Even though South Africa’s Department of Health scientifically confirmed and definitively linked the bacteria to products made at Tiger’s meat processing factories, Tiger CEO Lawrence MacDougall tried the old playbook of PR distraction, shifting blame and pronouncing outright denial of responsibility by claiming there was no link between the outbreaks and Tiger Brands.
What has made this iteration of the Tiger Brands scandal more impactful than their 4 previous scandals?
The big difference this time is the power of the see-through economy, where Tiger’s press release is drowned out by the outrage of their customers and investors. The undeniable power of the see-through economy brought about by new technology that quickly links actions to outcomes through social media has given employees, customers, and investors a voice to be heard louder than any PR activity can counter. Thousands have taken to Twitter to voice their outrage over the Tiger Brands scandal and demand the brand take responsibility.
Based on my many years of experience in risk management, I predict this case will proceed down the very predictable pattern of failures in risk management. Evidence will be found to show employees knew about the conditions leading to the listeria outbreak, and shortly after a class action lawsuit by investors in Tiger Brands will occur citing Tiger Brands’ risk management negligence. Just a few weeks after the scandal broke, South African human rights lawyer Richard Spoor has planned a class action lawsuit against Tiger Brands on behalf of the families of people who died and those affected by the worst listeria outbreak in history.
A class action typically involves a large number of people who collectively band together to sue a person or company for damages. The see-through economy makes it easier for customers, investors, and other stakeholders to organize around their frustration with the lack of accountability they can now see and understand. “They must pay a price. It’s an incentive to them to act. Litigation like this encourages others to relook their norms and standards, because they know if they slip up they’ll pay,” says Spoor.
Tiger Brands stock is down 23% since the scandal unfolded, a US$1 billion-dollar loss in value. Organizations should take heed of Tiger Brands’ financial losses and the pain individuals and families have experienced. The only way to stay out of this kind of spotlight is to learn from the root cause of their wrongdoings and implement effective risk management.