19 September 2017

South Africa: How KPMG Tried to Manage a Crisis - and Only Managed to Make Things Much Worse

analysis

There's always a danger that responding and admitting culpability - while absolutely necessary in a crisis response - can actually raise awareness about a problem, give journalists more information to latch on to and spark further outrage. And it seems that KPMG has blown a hole in its own foot.

It has long been acknowledged by practitioners and academics that crisis management is itself in crisis. Companies operate in a world where there is a crisis - with dire consequences for their reputations - lurking behind every rock, stone and pebble. They range from North Korea's nuclear ambitions and hurricanes to terrorism to tweets from staff members. The responses from businesses in South Africa embroiled in corporate crises of late have shown that they have simply failed to adapt; that they need to understand how accountability works now, and fast.

The case of KPMG is particularly fascinating, given the wide range of measures it announced last week as penance for doing business with the Guptas and writing a flawed report on the so-called "rogue unit" of the South African Revenue Service (SARS). There's always a danger that responding and admitting culpability - while absolutely necessary in a crisis response -...

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