ABSTRACT
Public perception crises have a particularly shattering effect on top management. The very visibilty of the situation interferes with rational thought. Chief executives can get away with lying to a board of directors, but not with embarrassing them before the public. Carbide was in serious trouble as soon as the deadly gas began to leak in Bhopal, but there were some steps that it, Dayco, and the Bank of Boston could have taken to limit the damage from their crises. First, management should have been in charge early and pinpointed the problem. Next, once a crisis arose, particularly one involving public perceptions, the wise chief executive would have sought an outsider’s opinion on how his actions would appear to the public. There is a strong tendency for executives caught in situations like these to argue about the difference between “perception” —the way the world sees what’s going on— and “reality”—the way he sees it.
