Examining the Chinese Approach to Crisis Management: Cover-Ups, Saving Face, and Taking the “Upper Level Line”

Abstract

In 2008, the Sanlu Group, a former giant in the Chinese dairy industry and a quintessential Chinese organization, was confronted with the melamine-contaminated milk crisis. Its products were blamed for causing at least six babies' deaths and damaging the kidneys of about 294,000 babies. Sanlu was criticized for its crisis handling, which resulted in its collapse several months later. Using the contingency theory of strategic conflict management and Coombs' typology of crisis communication strategies, this study explored Sanlu's crisis management as a mirror to understanding the Chinese approach to crisis management. Findings showed that influenced by political, social, and cultural factors, Sanlu adopted an accommodative stance toward its local government while maintaining an advocacy stance toward the media and consumers. Government relationships, cover-up, and denial were used. Findings also suggested that the Chinese approach to crisis management remains mired in values that differ from best practices of effective crisis management.

KEYWORDS:

• China
• corporate social responsibility
• crisis management
• melamine-contaminated milk crisis
• Sanlu Group

Notes

¹In 2004, in Fuyang city, located in Anhui province, a total of 171 infants suffered from malnutrition, and 13 infants died after consuming fake milk powder deficient in protein and other nutrients, with a majority of them living in rural areas (Zhou, 2004).