Lessons Learned from Organizational Crisis: Business Ethics and Corporate Communication

Shuhui Sophy Cheng, Matthew W. Seeger


This article examines the collapse of HIH, the largest corporate failure in Australian business history. The
company grew very quickly and did not have appropriate operational protocols in place to support the
business expansion. Lies and deception within HIH hurt corporate profitability, accountability and image.
The HIH debacle is a story of a company that showed little concerns for its stakeholders. In this case study,
communication strategies are explored to understand how HIH executives managed their corporate
communication when the company was under siege. The results of the study indicate that denial and
shifting the blame to others within the company were the prototypical strategies used, especially as HIH
corporate executives tried to distance themselves from the wrongdoings. HIH executives were more
concerned about avoiding legal liabilities rather than attending to issues of public opinion. This study also
illustrates the close connection between ethics, organizational crisis and open communication.

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DOI: https://doi.org/10.5539/ijbm.v7n12p74

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