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In 2015, Hubang chili sauce was launched in China’s highly competitive emerging condiment and sauce market. Instead of undertaking direct competition and a costly price war in traditional retail channels already dominated by a market leader, Wenjin Lu, a local entrepreneur and the chief executive officer of Hubang, developed a unique strategy to achieve breakthroughs via online-to-offline (O2O) food delivery platforms, whose consumers were made up of a fast-increasing consumer base of Internet and mobile users. By 2020, Hubang had achieved an annual sales milestone of US$29 million and secured series A financing. Lu faced a new dilemma: Should Hubang keep strengthening its unique O2O channel through market penetration and product expansion, or should it reposition to enter the retail market with its existing products?

Why has the incidence of corporate crisis risen markedly in China? Why are foreign firms frequently targeted by the Chinese authorities and how should they deal with it? Addressing these pivotal questions is essential for effective management of corporate crisis in the Chinese market. Herein, we describe the background of relevant institutional and market environments in China. Then we introduce three prominent principles deeply rooted in Chinese thinking and business practice--sentiment, reason, and law--and pinpoint how they relate to crisis management. Several cases drawn from well-known corporate crises are utilized to illustrate the dynamic relationships among these three fundamental principles. We proceed to highlight the importance of sentiment and emphasize the delicate balance between sentiment and law. Finally, we elaborate how different forms of institutional capital and social media can be employed to manage sentiment, reason, and law so as to curtail and tackle corporate crisis.

In 2000, media superstar Oprah Winfrey promised the recently retired Nelson Mandela, first president of post-apartheid South Africa, that she would build his country a top-notch boarding school for disadvantaged girls. Her twin purpose was to use the power of education to help impoverished young girls with exceptional promise-girls much like herself as a child-realize their potential and transform their lives and, at the same time, to train a cohort of strong new leaders who would contribute to the success of post-apartheid South Africa. To that end, Winfrey built a $40 million dream school-spacious, thoughtfully-designed, and elegantly-appointed, with excellent teachers, small classes, modern facilities, and extensive grounds. In South Africa and elsewhere, the opening of the extraordinary school garnered much attention, praise, and imitators, but also drew significant criticism. Some of the critics were appalled at using so much money to create so posh a facility for so few children, when so many were in desperate need. Others chided Winfrey for failing to take a community-based approach, and for separating the children from their homes and communities. Winfrey, confident in her model, stayed the course. The case allows students to consider a number of issues: what is the appropriate role of private philanthropy, how to think about private resource allocation in a poor country, what kind of school is in the best interest of the students, and what kind of school is in the best interests of the country. HKS Case Number 1930.0