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Marketing6

Marketing6

Were Deadly COVID-19 Outbreaks aboard Carnival Cruise Ships the Result of Managers’ Resistance to Change?

(page 452)

This case examines the COVID-19 outbreaks that occurred aboard Carnival cruise ships in the spring of 2020. By the end of April, the outbreaks had resulted in more than 1,500 positive cases of the virus and at least 39 deaths.170 Let’s begin by considering a timeline of events so that you can evaluate the behavior and decisions made by Carnival’s leadership.

TIMELINE OF EVENTS

January 30: Carnival ship Costa Smeralda is docked near Rome. All 6,000 passengers and 1,000 crew members are quarantined after a woman and her partner became ill with symptoms that could be COVID-19.

February 1, 11:21 pm: The Carnival Diamond Princess is sailing around Asia when a representative from the company’s sanitation vendor sends an e-mail to the chief administrative officer and a guest services account. The purpose of the e-mail is to alert the Diamond Princess crew that a woman in Hong Kong, who has recently been aboard the ship, had tested positive for COVID-19.

February 2, 11:33 am: Records show that Carnival’s chief medical officer, Grant Tarling, sends an e-mail to Hong Kong health authorities with the subject line “Confirmed COVID-19 Case.” In the e-mail, Tarling lists the infected passenger’s name, age, and Princess Margaret Hospital room number.

February 2, 6:44 pm: According to statements from Carnival after-the-fact, this is when Tarling is actually made aware of the confirmed COVID-19 case.

February 3, 6:00 pm: Diamond Princess Captain Gennaro Arma announces to the ship’s passengers that they may have been exposed to COVID-19. He adds that no one on board has reported illness but that they should avoid close contact with anyone showing respiratory distress, follow proper hand-washing protocol, and contact the ship’s infirmary if they begin to feel symptoms. According to some of the ship’s passengers, the crew continues to promote social activities, guests enjoy bars and buffets, people steam in saunas, and the evening’s opera goes on as planned.

February 3: Evening: The Diamond Princess arrives in Yokohama. Japanese health workers immediately begin conducting medical screenings of the passengers.

February 3: Also on this day, news reports of countries denying entry to cruise ships around the world begin to surface.

February 4: Carnival spokesman says in statements after-the-fact that by this day the staff has discontinued “most” scheduled activities.

February 5: Japanese officials institute a ship-wide quarantine requiring passengers to stay in their cabins until further notice. According to Carnival CEO Arnold Donald, on this day he takes control of the company’s response to the illness but had been made aware of it previously.

February 27: There are now 696 confirmed cases of COVID-19 aboard the Diamond Princess.

March 4: As the Carnival Grand Princess heads to Mexico, passengers receive a notification from the office of Grant Tarling under their cabin doors. The message says that the CDC is looking into a “small cluster” of COVID-19 cases in California that may be tied to the ship. The Grand Princess makes a U-turn and heads back toward California. Passengers notice that crew members are wearing gloves and setting out hand sanitizing stations. Events on the ship go on as planned, including swimming, card games, dance classes, concerts, and an evening show.

March 5: Grand Princess captain John Smith announces a quarantine over the ship’s loudspeaker. All passengers must return to their cabins indefinitely. According to some passengers, many detour to the buffet before complying.

March 8: The CDC issues a public health advisory to warn U.S. citizens to avoid all cruise ship travel.

March 9: The Grand Princess docks in Oakland, California, and is immediately commandeered by the CDC. For the next 2 weeks, passengers shelter in place in their cabins and helicopters drop supplies and COVID-19 tests down to the ship’s decks.

March 25: Of the 1,103 tests conducted, 103 have come back positive, 699 have come back negative, and the remaining are pending.171 [After this date, no additional test results are publicized.]

EXECUTIVES’ RESPONSES

Many have wondered why Carnival wasn’t quicker and stricter with quarantines aboard its ships. After all, throughout the crisis, the CDC repeatedly warned that viral outbreaks would be particularly difficult to contain on cruises for several reasons (e.g., age and health of passengers, close physical proximity throughout the ship, shared staff quarters, etc.). CEO Arnold Donald maintained that the rate at which COVID-19 spread was the same in “an airport terminal, a subway station, a restaurant, a theater, a stadium,” and that any evidence of a higher infection rate had “Nothing to do with cruise ships.” At one point, Carnival’s chief communications officer Roger Frizzell defended the company’s position by passing around a Buzzfeed article that reported on multiple COVID-19 deaths having resulted after a family funeral service. (The CDC estimated infection rates aboard the affected ships at close to 20%, while the infection rate for the general population was closer to 3%.)

Carnival’s executives maintained a sense of pride in their response to the viral outbreaks. Donald told reporters, “It wasn’t like there were protocols, and that this was established. You’re at sea, you’re moving people around, and the rules are changing as you go.” He added, “This is a generational global event—it’s unprecedented. . . . Nothing’s perfect, OK?”

Jan Swartz, president of Princess Cruises, thinks the company did everything it could have been expected to do. “It’s very easy and Monday morning, you know, 20/20 hindsight, to say what’s the view of what should have been occurring,” said Swartz, adding “We did our best to take care of people.” She believes the company’s response may even have improved its reputation with some of its customers. “There are many loyal Princess guests who have told us that this has actually cemented Princess as their No.-1 vacation choice.”

BACKLASH

John Padgett, Carnival’s chief experience and innovation officer, told reporters that the company’s executives were aware of the magnitude of the virus as far back as January 25. Padgett had been in contact with one of the company’s manufacturers in Wuhan and had learned details about the virus that he discussed with the team, including Donald. “The biggest thing about that—it’s a learning I don’t think I’ll ever forget, and we shared it with Arnold when we were talking—is that we actually had insight into the global situation much earlier than most.”

If Carnival’s executives had chosen to make different decisions during the outbreaks, it’s possible that the lives and health of numerous passengers could have been spared. In addition, executives’ decisions had wider-ranging impacts. Said Cindy Friedman, epidemiologist and head of the CDC cruise ship task force, “If these ships had stopped sailing, our large team could all be working on helping states and local public health authorities with their community outbreaks.”

By July of 2020, Congress had opened an investigative probe to examine Carnival’s response, the Australian police were conducting a criminal investigation to determine whether the company had purposefully lied to authorities about passengers’ health in order to dock one of its ships in Sydney, and Carnival was facing multiple individual and class-action lawsuits.172

Arnold remained confident that consumer demand for cruises would bounce back after all the “negative noise” had a chance to die down.

FOR DISCUSSION

Problem-Solving Perspective

  1. What is the underlying problem in this case from the CDC’s perspective?
  2. What are some of the causes of this problem?
  3. Do you think Carnival CEO Arnold Donald should be held personally liable? Explain your rationale.

Application of Chapter Content

  1. Describe the forces for change both inside and outside Carnival during the outbreaks.
  2. Does Carnival need adaptive, innovative, or radically innovative change? Explain.
  3. Utilize Lewin’s model of change as a blueprint to describe how Carnival’s executives might inspire change at Carnival.
  4. What specific reasons can you see for Carnival executives’ resistance to change? Explain.

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