Principles of Public Relations: Food Panda Crisis Analysis Report

This report provides a detailed analysis of the crisis faced by Food Panda in Malaysia, stemming from a new payment scheme that led to protests by its riders. The report applies the issue life cycle theory to summarize the crisis, evaluating the company's pre-crisis preparation and the impact of the crisis on its brand image and reputation. It explores the role of ethics and emotional intelligence in Food Panda's crisis management, as well as its social responsibility in crisis recovery. Furthermore, it examines the key digital factors involved in managing the crisis and offers suggestions for improvement. The analysis covers various aspects of the crisis, including the company's responses, the impact on riders, and the involvement of government entities, providing a comprehensive overview of the public relations challenges and strategies associated with the situation. The report also examines the role of ethics and emotional intelligence in the company's response to the crisis, and the impact of the crisis on the company's brand image and reputation.

Running head: PRINCIPLES OF PUBLIC RELATIONS
Principles of public relations
Name of the Student
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Author Note

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Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Applying issue life cycle to summarize the crisis:.....................................................................2
Pre crisis preparation of Food Panda:........................................................................................2
Role of ethics and emotional intelligence in crisis management by Food Panda:.....................2
Social responsibility in crisis recovery of Food Panda:.............................................................2
Key digital factors in crisis management:..................................................................................2
Suggestion..................................................................................................................................2
Conclusion:................................................................................................................................2

PRINCIPLES OF PUBLIC RELATIONS
Introduction:
The paper analyzes the crisis faced by the online food delivery brand company that
operates in ten countries. Another food delivery company named delivery hero that is a
global leader in the categories such as restaurants, orders and active customers owns the Food
Panda. The crisis initiated when the riders of the online food delivery began protesting due to
the introduction of new payment scheme. Under the new scheme, the riders would be paid
based on the number of deliveries instead the total number of hours worked during their shift
as they were paid more under the old scheme. In this report, critical evaluation of the pre
requisites of the company before the crisis and the impact of such crisis on the performance
of the company is demonstrated. Crisis management by Food Panda has been explained in
terms of ethics and emotional intelligence along with the recovery from such crisis and the
social responsibility of the company. Lastly, the key digital factors in the management of
crisis has been explained in the context of the company facing crisis.
Discussion:
Applying issue life cycle to summarize the crisis:
In this section, it is required to summarize the crisis faced by Food Panda by the
application of issue life cycle. It is posited by the issue life cycle theory that an organization
give rise to environmental or social issue when they become insignificant to the welfare and
wellbeing of the state. Such issue arises due to the gap between the expectation of public and
the actual performance of organization. The issue life cycle can very well explain the crisis of
Food Panda due to the introduction of new payment scheme for its riders. The riders were
unhappy with the scheme as it would make them earn less as the payment would be made
based on the total number of deliveries made in their shift hours instead of the working hours.
It was claimed by the riders that payment would not be made to them for the actual working

PRINCIPLES OF PUBLIC RELATIONS
hours. Moreover, it is also claimed by staffs of the company that the new scheme would
provide them fewer opportunities to work and fewer benefits. It is indicated by the
introduction of the new scheme and the protests by the workers that the new scheme is
working against their welfare and would hamper their social wellbeing. However, it was
announced by the company that the income of all riders would be boosted under the new
payment scheme. The protest demanded the company to revert back to the older payment
scheme and boycotted the company as hundreds fear about the decline in their income. The
company made repeated assurance about the benefits of the new scheme as the performing
riders would be able to earn as much as 50% more than what they are earning under the
current payment scheme (Yeoh 2019).
The company claims that the new scheme of payment is based on the efficiency
model where the riders making more deliveries would earn more. It is very essential for the
companies to be alert to the legitimacy gap due to the changing perception of public in the
business environment that is ever changing. This is so because the organization might lose or
gain their reputation in the societal expectations evolution. For having favorable reputation of
the company, it is important that have legitimacy as the prerequisite. From the discussion of
the crisis faced by Food panda in Malaysia, it has been found that there exist a legitimacy gap
between the workers and the company (Ham and Kim 2019). In such circumstances, it is
important for the company to identify its responsibility of being a socially responsible
organization to maintain the reputation and address the issues. Nevertheless, it is repeatedly
reassured by the company of the new payment scheme to be based on the efficiency model
and thereby it addresses the employee welfare.

PRINCIPLES OF PUBLIC RELATIONS
Pre crisis preparation of Food Panda:
The next course of action taken by Food panda in the form of introduction of new
scheme form payments was taken because of the confidence of the scheme that claims to
make the lives of worker better as they would be rewarding performing riders. However, such
scheme seems unfair to the new joined staffs or staffs working in shift hours as they would
experience a decline in their total income. The company was prepared in terms of their strong
words for the new proposed scheme of payment as the earnings potential of the riders would
be uplifted with the expansion of the foothold of the company in the unique market of
Malaysia. They claimed that the adoption of such scheme would not jeopardize the rider’s
welfare. Instead of protesting, the riders should try out the scheme before making any
judgment about it. Riders have been continuously urged by the company to have faith in the
scheme as the hard working employees would be benefitted (Darvishmotevali et al. 2017).
Benefits to the employees as proposed by the company aligns with the continuous
commitment of the company, culture and experience.
Restructuring of the payment strategy is done by Food panda in an effort to streamline
the effectiveness of delivery and operations. This was initiated with the objective of lowering
down the lost time from waiting around and increasing the overall earnings. In an effective
manner, there was a shift to a higher per delivery fee from per delivery plus time based fees.
This business move is considered effective because the incentive would be greater for the
riders to go out and deliver and they would not be paid anything for just standing around and
being idle. It was identified by the managing director that under the new initiative, a
significant proportion of the riders are earning more compared to the older scheme. For
handling the crisis introduced due to the new payment scheme, the company already had right
strategies that would increase the motivation of the workers and enhance the job satisfaction
(Reuter et al. 2018).

PRINCIPLES OF PUBLIC RELATIONS
Impact of crisis on Food Panda:
The crisis resulting from the new payment scheme initiated by Foodpanda attracted
the attention of youth and sports minister of Malaysia and also resulted in conducting of the
investigation into the grievances by the riders of the company against its management. In the
digital economy, it is ensured by the minister that the welfare of the groups would be
protected and the issue over the welfare of the workers of the company would be raised in the
cabinet meeting. It is claimed by the riders on the Malaysian star online that they would not
be paid for the actual number of hours worked under the new scheme of payment and the
payment would be made only for the batches of one to six hours between MYR 4.5 and MYR
7 (thestar.com.my 2019).
It is quite evident from the complaints made by the riders that the company do not
work for the welfare of their employees and are just bothered about the foods being delivered
and hence increasing their services and capturing the market. In such scenario, it is observed
that various protests and a call from the minister in Malaysia has dampen the reputation of the
company. It was further pointed out by the riders of the company that changes in the policies
were brought without their consult and they are made to work without wages. Therefore,
from the above discussion, it is deduced that the crisis has adversely affected the brand image
and reputation of the company and has also faced criticism from youth minister. It also intend
to develop a law or policy so that the workers of gig economy are protected. In this regard, it
is also ensured by the ministry that it would attempt to bring a win-win situation between the
company and riders of Foodpanda (da Silva et al. 2017).
In response to the critics faced by the company, statement is being made by the
Foodpanda Malaysia to defend itself by explaining the new scheme of payment. The boycott
of the company seems to be disheartening and made the statement about its confidence in the
new scheme and the benefits it will bring to its partners, customers and riders in particular.

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Hence, it was said that the prior to taking any next course of action, implementation of the
scheme would be continuously monitored by the company. It is said by the company that no
hourly rate would be earned by the riders outside the Klang Valley. However, there has been
an increase in the payment that is made per order from RM 3 to RM 5 to RM 4.50 and RM 7.
In addition to this, the company also claims for paying incentives to the riders of RM 100
when they complete 60 hours in a week and making extra payment of RM 1 per order when
they work between 11pm to 9 am (Vasudevan et al. 2017). It is therefore continuously
insisted by the company about the benefits of the new payment scheme.
For the riders outside the Klang Valley, the new scheme has impacted the protest was
done solidarity with the other riders as they refuse to deliver and pick up the orders on their
mobile application. Furthermore, it was also urged by the cabinet to reinstate the original
scheme of payment so that the welfare of riders are ensured. It was urged by the cabinet to
the food delivery company to reinstate its original scheme of payment so that the welfare of
riders are protected. It was also said that the government does not intend to promote free
market competition at the worker’s cost. Moreover, it is observed that the negative responses
during crisis is dampened by the congruence between initiative of CSR and issue of crisis. It
is further suggested that making the CSR as an effective tool of crisis management, it is not
necessary that the post crisis initiatives are similar prior to the crisis (Qian 2017). However, if
there do not exist a relationship between the pre-crisis initiatives of CSR and between the
crisis, it is suggested to the organization that the initiatives of CSR should be similar to the
previous initiatives of CSR.
Role of ethics and emotional intelligence in crisis management by Food Panda:
Ethics and emotional intelligence are the determinants on the emotional and
rationalized integration of human behavior that is inherent in the organizational and societal

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world. The indicator of the potential crisis of an organization is the ethical environment of
organization. Emotional intelligence is defined as the set of capabilities and non-cognitive
skills that helps in building the ability of individual to overcome the mental pressure and this
helps in recognizing the relationships and emotion in solving the problems. For the crisis
management of Food panda to be successful, one necessary ingredient is ethical leadership
and the management and leaders of the company are required to take remedial steps for
sustaining and initiation of the directional force for the successful operationalization of the
crisis management (Peterson 2019).
The role of emotions should be very well understood during the crisis situation so
there appropriate strategies are designed to respond to the challenges faced. In order to cope
up with the rapid changes taking place in the environment, it is important for the managers to
have some degree of emotional intelligence. There are four dimensions of emotional
intelligence that is applied by the organization in managing the situation of crisis and it
comprise of self-management, self-awareness, social skills and social awareness. The ability
of the managers to effectively respond to the crisis is emotional intelligence as in such
extraordinary situations, it helps oneself in encompassing the emotional resilience and
behavioral dynamics. Role of emotionally intelligent managers come into play when they are
required to respond to crisis situation and emotional intelligence forms an important element
in the situation of crisis management (Irvine et al. 2016). Emotional intelligence in an
organization is viewed as the critical success factor in addressing the crisis situation.
It is important for Foodpanda to ethically communicate during the crisis situation that
would help in prompting the responsibility, transparency and honesty that comes with the
intention of providing the public with complete possible information. This would help in
steering the organization in transparently resolving the crisis. Ethics in the crisis management
during the entire crisis cycle is about communicating the information in an ethical manner

PRINCIPLES OF PUBLIC RELATIONS
that requires communication of the timely and accurate crisis information to its prioritized
stakeholders. This would contribute to the reputational wellbeing and overall business
strategy in the long term. However, the ethical communication in the crisis management
requires support from top management and thoughtful planning. It is important for the
practitioner such as Food panda to be well aware of the relational, situational and personal
factors and mindful in handling the situation so that the public interest and wellbeing of
organization. Nevertheless, it is important for the organization during the crisis management
to ethically communicate the information by aligning with the mission, vision and core values
of the company. The initial stance of the strategies of crisis communication of organization in
the crisis situation is training, preparedness and communication by the top management. Both
the determinants of the crisis management that is ethics and emotional intelligence is closely
associated and the crisis management of Foodpanda should be addressed by the managers
having high level of emotional intelligence and they would be more successful in addressing
the issues by interacting and maintaining the public relations (freemalaysiatoday.com 2019).
Social responsibility in crisis recovery of Food Panda:
The new scheme of payment has resulted in the company facing crisis as it has faced
continuous protest from its riders and boycotting the business at the same time. Engagement
with the stakeholders is considered as the key to the sustainable business development that
helps in gaining valuable and diverse perspectives. Damage faced by the company following
the crisis can be addressed by the adoption of the framework of corporate social
responsibility and this approach is adopted by the company as a strategy of preventing crisis
so that the crisis impact can be minimized. Engagement of an organization into the activities
of corporate social responsibility by recognizing such efforts as an assets of the company and
engaging in such activities prior to the occurrence of crisis would help in minimizing the

PRINCIPLES OF PUBLIC RELATIONS
crisis impact. Companies facing crisis such as Foodpanda would be able to steer clear of the
crisis faced using the approach of CSR as it serves as a system depicting warning on earlier
basis in two respects. Firstly, the compliance management system of the company is
supported by the integration of CSR into the strategies of company, where the employees are
asked to feed when there comes a situation of crisis. Secondly, manifestation of the proactive
approach of CSR should be done in regular communications that involves wide range of
stakeholders such as NGO, political parties and trade union (Civelek et al. 2016).
Foodpanda facing crisis can successfully address the situation using the approach of
CASR which is regarded as the good opportunity. However, it the CSR is not adjusted for the
factors of crisis, this strategy would backfire on the organization. It is said that CSR can be
considered as the effective tool of managing crisis when the activities of the CSR is similar to
the cause of crisis. It is so because the skepticism of the customers could be triggered by the
incompatibility between the cause of crisis and CSR initiatives (Jin et al. 2019). In this
aspect, it is important for Foodpanda to well align the initiatives of CSR and the cause of
crisis in addressing the crisis situation using the CSR approach.
During the crisis, communication becomes inevitable and the creation of proper
response to the crisis is influenced by the choice of platform. In order to prevent crisis from
spreading out, social media can be used by the organizations as it is perceived by the
respondent that the information received by them is less compared to what they should have
received. It is extremely important to share the missing information using the interactive
social media so that the accurate and factual information is received by people. Using such
platform would help organization in building awareness as this would facilitate two way
communication between the organization and stakeholders (Oswald et al. 2019).

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A study conducting an investigation into the effect of the practice of corporate social
responsibility in protecting and restoring the reputation of company suggests during crisis
situation. It is suggested that the potential damage caused to the organization during crisis is
countered by the proactive approach to CSR, but after the crisis, such approach do not
provide as remedy. In the event of victim crisis as in the case of Foodpanda that has put its
reputation at stake resulting from the persistent protest by its riders and notice from ministry
to withdraw from its new payment scheme, a low fit reactive corporate social responsibility is
considered to be more effective. In this regard, a reactive strategies of CSR adopted by
Foodpanda would not help in addressing the crisis and maintaining the reputation of the
company if the company is already engaged in proactive CSR (therakyatpost.com 2019). It is
important for Foodpanda to apply the fit strategy that would help in significantly improving
the company’s reputation as it has experienced a preventable crisis.
Key digital factors in crisis management:
Digital factors forms an important component when it comes to manage crisis and it
contributes to the crisis management effectiveness. For the business these days, it is
important to have digital presence as it helps in addressing any unforeseen circumstances
impacting the reputation, financial standing and assets of the business. In the development of
the presence of online business using a digital strategy places importance on the strategy of
crisis management. Any scenario impacting the business and promptly addressing the issues
can be done through the well planned strategy of crisis management. Crisis management and
the activities related to it are of extremely important for the managers of Foodpanda in an era
of complexities and digitization (Rastegar et al. 2019). For the development of crisis
management, digital factors such as technological changes, social media and social practices
are considered as an opportunity as well challenge at the same time. Availability of time for

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responding to the crisis is reduced by the advancement of digitization. The technological
development can be adopted and implemented by the organization that would help the
managers in effectively gaining the access to the information (Gutierrez and Mullen 2016).
Communication made by organization and engagement of employees is
revolutionized by the digital transformation and the reliance of organization on the social
networks, data analytics and mobile technologies have been deepened due to digitization
(McCleskey 2016). This in turn has reformed the communication role in the business and
responding to the crisis management situation.
The plan of crisis management by the organization such as Foodpanda should
digitized the plan. This is so because it helps in enhancing the accessibility of the plan,
updating the real time information, team coordination and creation of multiple touch points.
Crisis can be averted and avoided by the organization and it has become imperative when it
comes to the preparedness of the crisis. Importance of digitization is realized in the event of
communication in the crisis management. The maturity of the overall to the preparedness of
crisis is reflected by the effectiveness of the crisis communication of the organization. One of
the integral part of the team of crisis management is the communication professionals. The
culture of misinformation and the hyperdrive digital information makes it critical for the
organization to communicate the information. In order to address the crisis situation in the
digital age, it is important for the digital business to have awareness and training in place.
Sometimes, the organization lacks engaging with the stakeholders using online media for the
digital communication and reputation management (Hakim and Hakim 2019). However, such
scenario can be identified because of lack of knowledge and institutional experience in
engaging with the prioritized stakeholders online. Crisis management is becoming an
important for which every organization is required to have established crisis management and