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Coombs Protecting Organization Reputations PDF
Coombs Protecting Organization Reputations PDF
Academic Research
Protecting Organization Reputations During
a Crisis: The Development and Application
of Situational Crisis Communication Theory
W. Timothy Coombs
Department of Communication Studies, Eastern Illinois University,
Charleston, IL, USA
www.palgrave-journals.com/crr 163
Situational Crisis Communication Theory
of SCCT and its application to reputation Public Relations’ fake, supportive blogs for
protection during a crisis. Wal-mart are examples of crises that tran-
spired primarily online rather than in the
CRISIS AS A REPUTATIONAL THREAT news media.
A reputation is an aggregate evaluation Because reputations are evaluative, some
stakeholders make about how well an point of comparison is required. Stakehold-
organization is meeting stakeholder expecta- ers compare what they know about an
tions based on its past behaviors (Wartick, organization to some standard to determine
1992). The term ‘organization’ is used here whether or not an organization meets their
instead of corporation because SCCT is ap- expectations for how an organization should
plicable to variety of organizational forms behave. A failure to meet expectations, an
and the term ‘corporation’ implies a specific expectation gap, is problematic for organiza-
type of for-profit organization. As evalua- tions (Reichart, 2003). Reputations are based
tions, reputations are favorable and/or unfa- in large part on how stakeholders evaluate
vorable. Stakeholders are any group that can an organization’s ability to meet their expec-
affect or be affected by the behavior of an tations for treating stakeholders.
organization (Agle et al., 1999; Bryson, 2004).
Reputations are widely recognized as a Threat Posed by Crises
valuable, intangible asset. Reputational assets A crisis is a sudden and unexpected event
can attract customers, generate investment that threatens to disrupt an organization’s
interest, improve financial performance, operations and poses both a financial and a
attract top-employee talent, increase the return reputational threat. Crises can harm stake-
on assets, create a competitive advantage and holders physically, emotionally and/or finan-
garner positive comments from financial cially. A wide array of stakeholders are
analysts (Carmeli and Tishler, 2005; Davies adversely affected by a crisis including com-
et al., 2003; Fomrun and Gardberg, 2000; munity members, employees, customers,
Fombrun and van Riel, 2004). suppliers and stockholders. Crises threaten
to damage reputations because a crisis gives
The Formation of Reputations people reasons to think badly of the organ-
A reputation develops through the informa- ization. Again, the news media and the
tion stakeholders receive about the organiza- internet play a critical role. Most stakeholders
tion (Fombrun and van Riel, 2004). will learn about a crisis from news reports.
Stakeholders receive information through In a smaller number of crises, stakeholders
interactions with an organization, mediated learn about crises through online social media.
reports about an organization (including the The exceptions would be victims or poten-
news media and advertising) and second- tial victims who are more likely to experi-
hand information from other people (eg, ence the crisis or to be informed directly by
word of mouth and weblogs). Most of the the organization about the crisis. If a reputa-
information stakeholders collect about tion shifts from favorable to unfavorable,
organizations is derived from the news media. stakeholders can change how they interact
That is why media coverage is an important with an organization. Clearly, the benefits of
feature of reputation management (Carroll, a favorable reputation noted earlier may be
2004; Carroll and McCombs, 2003; Meijer, lost. Furthermore, stakeholders may sever ties
2004). Second-hand information from social to the organization and/or spread negative
media on the internet, such as weblogs word of mouth about the organization.
or blogs, is critical for some crises. Krypton- The field of crisis management is cogni-
ite, the bicycle lock makers and Edelman zant of the value of reputations. One
164 Corporate Reputation Review Vol. 10, 3, 163–176 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00
Coombs
manifestation of this concern is the notion this psychological stress, stakeholders need
of reputational capital. Reputational capital information about what had just happened.
is an organization’s ‘stock of perceptual and Furthermore, stakeholders want to know
social assets – the quality of the relationship what is being done to protect them from
it has established with stakeholders and the similar crises in the future – what corrective
regard in which the company and brand is actions are being taken. Corrective actions
held’ (Fombrun and van Riel, 2004: 32). reassure stakeholders that they are safe
Organizations accumulate reputational capi- thereby reducing their psychological stress
tal over time. Some writers use the metaphor (Sellnow et al., 1998). A final component of
of a bank account (Alsop, 2004; Dowling, adjusting information is an expression of
2002). A crisis will inflict some reputational concern for the victims. Expressions of con-
damage – reputational capital is lost. A favo- cern are expected by stakeholders and rec-
rable prior (pre-crisis) reputation is a buffer ommended by crisis experts but are not
against the reputational capital lost during a admissions of guilt (Fuchs-Burnett, 2002;
crisis. An organization with a more favorable Patel and Reinsch, 2003).
prior reputation will still have a stronger It would be irresponsible to begin crisis
post-crisis reputation because it has more communication by focusing on the organi-
reputational capital to spend than an organ- zation’s reputation. To be ethical, crisis man-
ization with an unfavorable or neutral prior agers must begin their efforts by using
reputation. As a result, a favorable prior rep- communication to address the physical and
utation means an organization suffers less psychological concerns of the victims. It is
and rebounds more quickly. Fombrun and only after this foundation is established that
van Riel (2004) report that a number of crisis managers should turn their attentions
event-based studies found support for the to reputational assets. SCCT provides guid-
reputational capital effect when examining ance when crisis managers have met their
stock prices (eg, Gregory, 1998; Knight and initial obligations and are prepared to address
Pretty, 1999). reputational assets.
© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 3, 163–176 Corporate Reputation Review 165
Situational Crisis Communication Theory
166 Corporate Reputation Review Vol. 10, 3, 163–176 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00
Coombs
© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 3, 163–176 Corporate Reputation Review 167
Situational Crisis Communication Theory
Victim cluster: In these crisis types, the organization is also a victim of the crisis.
(Weak attributions of crisis responsibility = Mild reputational threat)
Natural disaster: Acts of nature damage an organization such as an earthquake.
Rumor: False and damaging information about an organization is being circulated.
Workplace violence: Current or former employee attacks current employees onsite.
Product tampering/Malevolence: External agent causes damage to an organization.
Accidental cluster: In these crisis types, the organizational actions leading to the crisis were
unintentional.
(Minimal attributions of crisis responsibility = Moderate reputational threat)
Challenges: Stakeholders claim an organization is operating in an inappropriate manner.
Technical-error accidents: A technology or equipment failure causes an industrial accident.
Technical-error product harm: A technology or equipment failure causes a product to be recalled.
Preventable cluster: In these crisis types, the organization knowingly placed people at risk, took
inappropriate actions or violated a law/regulation.
(Strong attributions of crisis responsibility = Severe reputational threat)
Human-error accidents: Human error causes an industrial accident.
Human-error product harm: Human error causes a product to be recalled.
Organizational misdeed with no injuries: Stakeholders are deceived without injury.
Organizational misdeed management misconduct: Laws or regulations are violated by management.
Organizational misdeed with injuries: Stakeholders are placed at risk by management and injuries
occur.
168 Corporate Reputation Review Vol. 10, 3, 163–176 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00
Coombs
unfavorable prior relationship reputation. lessen. Negative emotions can cause stake-
Similarly, the presence of intensifying factors holders to lash out at an organization
results in accident crises creating the same (engage in negative word of mouth) or to
reputational threat as an intentional crisis sever interactions with the organization
(Coombs and Holladay, 2001, 2004). (Coombs and Holladay, 2004).
Two propositions explain how the inten- Ultimately, the model needs to connect
sifying factors can alter the initial reputa- the effects of a crisis to behavior intention.
tional threat. The Crisis History Proposition, If crises altered reputations and create affect
represented by arrows B1 and B2 in the but did not impact behavioral intentions,
model, states that an organization that expe- there would be no reason to worry about
rienced a similar crisis in the past is attrib- the effects of crises. The Organizational
uted greater crisis responsibility and suffers Reputation–Behavior Intention Proposition,
more direct and indirect reputational damage represented by arrow D in the model, posits
than an organization with no history of cri- that the more negative the reputation, the
ses. The Prior Relationship Reputation less likely stakeholders are to report behav-
Proposition, represented by arrows B3 and ioral intentions that are supportive of an
B4 in the model, states an organization that organization (eg, using products or services).
treated stakeholders badly in the past is Hence, the reputational damage inflicted by
attributed greater crisis responsibility and a crisis has implications for the interactions
suffers more direct and indirect reputational between the organization and its stakehold-
damage than an organization with a neutral ers. After a crisis, customers can stop buying
or positive relationship reputation. Research products or community members may no
supports the belief that both crisis history longer support the organization. Research
and an unfavorable prior relationship reputa- demonstrates that the post-crisis reputation
tion intensifies attributions of crisis respon- is related to behavioral intentions such as
sibility and have a direct effect on reputations purchase intention and support for an
(Coombs, 2004a,b; Coombs and Holladay, organization (Coombs and Holladay, 2001;
2001). The Crisis History and Prior Rela- Siomkos and Kurzbard, 1994). The relationship
tionship Reputation Propositions illuminate is important because changes in the reputation
how situation factors can amplify the repu- will have behavioral ramifications.
tational threat of a crisis and alter the nature The Affect–Behavioral Intention Proposi-
of the crisis. tion, represented by arrow E in the model,
Crisis responsibility triggers affective reac- believes the stronger the feelings of negative
tions as well as being a reputational threat. affect (anger and schadenfreude), the less
Emotions operate on a parallel track to rep- likely stakeholders are to report behavioral
utation and affect behavior intentions as well. intentions that are supportive of an organiza-
Increased attributions of crisis responsibility tion and will be more likely to engage in
generate stronger feelings of anger and in negative word of mouth. Research has
some extreme cases schadenfreude (drawing shown limited support for this proposition
pleasure from the pain of others) toward the (Coombs and Holladay, 2004; Jorgensen,
organization while reducing feelings of sym- 1996; Rudolph et al., 2004). Crisis responsi-
pathy for the organization (Coombs and bility can impact behavioral intentions
Holladay, 2005). The Crisis Responsibility– through emotions as well as through reputa-
Affect Proposition, represented by arrow C tion. While reputation and emotions are
in the model, argues that as crisis responsibil- closely related, that connection is largely
ity strengthens, feelings of anger and schaden- explained by the shared connection to crisis
freude intensify and feelings of sympathy responsibility.
© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 3, 163–176 Corporate Reputation Review 169
Situational Crisis Communication Theory
170 Corporate Reputation Review Vol. 10, 3, 163–176 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00
Coombs
How Crisis Response Strategies Protect use the crisis response strategies to establish
against Negative Reactions to a Crisis a frame or to reinforce an existing frame.
SCCT holds that communication affects In most cases, the news media is the final
people’s perceptions in a crisis. The words arbitrator of the crisis frames.The frames used
used and action taken by management affect in the news media reports are the frames that
how people perceive the organization and/ most stakeholders will experience and adopt.
or the crisis. In turn, those perceptions shape That is why it is critical that crisis managers
evaluations of the organizational reputation present ‘their side of the story’ to the news
as well as stakeholders’ emotional response media. One exception would be crises that
toward and future interactions with the transpire predominantly online. For online
organization (Nerb and Spada, 1997). SCCT crises, people posting crisis-related informa-
shares this belief in the power of communi- tion to the internet provide the frames.
cation with Image Restoration Theory The people who post to the internet about
(Benoit, 1995). Image Restoration Theory is crises include the crisis managers, influential
a descriptive system used to analyze crisis bloggers, critics of the organization and crisis
cases. The focal point is identifying which victims.
crisis response strategies were used in the Deny strategies seek to establish a crisis
case and drawing speculative conclusions frame. Deny strategies attempt to remove any
about the utility of the crisis response strat- connection between the organization and
egies. I use the term speculative because the crisis. If the organization is not involved
these are case studies, not empirical tests of in a crisis, it will not suffer any damage from
hypotheses. As other critics have noted, case the event. In rumor and challenge crises,
studies limit our understanding of how managers need to argue that there is no ‘real’
people respond to crises and crisis response crisis. Managers deny the truth to the rumor
strategies. Moreover, Image Restoration or refute the charges of immoral conduct.
Theory offers no conceptual links between If stakeholders, including the news media,
the crisis response strategies and elements of accept the no crisis frame of denial, the
the crisis situation. SCCT draws upon the organization is spared any reputational
crisis response strategies articulated in Image harm.
Restoration Theory by integrating those The diminish crisis response strategies
strategies into a system that predicts how argue that a crisis is not as bad as people
stakeholders should react to the crisis and think or that the organization lacked control
the crisis response strategies used to manage over the crisis. If crisis managers lessen an
the crisis. organization’s connection to the crisis and/
Crisis response strategies have three or have people view the crisis less nega-
objectives relative to protecting reputations: tively, the harmful effects of the crisis are
(1) shape attributions of the crisis, (2) change reduced. Managers need solid evidence to
perceptions of the organization in crisis and support these claims and even then might
(3) reduce the negative affect generated by fail. Failure occurs when the news media or,
the crisis (Coombs, 1995). These three in the case of online-oriented crises, people
objectives all support the larger goal of posting messages reject the crisis manager’s
reputation protection and are represented by frame and continue using a different frame.
arrows F1, F2, and F3 in the model. Crisis Stakeholders will be given competing frames
managers may pursue any combination of and will select the frame provided by the
these three objectives with their responses. source they find most credible. Diminish
As noted earlier, a crisis event is framed as strategies are most effective when reinforcing
being a specific crisis type. Crisis managers existing crisis frames. Excuse strategies, lack
© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 3, 163–176 Corporate Reputation Review 171
Situational Crisis Communication Theory
of intent and/or volition can be used to re- A crisis will create negative affect, espe-
affirm a crisis situation as residing in the cially the intentional crisis cluster. Stakehold-
accidental cluster. The value in reinforcing ers become angry and may even enjoy
such a frame is that an accidental crisis is seeing the organization suffer. Deny elimi-
much easier and less expensive to manage nates negative affect if people accept there
than an intentional crisis (Coombs and is no crisis. Adjusting information and
Holladay, 2002, 2004). rebuild strategies are the most effective ways
To change perceptions of the organization to reduce negative affect. Part of adjusting
in crisis, managers present new, positive information is the expression of concern for
information about the organization and/or victims. Expressions of concern themselves
remind stakeholders of past good works by help to reduce negative affect. Expressing
the organization. The key is to offset the concern for victims (adjusting information)
negatives from the crisis with current or past and reinforcing this compassion through
good works. Rebuild strategies are the main compensation and/or a full apology serve
avenue for generating new reputational to blunt feelings of anger (Coombs and
assets. Rebuild strategies attempt to improve Holladay, 2005). A crisis can also evoke
the organization’s reputation by offering sympathy for the organization. The victim-
material and/or symbolic forms of aid to age strategy serves to reinforce the belief that
victims. The crisis managers say and do the organization deserves sympathy.
things to benefit stakeholders and thereby
take positive actions to offset the crisis. Review
Offering compensation or a full apology SCCT holds that as the reputational threat
both are positive reputational actions. The and negative affect increases (both of which
rebuild strategies are used for crises that are functions of situational factors), crisis
present a severe reputational threat such as managers should utilize crisis response strat-
intentional crises or accidental crises coupled egies with the requisite level of accepting
with a crisis history and/or unfavorable pri- crisis responsibility. Table 3 provides a sum-
or relationship reputation. mary of the SCCT recommendations for the
Bolstering offers a minimal opportunity use of crisis response strategies.
to develop reputational assets. Managers who It would be easy to conclude that the
have had positive relationships with stake- safest crisis response would be the rebuild
holders can draw upon that goodwill to help strategies because they address victims so
protect the organizational reputation, praise well. Rebuild strategies are, however, not
stakeholders for their efforts during the cri- always the preferred response. The more
sis as a means of improving relationships with accommodative the strategy, the more
them or draw sympathy from being a victim expensive it is for the organization (Cohen,
of the crisis. Praising stakeholders generates 1999; Patel and Reinsch, 2003; Stockmyer,
some goodwill and being cast as the victim 1996). Research has demonstrated that using
evokes sympathy for the organization. overly accommodative strategies produces
Reminder, another bolstering strategy, uses no greater reputational benefits than those
past good works to counter-balance the cur- prescribed by SCCT. For instance, using a
rent negatives from the crisis. The reminder full apology in an accidental crisis provides
strategy demands that there are good past no greater reputational benefit than an
works from which to draw. All bolstering excuse strategy with adjusting information.
strategies are best used as supplements to Management pays more for the response but
the three primary strategies and adjusting does not see an increased yield in reputation
information. protection (Coombs and Holladay, 1996,
172 Corporate Reputation Review Vol. 10, 3, 163–176 © 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00
Coombs
1. Informing and adjusting information alone can be enough when crises have minimal attributions
of crisis responsibility (victim crises), no history of similar crises and a neutral or positive prior
relationship reputation.
2. Victimage can be used as part of the response for workplace violence, product tampering, natural
disasters and rumors.
3. Diminish crisis response strategies should be used for crises with minimal attributions of crisis
responsibility (victim crises) coupled with a history of similar crises and/or negative prior
relationship reputation.
4. Diminish crisis response strategies should be used for crises with low attributions of crisis
responsibility (accident crises), which have no history of similar crises, and a neutral or positive
prior relationship reputation.
5. Rebuild crisis response strategies should be used for crises with low attributions of crisis
responsibility (accident crises), coupled with a history of similar crises and/or negative prior
relationship reputation.
6. Rebuild crisis response strategies should be used for crises with strong attributions of crisis
responsibility (preventable crises) regardless of crisis history or prior relationship reputation.
7. The deny posture crisis response strategies should be used for rumor and challenge crises, when
possible.
8. Maintain consistency in crisis response strategies. Mixing deny crisis response strategies with
either the diminish or rebuild strategies will erode the effectiveness of the overall response.
2004). Moreover, using overly accommodat- reputational repair effectiveness of the crisis
ing strategies when unnecessary actually can response.
worsen the situation. Stakeholders begin to As noted earlier, most stakeholders will
think the crisis must be worse then they learn about a crisis from the news media.
thought if the organization is responding so Hence, how the news media frame (define)
aggressively (Siomkos and Kurzbard, 1994). the crisis is an important consideration.
Research from agenda setting and reputation
BOUNDARY CONDITIONS (Carroll, 2004) suggest that the stakeholders
The guidelines provided by SCCT are will adopt the media’s frame for the crisis.
affected by the constraints surrounding the A crisis manager may find it difficult to change
crisis situation. Financial resources are the the media’s frame for the crisis and be forced
dominant constraint. Financial constraints, to manage within that crisis frame. The same
for example, impact the strategy selection dynamic holds true when a crisis is based
(Tyler, 1997). If an organization cannot online. In these cases, people posting the
afford a particular crisis response, they can information on the internet help to establish
opt for the next best but less-expensive strat- the crisis frame. If the media coverage or
egy. SCCT is used to determine which internet discussion provides no clear frame,
crisis response strategies would be ‘the next the crisis manager will have an easier time
best’. A crisis manager, for instance, may have establishing his/her own frame.
to use an excuse strategy rather than the
recommended apology strategy. SCCT helps SUMMARY
the crisis manager understand his/her Ethics recommend that the physical and psy-
options. The crisis manager will realize that chological needs of the stakeholders be the
the use of a lesser strategy will reduce the top priority in a crisis. Once stakeholder
© 2007 Palgrave Macmillan Ltd. 1363-3589 $30.00 Vol. 10, 3, 163–176 Corporate Reputation Review 173
Situational Crisis Communication Theory
needs are addressed, crisis managers can turn Barton, L. (2001) Crisis in Organizations II, 2nd edn.,
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