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TECHNOLOGY
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TEL: (04) 5535728 FIT 2022 - WRITING A RESEARCH PAPER
Statement of authorship
Student name: Nguyen Bui Nhat Linh – Do Kieu Linh Chi
Class: CCO - 02
Student Id: 2001060048 - 2001060012
Subject: Corporate Communication
Lecturer: Ms. Nguyen Thi Bao Chau
Name of research paper: The Influence of Crisis Management on Brand Reputation: A case
study of H&M's “Coolest Monkey In the Jungle” incident

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Date: 09/12/2022

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 HANOI UNIVERSITY
FALCUTY OF INFORMATION TECHNOLOGIES
----------------------------0O0----------------------------

The Influence of Crisis Management on Brand

Reputation: A case study of H&M's

“Coolest Monkey In the Jungle” incident

Teacher: Ms. Nguyen Thi Bao Chau

Students: Nguyen Bui Nhat Linh

Do Kieu Linh Chi

Class: CCO - 02

Course: Corporate Communication

Date: 09/12/2022

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 ABSTRACT

When a company is developing, it is critical to protect the brand's reputation when a crisis
happens. According to previous research, a crisis is a threat to a company's reputation.
Through analyzing H&M's "Coolest Monkey in the Jungle" case study on three stages: pre-
crisis, crisis response, and post-crisis, and examining the impact of that crisis on H&M,
three factors affected when experiencing a crisis: financial results, consumer loyalty, and
media response were identified. The following research emphasizes the significance of crisis
management in protecting brand reputation.

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 Table of Contents
I. INTRODUCTION................................................................................................................2

II. LITERATURE REVIEW...................................................................................................3

III. METHODOLOGY............................................................................................................3

3.1. Content analysis..............................................................................................................3

3.2. Case study analysis.........................................................................................................5

IV. FINDINGS..........................................................................................................................5

4.1 How H&M dealt with their crisis: A crisis management analysis in the Coolest
monkey in the jungle case......................................................................................................5

4.1.1. Pre-crisis phase.........................................................................................................5

4.1.2. Crisis response phase...............................................................................................7

4.1.3. Post-crisis phase.....................................................................................................11

4.2. How was H&M's brand reputation affected by the crisis?............................................12

4.2.1. Financial performance............................................................................................12

4.2.2. Customer loyalty....................................................................................................13

4.2.3. Media response.......................................................................................................14

V. CONCLUSIONS................................................................................................................15

REFERENCES.......................................................................................................................16

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 I. INTRODUCTION
For years, the necessity of using crisis management and its influence on brand reputation has
been explored constantly, but it is still unclear what factors, as well as why and how, affect
corporate reputation (Greyser, 2009, as cited in Bodeklint, Lindhe & Unosson, 2017). This
concept has been widely adopted in many case studies of different popular names in the
fashion industry, including H&M as in the study of Kjærsgaard (2018), Bjerre (2018), and
Vanadia (2020).

Despite having an immense amount of loyal consumers and considered one of the leading
enterprises in fast fashion industry with 237,569 million dollars of global revenue reported in
2014) (Arrigo, 2017), in recent years, H&M has constantly been involved in scandals and
received backlash from people. While being suspected of land-grabbing in Ethiopia in 2014,
this famous fashion brand was also criticized for copyright infringement with the street artist
Jason William (Bain, 2018). Only 3 months before this, H&M had to handle another wave of
criticism with the “Coolest Monkey in the jungle” incident, which is the main subject of the
research paper.

On Sunday, the 7th of January 2018, H&M released an advertisement that featured a black
boy wearing a hoodie with the words "Coolest Monkey in the jungle" printed on the chest.
Immediately, H&M experienced repercussions and was accused of being racist by consumers
in many countries. The term "Monkey" is considered racist against Africans. Additionally,
the corporation was forced to temporarily close a few stores due to boycotts and protests. The
closure of several locations impacted H&M's finances; operating profit decreased 62%
between December 2017 and February 2018, according to H&M 2018’s Annual Report.

With such a great influence on the global fashion business, the public has highly anticipated
H&M’s performance in practicing Corporate Social Responsibility (CSR), since cultural
sensitivity and ethical standards are widely acknowledged, especially the issue of racism and
discrimination, due to the recent explosion of unconventional media platforms, such as social
networks. Matamoros-Fernández and Farkas (2021, p. 206) say “As social media have come
to dominate socio-political landscapes in almost every corner of the world, new and old racist
practices increasingly take place on these platforms”. Hence, it is inevitable that the crisis

2
management process of corporations like H&M related to this social aspect is carefully
assessed and even immensely affects their reputation in certain situations, which may explain
the strong ostracism in the “Coolest Monkey in the jungle'' scandal. Furthermore, as the
debate of whether brand reputation damages or protects the enterprise during and after a crisis
is still a hot topic for popular writings and academic research to discuss, this research paper
aims to provide another profound analysis of the discussion by studying the influence of
H&M's crisis management process through the above-mentioned case on its brand reputation
and answer the question:
How can a crisis and the crisis management process affect a brand’s reputation?

II. LITERATURE REVIEW

The management of a crisis is a significant topic that has to be paid close attention to and
dealt with by every company’s manager. According to Coombs, a crisis is “the perception of
an unpredictable event that threatens important expectancies of stakeholders related to health,
safety, environmental, and economic issues, and can seriously impact an organization’s
performance and generate negative outcomes” (Coombs, 2007, p. 2). A crisis is regarded as a
threat to an organization's reputation for the reasons that reputation develops through the
information stakeholders know about the company (Fombrun & Riel, 2004). Therefore, when
a crisis happens, information spreads at an incredibly quick rate through social media and
mass media, changing stakeholders' views of the company and having a direct impact on the
reputation of the brand. That creates an urgent requirement for the crisis manager to take
action immediately to resolve the issue. During the crisis management process, three phases
can be defined, including pre-crisis, crisis response, and post-crisis. Which, the management's
actions and words in the process of a crisis are called crisis response; this process is crucial
since it helps in developing the message for various public audiences. Crisis managers must
create an appropriate crisis response strategy to limit reputational damage. However, many
people believe that when a company has a good brand reputation, they typically overlook
crisis management. In reality, bad crisis management will result in a significant change in
brand reputation, and brand reputation will be damaged in the long run. A case study of
H&M's "Coolest Monkey in the Jungle" incident will clarify the influence of crisis
management on brand reputation.

III. METHODOLOGY

3.1. Content analysis

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In order to accurately evaluate the impacts of the crisis management process on an enterprise,
this research paper will discuss these influences based on the methods and framework used in
the study of Bjerre (2018), which assessed both traditional and new media’s reaction to the
H&M’s “Coolest Monkey in the Jungle" controversy. Online articles from reliable
newspapers like The Guardian, Fox News, etc, and consumers' social network most reacted
posts on Twitter will be utilized in the assessment procedures. While the data from online
newspaper sources are collected from 12 articles, there are 7 tweets and comments retrieved
from Twitter via hashtag #CoolestMonkeyintheJungle. The time period considered for both
data sources was mainly from January 7 to January 20, as seen in the graph below, which was
obtained from Google Trends. This is the time period during which the "H&M Coolest
Monkey in the Jungle" controversy received the most media attention. However, some
articles from the pre-crisis and post-crisis phases are still input as a reference of the incident's
effects.

During the evaluation of articles and social media posts on the impact of the “Coolest
Monkey in the Jungle'' scandal on certain aspects of H&M’s brand reputation, Carroll and
Lee's framework has been used to assess academically if an article had a positive, neutral,
mixed or negative tone (Carroll & Lee, 2011) since the tone and the content of online articles
and social network posts are important elements to examine the influence of the controversy
to H&M’s brand reputation in specific and other enterprises in general.

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 Tone Description

Positive A positive response is one that is supportive of the subject or the actor or the
problem.

Neutral A neutral response is one that doesn't use either positive or negative tones while
discussing the problem or the actor.

Mixed A mixed response is one that includes both favorable and negative content
about the problem or the actor.

Negative A negative response is one that expresses a negative attitude towards the
problem or the actor.

3.2. Case study analysis

As the orientation of this research paper mostly depends on a qualitative approach that
prioritizes words above measurement, the case study analysis method is utilized to provide
more descriptive information and suggest other relevant theoretical hypotheses which can be
proposed in the discussion of how the crisis management process affected the brand
reputation of H&M. Using this method, the paper focuses on the ways each event within the
crisis happened and the motivation behind the consequences occurred. Yin (2009) assumed
this approach as the “explanatory case study". The analysis retrieved from this part will serve
as evidence and base knowledge to determine the effect of crisis management procedures on
business firms.

IV. FINDINGS

4.1 How H&M dealt with their crisis: A crisis management analysis in the Coolest
monkey in the jungle case

4.1.1. Pre-crisis phase

H&M (also known as Hennes & Mauritz) was established in 1947 in Stockholm, Sweden is
an international fashion retail company with more than 3,000 stores that currently operates in
53 market. (Branding of H&M, n.d.) H&M not only covered worldwide but also covered
almost every social network, including Facebook, Instagram, YouTube, Twitter, and even

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Sina Weibo and Russia's Vkontakte. H&M's target customer does not belong to a certain age
group, but instead to all age groups, divided by location, with various regional preferences
and styles. Additionally, H&M's target market is quite diversified; they provide their products
in a wide range of categories and always aim to be responsive and to provide the best balance
of fashion, quality, and affordability. They have the ambition to exceed customer
expectations. Instead of pursuing the conception of high fashion and celebrities should be tied
together, they collaborate with many celebrities, such as Erdem, The Weeknd, G-Eazy, Sonia
Rikyel & Lanvin, and Jimmy Choo, to break the idea of celebrity riches and pricey fashion,
therefore establishing a new reality in which you can wear a designer brand at an inexpensive
cost. Based on understanding customers, the company has extremely high recognition, and
also builds client loyalty and a positive reputation. They were placed second on the list of the
world’s most valuable apparel brands ($19 billion) by Brand Finance. H&M is also ranked
#31 on Forbes' list of the world's most valuable brands. (Branding of H&M, n.d.)

For shareholders, customers, public, H&M used to have a positive image. However, H&M's
positive image among customers has slowly faded as the company is rocked by scandal and
accusations of racism several times before the "Coolest monkey in the jungle" event, the
straw that broke the camel's back. An allegation of racial discrimination has occurred in
November 2015, a shopper named Tlalane Letlhaku called out H&M for a lack of
representation in advertising images, when just a few black women were included in their
advertising (The Huffington Post UK, 2015).

In response to these allegations, H&M South Africa's social media team tweeted, "H&M's
marketing has a major impact and it is essential for us to convey a positive image," and "We

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want our marketing to show our fashion in an inspiring way, to convey a positive feeling.".
Their explanations add fuel to the fire for the insinuation that white models transmitted a
more "positive image" than black models. After that, H&M responded again with more
tweets, emphasizing their commitment to diversity, but this just stoked further argument.

4.1.2. Crisis response phase

After H&M launched advertisements featuring a young black youngster wearing a sweater
with the words "Coolest Monkey in the Jungle" emblazoned on it in January 2018. The ad
immediately received accusations of racism when H&M used the word “Monkey”, which
was considered a racial slur, causing outrage on social media. Many people have expressed
their dissatisfaction, with some claiming that H&M has little awareness of racial issues and
lacks sensitivity when producing new products.

Kate Osamor, a member of the UK's Black Labor Party, tweeted: "I was totally shocked,
dismayed to say the very least, to find this online imagine, hm do you think this imagery is an
appropriate representation of a young black boy?”. (The Guardian, 2018)

Alex Medina, a brand designer also tweeted: “In the year 2018 there’s no way brands/art
directors can be this negligent and lack awareness. If you look at other sweaters in the same
category, they have white kids. We have to do better.” (The Guardian, 2018)

Twitter users also give their opinion on the advertisements. A user named @Tamaraosa
accusations that H&M intentionally chose a black child to stir up controversy: “H&M didn't

7
need to use a black child! They know how "monkey" has been historically used as a racial
slur. I think these companies profit off of black outrage on Twitter! This was intentional”.

Another user, @big deen75, questioned the other shirt launched by H&M when a white kid
wears a shirt with the words "Mangrove jungle" and "Official survival expert" on it: “So the
black kid gets to wear the H&M sweater with "Coolest monkey in the jungle" and the white
kid with "Survival expert". This is beyond disgusting. It's a projection of your neocolonial
thinking. You won't see me anywhere near your shops these days @hm.”

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However, some Twitter users voiced their support of H&M. According to
@AnaSofaKingCoo, the issue this time is not with the company as a whole, but with the
editor.

Besides, two other users chimed in, claiming that people were "looking to be offended" and
misunderstood H&M's message.

9
Following the accusation, H&M spokesperson quickly made a public apology, saying, "We
sincerely apologize for offending people with this image of a printed hooded top. The image
has been removed from all online channels and the product will not be for sale in the United
States.” H&M stated in a statement obtained by Fox News, the company also claims, adding,
"We believe in diversity and inclusion in all that we do and will be reviewing all our internal
policies accordingly to avoid any future issues.” However, this public apology has elicited the
opposite reaction. Many people were dissatisfied with this apology as the hoodie was still
available on the company's UK website.

Following H&M's insufficient apologies, The Weeknd, an Ethiopian-Canadian rapper who

has been in H&M advertising campaigns since 2017, also announced that he will never work
with H&M again through Twitter.

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On January 9, 2018, H&M published a new apology, beginning with the statement: "Our
position is simple and unequivocal - we got this wrong and we are deeply sorry.” H&M also
admitted their own mistake: "We agree with all of the criticism that this has generated - we
got this wrong and we agree that, even if unintentional, passive or casual racism needs to be
eradicated wherever it exists." H&M also put action behind their words, announcing that the
clothing in question will be removed from sale and recycled. Finally, H&M promises that
anything similar will never happen again. (H&M Issues Unequivocal Apology for Poorly
Judged Product and Image, n.d.)

However, the public did not totally forgive H&M's apologies. To protest H&M's
discrimination, members of the South African Economic Freedom Fighters marched through
the streets and smashed stores of H&M. H&M had to close some stores in South Africa
temporarily. (Flanagan & Tahir, 2018)

4.1.3. Post-crisis phase

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H&M's sales plummeted after the “Coolest monkey in the jungle” hoodie incident. H&M's
profit dropped 62% in the first quarter, according to Bloomberg Quicktake, as it collected a
record pile of unsold clothing worth more than $4 billion, pushing its shares to their lowest
closing price on the Stockholm stock market since 2005. H&M, on the other hand, worked
quickly to address this mistake. To resolve the company's difficulties, H&M appointed Annie
Wu, a Taiwanese-American attorney, as a global leader in diversity and inclusion two months
after the event. In 2020, Helena Helmersson, CEO of H&M Group, pledged to give $500,000
to the NAACP Legal Defense and Education Fund, Color of Change, and the ACLU after the
murders of members of the black community in America. They also state that they have
learned from their mistakes and are dedicated to supporting and fighting discrimination: "We
also acknowledge our past mistakes and they have made us acutely aware of how much we
still need to learn. As a company, we are growing, but we can and must do better. We re-
commit to taking tangible steps to challenge racism and support our colleagues, customers,
and communities. Symbolic support is not enough – we will take action." (Helmersson, 2021)

4.2. How was H&M's brand reputation affected by the crisis?

It is inevitable that no matter how excellent brands are in practicing crisis management, they
will be affected by issues related to the aspects of brand reputation, which may require the
companies to re-assess and even adjust their current goals. While in some cases, the prior
reputation can benefit the corporation during a crisis (Coombs & Holladay, 2006), what has
been discussed in the previous part at least hints that the negative impacts of a crisis on a
brand reputation capital are available and proven through the analysis of H&M’s controversy.
A similar suggestion was also reached by Alsop (2004, p. 17): "A crisis or other negative
development will certainly tax any reputation and rob a company of some of its stored-up
reputation capital." To support this point of view, this section will study the effect of the
“Coolest Monkey in the Jungle" incident on H&M’s brand reputation based on three specific
factors: their financial situation, customer loyalty, and media response within weeks, months,
and a year after the crisis's occurrence.

4.2.1. Financial performance

According to Laskin (cited in Caroll, 2013, p.376), it is widely acknowledged that financial
performance is a measurement or main feature of corporate reputation. Hence, any change in
the financial situation of a company can also help to reflect the current state of that firm's

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reputation. In the case of H&M, during the first few days of the crisis, despite the immediate
actions from H&M, which have been presented above, to tackle the problems, the fluctuation
in H&M's stock value had acted as a sign of the future plunge of the firm's profit. Ganderup
(2018, as cited in Kjærsgaard, 2018) reported that H&M's stock price has dropped by more
than 40%, especially after the response of public figures like Lebron James, Niecy Nash, etc.

In the later weeks, the effect of “Coolest Monkey in the Jungle" on H&M’s financial status
seemed to be more serious as other elements were also influenced. The stock price of H&M
continued to experience a huge drop of about 8%, which was the lowest level of value since
March 2009 (Molin, 2018). In addition, Magnusson (2018) also reported that Hennes &
Mauritz AB had recorded its greatest rate of store closings in the last two decades. The
clothes company anticipated closing the most stores since 1998, with 170 stores closing and
390 openings.

Starting the year with such an unfavorable event, H&M’s growth in sales eventually
decreased compared to the previous year. In the first quarter of 2018, this Swedish clothing
retailer announced that it will be boosting markdowns as a result of accumulating a massive
quantity of unsold clothing totaling more than $4 billion (Molin, 2018). These constant
plunges in financial performance had led H&M to a year of loss and controversies as not only
had they had to deal with the public's anger but they also witnessed a 25% drop in operating
profit after financial items, according to H&M Annual Report 2018.

4.2.2. Customer loyalty

The second aspect of H&M's brand reputation which has been negatively affected because of
the “Coolest Monkey in the Jungle" is customer loyalty. From the tweets of different
consumers presented in the third section, it is clear that the trust of customers in H&M had
been heavily damaged, to the point that a boycott trend had been arise right on the first day of
the crisis(big_deen, 2018). Another impact came from the termination of contracts of some
well-known celebrities who were H&M's brand representatives at that moment, such as The
Weeknd and G-Eazy. Sharma and Kurma (2013) implied that such famous people have an
enormous positive impact on their followers, etc., and therefore, these people often have an
emotional connection to the company their idols are endorsing. Hence, if a public figure

13
decides to terminate their endorsement, the brand will lose a certain amount of customers,
who only purchase the product as an act to support that celebrity.

In the case of H&M, losing customer loyalty not only resulted in being boycotted but also
triggered a wave of anger for black people. At least six malls were reported to experience
violence break out as protesters in South Africa vandalized H&M stores there in response to
the "Coolest Monkey in the Jungle" incident (Flanagan & Tahir, 2018), even though H&M
had apologized for their controversial product days ago. This finding supports the idea that it
is difficult to prevent a crisis from escalating once it has been deeply involved in such
sensitive topics as race.

4.2.3. Media response

How the media react and respond to the incident of H&M is also an essential factor to assess
when studying the impact of a crisis on a brand reputation. Among 12 articles assessed within
the scope of this research paper, there is only one that is written in a positive tone about the
controversy, and that article was published after the incident 2 months. Meanwhile, during
the most intense phase of the crisis, most articles were delivered in either a neutral, mixed, or
negative tone. A possible explanation for this is that the apology and other actions proceeded
by H&M were not convincing enough for newspapers to propose a positive attitude.
Therefore, criticizing and stating the wrongdoing of H&M are the main actions of major
newspapers, which may provide an inappropriate brand image today since this incident is
constantly mentioned as an example of bad marketing and an insincere apology response.

On the other hand, social media are places where H&M’s boycott trend was started. Negative
and positive are surprisingly two major tones presented in Twitter users' posts. The opinions
were divided into two categories: those who disagreed with the image of a black boy wearing
a monkey hoodie and those who were confused because they didn't understand other people's
overacting attitude. It is noticeable that after the incident, the number of H&M's followers on
Twitter dropped constantly and only stopped when the brand proceeded with other marketing
campaigns on the platform This has proven the fact that a brand reputation capital can still be
harmed even after the firm adequately managed the crisis.

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V. CONCLUSIONS
Although crisis management is an important component of running a business, especially in
the era of the Internet and social networks, which expand and spread at an alarming rate,
many companies ignore its significant impact on brand reputation. The reputation of the
brand is regarded to be one of the most significant factors affecting the development of any
company, and the crisis management process is how businesses protect the reputation of the
brand. In this research, through three stages of crisis management, the impact of a poor crisis
management strategy on a brand's reputation is highlighted through three components in the
case study "Coolest Monkey in the Jungle": financial results, consumer loyalty, and media
response. A crisis may pass on its own in a short period, but its consequences will remain
permanently due to its unpredictability, uncertainty, and pervasiveness. If crisis management
is effective, people will forget about the crisis, resulting in no damage to the brand's
reputation in the long term. In contrast, if a crisis is not fully evaluated, it will be difficult for
crisis managers to provide the right messages to the public, and when the message is
communicated incorrectly, severe consequences will result. Because of the disastrous
consequences of the crisis, it is crucial for limiting the impact of the crisis on brand
reputation, researchers must continually enhance their crisis management skills. Identifying
the appropriate sort of crisis and quickly executing a crisis management strategy to give the
right message to the public can help crisis managers in maintaining the company's reputation
and brand in the eyes of the customers, competitors, and stakeholders.

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Flanagan, J., & Tahir, T. (2018, January 13). H&M store trashed in ‘coolest monkey in the
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the hierophant 🤴🏾 on. (2018, January 8). Twitter.
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The Weeknd on. (2018, January 8). Twitter.
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