stemming from the company’s openness with the media. In addition, other technique used by the
crisis management team was included 24 hours hotlines for consumers query and complaints,
assigning a specialist to work with the FDA and the legal department were also involved during
the communications process (Pepsi case, n. . ) (Fearn-Banks, 1996). The communication
effectiveness of the company was a success as the crisis lasted for nine days with the crisis
communication team working 15-20 hours a day. The team’s efforts resulted in positive media
coverage during and after the crisis, which in turn reflected positively for the companies
involved. Furthermore, Pepsi distributed instructing information, helping the public to react to
the situation, making it an excellent example of how to handle a crisis. ( Strurges, n. d. ).

The poor communication with the external public can see from the action they did to the public
after the incident happened. The first complaint regarding syringe was announced on 10th June
1993 but the company did not took any action to that. Pepsi-Cola Co. said that they could not just
tell the public about the incident without having substantial amount of evidence to enforce their
claim. Pepsi invited media to capture the canning process then the public relation department
demonstrating the bottling procedure.

The crisis management team then releases the video news release (VNR) through the media such
as television to reach the public eye after a total of 55 complaints about the case in a week. The
video shows that is impossible to interfere with the process of the product, the speed of the
equipment, and the safety precautions to produce the product. The management team should
show the public with this video once they receive the first complaint and not to deny that it is not
possible to have a syringe in the can. This is to ensure that they can still gain trustworthy from
their customers.

The vice president of product safety, Jim Stanley said that “Because you don’t have a lot of time
to gather the facts, you’d better take advantage of the first few hours that you do have. If you
waste those early hours in trying to deliberate on what you should do, you are going to miss an
opportunity to solve a lot of issues that you could best solve immediately”. In this case, the
company had applied the Likert’s System IV where decision-making is performed by every
organizational member and goals are set by complete work groups (Rensis Likert, 1967).

It can see from the unity of the Pepsi-Cola Co. employees’ work together to overcome or helps to
solve the crisis in a short period of time. The crisis communication team works 15-20 hours a
day in order to manage and try to work out the solution. Besides, the Likert’s System IV also
emphasize on control of the organization in every level where the Pepsi-Cola Co. practices it
during the crisis. The crisis management team had meeting with the internal publics on the ways
to communicate with the external public or the way to answer media questions.

The way that internal publics answer questions from the external public is very important
because they are representing the company to voice out the answer. According to most of the
report from the publics including medias, the Pepsi-Cola Co. had handled the crisis effectively
and able to rebound and increased its sales after the crisis. However, the organization could
handle the crisis more effectively and better. With a better and effective internal and external
communication, it will help to reduce the damages strike to their company.

Pepsi-Cola Co had showed a video regarding of the canning process and let the public
understand how hard it would be to get an object into one of their cans. The company also
showed a video of a woman trying to stick a syringe in a Pepsi can at a supermarket. However,
they did not release the video on the spot. Public do not believe it although the company state
that there were no way to insert the syringe in the bottling process at the plant. This become
serious when there were 50 cases reported the following week. This proved their communication
to the external public was not effective enough to convince the public when the crisis occurred.
They should release the video once the crisis happened and not release after they found out the
case become nationally. If they could release the video instantly once they found out they were
innocent, the public no matter from internal or external will tend to believe it was a product
tampering cases. They external public (consumer) will not under panic attack (worried about the
syringe might bring AIDS or hepatitis which it usually related to it) and the media will report the
incident and make a clear statement which the product is safe to drink to the audiences.

The surveillance camera which caught the women trying to put a syringe into the Pepsi can when
the worker turn around sound more solid and easier to gain public convincing than the video
which shot about the canning process. The organization can handle the situation differently in the
other way was the CEO of the company should stepped out as the spoke person once the first two
cases occurred. At first case occurred, the CEO and president of the Pepsi-Cola Co. was not the
spokeperson who accepted the interviewed by the reporter.

The first spokeperson was the Alpac Bottling Company CEO. As Alpac should be responsible of
the incident, due to the external public only knew little about Alpac, they will only pointed their
finger to Pepsi-Cola Co. because they were the imminent owner of the bottling company.
Therefore, to decrease the damages brought by the crisis, the Pepsi-Cola Co. CEO should
appeared in the first place to clarify the crisis and try to gain back public trust. The words from
the company’s CEO will be more credible, powerful and convincing.

The external communication (consumer, media, government, etc) is important to the company as
the internal communication (employee, employers and managers) will also play a crucial role in
the organization. For the external communication to the publics who involved, they will tend to
believe the words from the leader who was ultimately responsible than a public relations
practitioner. The media can get a clear statements, answers or announcements from the CEO
directly. As for the internal communication, the CEO who involved themselves into the crisis
will gain more trustworthy and support from the employees or subordinates.

Different company practices different approach and theory. As for the Pepsi-Cola Co. , it
practiced human resources approach during the crisis. The human resources approach was
widely adopted by organizations in the 1960s. This participative, team approach to management-
employee relations recognized that employees can contribute both physical and mental labor
(Berger, 2008). Human resource approach acknowledges contribution of classical and,
especially, human relations approaches to organizing (Miller, 2009).

According to the human resources theorist, individual labor is an important ingredient to reach
organization goal but also must consider individual feelings in the organization. Therefore,
human resource approach is the mix of classical approach and human relations approach which
emphasize on both meeting organization goal and individual feelings. In human resource
approach, communication became multidirectional and more interactive compare to the other
two approaches. Feedback was sought to enhance problem solving and stimulate idea sharing
and innovation content was added to social and task information in communications (Berger,
2008).
Concepts of employee trust and commitment emerged as important issues, and organizations
began to share communication decision-making among employees (Berger, 2008). There are two
theories categories in this approach which are Blake and Mouton’s Managerial Grid that
concentrates on how a manager can combine values of the human relations school and the
classical school into a leadership style and Likert’s system IV that specify the details of the
organizational form that will incorporate the ideals of the human resources movement (Miller,
2006).

In the crisis of syringe found in Diet Pepsi cans in 1993, the Pepsi-Cola Co. is using the human
resource approach in their organizational communication. During the crisis time, they not only
work to solve the crisis but they also treated the employees with utmost consideration. The
public relations department contacted the management department on how to communicate with
the employees regarding the crisis situation and how to answer questions from the public and the
employees (Yaxiara, 2008).

All 400 field locations were aware at all times of what was going on in the company, what
information is being reported, how the government was handling this matter, and how the
company is responding to this matter (Yaxiara, 2008). They updating the employees regarding
the situation by sending advisories to bottler and manager several time a day. When there is any
update from the investigation, the president was also contacting the management department to
share the latest information.

This show that the company was concerning on employees feelings, therefore had explaining and
updating the employees on everything that is happening and by ensuring to the employees that
the corporate office does not think that the tampering is happening at the plants and by confiding
and trusting in the employees abilities increased the employee’s morale at a critical time during
the crisis (Yaxiara, 2008). Besides, they giving all information and teach the employees to
respond is to control the information that shared with the external public and able to meet the
company goal which is solving the company crisis.

The communication of the organization toward external public is also applying the human
resources approaches. The company public relations department convinced the external public of
the investigation proceeding on a daily basis to ensure to the public that the problem is under
control (Yaxiara, 2008) in order to calm the public feeling and control the external situation. We
cannot deny that management must exercise control for organizations to succeed. Based on the
crisis that faced by Pepsi during the year 1993, we can see that the internal publics were well-
handled. The Pepsi-Cola Co. did a very good job with keeping employees up to date with new
information about the crisis they faced. This consequently gave faith to the internal publics. The
Pepsi CEO also fully utilised his power towards the external public. During the crisis, Pepsi CEO
appeared on every major network to share the message that defect was practically impossible in
their products. A management function aimed at achieving defined goals and usually have
three components which included taking corrective action, setting standards and measuring
actual performance.

The contribution of power is very important in order to exercise control towards management.
The power of ideology and hegemony made the employees in the Pepsi-Cola Co. to think that
the organization hierarchy is needed to be practiced by the company. The Pepsi-Cola Co. created
an ideology to the internal publics that the crisis can never related to the company and keep the
employees up to date. The public relations department got in touch with the management
department on how to communicate with the employees about the crisis situation.

There are also discussion on the way to answer questions from the employees and the public. All
400 field locations were aware at all times of what was going on in the company, what
information is being reported, how the government was handling this matter, and how the
company is responding to this matter. Internally, Pepsi prevented organizational disorder by
updating employees with daily advisories to over 400 facilities nationwide. By doing this, the
frame of an idea will be built in the internal publics’ mind. This ideology made the internal
publics tend to trust the company.

In order to convince the external public, the internal public must have faith in the company too.
The leader applied the legitimate power in the communication process within the internal public.
The crisis management team which leaded by Craig Weatherup, the president and CEO of Pepsi
was in charge of the education of the senior management regarding how to answer the questions
from the employees and public. The employees were educated by the senior management
regarding how to answer the questions from the public. This shows that the company are
practicing legitimate power which is the power was emerged from positions and titles.

The people on the higher hierarchy have the right to control the lower level. However, the
communication can be in formal and informal way. It also can be written and spoken and
including all the channels. However, the legitimate power wasn’t excluded. From here, we can
see that the Blake and Mouton’s Managerial Grid of the human resources approach was applied
in the internal communication of Pepsi-Cola Co. This approach assumes that leaders will be most
effective when it concerns both concern for people and concern for production.

The way that Pepsi-Cola Co passed their messages was practicing classical approach which is
based on the hierarchy level. The legitimate powers of the leaders successfully control the
management and formed an effective communication. On the other hand, they pass the message
by using both formal and informal way. This is basically practicing human relations approach.
By combining these 2 approaches, Blake and Mouton’s Managerial Grid of the human resources
approach was applied in order to control and the organization and way of communication.

Pepsi successfully overcame the crisis by using different communication techniques and
management power to show the internal publics and external publics that this scare was not
possible. The internal publics were considered as successful in working together. The company
guaranteed the external publics that there company does not experience any problems in
manufacturing their products. It is now one of the biggest manufacturers in the world. Pepsi is
connected with 200 countries and profits of the organization continue to rise per annum. This
incident has not been discussed for years.

Pepsi-Cola Co. will stay successful if they use the right communication way when facing
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Public Relations website: http://www. instituteforpr. org/topics/ employee-organizational-
communications/ Blake, R. , & Mouton, J. 2010, May 19). What is Blake & Mouton's
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