Author: Boyd, Colin
Source: University of Saskatchewan
Company Name: The Peninsula and Oriental Steam Navigation Company
Number of pages: 17
On 6th March 1987 the Herald of Free Enterprise, the pride of the Townsend Thoresen ferry fleet, sank outside the Belgian port of Zeebrugge with the loss of 188 lives. The ship had sailed with its bow doors open. This case provides a remarkable and chilling insight into the management of a firm experiencing a catastrophic disaster, utilising extracts from the judicial report of the investigation of the sinking. The (A) case generates discussion on the degree to which managers and directors should be held responsible for the disaster, and raises wider issues such as the competitive pressures on the ferry industry caused by the Channel Tunnel, and the compromise between efficiency and safety implicit in the design of roll-on/ roll-off ferries. The (B) case raises the controversial issue of criminal prosecutions, and the degree to which the law should play a role in the definition of ethical corporate behaviour. This case is in widespread use in North America as a classic strategy/social responsibility case.