Crisis Management and Reputation Repair

This assignment provides an in-depth analysis of crisis management strategies for Le Petit Gourmet, a catering company that was hit by a hepatitis-A outbreak. The report outlines the stages of crisis, including prodromal, acute, chronic, and resolution phases, and applies Mitroff's Five Stages Model to understand the situation. A SWOT analysis is also conducted to identify internal strengths and weaknesses, as well as external opportunities and threats facing the company. The report then focuses on reputation repair strategies for Le Petit Gourmet, including maintaining transparency, cooperation with stakeholders, and implementing new safety protocols.

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MCs International Hospitality Management with Professional Practice
TOU9171M – Crisis Management for Hospitality Enterprises
Report of Crisis Management: The Case Study of Le Petit Gourmet
Student: Trung Chanh Tran
Martin Knight
Natascha McVeigh Word Count – 2199

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Contents
1. EXECUTIVE SUMMARY..............................................................................................3
2. TERMS OF REFERENCE..............................................................................................4
2.1 Scope and extent of report...........................................................................................4
2.2 Sector...........................................................................................................................4
2.3 Working definitions.....................................................................................................4
2.4 Phase of crisis..............................................................................................................4
2.5 Turning point...............................................................................................................4
2.6 Stakeholders................................................................................................................4
2.7 Limitations...................................................................................................................4
3. INTRODUCTION............................................................................................................6
3.1 Organisation Background............................................................................................6
3.2 Organisation’s Crisis...................................................................................................6
4. PHASE OF CRISIS..........................................................................................................6
4.1 Identification of Turning Point....................................................................................7
4.2 Pivotal Crisis and phase of crisis.................................................................................7
5. STAKEHOLDERS AFFECTED BY CRISIS...............................................................7
5.1 Impact on business owner:..........................................................................................7
5.2 Impact on the staffs:....................................................................................................8
5.3 Impact on the clients:...................................................................................................8
6. CRISIS COMMUNICATIONS.......................................................................................8
6.1 Internal Communications............................................................................................8
6.2 External Communications...........................................................................................8
6.3 Spokeperson................................................................................................................9
6.4 Timeline.......................................................................................................................9
7. PERCEIVED THREATS AND RESOLUTION.........................................................10
8. EVALUTION..................................................................................................................10
9. CONCLUSION AND DISCUSSION............................................................................11
10. REFERENCES................................................................................................................12
11. APPENDIX......................................................................................................................13
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1. EXECUTIVE SUMMARY
As the amount of crises affecting the national economy in general and the hospitality
sector particularly, it is becoming necessary to understand the nature of these crises and how
to limit the impacts of such incidents. This report examines hospitality crisis management
practices within the context of the Le Petit Gourmet – a family catering located in central
Denver, Colorado, USA. The paper also focused on examining the occurrence of food
poisoning incident which has been traced to the organisation. The report is conducted with
some crisis communications frameworks that evaluate the importance and imperiousness of
crisis management in the hospitality industry. The findings illustrate which practices
hospitality managers should consider as crucial and which practices they actually use during
the crisis. The report also concludes with some recommendations for future research and
management of crises. All of the analysis and evaluations are made using facts and
information gathered from academic journals, online resources and literature references.
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2. TERMS OF REFERENCE
This Terms of Reference will guide the development of Le Petit Gourmet Catering: A Crisis
Management Report. This report forms part of the comprehensive strategic assessment of Le
Petit Gourmet Catering in Denver, Colorado, USA. Key issues raised in this report related to:
2.1 Scope and extent of report
This report is aimed to evaluate crisis communication process of Le Petit Gourmet
Catering in Denver, USA. The report will concentrate in analysing the response strategy of
business owner during their food poisoning incident. The time period is 1-year length which
is from December 1992 to December 1993.
2.2 Sector
This report will discuss the crisis management strategy of a local hospitality
organisation, with its influence in a national dimension as the incident had affected a wide
range of internal and external stakeholders.
2.3 Working definitions
Pauchant and Mitroff (1992) defined crisis as a “disruption that physically affects a
system as a whole and threatens its basis assumptions, its subjective sense of self, its
existential core”. This statement could be adopted as a working definition of crisis for the
case of Le Petit Gourmet Catering since the incident has severely affected the organisation’s
reputation and outcomes, also its target audiences and the core stakeholders.
2.4 Phase of crisis
The report will analyse and evaluate the reactive and recovery phase of the crisis, or
chronic crisis stage and crisis resolution stage.
2.5 Turning point
The turning point here refers to the point of time when the crisis marked an escalation
in intensity. The turning point of Le Petit Gourmet Catering was right after the food
poisoning incident which had been traced to the organisation in December, 1992.
2.6 Stakeholders
There are three predominant stakeholders that had been directly impacted by the
crisis: the business owner, the staffs and the customers.
2.7 Limitations
It is undeniable that this study has limitations, mostly due to the limited access and
ability to examine the reliability of statistics released by the company in 1992. Moreover,
most of the information and statistics displayed in this report was gathered through online
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research from academic journal and virtual newspaper which may contain subjective opinion
of the journalists or information bias.
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3. INTRODUCTION
The spectrum of recent crises impacting on the tourism and hospitality industry is
large, ranging from terrorism attacks in Madrid in 2004 and the “September 11 attack”,
natural epidemics such as the Boxing Day Tsunami affecting large parts of coastal South East
Asia in 2004 (Sharpley, 2005), bush fires in Australia’s capital Canberra in 2002 as well as
the Asian pandemic crisis in 1997 to health-related threats such as the SARS outbreak and
bird flu epidemic in 2003, also the food and mouth outbreak in England in 2001 (Leslie,
2006). These issues resulted in an increase of studies assessing about crisis management,
especially within the context of hospitality industry. The purpose of this report is to evaluate
which approaches had been adopted when dealing with a crisis through a case study of Le
Petit Gourmet in Denver, USA.
3.1 Organisation Background
Le Petit Gourmet was founded in 1960 as a family catering business. The company
was located in a 15,000 square foot facility in Glendale, Colorado, in the Denver metro area.
Le Petit had a number of employees ranging from 150 and 220 people, but only one-third of
them were full-time staffs. The founder O'Connor also operated the Sweet Soiree bakery
shop, which is a subsidiary venture in the same building as he wanted to expand his business
and helped the customers having more options. Although having achieved many success in
his ambition with Le Petit Gourmet and being recognised as the most biggest caterer in
Denver, O'Connor, however, had the desire to make his business become prominent on every
sectors, from desserts to main dishes, and said that Le Petit had to cope with the fact that
coming forward to appeal a larger segmentation on the market is the only way to survive.
3.2 Organisation’s Crisis
On December 30, 1992, while on a vacation in California, Jim O’Connor, president
and owner of Le Petit Gourmet, a high-society catering firm in Glendale, Colorado received a
phone call notifying him that a food poisoning incident of potentially epidemic proportion
(hepatitis-A) had been traced to his organization. The health department was shutting his
business down indefinitely. At first, O’Connor’s feelings was shock and defensive, however,
he managed to overcome his personal concern and tried the best to find a solution.
4. PHASE OF CRISIS
Similar to most human events, crises can be described in terms of stages, or relatively
identifiable sequences of events and reactions. Stages enable planners to monitor risks,
progress, target stakeholders and take strategic action appropriate to the stage.
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Fink (2002) had concluded that crisis management is defined by four consecutive
stages:
 Prodromal crisis stage – the warning signs
There was no warning sign for the incident at Le Petit Gourmet to happen.
 Acute crisis stage – sudden onset
A food poisoning incident of potentially epidemic proportion (hepatitis-A) had been traced to
Le Petit Gourmet.
 Chronic crisis stage – organisation mopping up the damage
The CEO personally called the patients and apologised for what happened, knowing that he
could not be afraid to speak up discussing the crisis incident with the community and the
press.
 Crisis resolution stage – returning to pre-crisis existence
In an effort to regain the reputation, the CEO stated that he and his co-workers were working
diligently with health officials to get through the crisis.
4.1 Identification of Turning Point
Epidemics, industrial accidents and other crises can disrupt an organisation’s
functioning and survival (Caponigro, 2000). This is particularly true to the hospitality
industry, which is often a prominent victim in crises (Faulkner, 2001). In the case of Le Petit
Gourmet Catering, the turning point here refers to the point of time when the crisis marked an
escalation in intensity. The turning point of Le Petit Gourmet Catering was right after the
food poisoning incident which had been traced to the organisation in December, 1992.
4.2 Pivotal Crisis and phase of crisis
According to Pearson and Mitroff (1993), four major issues should be analysed as a
part of every crisis management strategy, namely (1) types of crisis, (2) phases through which
the crisis moves, (3) systems and factors that cause or prevent a crisis, and (4) stakeholders
involved. Building on this stream of research, Faulkner (2001) developed the first
comprehensive model for crisis management in the hospitality industry. An important facet of
this model was to integrate hospitality and tourism organisations and the local communities
into the crisis management process. Since the hospitality industry is deeply embedded in local
communities, both the industry and its community need to be coordinated in crisis situations.
5. STAKEHOLDERS AFFECTED BY CRISIS
There are three predominant stakeholders that had been directly influenced by the
incident: the business owner, the staffs and the clients.
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5.1 Impact on business owner:
According to Xiao (2012), the business owner has played a vital role towards the
operation and financial performance of the organisation. Hence, the organisation’s crisis will
result in the loss of owner’s reputation and brand’s image, also many other forfeiture such as
financial gains, trust of out-source suppliers and relationship with local administration.
5.2 Impact on the staffs:
For the perspective of employee, it is clearly that incident has a bad influence on their
task-performing ability. In this case, the fact that health department had shut down the
business made them feel worried about their working position. Not only the crisis affected
employee’s current vacancies, it could lead to much more further destruction in terms of their
career path since they could not work in food service sector for an undetermined amount of
time.
5.3 Impact on the clients:
It is clearly that the customers were the most vulnerable people in this crisis, due to
the fact that their health safe and well-being had been injured by the hepatitis-A outbreak,
also they had to rely on medical assistance to prevent or inhibit the consequences of this
crisis. According to Morgan (1994), relationship and loyalty between business ventures and
customers is only constructed on the foundation of trust and commitment. Otherwise,
conflicts and stresses may occur if there is lack of conviction or appearance of uncertainty.
Only through commitment and reputation to its stakeholders, the organisation can secure the
stabilization of the relationship with customers, also gain more respects and reliance in
customer’s perspective.
6. CRISIS COMMUNICATIONS
6.1 Internal Communications
In a recent study, Kim (2005) has concluded the importance of establishing an
effective channel of internal and external communication and an emergency communication
network Shortly after the happened incident, the CEO of Le Petit Gourmet Catering –
O’Connor organised a meeting and received advice from many stakeholders about how to
handle the situation. The first decision was to clear all the outsiders from his business office
and facility. O’Connor and the management team consolidated all the information and
consult from the lawyers, insurance company, staffs and the most important internal
stakeholders – his family. They decided the press have to wait and no press release had been
made until final investigation was conducted.
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6.2 External Communications
The first priorities were the wellbeing of people including staffs, customers and victims of
hepatitis-A outbreak. O’Connor planned to meet the victims in person and apologised for
what happened. A lot of meetings inside the company were organised to calm the staffs’ fears
and to commit about the safety of their jobs. O’Connor discussed what need to be done in the
next stage and highlighted three main areas of concern in this crisis: mudslinging and
pointing the finger, trust in people and control of emotions. Initially, O'Connor hired a public
relations firm to assist him, at a cost of approximately $15,000, but he decided that he needed
to take a more active role to save his business. This action is supported by a study of Herrero
(1999) when he discussed about the significance of building a communication system in the
hospitality industry, with the purpose of managing and reducing the negative impact of crisis
situations.
6.3 Spokesperson
As the business owner played an important part in controlling every aspects of a
venture, it is necessary to assign him as the key spokesperson when appearing in front of the
crowd. O’Connor made the decision that he personally needed to be the public relations
spokesperson for Le Petit Gourmet, knowing that he could not be afraid to speak up when
discussing crisis issues with attorneys, insurance agents, and media representatives. His first
priorities were people, victims of the outbreak and his employees. Even more, he managed to
contact the patients of hepatitis-A and personally expressed his deeply regret for what had
happened. Being aware of Le Petit Gourmet success was mostly based on his family
reputation, O’Connor knew his interaction with clients – the core stakeholders could be the
key to pull the whole business out of the catastrophe.
6.4 Timeline
 22 November, 1992, Tri-County health department officials notified O’Connor that
they had traced a hepatitis-A outbreak to a Le Petit Gourmet kitchen manager, who
had served at least two holiday parties.
 30 November, 1992, the first hepatitis-A case was reported when a doctor, who
treated a Le Petit employee on 22 November had laboratory confirmation that the
patient had hepatitis-A virus.
 Early December 1992, health department officials investigated the case and suggested
that all the employees of Le Petit Gourmet should be given a gamma globulin shot as
a preventive measure.
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 5 December, 1992, O’Connor informed all the staffs about the recommendation and
urged them to immediately comply. However, only 50 employees had received their
immunizations.
 17 December, 1992, health department officials confirmed that four additional Le
Petit Gourmet employees had developed hepatitis-A symptoms.
 30 December, 1992, all Le Petit Gourmet employees had been inoculated.
 31 December, 1992, state and other health department agencies ordered food service
workers in metro Denver, US to use gloves or utensils when serving foods.
 By 4 January, 1993, thousands of guests who attended parties catered by Le Petit
Gourmet lined up at hospital areas for gamma globulin shots. Le Petit Gourmet
employees were forbidden to work anywhere else as food handlers until 31 January,
1993.
7. PERCEIVED THREATS AND RESOLUTION
Although suffering from a big loss in financial performance due to the food poisoning
crisis, O'Connor recognised that public observation was more significant than income at this
point of time. In an effort to gain the trust from community, he and his staff dumped $45,000
worth of food products into the trash. Many of these items were unopened and frozen
products, not part of the infected food, but he felt that as a good faith gesture he needed to
discard all products.
Also, since the employees were perceived as the most emergency issue, he met with
his staff, telling them that pay cuts were forthcoming in the immediate future and their long-
term status as employees might be gloomy. However, he decided to stand by the staff and
help in any way that was possible so they might also stand by him. O'Connor did not
terminate anyone due to the outbreak. However, he was able to tell people that the individual
to whom the initial outbreak was traced had already left Le Petit Gourmet. Some employees
were wary of the situation and questioned the handling of the incident. O'Connor presented
the information honestly and quickly to relieve any fears that they had.
8. EVALUTION
The real challenge in handling with crises is to recognise them in an appropriate
manner and implement coping strategies to reduce their destruction (Darling et al., 1996).
Moreover, pre-planning in crisis management will enable more availability make decisions
when a crisis which could be beneficial for business ventures, rather than organisations being
managed by the crisis which leads to rushed and ineffective decisions (Burnett, 1998)
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As for Le Petit Gourmet, the actions and decisions by O’Connor are demonstrative of
strategies for small business survival, thus indicating the entrepreneurial implications of the
case. The CEO has shown his influence when considering all the scenarios and delivering
suitable actions to untie the knot and pull the business away from sinking down into the
catastrophe. Finally, an important part of this issue has been the business survival and
strategies concerning the management and marketing aspects of Le Petit Gourmet. Those
activities will lay a solid foundation for the management team to help the organisation
overcome the difficulty and develop even stronger in the upcoming future.
9. CONCLUSION AND DISCUSSION
Crisis management in hospitality sector is extremely complex, mostly because of the
services, which can include many different operations organised in the facility, or through
outsourcing. On the other hand, unlike any other industry, the hospitality sector is vulnerable
as it is uncovered to internal and external influences. These issues need to be predicted, and
crisis management needs to be in place for them. In such complex circumstances, hospitality
managers are required to be more entrepreneurially oriented, more imaginative, penetrative,
persistent, and patient in order to meet the needs of global customers from all generations.
The characteristics of hospitality services, the organisational structure of the venture, the role
of human resources, the importance of standards and the specifics of maintaining a hospitality
business are the most crucial aspects that every manager must pay special attention to.
This report provides an opportunity to assess managers’ perceptions and actions of
crisis management through a case study of Le Petit Gourmet Catering. The common theme
suggests that communication is considered as a crucial element when dealing with a crisis.
This is particularly exact in cases where crisis is prompted by external factors. It is suggested
that hospitality managers should prepare an action plan for effectively dealing with future
crisis situations.
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10. REFERENCES
11.
Burnett, J. (1998). A strategic approach to managing a crisis. Public Relations
Review, 24 (4):, 475-488.
Caponigro, J. R. (2000). The crisis counselor: A step-by-step guide to managing a
business crisis. Chicago: Contemporary Books.
Darling, J. H. (1996). Crisis management in international business: A case situation in
decision making concerning trade with Russia. The Finnish Journal of Business Economics,
Vol. 4, np.
Faulkner, B. (2001). Towards a framework for tourism disaster management. Tourism
Management., 135-147.
Fink, S. (2002). Crisis Management - Planning for the Inevitable (2nd ed.). Lincoln:
backinprint.com.
Freeman, R. E. (1984). Strategic Management - a Stakeholder Approach. Cambrigde:
Cambrigde University Press.
Herrero, A. G. (1999). Product commercialization and crisis planning in the tourist
sector: Corporative image and consumercentred marketing. Papers de Turisme, 24, 6.
Kim, S. S. (2005). The effects of SARS on the Korean hotel industry and measures to
overcome the crisis: A case study of six Korean five-star hotels. Asia Pacific Journal of
Tourism Research, 10 (4), 369-377.
Leslie, D. &. (2006). Tourism and the impact of the foot and mouth epidemic in the
UK. Journal of Travel and Tourism Marketing, 35-46.
McEuen, M. B. (2011). The Game Has Changed: A New Paradigm for Stakeholder
Engagement. Cornell Hospitality Perspectives.
Morgan, R. M. (1994). "The commitment-trust theory of relationship marketing".
Journal of Marketing, Vol. 58, 20-38.
Pauchant, T. &. (1992). Transforming the Crisis Prone Organization. San Francisco,
CA: Jossey-Bass Publishers.
Pearson, C. M. (1993). From crisis prone to crisis prepared: A framework for crisis
management. . Academy of Management Executive, 48-59.
Sharpley, R. (2005). The tsunami and tourism: A comment,. Current Issues in
Tourism, 344-349.
Xiao, Q. O. (2012). "The role of hotel owners: the influence of corporate strategies on
hotel performance". International Journal of Contemporary Hospitality Management, Vol.
24,, 122-139.
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12. APPENDIX
Le Petit Gourmet Catering – Denver, USA
Memorandum
To: Martin Knight
From: Trung Chanh Tran
Date: 15 July 2020
Re: Analysis of Le Petit Gourmet Catering Hepatitis-A Crisis
Period: December 1992 – December 1993
Target Organisation
This memorandum was commissioned to critically analyze the crisis and crisis
management of an independent organisation in hospitality industry. The chosen organisation
is Le Petit Gourmet Catering, the largest catering company in Denver, USA, which was
involved in a Hepatitis A outbreak in the end of 1992. The company was well-known for its
high reputation and high quality of foods and service. After the hepatitis-A outbreak
occurred, though the business owner and management team had applied a crisis management
strategy in order to reduce the trauma, the restaurant was still forced to shut down after two
weeks of the outbreak. Not only was revenue lost but many additional costs were incurred.
Their net income for 1993 was less than half the 1992 pre-crisis figure of US$779,300. Also
their reputation and customer loyalty had been hugely influenced by the incident (O'Halloran,
1995).
Introduction to Organisation Background
Le Petit Gourmet was founded in 1960 as a family catering business. The company
was located in a 15,000 square foot facility in Glendale, Colorado, in the Denver metro area.
Le Petit had a number of employees ranging from 150 and 220 people, but only one-third of
them were full-time staffs. The founder O'Connor also operated the Sweet Soiree bakery
shop, which is a subsidiary venture in the same building as he wanted to expand his business
and helped the customers having more options. Le Petit Gourmet has organised a wide
variety of catering jobs ranging from cocktail parties to weddings, receptions, and dinners. Le
Petit Gourmet has been well-known for serving the cream of society and is recognised as the
most expensive and upscale caterer in Denver. O'Connor, however, had the desire to make his
business become prominent on every sectors, from desserts to main dishes, and said that Le
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Petit had to cope with the fact that coming forward to appeal a larger segmentation on the
market is the only way to survive.
Introduction to Organisation’s Crisis
On December 30, 1992, while on a vacation in California, Jim O’Connor, president
and owner of Le Petit Gourmet, a high-society catering firm in Glendale, Colorado received a
phone call notifying him that a food poisoning incident of potentially epidemic proportion
(hepatitis-A) had been traced to his organization. The health department was shutting his
business down indefinitely. At first, O’Connor’s feelings was shock and defensive, however,
he managed to overcome his personal concern and tried the best to find a solution.
Categorisation of Organisation.
According to the building blocks of crisis management strategy, Le Petit Gourmet is a
reactive organisation due to the fact that the management team responded quickly to
minimize the influence of threat and tried to pull their business out of the crisis, regain their
reputation and made plans for business continuity development.
Crisis management
 The CEO of Le Petit Gourmet Catering – O’Connor organised a meeting and received
advice from many stakeholders about how to handle the situation.
 The first decision was to clear all the outsiders from his business office and facility.
 O’Connor and the management team consolidated all the information and consult
from the lawyers, insurance company, staffs and the most important internal
stakeholders – his family. They decided the press have to wait and no press release
had been made until final investigation was conducted.
 The first priorities were the wellbeing of people including staffs, customers and
victims of hepatitis-A outbreak. O’Connor planned to meet the victims in person and
apologised for what happened. A lot of meetings inside the company were organised
to calm the staffs’ fears and to commit about the safety of their jobs.
 O’Connor discussed what need to be done in the next stage and highlighted three
main areas of concern in this crisis: mudslinging and pointing the finger, trust in
people and control of emotions.
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 Finally, O’Connor decided to pick himself as the spokesperson when discussing the
incident with attorneys, insurance company and the media representative.
Crisis and Crisis Management working definition
According to Brewton (1987), a crisis by definition is a turning point or a crucial
time. In business, two criteria which generally define a crisis are the potential for injury for
internal stakeholders and damage to business venture; and the second is urgency or
importance of making quick decisions.
Moreover, according to Henderson (2003), the tourism and hospitality industry is
prone to crisis, and organisation owners should make plan for any potential crisis that could
happen and affect the overall performance of company. Mitroff (1990) also stated that the
main purpose of crisis management is to help the company combat the outbreak of threats
and survive in the market. If the company fails to reassure customers, employees,
stakeholders, the public and trading partners, the implications may be serious enough to lead
a financial collapse.
Understanding the background to Organisation’s Crisis
Timeline
 22 November, 1992, Tri-County health department officials notified O’Connor that
they had traced a hepatitis-A outbreak to a Le Petit Gourmet kitchen manager, who
had served at least two holiday parties.
 30 November, 1992, the first hepatitis-A case was reported when a doctor, who
treated a Le Petit employee on 22 November had laboratory confirmation that the
patient had hepatitis-A virus.
 Early December 1992, health department officials investigated the case and suggested
that all the employees of Le Petit Gourmet should be given a gamma globulin shot as
a preventive measure.
 5 December, 1992, O’Connor informed all the staffs about the recommendation and
urged them to immediately comply. However, only 50 employees had received their
immunizations.
 17 December, 1992, health department officials confirmed that four additional Le
Petit Gourmet employees had developed hepatitis-A symptoms.
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 30 December, 1992, all Le Petit Gourmet employees had been inoculated.
 31 December, 1992, state and other health department agencies ordered food service
workers in metro Denver, US to use gloves or utensils when serving foods.
 By 4 January, 1993, thousands of guests who attended parties catered by Le Petit
Gourmet lined up at hospital areas for gamma globulin shots. Le Petit Gourmet
employees were forbidden to work anywhere else as food handlers until 31 January,
1993.
Understanding key stakeholder impact
In an organisational crisis, typically multiple stakeholder groups are affected and
involved to a varying extent. According to McEuen (2011), while managers still think first
about what the organisation wants and needs to generate profit, true stakeholder engagement
implies understanding of what stakeholders value and view as important. Therefore, the
stakeholders play a crucial role and also receive the most gigantic consequences on every
actions of the company. On the other hand, a stakeholder is any group or individual who can
affect or is affected by the achievement of the organisation’s objectives (Freeman, 1984). The
stakeholder view assessed long term survival and success of a company based on its ability to
create and maintain loyalty relationships with its critical stakeholders. Thus, this section will
be aimed to evaluate on three predominant stakeholders that had been directly impacted by
the crisis: the business owner or CEO, the employees and the customers.
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Figure 1: Traditional Stakeholder Map (Freeman, 1984)
 The business owner: According to Xiao (2012), the business owner has an
enormous impact on the operation and financial performance of the organisation.
Hence, the organisation’s crisis will gradually lead to the loss of owner’s reputation
and brand’s image, also many other forfeiture in terms of financial gains, trust of out-
source suppliers and relationship with government.
 The employees: For the perspective of employee, it is clearly that incident has
a bad influence on their task-performing ability. In this case, the fact that health
department had shut down the business made them feel worried about their working
position. Not only the crisis affected employee’s current vacancies, it could lead to
much more further destruction in terms of their career path since they could not work
in food service sector for an undetermined amount of time. Also, organization’s loss
of financial income could seriously affect to staffs’ pay packet, giving the situation of
not meeting their economic needs and putting employee’s development and loyalty
under the threat.
 The Customers: It is clearly that the customers were the most vulnerable
people in this crisis, due to the fact that their health safe and well-being had been
injured by the hepatitis-A outbreak, also they had to rely on medical assistance to
prevent or inhibit the consequences of this crisis. According to Morgan (1994),
relationship and loyalty between business ventures and customers is only constructed
on the foundation of trust and commitment. Otherwise, conflicts and stresses may
occur if there is lack of conviction or appearance of uncertainty. Only through
commitment and reputation to its stakeholders, the organisation can secure the
stabilization of the relationship with customers, also gain more respects and reliance
in customer’s perspective.
Stage of Crisis
Similar to most human events, crises can be described in terms of stages, or relatively
identifiable sequences of events and reactions. Stages enable planners to monitor risks,
progress, target stakeholders and take strategic action appropriate to the stage.
Fink (2002) had concluded that crisis management is defined by four consecutive
stages:
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 Prodromal crisis stage – the warning signs
 Acute crisis stage – sudden onset
 Chronic crisis stage – organisation mopping up the damage
 Crisis resolution stage – returning to pre-crisis existence
Another framework could be used to utilize the stages of crisis is Mitroff’s Five
Stages Model. According to Mitroff (1996), crisis management is divided into five phases:
 Signal detection – warning signs
 Preparation/prevention
 Containment/damage limitation
 Recovery – back to normal as far as possible
 Learning – reflections on lessons learned.
Figure 2: Stages of Crisis Management
Overview of threats facing the organisation
As Thompson et al. (2007) stated, SWOT analysis framework as a simple but
powerful instrument for sizing up an organization’s resource capabilities and deficiencies, its
market opportunities and the external threats to the future development.
The following analysis is quickly briefing about the internal strengths and weaknesses
of Le Petit Gourmet, also the opportunities and threats facing the venture in the external
environment.
STRENGTHS WEAKNESSES
Location:  Central business district of Competition:  Broad competitive market
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Denver, USA
Number of employees:  150 – 220
Products quality:  Fresh and local sourced
Reputation:  Society well-known catering
Vulnerable:  Easily becoming the target
of media, press and government when crisis
happened.
OPPORTUNITIES THREATS
Social trends:  Can refine the restaurant
and catering concept
Development:  Having the ability and
resources to expand wider market
On-going threats:
 Losing performance revenue and
customer loyalty as customers had to seek
for medical support.
 A huge number of employees could not
work in food handling service sector for one
year.
Potential threats:
 Prejudice will always be linked to the
brand.
 The company will consistently have to
deliver on their promises.
According to a report by O'Halloran (1995), the hepatitis-A outbreak which occurred
in Le Petit Gourmet had a huge impact on the well-being life of thousands of customers
attended at parties catered by the company. Their lives had been put in danger and they
needed to make arrangements for medical check, some even needed to be vaccinated with
gamma globulin shots in case the virus had been exposed.
Another consequence of the incident is the fact that not only
Le Petit Gourmet staffs but also all food service workers in metro
Denver were required to use gloves or utensils when handling food.
Interim Prognosis
According to Fink (2002), a management team is essential in
fighting against a crisis, and they must work under the coordination
and control of team leader. In Le Petit Gourmet case, the CEO
O’Connor plays a crucial role in considering all the scenarios and
delivering suitable actions in order to untie the knot and pull his
business away from slipping deeper into the catastrophe.
Although suffering from many aspects of emotions,
O’Connor has successfully managed his feelings of fears and anger
and become comprehensive in dealing with the crisis. Moving out
from feeling defensive and angry, O’Connor tried to cooperate with
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his internal stakeholders to find the best solutions. Despite of hiring a public relations
company to support, he still wanted to get himself more involved in fighting against the
incident and did not fear to appear in front of the press and media representatives. The
scenario could be worse if the business owner only concerned about how to survive
personally, since defensive strategies such as denial and minimizing become less effective
when response with a crisis (Benoit, 1995). Those activities will lay a solid foundation for the
management team to help the organisation overcome the crisis in the near future.
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