The Wall Street Journal spoke with Judy Phair, APR, Fellow PRSA, president of PhairAdvantage Communications, LLC and chair of PRSA's MBA Business School Committee, for her thoughts on 7-Eleven's handling of this crisis. She stated:
“Smart business leaders know the difference between accepting responsibility and liability. They know that assuming responsibility and acting accordingly are both the ethical and smart responses to a crisis. However, 7-Eleven Stores Ltd. has spent more time distancing itself from allegations of illegal labor practices by some franchisees than working to solve the problem and regain consumer confidence.
“Since Australia’s Fair Work Ombudsman filed charges against a 7-Eleven franchise owner for allegedly underpaying workers and fabricating false records to hide it, 7-Eleven has made several weak–and even evasive–statements. In its first public announcement on Aug. 29, the company expressed ‘extreme’ disappointment that some franchisees ‘have chosen not to meet their obligation as employers.’ Missing in non-action were:
- An apology for any illegalities by its franchisees.
- A specific plan of action to ensure such violations would not recur.
“Two days later, 7-Eleven Australia backtracked a bit, expressing support for the Ombudsman’s prosecution of the errant franchisee and announcing that it would set up an independent panel to receive and review claims of underpayment by franchisees. Still, the company brushed aside assertions that its franchise model was ‘financially unviable,’ driving some franchisees to deceptive practices to stay solvent. It concluded that the company ‘cannot allow the few to taint the achievements of the many.’
“It’s time for 7-Eleven to change a communications tone varying between arrogance and cluelessness. It needs new words and actions that accept responsibility and seek to correct past mistakes, create solutions, and monitor future practices.”
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