Amazon Changes NYC Plans


After months of searching for a new headquarters location and deciding on Long Island City, Amazon has changed course and withdrawn the plan. In a blog post, the company explained the decision:

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After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term. While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.

We are disappointed to have reached this conclusion—we love New York, its incomparable dynamism, people, and culture—and particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.

We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can’t speak positively enough about all their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult.

We do not intend to reopen the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.

Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.

Amazon claims the new office would have created 25,000 jobs, but NYC lawmakers questioned the subsidies the company would have received. Critics also oppose Amazon’s anti-union stance and cite concerns about how the growth would affect Queens. In the end, officials say Amazon was inflexible; one local politician referred to the company as “a petulant child.”

According to a New York Times article, “Amazon’s decision is a major blow for Gov. Andrew M. Cuomo and Mayor Bill de Blasio, who had set aside their differences to lure the giant tech company to New York.”

Long Island city image source.

Discussion:

  • Analyze Amazon’s statement. How well does the company announce the decision, while maintaining relationships?

  • What else, if anything, should the company say at this point?

  • Should Governor Cuomo or Mayor de Blasio make their own announcements? Why or why not?

More About Failure Resumes

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Two years ago, a Princeton professor’s “CV of Failures” went viral, encouraging all of us to admit our misses and view them as learning experiences. This week, The New York Times popularized the idea in an article, “Do You Keep a Failure Resume?

The author advises a strategy:

“When you fail, write it down. But instead of focusing on how that failure makes you feel, take the time to step back and analyze the practical, operational reasons that you failed. Did you wait until the last minute to work on it? Were you too casual in your preparation? Were you simply out of your depth?”

Of course, what he’s proposing is self-reflection. But the approach is rationale: to think through what happened. Research tells us that a more emotional approach—allowing yourself to actually feel negative emotions from a failure—leads to greater learning and makes it less likely that you’ll make the same mistake in the future.

We may avoid failure because we feel shame. The graphic above shows the difference between failing and “being a failure.” Experiencing failure instead of feeling like a failure helps us be vulnerable instead of feeling what could be debilitating shame.

Quote image source.

Being a Failure image source.

Discussion:

  • How do you typically view failure? Do you try to forget about it? Are you harsh with yourself? Or something else?

  • Do you have a process of regular self-reflection? What could you do on a daily basis to learn from both your successes and your failures?

Marriott Breach Involved Passports

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Although fewer people were affected by the Marriott data breach than originally expected, millions of passport numbers have been stolen. Marriott representatives have clarified that the breach happened at Starwood before the acquisition was completed. In its latest statement, Marriott confirmed that the following were stolen:

  • There were approximately 8.6 million unique payment card numbers, all of which were encrypted

  • There were approximately 5.25 million unique unencrypted passport numbers and approximately 20.3 million encrypted passport numbers.

Officials say it’s unlikely that someone could create a fake passport based on only a number. But the breach is worrying because passport numbers provide intelligence agencies with information about where people go, particularly when they cross borders. The U.S. hasn’t charged China with the breach, but experts say tactics are similar to those used in other breaches.

Marriott is offering new passports for guests whose documentation was used for fraudulent purposes.

Marriott image source. Passport image source.

Discussion:

  • Analyze Marriott’s communication so far: the audience, objectives, organization, tone, and so on. What works and what could be improved?

  • Compare the communication to how other companies handled a data breach.

  • Should Marriott offer new passports to all affected guests—not just those whose documentation was used for fraud? Why or why not?

Facebook Defends Sharing Information with Partners

Facebook is responding to new criticism about how it shares users’ information. A New York Times report identified a few examples of how Facebook allowed other technology companies to access private information:

Facebook allowed Microsoft’s Bing search engine to see the names of virtually all Facebook users’ friends without consent, the records show, and gave Netflix and Spotify the ability to read Facebook users’ private messages.

The social network permitted Amazon to obtain users’ names and contact information through their friends, and it let Yahoo view streams of friends’ posts as recently as this summer, despite public statements that it had stopped that type of sharing years earlier.

In a blog post, Facebook’s Director of Developer Platforms and Programs, Konstantinos Papamiltiadis, explained the reason for about 150 companies to have such access:

Today, we’re facing questions about whether Facebook gave large tech companies access to people’s information and, if so, why we did this.

To put it simply, this work was about helping people do two things. First, people could access their Facebook accounts or specific Facebook features on devices and platforms built by other companies like Apple, Amazon, Blackberry and Yahoo. These are known as integration partners. Second, people could have more social experiences—like seeing recommendations from their Facebook friends—on other popular apps and websites, like Netflix, The New York Times, Pandora and Spotify.

To be clear: none of these partnerships or features gave companies access to information without people’s permission, nor did they violate our 2012 settlement with the FTC.

The post goes on to explain the value to Facebook users of having their information shared.

Discussion:

  • Read the full blog post. How well does the company defend its practices? Analyze the audience, communication objectives, writing style, and so on.

  • How well does the company accept responsibility for sharing information?

  • What else, if anything, should Facebook do to rebuild its image? The company has faced increased criticism and regulatory interest in the past few months.

Deutsche Bank on the Defense

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With stock at an all-time low and a German government raid last week, Deutsche Bank is trying to reassure customers and shareholders. Finance chief James von Moltke said on CNBC, “To date, we’re not aware of any wrongdoing on our part.” The investigation relates to the Panama Papers, which are documents made public in 2016 that revealed tax havens for individuals from more than 200 countries.

Throughout the CNBC interview, von Moltke tries to put the issue into perspective. He says the investigation involves a small, trust services business that the bank sold earlier this year. However, some of the money laundering accusations involve current managers. Still, von Moltke claims that new precautions are in place today.

Deutsche Bank stock fell further on the news, losing 51% of its value this year.

Discussion:

  • Assess the CFO’s video interview with CNBC. What persuasive communication strategies do you observe?

  • Which are his strongest and weakest arguments?

  • Also assess his delivery skills: tone, rapport, volume, pace, and so on.

Marriott Security Breach

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Personal information of more than 500,00 guests was stolen from the Starwood reservation system. Exposed data includes payment card information, and critics say the company could have avoided the breach years ago. In 2015, Starwood announced a small breach, which cybersecurity experts say should have inspired the company to do more at the time. Starwood argues it didn’t realize the risk, and Marriott leaders argue that they had not yet acquired Starwood. On Friday, Marriott shares were down 5.6%.

A notice at the top of the Marriott homepage reads, “For more information on the Starwood guest reservation database security incident, please click here.” Although the breach was from a Starwood database, the media is consistently reporting the news as “Marriott.” That link and a press release on the website both go to legal sounding statements, although they do provide FAQs at the bottom.

Lawsuits have already been filed against the company for failing to protect users’ data.

Discussion:

  • Is the company taking adequate responsibility for the breach? Explain your response.

  • How can Marriott respond to this crisis and protect the brand at this point?

  • How can the website information be improved? Consider the primary and second audiences, communication objectives, organization, writing style and so on.

Lettuce Recall Data

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An opinion piece in the Wall Street Journal highlights the value data for decision making. With the article title, “Lettuce Try Not to Panic,” Jim Prevor criticizes the Centers for Disease Control and Prevention’s (CDC) edict that “U.S. consumers not eat any romaine lettuce, and retailers and restaurants not serve or sell any”:

There are 43 people known to be infected with the outbreak strain of E. coli 0157:H7. The CDC interviewed 25 of them. Eighty-eight percent of those 25 people, as opposed to 47% of the general population, said they ate romaine lettuce in the week before they got sick.

From population data, the Prevor concludes that you have a 1 in 11 million chance of getting sick from Romain lettuce, and a 1 in 28 million chance of ending up in the hospital. The author makes the odds even more concrete:

If this outbreak were active every day, and you ate one salad a day, on average you would be hospitalized for E. coli once every 77,000 years.

Even these data, Prevor argues, are overstated for most of us. Children, older people, and people with compromised immune systems are far more likely to get sick than the average adult. As a result of the CDC warning, the author estimates “tens of millions of dollars in losses.”

On the CDC website, a “Food Safety Alert” details the investigation results and advice.

Lettuce image source.

Discussion:

  • What’s your view of the CDC’s recommendation: better safe than sorry or overblown?

  • How well does Prevor argue his point? What persuasive strategies does he use? Which are his strongest and weakest arguments? What may be missing from his argument?

  • Help an audience visualize some of the data in Prevor’s article. What charts or graphs would be useful to help consumers make an informed decision?

GM Lays Off 15,000 Employees

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General Motors will lay off about 15,000 employees and close five U.S. factories. About 2,250 employees accepted a voluntary buyout, which could include six months of pay. But that number wasn’t enough for GM to reach it goals.

About 8,000 salaried employees, or 15% of the workforce, will leave the company. Engineers and designers are hardest hit, and the company will hire more technology workers to focus on electric and hybrid vehicles. The move reflects shifts in consumer preferences against small cars, such as Cruze compact and Volt, in favor of SUVs and trucks. Gas prices are low, so people want larger, more convenient vehicles.

In a statement, GM outlined its plans for the future, and Chairman and CEO Mary Barra explained the decision:

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future. We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”

President Trump said he spoke with Barra and was “very tough.” He also said he’s “not happy” about the plant closings and is hoping for the company to rebuild in Ohio.

Discussion:

  • Evaluate GM’s statement. What business writing principles are followed, and what could be improved?

  • What else, if anything, should GM do to maintain brand image during the cuts? For example, Barra could agree to media interviews. Should she? Why or why not?

Nissan Chairman Is Arrested

Nissan’s chairman was arrested for financial misconduct, including under-reporting his income in securities fillings. Carlos Ghosn may have been engaging in improprieties for years.

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The news came as a surprise to many. Ghosn is a popular business figure, credited with turning around Nissan, Renault, and Mitsubishi by forming an alliance and directing cost-cutting and layoffs. According to a Wall Street Journal article, the shock is felt particularly at Renault; a union leader described the reaction as “a feeling of stupefaction and a lot of anger.”

The French government has a 15% state in Renault, so President Emmanuel Macron also weighed in: “As a shareholder, the French state will remain extremely vigilant regarding the stability of the alliance.” At this point, officials are still trying to sort out the news and determine leadership going forward.

Nissan CEO Hiroto Saikawa delivered a news statement, translated in English on Bloomberg. The company also issued this matter-of-fact statement.

Nissan image source. Ghosn image source.

Discussion:

  • Why would a successful business executive engage in financial misconduct? What leadership character dimensions are lacking?

  • How does financial impropriety go on for years in a situation like this? Who should be accountable for the misconduct?

  • Assess Saikawa’s news statement. What works well to improve brand image, and what could be improved?

Announcing a Restaurant Closing

Danny Meyer gives us a great model of how to write a bad-news message. In his announcement about closing the restaurant North End Grill, Meyer demonstrates communicating with humility and transparency.

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Meyer describes the pain involved in closing a restaurant, including the effect on employees. He admits to mistakes and relates this closing to Tabla, which closed four years ago. He didn’t need to remind us, but he does so humbly, and as a lesson to learn from failure.

Meyer’s message is encouragement for compassionate, transparent communication planning:

All too often in our industry, a padlock on the front door might be the very first notice employees, landlords, and suppliers receive that a restaurant will be closing. 

He also teaches us that leading requires courage:

[W]hen reality dictates closing, we have a choice: to do so in secrecy and shame, or instead, with dignity, integrity, and pride.

Restaurant image source. Meyer image source.

Discussion:

  • Analyze Meyer’s full statement: audience, objectives, writing style, organization, etc. What works well, and what could be improved?

  • In what ways does Meyer’s statement illustrate vulnerability as a leadership strength?

News Conference About Shooting

A former marine shot 12 people in a California bar, and local officials delivered a news conference. Ventura County Sheriff Geoff Dean spoke first (about 5:00 on the video) to explain officers’ response and what they knew at the time.

We see the sheriff get emotional when answering questions about his deputy, Sergeant Ron Helus, who also died.

The shooting was particularly painful for people at the bar who also survived the Las Vegas shooting about a year ago. One young man, Telemachus Orfanos, survived the earlier incident but not this one.

Image source.

Discussion:

  • Assess Sheriff Dean’s statement for content, organization, and delivery. What worked well, and what, if anything, could be improved?

  • Assess how well Sheriff Dean responded to media questions.

Controversy About Wildfires

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As wildfires rage in California, let’s look at controversy about the cause. So far, fires have taken 31 lives, and more than 200 people are missing. Governor Jerry Brown requested federal aid.

In a tweet, President Trump blamed California for poor forest management. This drew a harsh response from the California Professional Firefighters association, which called the statement “dangerously wrong.” In a statement, the group defended state actions, firefighters, and victims:

“The president’s message attacking California and threatening to withhold aid to the victims of the cataclysmic fires is Ill-informed, ill-timed and demeaning to those who are suffering as well as the men and women on the front lines.”

Later, the president tweeted a more compassionate message:

More than 4,000 are fighting the Camp and Woolsey Fires in California that have burned over 170,000 acres. Our hearts are with those fighting the fires, the 52,000 who have evacuated, and the families of the 11 who have died. The destruction is catastrophic. God Bless them all.

Discussion:

  • Analyze the California Professional Firefighters statement: audience, objectives, writing style, organization, etc. How well does the group defend its position?

  • How well does the statement illustrate principles of persuasion: logical argument, emotional appeal, and credibility?

  • Which leadership character dimensions does this situation illustrate?

Timing Bad-News Messages

This week, we saw two examples of timing communications to improve image.

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President Trump waited until after the important mid-term elections to fire Attorney General Jeff Sessions. President Trump wasn’t happy with Sessions since he recused himself from the Russia election interference investigation back in 2017.

Although Sessions did technically “resign,” he did so at the President’s request. Sessions confirms this in his resignation letter, which begins, “At your request, I am submitting my resignation.”

Facebook capitalized on a busy news day to announce bad news: a report that the company didn’t do enough to stop anti-Rohingya propaganda on its platform. The site may have contributed to escalated violence in Myanmar. Skimm writers joked, “What to say when the midterms are dominating the headlines… Time to drop some bad news. Right, Facebook?”

FB image source.

Discussion:

  • Why didn’t President Trump fire Jeff Sessions after he recused himself? Why is the timing better now, more than a year later?

  • What other examples have you seen of companies taking advantage of news cycles?

  • The benefits of reporting bad news on a slow news day may be obvious. What are the risks?

GM Offers Employee Buyouts

To cut costs, General Motors is offering voluntary severance packages to 18,000 employees. The company is taking this path before mandatory layoffs, which could happen if not enough people leave voluntarily.

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To receive an offer, employees must have been with GM for at least 12 years and be on salary (not an hourly wage), which means more senior-level employees will be leaving. Typically, these employees are in managerial positions and are paid more highly, so the move means more savings.

The company is focusing on its most profitable regions and already cut salaried staff from about 90,000 to 77,000 after selling off its European divisions. At the same time, GM is staffing up technology functions to compete in the self-driving car market. Through its Cruise division, GM is planning to introduce a ride-sharing, autonomous vehicle in 2019.

Office image source. Cruise image source.

Discussion:

  • Why would a company choose a voluntary severance model instead of mandatory layoffs?

  • What factors should employees consider before deciding to take a package?

Tesla Investigated for Fraud

Tesla is facing a new challenge this week: a U.S. Federal Bureau of Investigation (FBI) criminal probe into whether the company misstated production data and therefore misled investors. The investigation will focus on Model 3 sedans.

A Wall Street Journal article explains part of the issue. CEO Elon Musk tweeted on July 2, 2017, “Looks like we can reach 20,000 Model 3 cars per month in Dec.“ But reports at the time showed a less optimistic picture. The result was only 2,700 cars produced for the entire year.

A spokesperson said the FBI document requests were voluntary and defended the company:

“When we started the Model 3 production ramp, we were transparent about how difficult it would be, openly explaining that we would only be able to go as fast as our least lucky or least successful supplier, and that we were entering ‘production hell.’ Ultimately, given difficulties that we did not foresee in this first-of-its-kind production ramp, it took us six months longer than we expected to meet our 5,000 unit per week guidance. Tesla’s philosophy has always been to set truthful targets –- not sandbagged targets that we would definitely exceed and not unrealistic targets that we could never meet. While Tesla gets criticized when it is delayed in reaching a goal, it should not be forgotten that Tesla has achieved many goals that were doubted by most. We are enormously proud of the efforts of the whole company in making it through this difficult ramp and getting us to volume production.”

Image source.

Discussion:

  • What’s your view of Musk’s statement compared to the result: arrogance, entrepreneurial optimism, or something else?

  • How well does the Tesla spokesperson address the investigation? What else, if anything, should the company say at this point?

  • In what ways does the company demonstrate a lack of vulnerability in this situation?

Bad News at Verizon and Sears

Verizon and Sears employees are facing job loss in the coming months.

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Verizon is outsourcing some technology functions to Infosys, resulting in 2,500 jobs leaving the company.

At first, Verizon wasn’t planning to offer severance, but pressure from employees caused company leaders to change the approach. Timing was part of the problem: last month, 44,000 Verizon managers were offered a voluntary severance package to leave the company. Now, about 1,000 employees have a choice of whether to work for Infosys or accept severance pay.

Sears is declaring Chapter 11 bankruptcy after years of attempts to save the department store. The company has been steadily shedding stores. Only 700 are left, down from 1,000 in February, and more than 3,000 about a decade ago.

CNN reports that Sears has been warning investors that they may go out of business, and suppliers are requiring payment up front.

Sears image source.

Discussion:

  • What’s your view of Verizon’s severance plans: unfair, discriminatory, financially necessary, based on sound principles, or something else?

  • Sears investors and suppliers recognize the likely fate of Sears. How prepared do you think employees are? What could the company do to help employees at this point?


Crisis at Sloan Kettering

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Memorial Sloan Kettering (MSK) Cancer Center’s chief executive, Craig Thompson, has resigned from two boards, Merck and Charles River Laboratories, following investigations of conflicts of interest. Thompson issued a statement about his decision to resign:

“I have taken feedback from our staff and faculty seriously and intend to lead by example. I believe this is the right decision for Memorial Sloan Kettering and will allow me to redouble my focus on MSK priorities: quality patient care, faculty, scientists and staff.”

Sloan Kettering’s chief medical officer, Jose Baselga, was accused of not reporting millions of dollars he received from pharmaceutical companies for his research articles. Baselga previously resigned from Memorial Sloan Kettering as well as Bristol-Myers Squibb, where he served on the board. As one former patient wrote, failing to disclose payments gives “the appearance of influence is troubling. It highlights ineffective oversight, with the potential to cast a shadow on the center’s other excellent doctors.”

When the story first broke, Memorial Sloan Kettering leadership wrote a letter stating, “MSK and our faculty need to do a better job.”

Thompson photo source.

Discussion:

  • Analyze the MSK letter. Who is the audience, and what are the communication objectives? How do you assess the organization and writing style?

  • Should Thompson also resign his chief executive position at MSK? Why or why not?

  • How well does MSK leadership take responsibility for the problems? How is this an issue of integrity for MSK?


British Rail Company Apologies

Great Western Railway is tripping over itself apologizing for thousands of canceled and late trains. Apologies by British train organizations are so common that a web designer created a site, https://www.sorryfortheinconvenience.co.uk, to chronicle statements, now totaling more than 420,000.

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A look at the railway’s Twitter feed shows two failures but no apology. Maybe the organization is catching on: over-apologizing isn’t a good strategy. At some point, customers just want problems fixed.

Discussion:

  • How can a leader know when the organization is apologizing too much?

  • Take a look at the GWR Twitter feed. How would you advise the organization to improve its communications?

  • What leadership character dimensions is GWR demonstrating and failing to demonstrate with its apologies?

WhatsApp Message Causes Dramatic Infibeam Stock Price Drop

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Infibeam, an India e-commerce company, lost more than 70% of its stock value after a WhatsApp message questioned the company’s governance. The message was reported to be sent by an analyst at Equirus Securities months ago, but it only recently surfaced and went viral. Equirus denies involvement.

An India Times article explains the message:

“The note said the company gave an interest-free and unsecured loan to a subsidiary with negative net assets to be repaid over eight years. The note also mentioned that the company has re-classified its co-founder, who continues to hold a large chunk of shares, as non-promoter.”

An Infibeam spokesperson responded to the controversy:

“The company has given interest-free unsecured loans to its wholly owned subsidiary NSI Infinium Global since inception. These loans are short-term loans which are repayable on demand and have been utilised by NSI solely for its business and operations. Further, there has been no change in the promoters from the list of promoters identified and disclosed by the company info in the offer documents for its IPO.”

Discussion:

  • How can people do a better job at distinguishing between real reports and rumors?

  • How well did Infibeam respond to the news? What effect do you expect on the company stock on Monday?




Facebook Breach Announced Today

Millions of Facebook users inadvertently gave hackers access to their accounts, and the company is trying to fix the problem. Hackers found a way in through the “View As” feature, which people use to see how their profile looks to others.

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The company learned of the issue this week and today held a conference call with reporters. To the extent to which Facebook could manage the story, it’s the perfect day for such a report, when the country is focused on whether lawmakers will support Brett Kavanaugh’s nomination to the Supreme Court despite allegations of sexual assault.

On the conference call, CEO Mark Zuckerberg stressed that fighting hackers is an ongoing concern:

"This is a really serious security issue. This underscores there are just constant attacks from people who are trying to take over accounts and steal information from our community. This is going to be an ongoing effort." 

Facebook’s VP of product development posted a “Security Update” statement on Facebook’s news site, including this reassurance:

“People’s privacy and security is incredibly important, and we’re sorry this happened. It’s why we’ve taken immediate action to secure these accounts and let users know what happened.”

Cover image source. Spotlight image source.

Discussion:

  • Do you agree that Facebook timed the announcement when a bigger story would likely overshadow the news? Or am I just cynical?

  • Assess the Security Update as a persuasive message. Describe the tone and organizational strategy. How well does the statement achieve its objectives?

  • How well does the company take responsibility for what happened?