Carlos Ghosn Responds to Charges

The former CEO of Nissan, Carlos Ghosn, who has been arrested four times on charges related to financial misconduct, responded in a video message. The key point: “I’m innocent of all the charges.” Ghosn also claims that accusations are “all biased, taken out of context, twisted.”

Ghosn was a celebrated business executive in Japan. His success in growing Nissan is “incontrovertible,” according to a New York Times podcast. He gained a reputation as a serious cost-cutter ("Le Cost Killer"), a strategy that was questioned at the time but brought about great profits for the company, placing it second in the list of Japanese automakers behind Toyota and ahead of Honda. Ghosn was CEO from 2001 - 2017, when he became chairman. He was then removed from the board in 2018, after his first arrest.

Charges against Ghosn include using company funds for multiple personal residences, hiding about half of his compensation, shifting $16.6 million in person losses to the company, and other accounting issues.

Nissan management responded to Ghosn’s video message:

“The sole cause of this chain of events is the misconduct led by Ghosn and Kelly. Aside from any criminal matters, Nissan's internal investigation has uncovered substantial evidence of blatantly unethical conduct. This resulted in a unanimous board vote to discharge Ghosn and Kelly as chairman and representative director, followed by a shareholder vote to discharge them from the board. Further discoveries related to Ghosn’s misconduct continue to emerge. The company's focus remains on addressing weaknesses in governance that failed to prevent this misconduct.”

Ghosn image source.

Discussion:

• What persuasive communication strategies does Ghosn demonstrate in his video message?

• What are the most and least convincing statements?

• Assess his Ghosn’s delivery skills.

• Which leadership character dimensions are illustrated by this situation?

Boeing's Apology Dilemma

A Yahoo Finance article describes Boeing CEO Dennis Muilenburg’s decision to apologize for the 737 MAX tragedies and speculates that he may open the company up to lawsuits. However, for crisis communication, his apology is the right decision.

After a report found the planes to blame, Muilenburg admitted, “but with the release of the preliminary report of the Ethiopian Flight 302 accident investigation, it is apparent that in both flights, the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information." He’s not telling us anything we don’t already know, and Boeing will likely get sued anyway.

He also apologized: “We at Boeing are sorry for the lives lost in the recent 737 accidents and are relentlessly focused on safety to ensure tragedies like this never happen again.” The apology is critical—and too late in my opinion. Research on apologies indicate that they often reduce lawsuits, time to agree on settlements, and settlement pay.

Discussion:

• Do you agree with the assessment that the CEO did the right thing by apologizing?

• How does this situation illustrate vulnerability as a positive leadership character dimension?

• What other character dimensions are illustrated by this situation?

Southwest Faces Customer Service Criticism

Despite trading on the NY Stock Exchange under “LUV,” Southwest is taking some heat from customers because of the Boeing 737 MAX plane groundings. According to a USA Today report, customers says Southwest didn’t handle rebookings well:

They're peeved about Southwest's handling of passenger rebookings, especially last-minute flight cancellations that leave them with few options. And they're perplexed by Southwest's uncharacteristic lack of flexibility, with affected passengers given two options: take the alternate flight, even if it's days later or to a different airport, or get a refund.

Our first clue about problems came with Southwest’s first statement about the plane groundings. Little guidance was offered for customers to rebook. The first three comments on a Southwest message posted on March 13 illustrate the problem.

A Southwest spokesman said it’s a challenging situation—like a snow storm that lasts for many weeks—and claimed that the airline did everything it could, including offering "massive flexibility'.'

Discussion:

• Southwest could not have prevented the Boeing 737 MAX disaster, but what about its own customer service situation? What, if anything, could company leaders have done differently?

• How should Southwest react to customers’ complaints now? I see nothing on its website or blog.
  

Another Boeing Plane Disaster

The same model Boeing plane that crashed in Indonesia last month has crashed on its way to Nairobi. Although U.S. Federal Aviation Administration confirmed that the Boeing 737 MAX Jet is safe, several airlines have grounded the planes. Other groups, such as the Association of Flight Attendants-CWA, have called for an investigation: “While it is important that we not draw conclusions without all of the facts, in the wake of a second accident, regulators, manufacturers and airlines must take steps to address concerns immediately.” American Airlines will continue to fly the planes. A spokesperson for the pilot union said, it is “very early, but we are watching it very, very closely.” Norweigan Air has grounded the planes based on advice from European Aviation Group, and the UK has banned the model from its airspace.

With 40% of the planes out of service, Boeing is taking a financial and public relations hit. In a message to employees, Boeing CEO Dennis Muilenburg wrote, “We are confident in the safety of the 737 MAX and in the work of the men and women who design and build it.” He also wrote, “Since its certification and entry into service, the MAX family has completed hundreds of thousands of flights safely.”

Boeing’s website statement expresses condolences and describes plans for a software enhancement.

Image source.

Discussion:

• How much evidence is enough to determine whether to ground planes? What is the logical fallacy to be avoided?

• How well is Boeing handling the communication? Consider both internal and external messages. What are Muilenburg’s challenges at this point?

Equifax and Marriott CEOs Testify About Security Breaches

U.S. Senators grilled Equifax and Marriott CEOs about data breaches at the companies in the past two years. Equifax CEO Mark Begor responded to questions following a Senate subcommittee report titled, “How Equifax Neglected Cybersecurity and Suffered a Devastating Data Breach.” The report concludes an investigation of the 2017 breach of 143 million customers’ personal data and accuses the company of not prioritizing security, not following its own patching policies, failing to notify the public in a timely manner, and more.

Begor defended the company and blamed the increasing sophistication of hackers:

“These attacks are no longer just a hacker in the basement attempting to penetrate a company’s security perimeter, but instead are carried out by increasingly sophisticated criminal rings or, even more challenging, well-funded nation-state actors or military arms of nation-states.”

But Senators pointed out that credit company competitors Experian and TransUnion have managed to avoid similar attacks.

The Marriott breach affected 83 million guests of Starwood, which Marriott acquired after the breach took place. Compared to the Equifax situation, Marriott got a pass from senators, such as Tom Carper of Delaware, who said, “The data breach announced by Marriott this past November does not appear to have been caused by the same cultural indifference to cybersecurity the record indicates existed at Equifax. Rather, it looks like Marriott inherited this breach from Starwood.”

Marriott has been consistent in blaming Starwood for the issue, wanting to preserve the brand. In his testimony, CEO Arne Sorenson reinforced the company separation:

“We conducted an assessment on integrating the two systems, although this inquiry was legally and practically limited by the fact that until the merger closed, Starwood remained a direct competitor.”

Here is Sorenson interviewed on CNBC:

Discussion:

• Watch some of the testimony. How well did each CEO handle the Senators’ questions?

• Assess Sorenson’s appearance on CNBC. What did he do to try to rebuild the company’s image? What persuasive strategies did he use?

• Review the subcommittee’s report on the Equifax breach. How is the report organized? How would you describe the writing style and tone? What suggestions would you have for the authors to improve readability?

• From your perspective, what leadership character dimensions do the CEO illustrate or fail to illustrate?

Measles: Evaluating Evidence

The news about a resurgence of measles raises interesting questions about how we evaluate evidence. About a dozen years ago, a small study alarmed parents and caregivers that the measles vaccine may cause autism. Since then, several large-scale studies have debunked that theory, and the article was retracted.

But the damage was done—and it lingers. A few hold-outs still believe the vaccine may be dangerous, and so they do not have their children vaccinated.

Recently, about 100 measles cases have emerged in the U.S., and once again, the evidence is up for evaluation. How are people convinced? What makes people change their minds?

In his book Factfulness, Hans Rosling offers this advice:

[I]f you are skeptical about the measles vaccination, I ask you to do two things. First, make sure you know what it looks like when a child dies from measles. Most children who catch measles recover, but there is still no cure and even with the best modern medicine, one or two in every thousand will die of it. Second, ask yourself, “What kind of evidence would convince me to change my mind?” If the answer is “no evidence could ever change my mind about vaccination,” then you are putting yourself outside evidence-based rationality, outside the very critical thinking that first brought you to this point. In that case, to be consistent in your skepticism about science, next time you have an operation, please ask your surgeon not to bother washing her hands.

Along these lines, a Medium article, The Falsification Mindset, suggests ways for us to change our opinions. The author encourages us to consider what evidence we would need in order to change our minds. This process is particularly useful because we more typically look for reasons to continue believing what we believe—confirmation bias.

Image source.

Discussion:

• What examples can you identify of when you have experienced confirmation bias. In retrospect, could you have avoided the bias to make a better decision or to have a more accurate view?

• What’s your view of the measles vaccination? How did you form this opinion? How has it changed over time?

• Identify a belief. What evidence would you need to think differently?

• How is humility relevant to this situation?

Open Letter to Amazon

After Amazon’s failed move to Long Island City, Queens, local executives, lawmakers, and others signed an open letter asking Amazon to reconsider. The letter focuses on the benefits NYC would gain from having Amazon, particularly 25,000 new jobs.

Also appearing as a full-page ad in the New York Times, the letter includes some emotional appeal about New Yorkers’ “charm” and acknowledges difficulties in getting community support for the project. Not until the last paragraph do we see a shift from New York to Amazon and how the company would benefit from building in Long Island City.

Discussion:

• What principles of persuasion does the letter illustrate?

• How could the letter be improved?

• What leadership dimensions are illustrated? Which may be lacking?

Interview with Delta CEO

In a LinkedIn interview, Delta CEO Ed Bastian discussed the decision to revoke the National Rifle Association (NRA) discount after the Parkland, FL, shootings, one year ago. The discount was for NRA members, and only 13 took advantage. But the real loss was in $40 million in tax benefits, which Georgia Governor Cagle fought to strike after the company’s decision.

Bastian admits that the loss was significant. But he concludes, “Our brand is worth so much more, and our values are not for sale.”

Bastian refers to the NRA’s “divisive rhetoric” and says that he didn’t want “to be seen as advocates” of the organization and its views. He also describes what we might call authentic or purpose-driven leadership:

"If you know who you are, you can make those decisions. And that you can make those decisions and sleep well at night.”

Discussion:

• What leadership character dimensions are demonstrated by this situation?

• Do you think Bastian did the right thing for Delta? Why or why not?

• How well does Bastian address the interviewer’s question? Overall, how do you assess his delivery?

Jeff Bezos’s Medium Post

News is swirling about Amazon CEO Jeff Bezos’s long Medium post accusing the National Enquirer of “extortion and blackmail” for pictures of him and a woman other than his wife. Bezos claims that Chairman and CEO David Pecker acts of behalf of President Trump to discredit key people, and he cites an immunity deal between the Enquirer and the justice department for these actions. President Trump has openly criticized Amazon for not paying enough taxes.

A popular story about the piece is how Bezos used the word “complexifier”:

“My ownership of the Washington Post is a complexifier for me. It’s unavoidable that certain powerful people who experience Washington Post news coverage will wrongly conclude I am their enemy.”

A Slate article explores whether it’s a real word, and it is not in standard English. The “investigation” concludes that the word “appears most at home in the canon of self-help business gobbledygook.” As expected, memes, like the one here, are popular.

Bezos’s post is interesting from a business writing and character perspective if nothing more.

Discussion:

• Analyze Bezos’s post: who are the primary and secondary audiences, and what are his communication objectives? How is it organized? What is the tone?

• To what extent does Bezos meet his communication objectives?

• Overall, what’s your view of his approach to address the situation with this post?

• Which leadership character dimensions does Bezos demonstrate?

Law Firm Faces Backlash About Diversity

When a law firm announced its 2019 partners, they didn’t expect such a strong reaction. A photo shows the 12 members of the new group—all white and only one woman. Paul Weiss is an elite firm in midtown Manhattan and claims that this year is unusual.

The firm has since removed the photo from LinkedIn, where it drew attention. About 170 lawyers across the country wrote an open letter to express their wishes for a more diverse legal community.

Paul Weiss leaders took quick action to address the controversy and held a town hall meeting for employees. Firm leaders also say this group is unusually not diverse. In fact, the firm was recognized by a Microsoft initiative that offers bonuses to diverse law firms. In addition, 23% of the firm’s partners are women compared to about 18% of other law firms’ top leaders. The firm’s website boasts additional awards for diversity, including being ranked #16 in The American Lawyer’s 2018 Diversity Scorecard.

An email to Paul Weiss employees shows the words “diversity” and “associate professional satisfaction” in quotes, and a writer for the website Above the Law warns,

“…maybe there’s still some work to be done in mastering how to talk about these subjects. In general, don’t put anything in quotation marks that you wouldn’t be willing to sarcastically put air quotes around in conversation. That’s my advice.”

Discussion:

• What’s your view of the photo and the reaction: should the firm have avoided the composite, did people overreact, or something else?

• How do you assess the firm’s response? What else, if anything, should the firm leaders do to improve its image?

• What persuasive strategies do the attorneys use in their open letter? Which are most and least effective for the situation?

Gillette Ad Gets Mixed Reviews

Gillette took a risk with its new ad campaign. Spinning its 30-year slogan, “The Best a Man Can Get,” the company introduced, “The Best a Man Can Be.” A new video references sexual harassment, challenges the expression “boys will be boys,” and encourages men to “hold other men accountable.”

Gillette explains the rationale in a press release. In addition, the URL thebestamancanbe.org redirects to https://gillette.com/en-us/the-best-men-can-be, where the company explains the campaign:

Thirty years ago, we launched our The Best A Man Can Get tagline.

Since then, it has been an aspirational statement, reflecting standards that many men strive to achieve.

But turn on the news today and it’s easy to believe that men are not at their best. Many find themselves at a crossroads, caught between the past and a new era of masculinity. While it is clear that changes are needed, where and how we can start to effect that change is less obvious for many. And when the changes needed seem so monumental, it can feel daunting to begin. So, let’s do it together.

It’s time we acknowledge that brands, like ours, play a role in influencing culture. And as a company that encourages men to be their best, we have a responsibility to make sure we are promoting positive, attainable, inclusive and healthy versions of what it means to be a man. With that in mind, we have spent the last few months taking a hard look at our past and coming communication and reflecting on the types of men and behaviors we want to celebrate. We’re inviting all men along this journey with us – to strive to be better, to make us better, and to help each other be better.

From today on, we pledge to actively challenge the stereotypes and expectations of what it means to be a man everywhere you see Gillette. In the ads we run, the images we publish to social media, the words we choose, and so much more.

As part of The Best Men Can Be campaign, Gillette is committing to donate $1 million per year for the next three years to non-profit organizations executing programs in the United States designed to inspire, educate and help men of all ages achieve their personal “best” and become role models for the next generation.

Our tagline needs to continue to inspire us all to be better every day, and to help create a new standard for boys to admire and for men to achieve… Because the boys of today are the men of tomorrow.

We’ve all got work to do. And it starts today.

Not everyone appreciates the new campaign. The YouTube video received 582,000 likes and 1 million dislikes. Some feel that the video unfairly accuses all men of not doing better.

A Gillette spokesperson said the campaign “is much more than a video—it is a commitment to spark and contribute to positive change through our voice as an advertiser and our actions as a brand and a company.” Analysts say the current boycotts probably won’t last long and will have little bottom-line effect on the company.

Discussion:

• What’s your view of the video? Do you appreciate the message, find it offensive, or something else?

• What else, if anything, should the company say in response to the controversy?

• Which leadership character dimensions are illustrated by this story?

Lawsuit Charges Purdue Pharma Family with Instigating Opioid Crisis

In a 312-page complaint, Massachusetts lawyers detail how members of the Purdue Pharma family contributed to the opioid epidemic. The complaint shows the company’s aggressive marketing strategy, including how it convinced doctors to over-prescribe drugs.

One argument in the documentation shows how representatives were trained to encourage doctors to prescribe medication to what the company called “opioid-naive” patients:

Purdue also promoted its drugs for opioid-naive patients using the receptive term “first line opioid.” “First line” is a medical term for the preferred first step in treating a patient. Opioids are not an appropriate first line therapy. Nevertheless, Purdue’s internal documents and testimony from sales reps shows that Purdue repeatedly promoted OxyContin as “first line” — “the first thing they would take to treat pain.” (Sic: “first-time opioid” should include a hyphen.)

A 2001 email written by Richard Sackler, whose family owns OxyContin, blames victims:

“We have to hammer on abusers in every way possible. They are the culprits and the problem. They are reckless criminals.”

The lawsuit also charges the family with claiming that opioids are addictive to only one percent of the population, although they had no evidence for that claim.

This lawsuit follows others in Washington, Ohio, and Alabama. Last year, the company did stop promoting opioids.

Purdue image source.

Discussion:

• Read more in the legal complaint. According to the documentation, how did the company wrongfully use persuasive communication?

• In some of the documentation, we see ads and tactics that any company might use. Which do you find to be typical examples, and which cross an ethical line?

Starbucks CEO Draws His Own Path

Starbucks CEO Kevin Johnson is identifying his own vision for the company—apart from Howard Schultz’s plan. In an interview with the Wall Street Journal, Johnson said that the previous plan to open about 1,000 Reserve cafes will be piloted with just a few stores. Reserve stores deliver a higher-end experience, selling artisanal products and cocktails.

The change is one example of how Johnson is distinguishing himself from Schultz, who was the company CEO for about 30 years. According to the article, Johnson often started meetings with, “I’m not Howard. I’m Kevin.” A couple of weeks after Schultz left, Johnson said about the business strategy, “Certainly, I tend to bring a much more disciplined approach to picking the priorities.”

Starbucks Reserve image source.
Kevin Johnson image source.

Discussion:

• Is it important for Johnson to distinguish himself from Schultz? Why or why not?

• Read more about Johnson as the new CEO. How well is he handling the transition? What, if anything, should he do differently? He’s in a tough spot, wanting to create his own path but needing to be respectful to the previous leadership.

Marriott Breach Involved Passports

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.

Report on Larry Nassar

A new report on the former Olympics coach and doctor, Larry Nassar, blames officials at Michigan State University, the U.S. Olympics Committee (USOC), and USA Gymnastics for allowing his abuse of hundreds of girls over decades. The investigators concluded, “Numerous institutions and individuals enabled his abuse and failed to stop him.”

In some cases when officials learned of an abuse allegation against Nassar, they waited weeks or months to report to; in other cases, officials reported claims but didn’t do enough to follow up. In still other cases, officials did nothing at all.

Nassar was finally convicted and sentenced to what will be life in prison. With the report results, some hope the USOC will now be investigated.

The report aligns with an NPR podcast, Believed, tracing claims against Nassar and his medical defense, which was accepted by too many for too long.

Image source.

Discussion:

• How do you think the abuse continued for so long? If you listen to the podcast Believed, you’ll hear Nassar’s defense during police interviews.

• Analyze the report. What business communication principles are followed, and in what ways could the report be improved?

Cheesecake's Failed Promotion

To celebrate its 40th anniversary, Cheesecake Factory offered free cheesecake delivery, but stores ran out and deliveries were slow.

Through the app DoorDash, customers ordered a free slice of the cake. The company said 40,000 slices were available, and people who didn’t get their promised piece got angry. Drivers were put in uncomfortable positions, sometimes waiting hours for orders to be ready for delivery. A flight between drivers broke out in Arlington, VA, and one got arrested.

The company responded by expressing gratitude for the tremendous interest and by complimenting themselves for delivering 60,000 slides—but no apology came. DoorDash tweeted, “A huge shoutout to all of the hardworking Dashers who made this exciting day possible! You’re the real MVPs.” A Cheesecake Factory spokesperson said, “Our Day of 40,000 Slices promotion had such a tremendous response from our guests that we extended it and delivered more than 60,000 complimentary slices. We were truly humbled by the popularity of the offer and by how quickly our fans responded as all of the 60,000 complimentary slices were ordered within an hour of the promotion's start time."

Discussion:

• How could Cheesecake Factory have done a better job planning the promotion?

• Should the company response be different? Do you think the leaders should apologize? Why or why not? If so, what would be an appropriate apology?

Deutsche Bank on the Defense

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.
  

Prep School Criticized for Abuse and False Apps

College prep school T.M. Landry has garnered national attention for helping Black students get into college, but all has not been well at the school. Students are speaking out about emotional and physical abuse as well as falsified college applications.

According to a New York Times report, examples of physical abuse include “forced to kneel on rice, rocks, or hot concrete for hours” and being “choked, yelled at, and berated.” Students report being told to lie on college applications about classes they took and the conditions under which they grew up, for example, exaggerating their poverty.

The Landrys, a married couple who run the school, defended their actions, saying they push kids to their limits. Mr Landry admits to physical contact, and he said, “Oh, I yell a lot.” Since a 2013 case against him that included probation, Landry says he no longer practices physical punishment. He also denied falsifying students’ applications.

College results have not been great. Students who spent more time at the prep school are more likely to withdraw or transfer to less demanding programs. The New York Times article describes an unaccredited school with little traditional programming, so students may not be academically prepared for the schools that admit them.

Image source.

Discussion:

• Assess the school website. The opening video features Mr. Landry, and the rest of the site boasts college acceptances. How convincing might families find the way the school is promoted? Other than admitting abuse, should the site say more to give parents and prospective students a more accurate picture of the school philosophy and practice?

• How is this situation an example of failing integrity? Also consider intent versus impact. What could the founders' intent, and how is that different from the impact? 

Dolce and Gabanna Cancels Show and Apologizes

Italian fashion designer Dolce and Gabanna cancelled a major show scheduled in Shanghai and apologized to the Chinese people for an offensive ad and comments on social media. The ad showed Chinese-French model Estelle Chen, in separate videos, eating pizza and pasta with chopsticks. With stereotypical music in the background, the ads seem to mock the woman and a Chinese pronunciation of the company’s name.

After criticism on Weibo, the company made the situation far worse. Co-founder Stefano Gabbana posted negative comments, at right, about China and its people on Instagram, and then denied the comments, claiming his account had been hacked.

Later, Dolce and Gabbana leaders tried to recover by posting a statement on the company’s Instagram account: "We are very sorry for any distress caused by these unauthorized posts. We have nothing but respect for China and the people of China." Another post read, "Our dream was to bring to Shanghai a tribute event dedicated to China which tells our history and vision. It was not simply a fashion show, but something that we created especially with love and passion for China and all the people around the world who loves Dolce & Gabbana.”

They also posted an apology video.

Discussion:

• What’s your view of the ad series? Can you see how people would think they are offensive? Why or why not?

• How well did Dolce and Gabanna eventually recover from the incident? Analyze the apology video.

• Which leadership character dimensions are illustrated by this situation?