CARUMBA CORPORATION

Carumba Corporation

Carumba Corporation

Introduction

Sometimes the best way to learn how to do something is to see how it is done badly. In terms of communicating poor business performance, there are hardly any worse examples than the widely reported e-mail message from the CEO, distributed to managers of Carumba Corporation's Kansas City managers. Carumba had been one of Fortune's 100 best companies in America to work for, but you would be hard-pressed to tell from the e-mail CEO Ramon A. Valquez distributed, which was widely reported and reprinted in U.S. Web sites and newspapers. No one can properly imagine the feeling managers had in their guts when they received this missive. Valquez did not want managers' ideas. He did not address the reasons for the problem, if he knew them at all. He did not discuss a process for fixing the problem. He just said, “Here's the bad news, it's your fault, I'm punishing all of you now and I'll punish some of you even more. Now fix the problem for me.” It is a classic case of how not to communicate bad news.

Discussion

News that directly affects employees is often the kind of news we most want to avoid disclosing. The announcement of an impending layoff will demoralize workers faster than nearly any other type of news. Yet, it is this type of news that most needs to be communicated effectively if there is any hope of retaining employee commitment during this difficult time. A workforce reduction is as traumatic an experience as an organical coverage, and the small percentage absorbed by employees. Charts and graphs project the cost over the next couple of years, and simple models explain how the company needs to increase the cost of its products and services to customers to absorb the increase and how those increased costs will affect the company's ability to compete in the marketplace. (Shannon 2010, 12)

In addition to this explanation, the company has offered employees a way to get involved. Links on the Intranet provide access to advocacy sites where employees can write their legislators or sign petitions protesting insurance company costs, the tort system that allows for frivolous medical-related lawsuits, and other avenues of activism.

Perhaps no cultural institution has been under more ethical suspicions of late than “corporate Australia.” Unethical communication in companies has reached proportions never before seen. Companies have tried to hide costs, use creative accounting practices, commit accounting fraud, and a plethora of other ethical breaches. The list of business scandals has been especially prominent. (Bales 2000, 47)

Some bad news has its genesis outside the organization. Often, the media report an event or disclosure about the organization. The company's lawyers counsel leadership to stay mum on the issue. “We'll cake care of it in court,” they say. The attorneys may well be able to address the legal concerns in court. Meanwhile, the fallout from your silence could have consequences farther-reaching than anything the legal system might have forced down your ...