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Tesco Bank Crisis

During crises, communication is vital. The method used to communicate during a crisis can cause complaints from especially those who feel a better method of communication could have been used. We have heard of Tesco crisis whereby the Bank was hacked due to an obvious failure in the bank’s IT systems. However, the manner in which the bank handled this crisis was unpleasant. Probably, organizations should learn strategic communication to know how better to communicate during crises. This paper covers Tesco’s bank crisis and the steps taken by the bank to address this crisis. Most people were unsatisfied from the way Tesco communicated. Thus, this essay also highlights how Tesco could have managed the crisis better based on strategic communication.

Description

TESCO BANK CRISIS 1

Tesco Bank Crisis
Introduction

The Tesco Bank cyber victimization is an ongoing case that has left the public speechless
after leaving customers broke. Tesco Bank was hacked in November 2016 due to an obvious
failure in the bank’s IT systems. The bank also failed in the manner it conducted its crisis
management public relations (Shirbon, 2016). The Tesco case is an example of crisis
management that companies should learn of things to do in case of a crisis. By evaluating the
manner Tesco managed the crisis, companies may come up with strategies to handle a crisis
better than those that were adopted by Tesco. The crisis tested the bank’s managerial skills in
case of corporate crises. This paper covers Tesco’s bank crisis, the steps taken by the bank to
address this crisis and how Tesco could have managed the crisis better. This paper highlights the
role of communication during a crisis and Tesco’s poor communication is the reason customers
are still complaining of the manner this crisis was handled.
Tesco Bank Crisis



On 5 th November 2016, Tesco bank’s computer systems were hacked and money
withdrawn from several accounts. Approximately forty thousand customers who had accounts
with the bank noticed something strange was happening to their accounts, while reportedly
20,000 of them lost money. This crisis is seen as one of the biggest cyber bank robberies ever
committed in the history of the bank (Shirbon, 2016). A link to this case is in the appendix of this
paper.
Tesco took three main steps as a way of controlling the situation and communicating with
its cardholders. Tesco’s approach of handling the situation led to the generation of panic and
dissatisfaction among its customers. To deal with the crisis, Tesco first locked accounts with

TESCO BANK CRISIS 2

activities it felt to be suspicious before sending texts to holders whose accounts had been locked.
After that, the bank communicated using Tweeter. The two Twitter pages that were used are
Tesco Bank and Tesco Bank help. In its message, Tesco said that it had locked the accounts as a
"safety precaution." Lastly, it issued a press release reassuring its customers that they will be
fully refunded. The bank also said that collaboration measures with authorities and regulators
were underway to ensure that the issue was brought to control (Shirbon, 2016).
Tesco did what it believed was better to tackle its crisis. However, to manage spreading
of the crisis, it could be better if the bank used a proactive and transparent approach to this issue.
In case of a crisis, there is need to provide as much information as possible. This helps to prevent
panic from the affected people and the general public (Burton St. John III, 2016). It could be
better if the bank issued more customer service lines. The bank only provided little information
to its customers making them know little of what had happened. This created more panic to its
customers. After the crisis, there were several calls made to the bank by customers. However, the
customers were frustrated when the lines were jammed. Many concluded that the bank deployed
few of its staff to assist the customers and that could be the reason response time was drastically
slow (Shirbon, 2016). Coombs (2013) points that to manage a crisis, an organization should
provide sufficient assistance to stakeholders who have been directly affected by the crisis which
so far, Tesco failed to do.
One of the central pillars of crisis management is communication (Coombs, 2013). After
the bank had confirmed that in deed a criminal act had been committed, the bank should have
communicated what had occurred. Additionally, there need for the bank to reassure customers
what it could do to prevent this crisis from reoccurring. The incident happened on a Saturday,
and the bank used Twitter as its main communication strategy. Burton St. John III (2016) points



TESCO BANK CRISIS 3

that social media is not an effective way of communication during a crisis since either the
recipient or transmitter of information may not be active to respond during this critical period.
Tesco needed to issue a press release on the same day of the incident and continue publicizing
updates across the weekend rather than merely communicating using Tweeter. Tesco only issued
a press release on a Monday 7 th November 2016 (Shirbon, 2016). Customers needed to be
reassured through news, websites updates, emails, and even text messages.
It could be worthwhile to note that steps taken to manage a crisis are crucial to protecting
the reputation of a brand (Burton St. John III, 2016). In the future, to manage a crisis, Tesco
should take actions that indicate a strong and dynamic business which takes control of its IT. In
spite of the hacking incident, the bank needs to move ahead with confidence. This helps to re-
establish the public reputation to the bank, especially its customers. Not only that, it is
important for the bank to assure the public that such an incident will not re-occur. Lastly, the
bank needs to update its online security using technologies with high robustly. This will act as
tangible proof that the bank is on top of the situation.

References

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Burton St. John III, Y. E. (2016). Crisis Communication and Crisis Management: An Ethical
Approach. London: SAGE Publications.
Coombs, T. (2013). Applied crisis communication and crisis management. Thousand Oaks:
SAGE Publications, Inc.
Shirbon, E. (2016, 11 7). Raid on 20,000 Tesco Bank accounts fuels cybercrime fears. Retrieved
from http://www.reuters.com/article/us-tesco- bank-idUSKBN1320SW

Appendix

TESCO BANK CRISIS 5

http://www.reuters.com/article/us-tesco- bank-idUSKBN1320SW

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