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Murdoch's problem isn't PR but culture

By John R. Kimberly, Special to CNN
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STORY HIGHLIGHTS
  • John Kimberly: Murdoch is victim of media culture he helped create
  • He says News Corp. has taken several of the right public relations steps
  • He says the publishing baron's real problem is the corporate culture of his organization
  • Kimberly: Executives must ensure employees don't think bad behavior will be rewarded

Editor's note: John R. Kimberly is the Henry Bower Professor of Entrepreneurial Studies and professor of management, health care systems and sociology at the Wharton School of the University of Pennsylvania. He and Hamid Bouchikhi co-authored "The Soul of the Corporation: How to Manage the Identity of Your Company."

(CNN) -- The story is moving fast, and ironically Rupert Murdoch is caught in a web of his own making.

Find the basis for a story that will make headlines and spare no effort to dig up any information that will get and hold readers' attention -- the bolder the headline the better. Go for the jugular. If there's a seamy angle to it, so much the better. Oh, and by the way, don't hesitate to use whatever sources you can, and use your own judgment about methods. But create the story. That's your job. The more sensational, the better. That's what sells newspapers, that's what makes us profitable.

So how does the media baron handle himself when he becomes the object of the reporting culture he has helped to create, when his own empire is operating in crisis mode, when what he has so carefully and successfully built is in danger of unraveling?

Opinion: What scandal says about Murdoch empire

Let's start with the hallmarks of successful efforts at PR damage control:

• Respond quickly -- try to get ahead of the stories that will be written

• Acknowledge responsibility publicly -- don't try to pass the buck

• Establish accountability -- demonstrate that you know where the problem lay

• Don't underestimate the scope of the problem -- leave enough wiggle room in early assessments so that you can credibly acknowledge widening scope if necessary

• Take concrete action that is commensurate with the scope of the problem

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Let's look at the score card thus far. I'm writing this on Sunday, July 17, knowing that headlines in the days ahead will contain new facets to a story that, not unlike the Dominique Strauss-Kahn affair, will continue to unfold in the unremitting glare of media attention.

This morning's front page headline in the New York Times, the rival to Murdoch's own Wall Street Journal, trumpets the spread of the "oil spill." "Tabloid Taint Rubs Off On a Cozy Scotland Yard" it screams.

And that was before the news broke of the arrest of Rebekah Brooks and the plan by Metropolitan Police Commissioner Sir Paul Stephenson to resign.

What, from the outside, are the steps Murdoch and his advisers appear to have taken in service of damage control? Les Hinton and Brooks have taken the fall. Check. He has closed down the offending paper, the long-lived News of the World. Check. He has met with the family of Milly Dowler and said he was sorry. Check.

He has taken out space in newspapers apologizing publicly for the offending actions. Check. He has hired a PR firm to help manage the front stage. Check.

What scandal tells us about Murdoch's empire

But on the other side of the ledger, son James was slow to react to the initial signs of trouble. Murdoch pere was initially defiant, then abruptly shifted and became repentant. In his public statements, he initially underestimated the scope of the problem and, as the "oil spill" has spread, he has lost additional credibility. He has taken concrete action, but will it make much of a difference? Probably not. And why?

Because behind all the public relations maneuvering and behind all the frantic efforts to stem the bleeding there are the very serious questions the hacking scandal raises. Questions that aren't about PR but that are about the very nature of the enterprise Murdoch has created and the role of the Fourth Estate in the world in 2011.

So the more profound question is not about the PR score card but about the relationship between the media and the world in which the media operate. It's a question of limits and boundaries. This relationship has always been the subject of controversy, and appropriately so. But what is different this time is the very real possibility of criminal charges -- criminal charges stemming from some boundaries having been crossed that most certainly should not have been.

Where will this go in England? What will be the fallout of the apparently cozy relationships between the Murdoch empire and Scotland Yard? What steps, if any, will the FBI take in the U.S.?

A glance in the rear view mirror suggests that employees at News of the World acted as if they would be rewarded for crossing boundaries. This is a common problem for organizations of all sorts. The case of News Corp is hardly unique.

We have only to look at recent history in the banking industry in the U.S. to see the grotesque consequences of rewards for excessive risk-taking behavior run amok. The most significant lesson to draw from the developing situation is not so much about how to use public relations efforts to aid in damage control. The PR pros are all over this, for sure. It's rather about understanding what provoked the damage in the first place.

All you executives out there, do you fully understand how the cultures of your organizations are influencing not only your direct reports, but even more important, those on the front lines? If you can't honestly answer this question, beware. You and your organization may be next.

The opinions expressed in this commentary are solely those of John R. Kimberly.

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