Introduction
Overview of Costa Crociere S.p.A. and Cultural Values
With revenues of 3.1 billion euros and 2.3 million total guests in 2011, Costa Crociere S.p.A. is the largest Italian travel group and Europe’s number one cruise company, comprising the brands Costa Cruises, AIDA Cruises and Iberocruceros. Costa Cruises (2012). The group is headquartered in Genoa. Costa Crociere S.p.A has Europe’s largest fleet: 27 ships with total guest capacity of around 70,000. Costa Cruises is committed to enhancing its ability to listen to, communicate with and engage with all stakeholders, to continuously increase its guest satisfaction level, to the empowerment of its people, to contributing to the welfare and development of the communities in which it operates, to respecting and protecting the environment in particular the seas in which the ship sails-and to improved safety.
The company values are: 1. Passion for the customer 2. Human Resources 3. Teamwork 4. Innovation and creativity 5. Financial performance 6. Teamwork and ethics
Michael Tamm, CEO of Costa Crociere comments on behalf of the company by saying “Furthermore, our Sustainability Report attests to Costa Cruises’ commitment to one of the crucial aspects of B.E.S.T 4 Certification: “continuous improvement.” This principle sets us apart and we apply it to all of the areas that we have previously mentioned through monitoring, control and prevention activities (always using the latest procedures) and through the use of the most sophisticated technology that progress has made available to us, going well beyond the current legislative requirements. We still have many objectives set for 2012 and we will achieve them thanks to the valuable contribution of all of those who work in this Company.” Costa Cruises. (2012). This implies that the company values and implements quality improvement efforts that are multi-level including validation of policy and procedure. Thus minimizing the risk for tragedy.
Description of the Accident The Italian cruise ship Costa Concordia partially sank on Friday the 13th of January 2012 after hitting a reef off the Italian coast and running aground at Isoal del Giglio, Tuscany, requiring the evacuation of 4,197 people on board. The Costa Concordia accident had a widespread impact. There were 11 confirmed deaths and 24 passengers missing while 64 others were injured (three seriously). Second, the potential for oil spill continues to threaten the environment. Third, the ship evacuation caused serious customer service and reputation impact to the organization. Lastly, the expense to Carnival Cruise line was $1.4 billion related to loss of production schedule, property, and equipment and rescue labor time. BBC News (16-1-2012a). The ship was equipped with advanced technology and the there were no challenging weather conditions at the time of the crash. The captain, Francesco Schettino, had deviated from the ships’ computer programmed route in order to treat people on Giglio Island to the spectacle of a close sail past. This maneuver is also known as tourist navigation which is commonly accepted among cruise captains. BBC News (16-1-2012a). The sail past lead the Costa Concorida to collide with a reef, list and partially sink the ship. Circumstances leading up to the collision were questioned in the media. Was the captain on the bridge? Did he want to greet the islanders following an old tradition? Was he districted by a mystery woman not on the passenger list but on the bridge and later appearing on television? Why did he leave the ship and not return until ordered to do so by the Coast Guard Commander? Why did he call the company office numerous times but not declare the emergency to port authorities earlier? All situations are complex and few disasters have only a single cause. However, the ship was taken manually up to four miles off course on a route that was not programmed directed by the company. Some literature and media point strongly to the Captain’s (human error) and negligence as the primary contributors to this tragic event. BBC News (16-1-2012a). In order to answer these questions, this paper will present and analyze human behavior issues central and relevant to this case. The central issues to be presented are failed leadership, perceptual distortion, communication breakdown, poor teamwork, poor decision-making and unethical behavior. The case study will conclude with suggested points that the cruise line could consider in learning from these mistakes and avoid future tragedy like the Costa Concordia accident. Failed Leadership Captain Francesco Schettino failed leadership in the sinking of his ship the Costa Concordia could be described an act of hubris, or exaggerated pride and overwhelming self-confidence. Hubris qualities can be marked by impetuosity, a refusal to listen to or take advice and a particular form of incompetence when impulsivity, recklessness and inattention to detail predominate. This can result in disastrous leadership and cause damage on a large scale. Owen, D. and Davidson, J. (2009). The captain’s leadership behavior exhibited pre and post accident indicate his lack ofregard for the well being others over his personal gratification. For example, it was more important for him to impress his guests with an unsafe maneuver than to stay the course. This paper will further present human behavior perspective that point to the core issue of the captain’s leadership shortcomings. Perceptual Distortion The Costa Crociere, operator of several Concordia class ships regularly supported “tourist navigation” which refers to deviating away from a programmed route for the purpose of enhanced guest excitement on the cruise. This accepted practice for ship captains led to a high-risk tolerance overtime. A ship captain with a high-risk tolerance can make a crucial mistake leading to a tragedy like the Costa Concordia. Perceptual Distortion was evident throughout the Carnival Corporation; both Captain Francesco Schettiono, and those around him believed that impressing their guests while engaging in high risk taking behavior was acceptable over ethical and safety obligations. In addition to tourist navigation by a ship’s captain, a human behavior known as normalcy bias also complicated and delayed action toward passenger safety. Alexander, D. (2012). Normalcy Bias is the desire to believe the least threatening hypothesis is true. Both the passengers and crew demonstrated a serious delay in responding to evident signs that the ship was sinking. Communication Breakdown There were several instances where communication broke down during the passenger boarding, shipwreck, sounding of the alarm, and captain’s abandonment of ship before passengers and crew and the evacuation. First, a majority of the passengers did not receive evacuation preparedness and lifeboat drills prior to setting sail. Second, a significant safety barrier was the multicultural representation on the ship. There were 21 countries represented among the passengers and crew yet, there was no formal language interpreter or translation resources available in the event of an emergency. <ref> Consequently, the crew’s ability to deliver instruction in the case of an emergency was severely limited. The captain and a handful of officers were aware of the decision to change course yet raised no concerns. Directly following the course change, the ship collision occurred. Directly following the collision impact, the captain communicated multiple times with his officers on the bridge, crew, Coast Guard Commander and the head of the Costa Crociere’s marine operations. Meichtry, S. (2012, Jan 25). Even though timely and multi-level communications occurred, there was a 73-minute gap between the ship’s collision and the sounding of the evacuation alarm. The barrier to effective communication is attributed to filtering that is, the distortion or with holding of information to manage a person’s reactions. Bauer, T., Erdogan, B., (2012). Captain Schettino’s filter of information prevented the members of all parties from getting the complete picture of the crisis on board the ship.

Teamwork

The evacuation was disorderly and erratic. The command and crew were sluggish in responding to a crisis as evidenced by the fact that it took over an hour to start the evacuation of 4,000 people aboard. The first advice to passengers was to go to their cabins. This highlights the management difficulties experienced by the crew when they did not have enough information to determine a reliable strategy and thus tend to require passive behavior from those people they have to manage or the passengers. Not only was the crew missing key information and direction to manage this crisis but improper training as well. The erratic evacuation could also be in part due to inadequate training necessary to coordinate among each other in high-pressure situations. The lack of teamwork between the captain and crew coupled with filtered communication from the captain likely led to the crew and passenger panic. Ultimately, the combined panic further frustrated rescue efforts. Group formation is beneficial but highly dynamic. Good leadership skills combined with effective communication will help any group perform at its peak level. It appears that Captain Schettino lacked the necessary leadership and communication skills to mobilize his team of officers and crew in order to manage a safe evacuation.
Decision Making The captain’s ego interfered with rational thinking making him reckless and dangerous. The lack of rational thinking led him to make dangerous decisions while delaying or completely omitting necessary decisions to ensure passenger and crew safety. The captain’s series of poor decisions leading up to the shipwreck could be partially explained by the Peltzman Effect. Battmann and Mass. (2012). He hypothesized that we have an individual “target level” of risk and measure the risk of a situation on our own “risk thermostat”. If the perceived risk is higher than the target level we will act in a way to reduce the risk; however if it is lower, we will behave more riskily. Due to the homeostasis “the sum of the sins is constant” since the perceived safety of the situation will be compensated by more risky behavior. Peltzman. (1975). The captain reported that he made the tourist navigation maneuver in the past successfully. <ref> Consequently, he was accustomed to more risky behavior and with high risk taking tolerance overtime, one can run the risk of making a crucial mistake leading to the tragedy of the Costa Concordia. Poor decision making behavior not only occurred prior to the crash but also after the crash where effective leadership was required to strategically mobilize evacuation and rescue efforts. The significant barriers to a safe evacuation were directly related to the Captain’s series of decisions to delay and / or omit accurate communication with authorities. This could be attributed to a decision-making trap known, as over confidence or bias, which occurs when, the decision maker is overconfident in his or her ability to predict the future. Bauer, T., Erdogan, B., (2012). This behavior was evidenced by his multiple opportunities to communicate the severity of the situation to passengers, crew, company executives and the Coast Guard yet, failed to do so. (Appendix A – Timeline). For example, Robert Ferrarinin, Costa Crociere’s head of marine operations fielded at least six calls from Captain Schettino in the 73-minute gap between the ships’ collision and through the sounding of it’s evacuation alarm. In his first four calls between 9:57 and 10:33 the captain described how water was spreading through the hull, making it harder for the ship to stay upright and afloat. Prior to that he described the situation as an unidentified emergency. At 10:14 the coast guard called the bridge. They were told that the ship was only suffering a blackout. The Coast Guard then sent rescuers anyway. Although multiple conversations occurred between the captain and the company’s head of marine operations, neither one of the called the Coast Guard. This was contradictory to standard operation procedure. If a ship strikes a rock, standard operating procedure for ship commanders is to immediately alert the Coast Guard and ships in the area and get passengers into position for a possible evacuation. Meichtry, S. (2012, Jan 25). Instead, Captain Schettino said to reporters that he focused his efforts on trying to ensure the ship made it closer to shore, enabling a safer evacuation. Meichtry, S. (2012, Jan 25). This implied that his behavior was perhaps overconfident-bias which assumed that by steering the ship closer he would mitigate the severity of the situation. <ref>. Again, the captain’s poor decision-making leading up to and directly following the crash likely contributed to the human error and neglect for passenger safety.
Unethical Behavior

------------------------------------------------- The captain not only filtered required information while communicating across multiple levels that resulted in a delayed evacuation but he also abandoned the ship. He left the crew and passengers on board and did not return until he was ordered to do so by the commander of the Coast Guard. Because many decision involve an ethical component, one of the most important considerations in management is whether decisions you are making as a leader are ethical. Captain Schettino failed to assess the ethics of his decisions. He failed to consider ethical guidelines prior to his decisions related to integrity, impact, legalities, no maleficence, fairness and input receiving. Schreiner, E. (2013). The captain appeared to allow insecurity to supersede integrity by not communicating the reality of the situation as quickly as possible. He failed to consider the impact that his decisions would have on the safety of 4,000 passengers and crew. He did not follow maritime law at the moment he failed to report the crash to the Coast Guard and other ships. Some decisions have the ability to cause harm. The captain’s decision to abandon ship could have proved harmful to others thus, he acted with no maleficence by not choosing the option that was least damaging to others. He did not act fairly. He allowed his personal overconfidence-bias to influence his decisions, which turned out to not be an ethical one. For optimal ethical decision making input receiving is required that is, give others a voice. By way of omitting critical information and communication the captain failed to give others a voice nor did he consider the concerns or needs of others. Overall, the captain’s decisions leading up to during and directly following the crash did not meet acceptable ethical guidelines.
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How can Costa Cronciere learn from mistakes made surrounding the Costa Concordia tragedy?
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The company can learn from these mistakes by creating greater controls across all levels of the organization. The Costa Cronciere Sustainability Report attests to full implementation of a B.E.S.T 4 Certification: “continuous improvement.” Costa Cruises. (2012). The company can demonstrate that lessons have been learned through utilization of this forum to operationalize better controls at sea. For example, operationalize a requirement that any deviation from the route plan require at least a two-person review on the ship and up line to maritime headquarters. Also, develop and implement enhanced training of crew and officers so that they have the opportunity to practice coordination among each other during high-pressure situations such as a crash or disaster. I recommend that a cultural review aligned with the company values be assess and communicated through out the ranks of the company. Clearly, the majority of the crew did not feel comfortable questioning the captain’s decisions. That speaks to company culture that limits all employees in having a voice and needs to be changed. Lastly, utilize B.E.S.T 4 continuous improvement to account for the multicultural diversity that is evident in the cruise industry. There must be a mechanism to offer interpreter and translation services on board a ship whether it be during emergent or non-emergent situations. Ultimately, the crew and passengers need to communicate effectively in order for the voyage to be safe and secure. Lastly, the company needs to widely support and deliver severe consequences for employees who engage in unethical decision-making. Unethical decision making that results in injury or harm to others or illegal practice must result in a severe consequence to that employee. If not, the risk for future tragedies similar to the Costa Concordia accident will remain high.
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Conclusion
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The Costa Concordia accident had a widespread impact. There were 11 confirmed deaths and 24 passengers missing while 64 others were injured (three seriously). The captain of the Costa Concordia, Francesco Schettino, was charged with manslaughter and abandoning ship. Hamilton. (2012). Other convictions included the head of crisis management at Conciere, the hotel director, two sailors and the helmsman. All negotiated a plea bargain for their testimony. The ship running aground on rocks and some issues with the evacuation process caused the tragic impact of the dead and missing passengers and crew. The ship ran aground on rocks because it sailed too close to the island in a manually programmed and authorized deviation in route also known as ”tourist navigation.” Which was intended to give passengers an exciting view. No crewmembers questioned the change in route. Although the ship contained alarms meant to warn crew when the ship goes off course, the captain deactivated the alarms. There were some issues with the evacuation procedure coupled with a severe list of the ship, which affected the ability to use lifeboats. Additionally some of the passengers (who had just come on board) had not yet completed a disaster or lifeboat drill. All situations are complex and few disasters have only one cause However, the human behaviors such as high risk tolerance, overconfidence-bias, arrogance leading to poor judgment, filter of pertinent information are some of the human behavior issues central and relevant to this case. These human behaviors contributed to the failed leadership, perceptual distortion, communication breakdown, poor teamwork, poor decision-making and unethical behavior.
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Appendix A – Costa Concordia Timeline - January 13, 2012
7:00pm Passengers board Costa Concordia vessel. Some but not all received emergency evacuation training in the event of an emergency.
9:39pm Captain Schettino disabled the autopilot and turned off the alarm system. The Costa Concordia deviated from its programmed route through the Tyrrhenian Sea in order to make a close approach to Giglio.
9:45pm Vessel hit the rock with water spreading through the hull and making it harder for the ship to stay upright. It began to list as the water filled two of four hull compartments. The ship started to list. Captain attempted a maneuver to steer the vessel closer to the shore. He did not sound an alarm or call the coast guard.
9:57pm The captain called the operating company to inform them that “he has a huge problem on board, that a blackout was in course, that there wasn’t any electrical current. He told the operator that he hit a rock.”
10:05pm Passengers began to call Coast Guard with complaints regarding ship danger.
10:14pm The Coast Guard issued radio contact to the ship’s bridge. They were told the ship was only suffering a blackout. The Coast Guard sent rescuers away.
10:16pm The captain had a 10-minute conversation with the company operator reassuring that the situation was under control.
10:33pm The captain called the operator a 2nd time to tell him that his was in contact with the Italian authorities.
10:35pm Captain called the company operator to inform him that he planned to abandon ship.
10:38pm Captain in a conversation with the Coast Guard Captain directing the Costa Concordia Captain to return back on board the ship and begin an equation.
10:58pm Captain sounded an alarm and began evacuation. * 73-minute gap between the ship’s collision and the sounding of its evacuation alarm.
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Reference List

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