On the road to crisis communications there are product recalls and there are lawsuits. Although Firestone's tire defect has dominated national news headlines in the past two
weeks, class action lawsuits constitute the fastest growing crisis category in corporate communication, according to research conducted by the Institute for Crisis Management
(ICM) in Louisville, Ky.
Class action suits grew 122% from 1998 to 1999 and now comprise 30% of all corporate crises. Product defects/recalls doubled during the same time frame and now account for 14%
of all crises.
The pecking order isn't surprising, says ICM president Larry Smith, considering product defects and lawsuits often go hand-in-hand. On a positive note, environmental disasters
fell from nearly 8% of all crises in 1990 to only 1% in 1999. But two numbers remained consistent with past years' findings: external stakeholders continue to account for 11% of
all crises, while employees are the cause of 13.5% of business disruptions. ICM's findings are derived through analysis of negative news coverage reported in more than 1,500 U.S.
print publications and wire services.
(ICM, 888/708-8351)