Crisis Communication: “how companies deal with their ... · Web viewThe reputation is developed through the information that stakeholders get from the organization. Stakeholders

Crisis Communication: “how companies deal with their stakeholders?”

MBA Thesis

Professor Joseph Santora

Emeline Brulé Sup 5 1A

46 bd Gaston Birgé

49100 ANGERS

August 28, 2011

25,030 Words

Table of contents

Acknowledgement................................................................................................................4

Executive Summary.............................................................................................................5

Introduction..........................................................................................................................8

1. Theory about crisis communication...............................................................................11

1.1 The planning part of crisis communication..............................................................11

1.1.1 Defining the types of crises...............................................................................11

1.1.2 Dealing with stakeholders.................................................................................13

1.1.3 Crisis history affecting the current crisis...........................................................16

1.1.4 Risk communication affecting crisis communication.......................................18

1.1.5 Planning crisis communication along with corporate communication.............21

1.2 The action part of the crisis......................................................................................25

1.2.1 Responding to the crisis....................................................................................25

1.2.2 Involving the CEO in crisis communication.....................................................30

1.2.3 Changing crisis communication because of the internet...................................34

1.2.4 Helping new technologies for communication teams.......................................41

1.2.5 Protecting the organization’s reputation...........................................................42

2 MBA Thesis : « Crisis Communication » Emeline Brulé

1.2.6 Learning lessons about crisis communication...................................................45

2. Theory of crisis communication applied to real life crises............................................50

2.1 What to not do in crisis communication...................................................................50

2.1.1The EXXON Valdez oil spill.............................................................................50

2.1.2 Jack in the box...................................................................................................56

2.2 What to do in crisis communication.........................................................................60

2.2.1 Johnson and Johnson: the Tylenol tragedy.......................................................60

2.2.2 Malden Mills and Cole Hardwoods fires..........................................................71

Conclusions........................................................................................................................77

Recommendations..............................................................................................................89

Bibliography.......................................................................................................................93


Acknowledgement

I would like to thank Professor Santora for guiding me through my thesis, enabling me to

be more focused on the important parts of my plan.

I would also like to thank all professors from the International School of Management for

teaching me new theory on business and communication, and methods of work that I was able

to use during the thesis.

Finally, I would like to thank my family for supporting me through my work and

encouraging me all along.


Executive Summary

The number of crisis in business and various other areas is rising nowadays because of the

changes in technology and in society, and also because of the globalization. As countries and

companies depend on each other, when a crisis occurs, more people can be touched by the

consequences.1

But why is it so important to act during a crisis? What is at stake? What can companies

lose if they don’t act quickly?

It is quite simple: their reputation. Business success depends on many things, but mostly

on reputation. If people don’t trust a company, they won’t buy form it.

Even if the company created the brand, it is the consumer who owns it in the end.

Organizations have two key assets: the corporate brand and the product brand.

The corporate brand is the institution’s image, reputation, financial assets, performance

and people. Corporate brand simply tells the consumer what to expect from the company as a

whole. The product brand refers to the products and/or services that a company offers on the

market. A product or service has its own brand, but its image depends on its corporate

heritage.

Consumers have become stronger in the last few years and more demanding. They not

only want a product, they want an experience. This is the reason why greater discourse is

required between the corporation and its stakeholders, and companies who want to succeed

have to communicate the brand message to its prospects, clients, shareholders and

stakeholders, but also have them experience it.

1 Stephens Malone Bailey 2005


There is a need for companies to communicate with their stakeholders. The corporate,

political, social and environmental events of recent years have meant that corporate citizens

just like their human counterparts can no longer exist as islands. They form part of the society

they live in and must ensure that they act as responsible members as well as communicate

their actions and intentions. Transparency is the key.

Effective stakeholder communication means talking to the employees, the unions; the

governments, the supplier and sharing not just information about the day to day operation,

short and medium term plans, but also the corporate vision, mission, purpose and values. This

is called a 360 degree communication.

Stakeholder corporate communication can be the reason an investor confronted by two

companies stock option will chose one company against another. The frameworks established

by effective communication could be the saving grace for a company experiencing an

unforeseen disaster.

Corporate communication plays three roles in the evolution of corporate organizations:

create the identity, build the brand, and manage the reputation.

Creating the identity involves the creation of a logo, style guides, and internal

communication manuals, templates for presentation, annual general meetings, and

environmental branding, which means creating a brand presence in the environment of work.

Building the brand is about having products or services that represent the brand and will

make a difference on the market.

Managing the reputation is about what people think and feel about the organization.

While brand is something that an organization can build its reputation is something it earns.

The brand is a promise and the reputation is the result of keeping that promise.2

2 Fernandez 2004


The brand is a very important item for a company, but its reputation is much more

important. If the company keeps its promises, then it will have a great reputation.

But when a crisis occurs, the reputation is at stake, so companies need to protect their

reputations, defend them and even restore them if the crisis has been really harmful.

The aim of this report is to see how companies can deal with crisis, using communication

to save their reputation and be able to keep on doing business.


Introduction

There are several definitions of a crisis for an organization. Here are some of them, which

seem the most relevant to me.

Fink defines an organizational crisis as “a situation that can potentially escalate in

intensity, fall under close government or media scrutiny, jeopardize the current positive public

image of an organization, or interfere with normal business operations including damaging the

bottom line in any way.”3

Pearson and Mitroff define a crisis as “an incident or event that poses a threat to an

organization’s reputation and viability. A crisis places survival of the organization at serious

risk. Crises are composed of five dimensions, which are that they are highly visible, require

immediate attention, contain an element of surprise, have a need for action, and are outside

the organization’s complete control”. 4

Crises all have the same elements of surprise, of a trigger event and reaction to the crisis.

Through the crisis, organizations need to act rapidly, give responses, do damage containing

and then recover from the crisis and learn from it.

There is uncertainty in a crisis about how people should react, and there is also

uncertainty about blame, public perception, resolution and consequences. The aim of crisis

communication is to reduce uncertainty about these matters.5

The aim of crisis communication is to save the reputation of an organization and the

people in it. Communication cannot make the crisis disappear. Once the crisis has occurred, it

cannot be taken back. But crisis communication is about saving the company’s image despite

the crisis that it is facing.3 Stephens Malone Bailey 20054 Stephens Malone Bailey 20055 Stephens Malone Bailey 2005


In crisis communication, the most important is to make sure that all the stakeholders get

the information that they need. These stakeholders are the tenants, vendors and regulators. It

is very important to do so because otherwise the company could lose its reputation, its money

and in the worst case the business in itself.

In order to have a good crisis communication, companies should plan the case of a crisis

and what to do in that case. They have to establish who will set up the crisis communication

team, the responsibilities of each member, which one will talk to the press and when. The plan

should include possible scenarios of crisis and what responses would be given to each

scenario. Making a plan prevents companies to make mistakes because of the panic of the

situation, which they would not make when planning a possible event.

When the crisis occurs, members of top management and employees who are related to

the crisis have to be informed quickly. Some companies have established a phone tree as soon

as a crisis occurs. Other companies make sure that top management is informed and then they

handle the situation.

In a crisis, to inform stakeholders various means can be used: phone, text messaging, e-

mailing, Facebook, twitter, company blogs, etc. These devices enable the company to inform

its stakeholders quickly and to update them on the situation. But using various devices doesn’t

keep the company from having only one spokesperson, which is critical in crises.

The message that is given during a crisis is very important, as much as who gives it. The

company needs to provide as much information as possible, and the message has to be

transparent, accurate and compassionate. The spokesperson has to know the facts and

understand how the crisis occurred and what will be the consequences. Only in that case can

the spokesperson give a clear message. Compassion is also very important because people

who are facing the crisis are likely to be scared and angry and will not consider the facts if the

company doesn’t express compassion. Then the company should explain what plan it will use


to respond to the crisis. The aim here is to reassure the stakeholders on the future actions of

the company concerning the crisis and also making sure that it doesn’t happen again.

In a crisis communication trust is very important. The aim of the communication here and

all of its devices, such as public relations, is not the same as it usually is. Here the aim is not

to promote the company’s image, but to save it. The aim will be to minimize the damages on

the image of the company and to regain trust from the stakeholders and the public.

A crisis management expert, Jonathan Bernstein, explains that “communication is your

most important asset, yet it’s an area people spend the last amount of time protecting. A crisis

communication plan is not a cost, it’s an investment. Without it, 20 years of hard work

building your reputation can be destroyed in hours”.6

The aim of this report is to evaluate the crisis communication process. It will consider the

steps that have to be taken after a crisis occurs, but also the mistakes that can ruin the

company’s reputation for a long time.

The process will be described according to the company type, the stakeholders, the type

of event, and various other criteria. There will be a review of various topics such as previous

crisis affecting the following ones, the company’s reputation, risk communication, corporate

communication, the role of the CEO, etc.

Another part of the report will show real crisis communication examples, how things

were handled, who talked, and what the consequences of the event were.

Finally the report will come up with conclusions and recommendations about crisis

communication and how can companies deal with their stakeholders in a time of crisis.

6 Hunt 2011


1. Theory about crisis communication

There are lots of writings about crisis communication, which mainly report several phases

in the crisis communication process, as there is in the crisis process itself. This first part will

explain all the notions surrounding crisis and crisis communication, such as the crisis, the

stakeholders, the communication team, the communication plan, etc.

1.1 The planning part of crisis communication

Crisis communication requires previous planning, which includes knowing the

environment of the organization pretty well.

1.1.1 Defining the types of crises

There are ten types of crises: natural disaster, rumor, product tampering, workplace

violence, challenges, technical-error product recall, technical-error accident, human-error

product recall, human-error accident, and organizational misdeed.

These crises are differentiated into three main categories: victim crisis cluster, accidental

crisis cluster and intentional crisis cluster.

Here a more precise description of each type of crisis by Coombs.

“Victim crisis cluster

Natural disaster: acts of nature that damage an organization (environmental, weather).

Rumors: false and damaging information about an organization.

Workplace violence: current or former employee attacking current employee onsite.

Product tampering/malevolence: external agent causes damage to an organization. Some

actor outside the organization has altered the product to make it dangerous.


Accidental crisis cluster

Challenges: Stakeholders claim an organization is operating in an inappropriate manner.

There is a public challenge based on moral or ethical, not legal, grounds.

Technical error accidents: A technology or equipment failure causes an industrial

accident. The cause of the accident is equipment/technology related.

Technical error recalls: A technology or equipment failure causes a product to be

recalled. A product is deemed harmful to stakeholders. The cause of the recall is equipment or

technology related.

Intentional Crisis Cluster

Human error accidents: Human error causes an industrial accident. The cause of the

accident is a person or people not performing job properly.

Human error recalls: Human error causes a product to be recalled. A product is deemed

harmful to stakeholders. The cause of the recall is a person or people not performing job

properly.

Organizational misdeed: Laws or regulations are violated by management or stakeholders

are placed at risk by management. Members of management knowingly violate

laws/regulations or offer a product or service they know could injure stakeholders.”7

Responses given to the crises can be the same for each cluster, rather than preparing a

plan for each type of crisis.

For the first type of crises, the victim cluster, the organization is given low responsibility,

as it is often seen as a victim too.

7 Coombs 2004


For the second type of crisis, the accidental cluster, the organization is given some

responsibility in the crisis but people acknowledge that the organization did not mean for it to

happen since it was an accident.

For the third type of crisis, the intentional crisis cluster, the organization is seen as

responsible for the crisis and its reputation is in danger. 8

1.1.2 Dealing with stakeholders

When an organization faces a crisis, many stakeholders can be affected by it. These

stakeholders can be internal and external; they can be the members of the organization, the

customers, the suppliers, the competitors and other members of its environment.

The company needs to know the number of stakeholders involved with it, especially in

times of crisis where stakeholders may appear and others may leave and not support the

company.

According to Dougherty, there are four types of stakeholders. These stakeholders are the

enabling public, the functional publics, the normative publics and the diffused publics.

Enabling public

They are the ones to provide the authority and who control the resources of the

organization. They can be the shareholders, regulatory agencies, or board of directors.

Functional public

They give input and take output from the organization. They provide labor and they use

the product or service of the organization. This group is composed of the employees, the

unions, the suppliers and the customers. In this group we have a new entrant during a crisis,

which are the victims. They can have been consumers, but as soon as the crisis hit them, they

became victims.8 Coombs 2004


Normative public

They have the same values and they have the same problems as the organization. They

can be trade unions or political groups.

Diffused publics

They are not directly related to the organization. They are not formal members of the

organization. When a crisis occurs, victims can also be in this group of they were not related

to the organization before the crisis occurred. For example if an oil company faces a crisis

where a boat has left oil in the sea, fishermen might be victims because they cannot fish

anymore, but they were never related to the oil company before.9

Once the company has established who its stakeholders are, the right message must be

delivered to the right people. The aim of the crisis communication in general is to preserve the

image of the company, or restore it if the crisis has damaged it. But regarding stakeholders,

crisis communication can also be a way to inform, convince and motivate some stakeholders

to take actions.

The crisis communication strategy will depend on the target audience, the type of crisis,

the available evidence, the severity of damage, the company’s performance history and the

legal issues. Other factors such as the damage done by the crisis can be included in the

strategic choices. The communication chosen in the crisis will have to do with the culture of

the company. The company culture will affect the way the company wants to address to its

stakeholders and to the public. Based on their cultures, some companies will take

responsibilities, some will offer an excuse and others may even put the blame on someone

else.

9 Stephens Malone Bailey 2005


Coombs used several works on crisis communication, including these of Allen and

Caillouet, and Benoit, to create five categories of responses given to a crisis. These responses

are the nonexistence strategies, the distance strategies, the ingratiation strategies, the

mortification strategies and the suffering strategies.

Nonexistence strategies

In this type of strategy the company deals with the crisis by denying its existence. The

company will say that the crisis didn’t actually occur. There are three ways of doing so:

clarifying that there is no crisis, attacking those who say there is a crisis or intimidating them

by a lawsuit for example.

Distance strategies

With this strategy, the company will try to put some distance between the crisis and itself.

In this case the company doesn’t deny the crisis but tries to make excuses for it. They try to

look like they didn’t intend for the crisis to occur, and they try to blame someone else for the

crisis. They also try to give justifications to the crisis by minimizing it or pointing out that the

victims deserved it.

Ingratiation strategies

This type of strategy aims at gaining the approval of the public by reinforcing the

company’s image and taking the crisis on its good side.

Mortification strategies

Companies using this strategy try to gain forgiveness and acceptance of the crisis. Here

the company will ask for forgiveness, give amends, tries to compensate the losses, and create

mechanism that will prevent another crisis to happen again.

Suffering strategy


This strategy is quite simple. The company will position itself as a victim and try to gain

sympathy from the public.

Other strategies exist such as silence, which is not really a strategy because it shows that

the company has nothing to say for its defense. Other companies chose to use an expert to

analyze the crisis, what happened and what could be done to prevent another similar crisis.

1.1.3 Crisis history affecting the current crisis

Crisis managers need to take into account the fact people may know about past crises. If

people know that the company has already been facing a crisis, then they will expect the

company to handle the situation as they did before. If the company did not handle it well then

the public will expect the situation to go wrong and will not listen to what the company has to

say. If the company handled it well, the public will wonder how the company could let

another crisis happen again.

In both situations crisis managers will have to be even more careful with the

communication they will use.

If the company has a past history in crisis, its reputation is even more at risk, the new

crisis creating a new threat to the already fragile reputation of this company.

When a crisis occurs, people will attribute the causes of the event to an organization or to

other people. They will attribute the cause of the event either to a person (personal causality)

or to an outside force (external causality). If they attribute it to a person, it means that they

think that the event could have been controlled by the people involved. If the crisis could have

been controlled by the organization, then people will hold the organization responsible for the

crisis, and its consequences.

The more responsibility people attribute to an organization during a crisis, the more anger

and negative view of the organization people are likely to be feeling.


When people make attribution, three different causes are often used. These causes are

stability, external control and personal control / locus.

Stability

It is when the cause of the event happens frequently, and instability is if the cause of the

event happens infrequently. That is when past crisis have an effect on people’s view of the

current crisis.

External control

Was the event controllable by some other person? Could someone other than the

organization do something to prevent the crisis?

Personal control / locus

Was the event controllable by the actor involved in the crisis?

Locus reflects whether the cause was due to the actor or to the situation.

Locus and personal control combined show the perception of people on whether the event

was intentional or unintentional.

With these three dimensions, people will decide if the organization is responsible for the

event. Let us take an example. If the event is perceived as stable, the company has a high

personal control and a low external control, and then the public will hold the company

responsible for the event.

So going back to past crises, when a company has a history of crises, the current crisis is

considered a stable crisis, because it has happened before, and the company will be more

likely hold responsible for it because it had control over the events and could have prevented

them, but then the event occurred again.


If the reputation of the company is in danger in a crisis, the company should use strategies

of acceptance of the responsibilities and consideration for the victims.

The crisis team has to take into account some variables to evaluate the threat that the

company’s reputation is facing. These variables are the crisis history (has the organization

already been facing such a crisis before?), the relationship history (the organization history of

good or bad behavior towards stakeholders), and the severity of the crisis (what is the amount

of damage done by the crisis?).

If the company has crisis history, and / or bad behavior history towards stakeholders, then

its reputation is more at stake when facing the crisis. 10

1.1.4 Risk communication affecting crisis communication

Crisis communication is also related to risk communication. A risk is the probability of

undesired effects arising from exposure to hazard. It is also defined by Manuele as “the

potential for realization of unwanted, negative consequences of an event”.11

The center for risk communication explains that risk communication is a “science-based

approach for communicating effectively in high concern situation”.12

The difference between risk communication and crisis communication is the moment at

which the communication occurs. In risk communication, it happens before any event, and in

crisis communication after the event has happened.

According to Fearn Banks, crisis communication is “concerned with transferring of

information to significant persons (publics) to help avoid or prevent a crisis (or negative

occurrence), recover from a crisis, and maintain or enhance reputation”.13

10 Coombs 200411 Ferrante 201012 Ferrante 201013 Ferrante 2010


There are several models that associate risk communication with crises communication,

explaining how people react to certain messages.

The mental noise model

When there is high stress and anxiety, people will not be able to process information as

easily as they usually do. The greater they perceive the risk, the more their ability to process

information will decrease. Stress generates mental noise that will prevent people from hearing

the message that is delivered to them.

The negative dominance model

This message shows how people will react to different messages, based on whether the

message is positive or negative. Negative messages receive more weight than positive

messages, which means that people place more value on their losses than on their gains in

high stress situations. This means that positive messages need to be delivered in order to

reduce the effect of negative messages. The words chosen in the message are also important.

If a message is positive but contains negative words such as not, cannot, never, nothing, etc.

then the message can be seen as negative. Positive messages have to focus on what is being

done, rather than being focused on what is not being done.

With all these models the idea is to understand the audience and its stake in the process.

So there are rules to apply in order to deliver the right message.

The first rule is to accept and involve the public as a legitimate partner.

The second one is to plan carefully and evaluate the efforts needed. The success will

depend on the communicator’s skills and whether or not the audience knew him and had

reasons to trust him.


The third rule is to listen to the public’s specific concerns. The credibility of the

communicator is also depending on his ability to recognize the audience’s point of view as

valid.

The fourth rule is to be honest, frank and open.

The fifth rule is to coordinate and collaborate with other credible sources. The person that

will deliver the message cannot express a completely opposite message to another

organization’s or make critics about other people, because the audience might feel that they

have to chose between messages or not believe any message at all. Conflicting messages are a

waste of time and they can increase the audience’s frustration and distrust.

The sixth rule is to meet the need of the media. In order for the message the

communicator wants to deliver to be released by the media the way he wants it to be, meeting

with the press is very important. A different message, shorter, can be dedicated to the press

because they need only facts, and the message for the audience has to be more complete and

more developed.

The seventh rule is to speak clearly and with compassion. Even if the situation is tensed

and the public is angry or scared, the person who will deliver the message has to give a clear

speech.

The communication can be misunderstood, even if the organization is following the rules.

Some mistakes have to be avoided. The speaker should not use jargon and technical language

that cannot be understood by the public. He cannot attack the audience of it expresses issues.

He should be careful about not sending negative non verbal message. He cannot blame

someone else, because putting the blame elsewhere is confusing for the audience and pushes

them to choose sides. He cannot focus too much on money, saying that there are not enough

funds to solve the problem. He would rather tell them what will be done with the existing


funds. Trying to be funny is a mistake too because people do not want to laugh at a serious

situation. He cannot be too long on the presentation. The presentation should last no longer

than fifteen minutes, and the rest of the conference will be dedicated to answering questions.

He shouldn’t make promises if he cannot keep them, instead he should use strong assurances.

He shouldn’t overuse statistics, because they are here to enhance and make a contribution, but

they are not enough. 14

1.1.5 Planning crisis communication along with corporate

communication

Crisis communication cannot only be directed by the public relations department, because

it needs more than just communication experts.

Once a crisis has occurred, mass media take an important role since they are the ones

giving the information to the public. Because of this fact, management should cooperate with

mass media to master the information that they get.

Crisis communication also implies crisis management. Employees have to be maintained

informed of the situation as much as people outside the company.

When a crisis occurs, ten steps have to be taken by the organization, according to

Bernstein. The first seven steps are part of the crisis planning, which means that these

decisions should be made before any crisis occurs and then adapted in times of crisis.

The first step is to identify the crisis communication team. In theory, the leader of the

team should be the CEO of the company and other chiefs such as the Chief of finance or the

Chief of personnel.

The second step is to identify spokespersons. This person will have to do internal and

external communications, talk in public, in front of a camera, and during public meetings.

14 Ferrante 2010


The third step is to train the spokesperson. Preparation is important because the

spokesperson will have to answer questions quickly and in a good way for the company to

look good.

The fourth step is to establish a notification system. This will enable the company to send

messages to all of its stakeholders in the right timing.

The fifth step is to identify and know all the stakeholders, internally and externally. They

can be the employees to a company, or the members of a nonprofit organization, the

consumers, the shareholders, the community, officials, etc.

The sixth step is to anticipate crises. Here the company needs to identify the potential

crisis with the best and worst case scenarios, and prepare answers to these crises.

The seventh step is to develop holding statements. They will be prepared answers for a

crisis, which will be adapted to the crisis when it occurs.

The eighth step is to assess the crisis situation. This step cannot be taken in advance. This

is a step that occurs after the crisis. The company has to be fully aware of the crisis situation:

what happened, how the company can answer to the crisis and what steps to take further on.

The ninth step is to identify key messages. Messages should be directed to specific

stakeholders but there should be no more than three different types of messages.

Finally the tenth step is to ride out the storm. The company has to adapt its

communication according to the reaction of its stakeholders.

The key to having a good communication is to adapt the company’s communication to

specific segments of audience (Luecke). This rule also applies in times of crisis.


There are six segments of audience for a company: the employees, the investors, the

customers, the suppliers, the community leaders, and finally the regulators and / or the

government agencies.

The CEO will have to address to employees prior to any press conferences, and keep

them updated. He will talk to them through companywide meetings, and letters. The message

will be about new jobs and retraining adapted to these jobs.

The CEO will also address to investors as soon as the crisis occurs through letters and

webcast, informing them of the change.

The marketing representative will address to customers with press releases to industry

trade magazine informing them that the company is working on changes to improve its

service. The message will also say that the crisis will make the company stronger, and that

there will be no disruption of orders or services.

The corporate supply chain manager will address to suppliers immediately informing

them that the company will get stronger with the changes. He will call them or send them

letters.

The CEO will address to community leaders before the press conference to inform them

of the change. A special meeting will be set up for this matter.

Finally, the CEO, supported by the legal counsel, will talk to regulators and government

agencies to from them of the change via a registered letter before the press conference.

Another expert in crisis communication, Turney, has evaluated six steps that are needed

during a crisis for the communication planning.

The first step is to state the mission of the communication team during a crisis. It still has

to be aligned with the organization’s mission. The mission of the communication team cannot

be to resolve the crisis, since that is management’s mission.


The second step is to identify the organization’s most critical publics to communicate

with.

The third step is to determine where crisis communication team members will be needed

and the location of any special operation center. The bigger the company, the more different

centers there will be, including for example crisis site, emergency operations center, public

relation offices, media center, etc.

The fourth step is to define task-related communication roles needed in the crisis. The

roles may evolve according to the size of the company and the nature of the crisis, but some

roles are very important and will be needed in all cases. One of these roles is the crisis liaison

manager, who will be the link between managers and will keep people updated. The employee

liaison will keep employees updated about the evolution of the situation for the company.

Spokespersons will talk to the media and give all the official information. Media facilitator

handle the media, sets interviews, gives background information. Investor and financial

community liaison is needed a publicly traded company. Finally the onsite monitor is the one

to look for information on the crisis site and update the crisis manager and stockpersons.

The fifth step is to prepare a crisis communication team roster with specific people to fill

each position.

Finally step six is about disseminating the plan and regularly updating it.15

1.2 The action part of the crisis

Once the environment is well known, as well as the potential risks that the organization is

facing, the action can take place. When the crisis occurs, the response stage comes along, with

all the devices needed, and the right team set to respond.

15 Valackiene 2010


1.2.1 Responding to the crisis

There are three main stages in a crisis, which are prevention, response and recovery. The

response stage is very important, as much as the two other ones.

The response stage is when the company has failed to avoid a crisis and is actually facing

one. At this moment, the company has to put resources in place and efforts in order to

minimize the effects of the crisis on environment, facilities and people.

At this stage, the organization has to make multiple decisions regarding what information

to share with what publics.

The response stage happens only minutes, hours and days after the crisis occurred. In this

stage there are still significant risks of immediate damages. It is a very important stage with

critical decisions to make. If the right communication is used during this stage, then the

recovery stage will be easier for the company.

During this period management has to restructure shared meaning and roles, but also

readjust basic assumptions.

Each crisis contains both success and failure. Whether people were prepared for the crisis

handling and how they behaved during the crisis will have an impact on the amount of

success after the crisis has occurred.

Preparation before a crisis isn’t only about choosing the crisis team and preparing

speeches. It is also about building a positive image for the company and being in good

relations with the press. Because when the crisis occurs, if the company has a good image and

a good reputation, it will be easier to argue than otherwise.

Having positive relationships, goodwill and trust in positives times will benefit the

company in the recovery stage.


In the response stage, time pressure and stress can be a barrier for managers when it

comes to looking for information.

Flows of information increase during that period because there might be a complex

situation, or many events at one time, that require accurate information.

But even if there is more information, the number of channels used to deliver the

information decreases. This can result in information overload and channel bottlenecks, which

in the end can cause the right information not delivered in time to the right group members.

The company will have a greater success if it shares information with critical stakeholders

before a crisis occurs. Among these stakeholders we will find the media.

In order to establish a theory on response stage during a crisis, scholars did an analysis of

qualitative data on the subject. They picked fifteen different organizations that faced a crisis

and made interviews with the people involved in the crisis. They chose them using Coombs

model of crisis in order to have a variety of organizational crises. There were fifteen crises

analyzed in thirteen organizations, two of them having faced two crises.

In order to do an analysis, the researchers used primary sources, interviewing people from

organizations, but also secondary sources, using information from previous studies

concerning ten other crises.

With all the data that was gathered during the study, some models of communication used

by companies during the crisis response were found. The linear crisis response

communication model was one of them. It was composed of four steps: a triggering event,

then observation, followed by interpretation, then choice and finally dissemination.

Triggering event observation interpretation choice dissemination


The observation step is about gathering information about the event that occurred. Here

organizations have to find information quickly and make sure that the information is accurate

and relevant.

The interpretation step involves attributing meaning to the information found in the

observation step. The organization will determine whether the information found is consistent

or not. If it is, then it will provide them a better understanding of the crisis, but if not the

company will not consider the information.

Then comes the choice step, in which the crisis team -or if there is no crisis team, the

decision makers – evaluates the information and then has to make a choice about what actions

to take in order to reduce ad prevent the crisis damages.

Finally the dissemination step is about informing those involved in implementing the

decisions. This is also the part of the response step when the organization will share

information with the public.

Another model found in the study was the spiral crisis response communication model.

This model comes as a more substantial model than the previous one. The linear model was

witnessed in each crisis analyzed, but was not quite complete.

The crisis response communication spiral happens when an organization faces a

triggering event and action needs to be taken quickly. The spiral model derives from the linear

model, except that we find out that companies often go through the steps of the linear model

again and again, which creates a spiral, as shown in the following tab.


Source: Hale Dulek Hale 2005

The spiral observation step is about observing and gathering information about the event.

It is quite normal that organizations have to go back to the observation step along the crisis

because new information comes forward and the company has to keep updating its

information.

The spiral interpretation is needed as soon as new information was found. This step can

also be needed when a choice needs to be done. It will help getting a better understanding of

the crisis so this step is essential.

The spiral choice is used whenever information is collected and a potential action could

take place deriving from the importance of the information found.

The spiral dissemination is constantly updated. Main actors of the crisis, stakeholders of

the organization and the public get information as soon as the organization has made choices.

The different steps of both models can be and are often conducted in parallel, according

to the information that the company gets, and new events coming along the crisis.

During each step, the crisis communication team is facing several challenges. One of

these challenges was finding data after the crisis occurred. Organizations often have a hard

time managing to find the right information about the triggering event or its possible


consequences. They need to prevent this lack of accurate information by sending people to the

event place and making their own investigation.

Another issue in the observation stage is that usual communication challenges such as

phones, email, etc, are not necessarily available during a crisis. This may seem to not be a

problem, but when a triggering event occurs and that people cannot communicate quickly, it

is a big problem because the first hours after the event happened are very important.

One challenge in the interpretation step is to interpret the data correctly. It is not always

easy to find the right interpretation for the information available. Determining whether the

information is accurate or not, relevant or not, is a challenge. Personal, professional and

organizational culture and values play an important role in evaluating the credibility of the

data.

In the choice step, the most challenging is the lack of time. The crisis communication

team needs to choose the better alternative action in a short amount of time, which requires

remaining calm and keeping the situation under control. But since the lack of time, and the

emergency that a triggering event creates, it is hard to make the right decision.

In the dissemination step, what is challenging is how to deliver the message to the public.

The message has to meet the needs of the target audience. If it doesn’t, then the audience will

not get the message as the company intended them to understand it.

The response stage in the crisis communication is not only about public relations. As

we’ve seen, it is about finding information, interpreting it, making choices, and only then

about communicating with the outside. The outside is not only the public, but all stakeholders

involved with the company.

The challenges that organizations face during a crisis happen simultaneously, which

makes it difficult to handle for the organization. These challenges put effective action in


danger, and if they are not handled well, they can create disruptions in the crisis response

stage and further put lives at risk, and the organization’s existence at risk too.16

1.2.2 Involving the CEO in crisis communication

The leader of the organization needs to anticipate what mental stresses others will be

experiencing and apply appropriate communication strategies to attempt to manage these

stresses and repair or preserve the organization’s reputation.

In a crisis situation there is often information overload, uncertainty and situational

complexity. Communication will suffer from unstructured tasks, stained relationships and

confused authority.

When a crisis occurs, the positive and negative aspects of a leader’s style are often

emphasized. They need to be prepared to adapt quickly to the situation.

During a crisis there is an emotional context that pushes the leader to inspire and persuade

others. This will make a change in the leader’s style because of the situation.

A transformational leader offers a vision and how it can be reached, he provides optimism

and confidence and he empowers his followers. He also leads by example.

The difference for a leader in a time of crisis is that people will be responding differently

to what they see, the information they get and how they perceive it. There is more at stake

during a crisis that there is at other times. The stress factor is very important and it will

determine how people will react.

Leaders will have more difficulties to gather information, and if they succeed to do it and

communicate it to the followers, they might not understand it well because people tend to

simplify complex information, and they might do it in the wrong way.

16


There are five mistakes that leaders or crisis communication teams make in a time of

crisis that can have terrible consequences for the organization.

The first mistake is to mix message from multiple experts. This is a mistake because the

public will not understand the situation if there are several experts explaining it in different

ways. Only one expert can be chosen and his message should be the right one, the more

accurate one, and the one that people will trust. Or many experts can express their view, but

the organization has to use experts that have the same view on the situation and give the same

recommendation otherwise people will not know which one to believe.

Another mistake is to provide information to the public, but too late. The risk here is that

of the organization gives information too late, other people, who will call them experts, will

give it before, and they might not give the right information, but when the organization will

give its answers it will be too late, because people will probably have followed other advices.

The third mistake is to adopt a paternalistic attitude. Saying that everything will be all

right is not the right attitude to take, especially at a time of information, when people can get

much information through social networks and the internet in general. On the contrary, the

organization should share the information that it has. The leader should communicate on what

information made him come to certain conclusions. He can asks himself what information has

he learnt that made him think that the situation wasn’t as bad as he thought in the first place,

and share this information with the public. This way he gives real information, that seems

reassuring to him, but he doesn’t just tell people a paternalistic speech.

The fourth mistake is to not counter rumors in real time. Thinking that a rumor is so

improbable that people won’t believe it is wrong, especially in times of crisis, when people

are more likely to believe rumors. Officials need to respond quickly to rumors, or the media

will report them to the public, and then it will be too late to change people’s mind about the

rumor. To prevent this from happening, the organization should have an open channel with


the media to communicate in real time. If the rumor is circulating on the internet, then the

organization should place a response on the internet.

The last mistake is to have a public power-struggle or confusion. The power-struggle part

can happen, but privately and it should be handled quickly. If this is not done under

confidentiality, then people will not be likely to trust officials. How could they trust people

who don’t get along together? When officials are in public, like at a press conference, they

should act as a united front because otherwise, if they argue, or if no one wants to talk first,

people are going to be uncomfortable with them.

During a crisis, a model that can be used to react to the crisis is the crisis and emergency

risk communication. This model emphasizes a participatory approach to communication

considering the social, psychological, and physical nature of the crisis. There are six

principles in that model: be first, be right, be credible, express empathy, promote action and

show respect.

Be first

The organization officials that have the information should be the first to provide it.

Be right

They also have to give all the information that they have, and inform people about what

they don’t know, and if they will have more information in the future.

Be credible

The organization has to tell the truth. Rumors are more damaging than hard truths.

Express empathy

The organization has to acknowledge what people are feeling, expressing that they

understand that the situation is not simple.


Promote action

They have to give people tasks, which will help restore order and reduce anxiety.

Show respect

They have to listen to people and treat them well, by communicating with them and

telling the truth.

Another important point during a crisis is the perception of risk. Some risks are more

accepted than others. Voluntary risks are more accepted than involuntary risks. Personally

controlled risks are more accepted than risks outside the individuals’ control. Familiar risks

are more accepted than unfamiliar risks. Risks generated by humans are less accepted than

risks generated by nature. Reversible risks are better tolerated than irreversible risks. Endemic

risks are more tolerated than epidemic risks. This means that people are more likely to accept

a car crash with few victims rather than a plane crash with many victims. Risks that do not

target a special group of individuals are more accepted than risks which do. Risks generated

by a mistrusted organization are less accepted than risks that are generated by a trusted one.

Risks that affect children are less tolerated than those which affect adults.

According to these risks, the leader should adapt his message. When the crisis occurs the

leader has to quickly make a statement, which will contain an expression of empathy,

confirmed facts about the event, what is known about the situation, what the process implies,

a statement of commitment, and finally where people can find information.

In order for people to understand the situation in the first statement, it has to be short and

focused, details will come later. Lots of background information is not needed at first. On the

contrary, important information matters most than details in such cases. The advices given in

the message have to be positive. For example instead of saying “don’t panic”, the message

should say “stay calm”. Finally, the message should be repeated so that a maximum of people


can hear it. It is a basic in communication, the reach and repeat, the more the message is

delivered and to the greater number of person, the best it will be understood and remembered.

Technical jargon, condescending sentences or tone, and making promises that can’t be kept

need to be avoided in messages.17

What is important to keep the trust of stakeholders after a crisis is the speed of the

response, the avoidance of missteps during the crisis, and the asking for forgiveness when

mistakes occur.18

1.2.3 Changing crisis communication because of the internet

The internet is now taking a major role in crisis communication. This mean of

communication is a new powerful tool that companies can use to communicate during a crisis,

but also a danger for them because it cannot be controlled. Rumors can be spread across the

internet without the company being able to handle it.

It has changed the way crisis processes develop and organizations need to adapt to this

new device. From its creation in the late nineteen nineties to today, the internet has become a

phenomenon that can’t be stopped and that has a very important social impact.

The internet is growing fast. Today more than a quarter of the world’s population has an

internet access, especially in the United States of America, where the percentage reaches more

than seventy percent of the population and in Europe where the percentage represents fifty

percent of the population.

In the last ten years, many blogs have appeared online, but also social networks such as

Facebook, Twitter or YouTube, which represent of place of sharing without precedent. The

internet has become a place where communication professionals have to be present because

they can reach the audience in an unusual way and make the difference with others.

17 Reynolds Earley 201018 Reynolds Earley 2010


The internet is now not only available on computers, but also mobile devices, digital TV

sets, and tablet PC. Because it is available nearly anywhere anytime, many customers,

investors, analysts, employees, the media, and others potential stakeholders of a company

have adopted it and made it their preferred platform of information.

But when it comes to crisis communication, the internet can quickly become dangerous

for the organization involved in the crisis. Rumors spread even faster than in the real world

and communication team do not know how to handle this.

In terms of crisis communication, the internet has provoked some changes. It has become

a new channel of communication, which is faster than any other is.

Companies are also now facing crises that exist because of the internet, such as crises set

off by spoof sites, rumors, hacking, shadow or copy-cat web sites, web security breaks, and

all forms of cyber-terrorism. Without the web there would be no such crises.

Before the appearance of the internet, companies would communicate through Medias

such as TV, the radio, press and magazines. The media used would consider the message and

chose if they accepted to publish it or not. It was called the one-to-many communication

model because it was the media that was giving information to the public.

But now with the internet people can share information without supervision of the media.

It is now the many-to-many communication model, where people can talk online and share

information through forums, online one to one discussions, or group discussion.

The media still have an important impact, but now companies who need to communicate

have to consider the internet as a new source of communication for most of its stakeholders.

In this new environment, new rules are in place. Now audiences have instant access to

information. Stakeholders are highly fragmented because of the vast choice of media available

online. With the conversation platforms online and social networks, individuals can gather as


a group and have a stronger voice. On the internet many information circulate but there is no

authority to distinguish the accurate information from the fake ones.

So now companies have to use the traditional media and the internet in time of crisis, and

give an even quicker response to the crisis before any rumors or negative information about

the company have the opportunity to be distributed online. The importance that the internet

will take in the answer campaign will depend on the consumers that have the company’s

product or service. If the company has business to consumer products or services, then the

consumers are very likely to be using the internet a lot to communicate, and they will have a

strong power. On the contrary, if the product or service is dedicated to professionals, then the

company would rather use more traditional medias and methods, because that is how it still

works in business to business.

The environment in which crises evolve today is more virtual than before, since many

individuals use the internet to spread their campaign against corporations. This is why

organizations need to use monitoring on the internet to identify, track and manage conflicting

issues before they become dangerous for the reputation of the company.

The internet media has to be considered on the crisis communication plans, including

potential scenarios of online crisis, or for traditional crises, online rumors.

Not only have the tool changed to respond to a crisis, but also the crisis itself. With the

internet, a crisis can become global in a matter of seconds and minutes. There are no more

time limits or geographical limits so there is a need for a more rapid response to the crisis.

The long lasting effect of a crisis has also changed because of the internet, because it is

impossible to eradicate what has been on the internet, good or bad, even when the crisis is

over.


But the internet is not only bad for companies in times of crises. It also has a great

potential if it is used well. There new opportunities to deal with a crisis. There are social

media platforms, the possibility of broadcasting digital videos and audio files for example.

Once the crisis is there, if there are negative information about it on the internet, the

company can still work with search engine optimization to make the website of the company

appear first when people do a search on Google or Yahoo or any other search engine. In

order to do that, members of the team need to have up to date technical education about the

internet.

As said before, the response needs to be faster than before. People are no longer expecting

a response after the twenty four first hours, but rather within hours. They prefer to have a

quick message on Twitter at least twice a day, rather than a big announcement at the end of

the day. This kind of response cannot be given as quickly unless the company has established

a clear social media policy long before the crisis.

This also implies that companies have to change now, before any crisis occurs, in

accordance with the online era. They need to ask the good questions. Organizations have to

engage online influencers, bloggers by responding to their posting via external corporate

blogs on a range of topics or by participating in online forums or social platforms. Internal

blogs and peer to peer platforms can also be created to encourage employees to exchange.

There will still be spokespersons and communication teams during a crisis, but other

employees have to be able to express their views on the crisis online, through social

computing technologies. Employees have the ability to change a negative opinion about a

company during a crisis if they feel that they can belong and participate in social media

communities.


Building open and honest relationship with key influencers establishes a company’s

credibility and may help prevent crises or minimize the damage they can do. Online crisis

management involves an important change of mentality because the internet has created more

potential scenarios to plan for, viral spreading, new forms of power configuration, and more

channels of communication to consider. But the basics of crisis communication remain the

same, and this new tool that can become dangerous for company’s reputation is also the same

that will help them keep it safe.19

Organizations need to implement internet elements during the process of a crisis. A crisis

has a lifetime cycle, just like a product or service has. It is composed of four stage based in

time: the issue management, the planning – prevention, the crisis and the post crisis.

In each stage, actions need to be taken to consider the internet.

Issues management phase

The organization has to assign resources, would they be human or economic, to issues

management tasks. It can be done internally, or with the help of an external agency.

An efficient online monitoring has to be established, monitoring web sites, blogs, news-

groups, etc.

The team has to be trained in order to be familiar with the online world and how it works.

A full map of influencers that show interest or issues on the web has to be drawn.

A corporate blog should be started to engage with the online community before any crisis

situation.

Guidelines have to be set for which way to address people on the online environment,

which is quite different from the more traditional media.

Planning prevention phase19 Gonzales-Herrero Smith 2010


The organization should develop a crisis manual online, which will be easier to update

than hard copy, and will enable the organization to put links to other sources of information

and databases.

Email lists and contact databases have to be kept updated at all times. All domain names

also have to be registered to prevent registration and use by activists groups.

An extranet should also be created so that crisis communication team members can have

access to internal information about the crisis, guidelines, plans, news report, statements,

contact information, etc.

A set of links should be prepared to be added to the website, connecting visitors to other

relevant sites, additional information and useful resources.

An internet expert should be added to the crisis communication team.

The capabilities of the company should be evaluated in order to know if the company can

develop graphic, video and audio files. If it can’t then the company should invest in

equipments or think about outsourcing.

The online crisis communication plan should be tested in advance.

Crisis phase

When the crisis occurs, the company needs to make sure that mainstream media and

online monitoring services are aware of the situation and that they report all outcomes online

as they appear.

At that moment, the company has to use the search engine optimization so that its website

appears first when people make researches.

An obvious link to “crisis information” has to be placed on the company’s website.20

20 González-Herrero Smith 2008


Post crisis phase

Although the crisis is over, companies should still track the issue by monitoring blogs,

online media, etc. for several months or even several years depending on the impact that the

crisis had.

Special thanks have to be done to the people who supported the company during the

crisis. It can take the form of thank you emails or thank you messages on the company’s

website.

An evaluation has to be run to know how the organization responded to the crisis, and

adapt further plans.21

1.2.4 Helping new technologies for communication teams

During a crisis, it is often said that face to face communication is the best scenario

possible to establishing a good plan, and handling the crisis well. But, as explained earlier in

the report, companies have to act fast when the crisis has occurred and such communication is

not always possible, especially of the company has various sites that are far from each other.

At this point, technology plays an important role because teams can use

videoconferencing to be able to get in touch with each other.

Decision making is more difficult during a crisis than in regular times because of the time

constraint, the changing situations, the incomplete information that teams can get, but also the

ambiguity if the situation and the pressure related to the crisis and its consequences.

Decisions have to take into account the allocation of resources for the accomplishment of

goals, with limited information and high levels of uncertainty. The quality of communication

among the team plays an important role in making the right decisions.

21 González-Herrero Smith 2008


Videoconferencing is a good help at having a good communication in times of crisis,

because people can exchange in real time and be able to understand each other well, better

than through emails or faxes, which could increase misunderstandings.

The availability of videoconferencing has increased in the last few years. Now there are

dedicated point to point systems, which make home video and office video available and large

hotels and conference centers also have them.

With such tools available, crisis teams can have ongoing communication and be able to

do group processes such as brainstorming, idea evaluation and consensus building.

Videoconferencing is the closest device to face to face communication. Of course it

cannot replace it and it is not as good as face to face communication. But compared to the

usual communication tools used during a crisis (which are phone, emails, or fax), it is far

better.

Complex messages, such as those used during a crisis, need rich media. Simple

information would require a simple email, but more complex information needs explanations

that cannot be given through an email.

Videoconferencing allows quicker feedback on the information given to team members,

and helps avoid misunderstanding or bad interpretations, because the person that delivers the

message can explain it in real time and make sure that the persons who got the message got it

right.22

1.2.5 Protecting the organization’s reputation

The more fragile and yet most important item to preserve during a crisis is the company’s

reputation. A crisis can damage the reputation of a company and if it happens then the way

stakeholders will interact with the company will change.

22 Chandler Wallace 2009


Post crisis communication can be used to repair the damages done to the reputation.

The reputation is recognized as a valuable, yet intangible asset in an organization.

Reputational assets can attract consumers, generate investment interest, improve financial

performance, attract talented employees, increase the return on asset, create a competitive

advantage and get positive comments from financial analysts.

The reputation is developed through the information that stakeholders get from the

organization. Stakeholders receive information about the organization through interactions

with the organization, mediated reports about the organization, and second hand information

from other people, such as word of mouth or blogs on the internet.

The major part of the information that stakeholders get comes from the mainstream

media, which is why organizations need to have good media coverage to build a good

reputation.

Reputations are based mainly on how stakeholders perceive an organization’s ability to

meet their expectations for treating stakeholders.

When a crisis occurs, the reputation of an organization is at stake. The crisis can harm the

stakeholders physically, emotionally or financially. A crisis gives people reasons to think

badly of the organization. The media and the internet play an important role here because

most stakeholders will get the information about the crisis through them.

With the news of the crisis, stakeholders can switch from valuing the organization to not

valuing it and spreading bad word of mouth, damaging its reputation.

One notion related to the reputation is the reputational capital, which is an organization’s

stock of perceptual and social assets, and the quality of the relationship it has established with

its stakeholders. The reputational capital is accumulated over time.


When the crisis occurs, the organization can lose some of its reputational capital. An

organization that had an important reputational capital before the crisis has more chances of

keeping its reputation safe than an organization that had a low or neutral reputational capital.

The organization with a high reputational capital will suffer less from a crisis and rebound

more quickly.

When a crisis occurs, the first to protect are the stakeholders. The crisis will create stress

among them, so they need information to be sure that things are taken care of. Then they will

need information about what will be done in the future to avoid such crises to happen again

and finally they will expect and need an expression of concern from the organization.

Only after that is done, the organization can focus on reputation. Doing it the other way

around would not be ethical and would not serve the company’s reputation at all.

People will react to the crisis according to various factors, including the crisis

responsibility, the crisis history of the organization and the relational reputation.

The initial crisis assessment is based upon the crisis type. The crisis type is how the crisis

is being framed. There are two levels of frames, which are the frames in communication and

the frames in thought.

Frame in communication is the way that information is presented in a message. Frame in

thought is the way that people will interpret the information. Frames in communication help

to structure frames in thought. The way that the message is framed will have an impact on

how it will be analyzed and interpreted. The focus on certain information will have an impact

on what people will focus on. If the focus is on certain factors more than other, then people

who receive the message will focus on these factors rather than the rest.


The damage done to the reputation can have effect on the interactions between the

organization and its stakeholders. After the crisis, consumers can stop buying the product or

services of a company and stakeholders in general can stop supporting the organization.23

Here is the Situational Crisis Communication Theory crisis response guideline according

to the crisis responsibility, the crisis history and the reputation:

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.

23 Coombs 2007


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.

Source: Coombs 2007

1.2.6 Learning lessons about crisis communication

The crisis communication plan has to be completed long before any crisis occurs. But

when the crisis currently occurs, the plan has to be used and followed carefully. Many

organizations make a great plan, but don’t use it in times of crisis because they feel it might

take too much time, or because they have too much pressure. One big lesson is to stick to the

plan. When the plan was created, people had time to evaluate the potential risks and the good

response. It was done to be a help so it cannot be left unused.

Another lesson is to anticipate criticism. No matter what event happens; no matter who is

held responsible, no matter what previous history of crisis the organization has, it will be

criticized by the public, elected officials and the media. It is inevitable to be publically

criticized as a normal part of the cycle of responding to a crisis. Team members, employees,

managers, even the CEO, have to remain focused on their objectives during the crisis

response stage and not listen to what people say about the organization. They have to respond

to the crisis, and make things right first.

Media responsiveness is not quite easy in times of crisis. Many plans include being

responsive to the media, collaborating with them and giving them the right information. But

the media need a lot of information in a short amount of time, and they will often ask a lot of

information to the organization because they have to be the first to provide the information to

the public. If the organization doesn’t have information yet, it can’t communicate it to the

media. Organizations should not let the media pressuring them into giving information that


have not been certified yet. The needs of the media should not determine how and when the

organization releases information.24

A crisis doesn’t necessarily have a negative impact. A crisis can cause disruption, but it

can also benefit an organization, if seen as an opportunity to learn. Mitroff offers a framework

of seven lessons that can help an organization emerge stronger from a crisis. These lessons are

emotional, creative, social and political, integrative, critical, aesthetic, and spiritual

developments that occur in crisis.

Mitroff sees crisis as a cyclical process. To him there is a way to stop the process of a

crisis. There are five stages to the process of a crisis. The first one is the signal detection,

when warning signs appear and prevention can be done to avoid the crisis to occur. The

second one is the probing and prevention, when team members should be looking for crises

risk factors and working to reduce potential harm. The third one is damage containment, when

team members try to limit the damage done. The fourth one is recovery, when the

organization is working to go back to normal business operations. And finally the fifth one is

learning and reviewing, when the team reviews and criticizes the crisis management process.

This last one will help improve signal detection if another crisis was to appear.

Coombs used Mitroff’s model, but simplified it and stated three stages on the crisis cycle:

the pre crisis, the crisis, and the post crisis. According to him, once the crisis is over, the

organization goes back to the first stage, which is pre crisis, but best prepared to another crisis

because of the learning experience it had when living the crisis.

Crisis theory acknowledges that warning signals can be acted upon to prevent a crisis, but

we realize in real life crises that these signals are being overlooked. Unfortunately, these

warnings are seen after the crisis has happened, and included in the learning process

afterwards. Hindsight knowledge always seems to reveal strong signals of the impending

24 Brown 2003


crisis. But if signals are revealed post crisis to help make sense of what happened, why is the

potential for signals to lead to a crisis not seen before the crisis strikes? Actually, it is

impossible to predict with any sort of precision when and where a crisis will strike. The

warning signals can only help the organization to reduce the impact of the crisis when it will

occur. And another problem is that organizations often fail to observe that their system is

failing. So other models may be taken into consideration when it comes to understanding

crisis processes.

The Learning Barrier Model shows how individuals and organizations move to success or

failure without seeing warning signals of potential crisis in their routine process. Pre crisis

communication entails two main functions, which are reducing the likelihood that a crisis will

occur, and communicating with key markets, audiences and publics to prepare them for a

crisis so that it can be framed and addressed when it occurs.

The first barrier to seeing signals is the classification with experience. As human beings,

team members only understand reality through the symbols they recognize. The symbol is the

verbal parallel to a pattern of experience. They perceive the world according to the symbols to

which they have been exposed. All new information is classified with a past experience. What

does not fit the classifications already in place is ignored or simply unnoticed.

The second barrier is the reliance on success. If the culture of organization is only focused

on past success, then future success can be hindered by blinding the organization to potential

failure. If the organization is only focused on success, it might not detect warning signals that

do not enter in the culture of success. According to Weick and Sutcliffe (2001) “arrogance

and hubris breed vulnerability”. On the one hand, for an organization to want to eliminate

failure is not a bad thing. On the other hand, not acknowledging failure inhibits the

organization from learning from smaller failures in time to prevent major crises.


The third and final barrier is trained mindlessness. This is when organizations train new

employees to do things the way they have always been done. By doing this, organizations

leave no room for new methods or new points of view. According to Langer, “individuals

who follow the same routine everyday without change become mindless experts who

concentrate on the end result and pay little attention to the process. They are not attentive to

the task environment and they don’t notice things out of the ordinary, and they are not

attentive to signals.

Without failure organizations cannot learn. Failures can act as small doses of experience

to discover uncertainties in advance. So the sooner failure is noticed and the organization can

learn from it, the sooner the crisis can be alleviated or even avoided. Turner classifies crisis

into six stages of “failures in foresight”. The first stage is when the normal operations take

place with cultural beliefs and precautionary norms. The second stage is the crisis incubation

period with early warning signals that are not noticed because of the beliefs and norms. The

third stage is the initial event that first draws attention to the crisis and challenges the

accepted beliefs. The fourth stage is the crisis going on and creating harm. The fifth stage is

the recognition of the collapse of beliefs and attempt to save the beliefs system. And finally

the sixth stage is a full cultural readjustment of beliefs that returns the organization to the first

stage.

The Mindful Learning Model tends to analyze facts when they occur, trying not to take

our symbols into account, but taking all facts into account. The situation can be reframed by

looking at the context, the environment, and the perspectives surrounding it. Reframing early

in the crisis cycle allows individuals and organizations to not only reduce the number of crises

but also shorten the time and severity of crises that occur. The organization’s culture

encourages or discourages its members to mindfully manage the unexpected. Learning must


be or become part of the organization’s culture for barriers to be acknowledged and warning

signals to be seen.

Learning is present through the crisis cycle. Some organizations will only learn in the post

crisis stage because their culture prevented them from seeing the warning signals, but some

other organizations will learn before that. If an organization learns in the pre crisis stage to

address an issue, then it is likely to remain in the pre crisis stage, mindfully monitoring other

issues that could lead to crises. The sooner warning signals, failures or crises are recognized;

the less damaging they will be to the organization. The others will learn later but as they learn,

they might not make the same mistakes again and be able to avoid any further crisis. 25

25 Veil 2011


2. Theory of crisis communication applied to real life crises

The first part of the report has shown that many theories exist about crisis

communication, how to handle a crisis properly, which team members to chose, which publics

to address to, what to tell them, how to overcome the crisis, etc.

The second part is dedicated at using this theory to see how organizations have managed

to get out of their crises. Have they applied the theory? How did it turn out? What were the

damages done to victims, but also to the organizations?

We will find out by studying great crisis of the twentieth century and how they were

handled.

2.1 What to not do in crisis communication

The following examples are crises in which the corporations did not use crisis

communication properly and put their reputation at stake. In those examples we will see that

the companies were more concerned about potential lawsuits than resolving the crisis. There

was no real concern for the victims and no excuses from the responsible for the crisis.

2.1.1The EXXON Valdez oil spill

Background

On March 24, 1989, just after midnight, the EXXON Valdez ran aground on Blight Reef,

and ten million gallons of crude oil gushed into the pure water of Prince William Sound on

the Alaskan coast from eight rupture cargo tanks.


More than two billion dollars were necessary to clean after the disaster occurred. The

EXXON Valdez was suit for pollution and damages done to nature. EXXON lost five million

dollar in oil lost, and twenty million in salvage and repair costs.26

Reactions

People do not deal easily with low probability, high consequences events such as the

EXXON Valdez disaster.27

People were shocked by such an event and could never have imagined it could happen.

There was a lot of anger among the public, especially people leaving close to where the event

occurred, that lost a lot due to the disaster. They were also disappointed at EXXON and at the

authorities for putting the blame on each other rather than taking action and cleaning the

mess.

Response

The response was not very efficient in the early hours after the event occurred because the

company did not have a solid plan in case of crisis. Their plan was inadequate in many ways.

They did not have immediately available response resources. They did not anticipate the

decisions and actions that such an event would require. They did not predict what they should

do in a crisis situation.

After some time, the federal on scene coordinator, the state of Alaska and EXXON

managed to put in place computer systems to track resource allocation, clean up progress,

availability of key personnel and spill movement. Even though their system was quite

sophisticated, with large databases and geographical information, and about hundreds of

computers working, this system was not available at the time of the spill, and decision makers

did not have access to all this precious information.

26 Harrald Marcus Wallace 199027 Harrald Marcus Wallace 1990


The coast guard on scene activated the regional response team and the On Scene

Coordinator organization. The coast guard and the EXXON decided to offload the vessel and

to initiate salvage measures. They stages response resources with the help of the state.

EXXON accepted full responsibility for the cleanup. It was then decided to use

dispersants, to allocate containment and removal equipments, and to use biological and

burning agents to combat the oil.

Since this was not really efficient (only fifteen thousand gallons were removed), it was

decided to allocate booms to protect vulnerable resources, and to replace and increase on

scene resources.

The crisis plan was incomplete and inadequate. The US and state government had a role

in the maritime safety. There were laws that were passed by the congress governing manning

standards and work rules on US flag vessels. The state of Alaska has a role in minimizing the

risk of a major oil spill. But there was a lack of control on vessels, especially on vessel safety,

including ship design and construction, crew training, licensing, and manning standards.

According to Lee Clarke, a sociologist at Rutgers University who specializes in

organizations and disasters, the EXXON plan about potential oil spill was a “symbolic plan”,

which is a plan that looks good on paper but can be worse than useless when push comes to

shove. The plan was developed by the Alyeska, an association of oil companies operating I

the port of Valdez, claimed that 65% of a hypothetical 200,000 barrel spill could be

recovered. The real problem was that no one had ever recovered anything close to that much

oil in open waters. The plan was made out of whole cloth. The symbolic plan soothed

stakeholders into thinking a big spill was manageable. But if Alyeska's symbolic plan had

been appreciated at the start, Alyeska and others might have deemed it inadequate and

focused more seriously on preventing a big spill in the first place.28

28 NA 2004


No one in the authorities thought that such a spill could or would happen. They did not

anticipate the limitations of the technologies available, the amount of equipment that would

be required and they did not plan operational strategies.

This resulted in a slow response to the crisis, because the contingency plan lacked

realism. It was EXXON and the government that brought resources but after the time for

effective response had passed.

Right after the oil spill, there was a 72 hours window of response opportunity, in which

effective mechanical removal of oil from the surface of the water was possible. But the

resources available on scene, accessible in the region and in the logistics pipeline, were not

adequate to do so.

Dispersants and burning techniques could also have been effective in that short amount of

time after the spill, but two days after the spill, a storm emulsified the oil. There was still a

window of response opportunity of a week in which oil on the surface could still be

significantly removed. But during that period, less than five percent of the oil was contained,

removed, dispersed or burned. After the first ten days, no more could have been done to

prevent the oil from reaching the beach.

The salvage of the EXXON Valdez was quite successful, thanks to the efforts of

EXXON, the US coast guard marine safety office Valdez, US coast guard pacific strike team,

and salvors contracted by EXXON. This prevented other millions of bbl of oil to enter the

Prince William Sound.

The beach cleaning was also another issue because the action taken to clean the beach

actually harmed the environment. The process of using high temperature, high pressure, hot

water, ten or twenty times, removed oil but also affected micro organisms that lived in the

tidal zone.


What also seemed to prevent both EXXON and the state of Alaska was the fear of a

lawsuit. Both parties accused each other of not moving first because of the possibility of a

future trial. Steve Cowper, Alaska’s governor said that “the legal system crippled our ability

to make decisions. Protecting themselves [EXXON] from a lawsuit was more important than

cleaning up oil”. On the other side, Lee Raymond, EXXON president, said that the state had

deliberately held-up cleanup efforts to bolster its own legal case: “they [Alaska] have been

preparing for litigation from day one”.29

Communication

In terms of communication, multimedia communication equipments and personnel were

deployed on scene. EXXON, key government agencies and local interest groups developed

videotapes and brochures to deliver their messages. But many pieces of technical information

were not explained to the public.30

People saw the disaster on TV, wildlife covered in black, bald eagles, seals, whales, ducks

and otters dying from suffocation because of the oil. Fishermen and other people living in the

areas had their livelihoods destroyed by the incident. They were blaming EXXON for the

disaster. Powerful pictures and raw emotions made EXXON look even worse.

EXXON directly put the blame on others for the disaster that had happened. The company

blamed the coast guards and Alaskan environmental officials. It made it worse for EXXON

because the public felt that EXXON wasn’t really concerned about the harm that had been

done to the environment and to people in the surrounding area. It looked like EXXON was

only concerned about limiting its liabilities and responsibilities in the incident. 31

29 Bowen Power 199330 Harrald Marcus Wallace 199031 Adubato 1994


By showing no sign of empathy, compassion, or concern, the company had trouble later

on to maintain its reputation because people only remembered what was said at first. This

discredited whatever the company had to say further on.

Even twenty years after the event occurred, EXXON is still not facing reality when it

comes to what happened and how things were handled. On the company’s website, only a few

words are written about the crisis, saying “ On March 24, 1989, the tanker EXXON Valdez

runs aground in Prince William Sound in Alaska. The Valdez oil spill was a tragic accident

that ExxonMobil deeply regrets. The company took immediate responsibility for the spill,

cleaning it up and voluntarily compensated those who claimed direct damages”.32

There would be so much more to say about this event, but instead the company made the

choice to give only few details about it and express regrets, surely too late.

According to the theory of crisis communication, EXXON did it all wrong. First, it didn’t

have a good crisis plan, or at least its plan didn’t manage to assess the worst case scenario and

what to do if that might occur. When the crisis stroke, there was no quick response, which is

the most important part of a crisis plan. People expect the company to act fast, to give answers

and to be present to handle the situation.

The crisis was in an intentional crisis cluster, more precisely a human error accident,

because it was the captain of the vessel, who wanted to avoid icebergs and made a bad move

so that the vessel has an accident. In these types of crises, people tend to consider the

organization responsible for the event, which is really what happened with the EXXON

Valdez.

And the company didn’t take responsibility right away for what happened so people hold

it even more responsible and unworthy of their trust, especially when facts were revealed

about the cost cutting that the company had been doing on environmental safety.32 <http://www.exxonmobil.com/Corporate/history/about_who_history.aspx>


The CEO didn’t play his role of spokesperson. He should have visited the site where the

crisis has taken place, but instead he remained at the headquarters because his lawyers advised

him to. He didn’t show compassion to the victims, and didn’t apologize for what happened.

This crisis has been hard for the EXXON Company and all the other authorities involved

because of their lack of actions, or rather their lack of planning for such an event. Their

reputation has been harmed too because they betrayed people’s trust in them. The event also

has had an impact on the economy, since the oil industry is an important industry in the

United States.

2.1.2 Jack in the box

Background

On January 13, 1993, the Washington State Health Department was alerted that doctors

Children’s hospital in Seattle were treating an unusually high number of children with E. coli

infections, a form of food poisoning that is life threatening to children.

Jack in the box is one of the fifth largest fast food chains in the United States. The CEO

of the company, Robert Nugent, was alerted on January 15 by the Washington State Health

Department that the E. coli outbreak was at least partly attributed to hamburgers purchased at

Jack in the box restaurants.

The CEO assigned a research team to Seattle to investigate.

One month after the first case was discovered, three children aged less than three died.

One of them had been eating Jack in the box food; one other had been in contact with a child

infected after having eaten at Jack in the box, and the last one’s infection was not certain.

Four hundred people were infected by the same bacteria in Washington State, Idaho and

Nevada. On February 6, 1993, the New York Times said that the E. coli crisis was Jack in the


box’s “worst nightmare”, reporting that shares of Foodmaker Incorporated, parent company of

the Jack in the Box chain, had “plunged, and the Securities Exchange Commission suspended

trading in the stock, reopening it the following week”.33

This crisis represented a threat for the sales of the company, and even its existence. On

February 5, Robert Nugent responded to accusations of culpability before a United States

Senate Subcommittee on agricultural research, forestry, conservation, and general legislation.

Response

The company didn’t accept full responsibility for the outbreak. They kept on saying that

they were not the only one responsible. During the crisis, Nugent kept on saying that there

was a “potential connection with between these illnesses and the food served through [their]

company”. He did that so that he might escape legal consequences from the crisis regarding

stakeholders. But, according to the New York Times, there were 40 lawsuits filed against

Foodmaker Inc., the parent company of Jack in the Box. These lawsuits were filled by two

stakeholders, who were consumers and franchises. 34

The company had to make an investigation to find evidence and interpret it the right way,

so that it might be helpful for the company during the lawsuits.

Once the company had done a primarily investigation, they maintained their position,

stating that they were not fully responsible for the illnesses. Nugent explained that “[they]

were informed that many of the children afflicted with this recent illness were consumers of

our establishment. Many other outbreaks victims were not our consumers”.35

With this statement, Nugent left the audience with two possible interpretation of the

crisis. The first one was that Jack in the Box was the only one responsible for the crisis, but

33 Ulmer Sellnow 200034 Ulmer Sellnow 200035 Ulmer Sellnow 2000


did not take responsibility for it. The second one was that there was some external agent had

also a role to play in the crisis.

Jack in the Box was creating an imbalance by doing this towards its stakeholders, putting

the blame on some external. The company was devaluating external stakeholders. Consumers

who were victims of the crisis did not find consolation in Jack in the Box messages. They had

still some physical damages from the E. coli, and they had hospital bills, but the crisis could

not be resolved until the company stopped looking at the evidence over and over.

Jack in the Box’s behavior during the crisis was quite unethical because the company did

not consider some of its stakeholders, the consumers, who were the victims of the crisis.

Instead, the company was more concerned about its employees and its shareholders.

In order to prove its point, the company relied on its respect of the FDA rules through its

history. Nugent asserted “In fact, the history of our company’s compliance with those

regulations is verified through numerous evaluations conducted by federal, state and local

governments”. 36But this was not a sufficient proof of their innocence, because other

restaurants were respecting the same regulations, and yet, none of them had such issues as the

one Jack in the Box was facing. Moreover, Jack in the Box had failed to meet the high

temperature guidelines imposed by the State of Washington for cooking hamburgers. Nugent

responded to this point by saying that he did not receive the message about high temperature

guidelines. By saying this he increased even more the ambiguity of the situation. This

statement created a doubt about the communication procedures of the Washington State

Health Department.

Once again, by defending that they were respecting the standards of the FDA, Jack in the

Box did defend the interest of its employees, and not of the consumers, the victims of the

crisis.

36 Ulmer Sellnow 2000


Communication

With their investigation, Jack in the Box found the origin of the contaminated

hamburgers. They questioned the meat inspection at the stage prior to the coming in the

restaurants. According to them, the source of the problem was the meat of one of its suppliers,

Von’s, located on the West Coast and Hawaii. They accused Von’s of supplying them meat

that was not fit for human consumption, and also accused federal agents of not having high

enough standards when inspecting meat. The blame was put on them, although it was proved

that Jack in the Box was using cool grill temperatures. They put pressure on their stakeholders

and did not consider at any moment discussing any internal problems.

Nugent did nothing to reassure consumers on the fact that the crisis would not happen

ever again by not doing an internal investigation, and trying to find other responsible for the

crisis.

Jack in the Box survived the crisis, but not without serious accusations of irresponsibility,

deception, and poor communication. The sales of the company did not reach its previous

potential after the crisis. But the franchise went back on its feet. 37

In this case the type of crisis can be either in a victim cluster crisis or an intentional crisis

cluster. If we believe what Jack in the Box claimed, then the crisis type is product tampering,

the supplier Von’s and federal agents being the ones to have caused the crisis, and by this fact,

causing harm to the company. If we believe that Jack in the box was responsible, because of

the cool grill temperatures, then the crisis is an organizational misdeed, because the company

would not have respected the federal regulations about heating temperatures in its restaurants.

In both cases, we can say that Jack in the box did not have a good crisis communication,

because the company was more attached to defending its own interest, than truly finding out

what happened. 37 Ulmer Sellnow 2000


The company, in the person of Robert Nugent, did not show any consideration or

compassion towards the victims. More than that, the communication was not clear or

transparent. The CEO of the company used unclear communication, through ambiguous

messages, and did not share the information in relation with his internal investigation.

2.2 What to do in crisis communication

In these few examples we are going to see how some companies managed to provide a

good response to the crises they were facing. In these examples the CEOs played an important

role as spokesperson. They showed compassion, empathy, and more importantly they acted

fast and provided transparent responses, giving all the information that they had. They acted

in order for another crisis not to happen again.

2.2.1 Johnson and Johnson: the Tylenol tragedy

Background

Johnson and Johnson is a drug manufacturer. Up until the nineteen eighties, it was a very

trusted company, which made good products and had a good reputation for it. It was a

household name. The company made baby products, such as baby powder, lotion, shampoo

and pharmaceutical in the world health organization list of essential drugs.

It had a good image among its employees. It was even elected on of the 100 best places to

work. The son of the founder wrote the company credo, stating that it had responsibilities

toward its consumers, its employees, the communities and the shareholders.

Here is specifically what the credo said:

“We believe our first responsibility is to the doctors, nurses and patients, to mothers and

fathers and all others that use our products and services. In meeting their need everything we

do must be of high quality. We must constantly strive to reduce our costs, in order to maintain


reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers

and distributors must have an opportunity to make a fair profit.

We are responsible to our employees, the men and women who work with us throughout

the world. Everyone should be considered as an individual. We must respect their dignity and

recognize their merit. They must have a sense of security in their jobs. Compensation must be

fare and adequate and working conditions clan, orderly and safe. We must be mindful of ways

to help our employees fulfill their family responsibilities. Employees must feel free to make

suggestions and complaints. There must be equal opportunity for employment, development

and advancement for those qualified. We must provide competent management, and their

actions must be just and ethical.

We are responsible to the communities in which we live and work and to the world

community as well. We must be good citizens – support good work and charity and bear our

fair share of taxes. We must encourage civic improvements and better health and education.

We must maintain in good order the property we are privileged to use, protecting the

environment and natural resources.

Our final responsibility is to our stockholders. Business must make a sound profit. We

must experiment with new ideas. Research must be carried on, innovative programs

developed and mistakes paid for. New equipments must be purchased, new facilities provided

and new products launched. Reserves must be created to provide for adverse times. When we

operate according to these principles, the stockholders should realize a fair return.

Johnson and Johnson” Source: Johnson and Johnson38

The company had good relations with the media too.

38 NA 2000


A reporter from the Chicago Sun-Times was assigned to do background research on

Tylenol, one of Johnson and Johnson product, for another journalist who was preparing a

story. He called a public relation staff member. The employee found it quite strange and

reported the call to the public relations department director, Robert Kniffin, who alerter

someone from the committee and the CEO of the company, James Burke. The reporter called

back a little bit later to explain that there had been reported deaths from the intake of Extra

Strength Tylenol.

Response

Corporate vice president Lawrence Foster took care of the public relations as soon as he

got the news.

The company didn’t have a crisis communication plan, not many companies did at the

time. It did have an emergency plan and call list for such incidents as plant fires. The first

step was to notify the chain of command.

There was an immediate meeting in Burke’s office with top executives, including

Lawrence Foster, head of public relations, David Clare, president and chairman of Johnson

and Johnson’s executive committee; Joseph Chiesea, president of McNeil consumer products

Company (a subsidiary); and David Collins, Chairman of McNeil.

During the meeting, Foster sent Kniffin to McNeil’s headquarters. Collins, who had been

president of McNeil Pharmaceuticals and knew the subsidiary well, was sent to McNeil. This

would have been the next step in the crisis communication plan, if there had been one.

The executives all said that it was a period of great fear. There were no warnings. Nothing

like that had ever happened to them or any other companies. A lot of questions were raised.

People didn’t know what was going on. They were wondering if there was a murderer in the

plant.


When the story was revealed by the media, the public was also afraid. The very idea that a

person could take a capsule for a headache and die was terrorizing. People were saying: “I

have a terrible headache, but I’m alive.” Even consumers outside the Chicago area were afraid

of Tylenol capsules, if not of all medications on the market. 39

Collins immediately set up a seven member crisis team. The team’s first task was to find

out what sickness it was actually facing. Then it would determine how to go about the healing

process. The crisis team handled decisions in the area of communications and was in charge

of all strategies and tactics. With Burke’s approval, the team decided to recall all Tylenol

capsules from stores in the Chicago area.

The recalled batch was tested and two additional cyanide-laced capsules were discovered.

Still, the team and company were uncertain of how the cyanide got into the capsules. They

hoped that the criminality was not in the company, but they could not be certain of it.

Johnson and Johnson had one overriding priority, which was to warn the public. The

company did that by being completely open and cooperative with the media in getting the

news out.

Foster said that there were three points that made the company successful in coping with

the crisis. The first one was that the company was open to the media. The second reason was

that the company was willing to recall the product no matter what that meant to the company.

And the third point was that it appealed to the American sense of fair play and asked for the

public’s trust.

Communication

39 NA 2000


Foster was responsible for the communications’ aspects of the crisis team’s work. The

team was concerned with helping the police and the FBI in finding the responsible party in

dealing with the Food and Drug Administration (FDA).

The first action of the communication team was to identify its key publics, which were its

consumers, through the media, the medical profession, employees and other internal groups,

and the FDA.

All publics were notified initially, and the team kept in touch with them throughout the

crisis.

The first story appeared in the morning edition of the Chicago Sun-Times on October the

first, 1982. The Chicago Tribune ran a story that same afternoon under a banner headline that

said: “five deaths tied to pills, Fear killer put cyanide in Tylenol”. The newspaper was quite

supportive of the company in the telling of the story. It didn’t’ use the “in-your-face”

coverage of crisis that was usual at that time. The company’s executives, the police, the FBI

and the newspapers knew from the start that the tampering could possibly have happened at

the plant, but there was no insinuation of this in the Chicago Tribune’s coverage. In that issue

the story was covered in four different stories, but the Johnson and Johnson name appeared

only on the first and second page, as follows:

“A spokesperson for Johnson and Johnson, parent firm of the company that makes

Tylenol, said Thursday evening his firm ‘launched an investigation this morning to track

down the capsules.’ The spokesman, Robert Andrews, and two other Johnson and Johnson

officials met for an hour and a half with Elk Grove Village detectives and evidence

technicians. He said his firm is ‘collectively shocked’”.40

Except from that quotation, all other mention of the company was of McNeil Consumer

Products Company, not as familiar a name as Johnson and Johnson. The caption on page two 40 NA 2000


indicated that medical examiners believed “the capsules were tampered with after leaving the

manufacturer’s plants in Pennsylvania”. 41

On Saturday, October 2, the headline in the Chicago tribune was “Stewardess is 7th

capsule poison victim”. There were two other stories about the Tylenol crisis, one about the

efforts to track the source of the poison, and another about funeral services for the victims. 42

On Sunday, October 3, the Chicago tribune’s front page banner headline “Shoplifter is

sought in poisoning probe”, referred to a story about a man who had been arrested a couple of

months before for stealing Tylenol. There was also an excerpt saying that consumers

nationwide were urged to stop using Extra Strength Tylenol capsules. Another excerpt said

that “Investigators have been unable to determine how and here the cyanide capsules were

placed in any of the suspects containers – whether the killer infiltrated the drug company’s

sophisticated manufacturing and distribution system at some point between plants in

Pennsylvania and Texas and warehouses elsewhere or whether the killer removed and

replaced containers once they have been placed on the shelves of the local stores. Stein said

he could not rule out factory error because of the reported disclosure by Lawrence Foster, a

spokesperson for Johnson and Johnson. Foster said potassium cyanide is used in chemical

tests at some of McNeil laboratories, but not in the manufacturing process. The labs are

remote from the manufacturing areas and cyanide would be detected even if someone tried to

introduce it during manufacturing.”43

Johnson and Johnson installed thirty three telephones to communicate with publics during

the crisis. Pretaped statements were placed on special toll-free lines to expedite news

gathering. The messages were regularly updated. A full page advertisement was placed in

41 NA 200042 NA 200043 NA 2000


major Chicago newspapers offering consumers an exchange of Tylenol capsules for Tylenol

tablets.

During the first week of the crisis, Kniffin handled the media from McNeil, whereas

Foster was in charge at headquarters. Approximately 180,000 news stories ran in newspapers

nationally. The story was at the top of television and radio newscasts.

Two thousand telephone calls were taken from the media. Thirty thousand calls from

consumers came in during the first month following the deaths.

But even though the situation was handled pretty well, there were still some issues.

During the first three days, as the Chicago Tribune article said, Foster issued a statement

to reporters that there was no cyanide in the manufacturing plants. A few days later, the

Associated Press heard that there was cyanide in the plants and called Foster to confirm the

report. After checking again, Foster discovered that indeed a small amount of cyanide was

used in the manufacturing plant for quality-assurance testing of some kind. However, the

cyanide was kept in a completely separate facility form the production line. Also, none of it

was missing. There was no way that it could have gotten into the capsules accidentally. Even

if it has, it would have been so dispersed as to be harmless.

Foster called the Associated Press and told them the truth. He had a reputation for being

honest, fair, and ethical. He could not afford a cover-up. When he told the wire service that

there was no way the cyanide could have gotten into the capsules, the reporters believed him

and agreed not to run the story, unless some other news outlet got the info too.

The Newark Star-Ledger got word of the information, called Johnson and Johnson for

confirmation, and again Foster said to trust him, and the reporter agreed.

Keeping his promise to the Associated Press, Foster called and told the wire service that

the Newark Star-Ledger had the information but also had agreed not to run it. The Associated


Press once again agreed not to run the story, unless still another newspaper or TV station got

the information.

But then the New York Times got the information too, and Foster gave up and called both

the Associated Press and the Newark Star-Ledger to tell them to run the story. The stories had

very little impact, as they were run on the Sunday edition in insignificant places, and mostly

because the facts were not blown out of proportion.

With this Foster realized that his positive dealing with the media over the years had paid

off. The story could have made front page headlines everywhere, but it did not because the

media trusted the public relations professional from their past dealing with him.

The FBI and the FDA never found any evidence of tampering at the two Johnson and

Johnson plants. They found that the contaminated capsules had come from both plants – one

in Texas, the other in Pennsylvania - but for the first time, there was basic proof that the

tampering was not an inside job. The finger now pointed to some external, malicious

psychopath who bought the Tylenol, laced it with cyanide, and placed it back in the containers

and on the shelves of stores.

After the crisis team found what had transpired, its members were relieved to be assured

that the contamination could not have occurred in the plants. The task of the team then turned

to saving Tylenol and restoring sales. The team was not worried that Johnson and Johnson

would go under because of the company’s diversified product line. Sales were not down for

other Johnson and Johnson products. There was no boycott against the company. However,

there was fear of Tylenol capsules. The future of Tylenol was at stake.

To reach the employees who had been worried while the company battled the crisis, CEO

Burke spoke to an assembly at McNeil and promised that Extra Strength Tylenol was coming

back. Employees had buttons on them that said “we’re coming back”. These employees that


were manufacturing Tylenol had been given other temporary jobs. Videotaped reports of

activities were shown to employees explaining what was going on with the crisis.

Information was sent through fax and telegram to major distributors who notified half a

million retailers and medical professionals.

Up to this point, there was a debate over whether to recall the product or not, but the FBI

and the FDA advised the company not to recall the products because it would mean giving in

to the terrorists.

The decision not to recall would have flown if it had not been for a copycat crime that

took place in northern California on October 5. The company decided then that removing the

product from all stores was the only way to show the public that it was concerned about the

welfare of its customers. On October 5, all products were removed from stores nationwide.

Later, there were approximately two hundred fifty copycat reports, all of which were

found to be without basis.

Recovery stage

During the recovery period, a decision was made to repackage the product. A sixty

second television commercial featuring the medical director at McNeil notifying consumers of

the upcoming return of Tylenol aired in October and November to an estimated eighty five

percent of US television households.

The triple seal safety package devised for the product was announced at a November

eleven news conference transmitted by satellite to twenty nine different sites were reporters

were gathered. Burke also announced the availability of coupons that could be used toward

the purchase of any Tylenol product and a special toll-free telephone number through which

consumers could learn about the special promotion. More than 200,000 calls came in to the

toll-free information number. Coverage of the press conference in the Kansas City Times


applauded Burke and the company for their efforts and described the new Tylenol safety

package as having “glued flaps…which must be forcibly opened. Inside a tight plastic seal

surrounds the cap and an inner foil seal wraps over the mouth of the bottle”. Johnson and

Johnson could not have paid for better coverage.

Johnson and Johnson executives did interviews with network televisions shows, such as

“Donahue”, “60 Minutes” and “Nightline”, as well as with major newspapers and magazines,

such as the Wall Street Journal and Fortune.44

As a result of the crisis, all Tylenol capsules were discontinued, as were capsules of other

brand names. Tamper-proof, triple sealed safety containers were swiftly placed on the shelves

of the retailers ten weeks after the withdrawal. Other manufacturers followed suit.

The crisis cost the company more than a hundred million dollars. Tylenol regained a

hundred percent of the market share it had before the crisis. Seven people died. Other lives

were saved by the company’s decision to recall all the capsules in the Chicago area. The

Tylenol murderer was never found.

An October 11 Washington Post front page article praised Johnson and Johnson crisis

response: “Johnson and Johnson has effectively demonstrated how a major business ought to

handle a disaster…what executives have done is communicate the message that the company

is candid, contrite and compassionate, committed to solving the murders and protecting the

public.”45

Marketers predicted that the brand would never recover from the sabotage. But instead,

two month after the tragedy, the company gained back thirty percent of market shares, even

more than before the crisis, when it was twenty seven.

44 NA 200045 NA 2000


The Chairman of the company, James Burke, was admired for his leadership and for his

decision making. He was also appreciated for his honesty with the media and the good way he

handled things. He looked in control, and people felt that they could trust him. Johnson and

Johnson was the first company to ever recall a product, which was appreciated of the public,

because it showed the concern of the company for its customers. 46

The Johnson and Johnson crisis was in the victim crisis cluster. It was a product

tampering. Someone who was never found altered the product to make it dangerous and make

the company look bad.

In this type of crisis, the company is seen as not responsible for what has happened. That

was the case for Johnson and Johnson. More than that, the company became heroic by

recalling the products and potentially saving lives.

This case is a really exemplary one. It is often cited as “what to do” in a crisis situation.

Indeed, even though there was not a real crisis communication plan in the first place, the CEO

of the company played an important role. He created a crisis team, allocating people and

resources at the right time and place. He showed compassion and concern. He played the

transparency card with the press and with all of the company’s stakeholders. He did it all

right.

The company was already respectful of its stakeholders, as we have seen in the credo of

the company. The stakeholders were clearly identified and a promise was made to them to be

respectful towards them and to work for the interest of all. This statement helped the crisis

team to identify the target audiences for their communication plan.

The good relations the company had with the press before the crisis was also a good help

because the company the press trusted them.

46 Rehak 2002


Without expressively having a crisis communication plan, the company followed the

steps that a plan normally has. This crisis was dangerous for the company’s reputation

because it was a matter of life and death, but thanks to the way events were handled, the

company went out of the crisis even stronger. It didn’t lose reputational capital.

2.2.2 Malden Mills and Cole Hardwoods fires

Here we will analyze the response of Aaron Feuerstein and Milt Cole, both CEOs of

companies facing fires inside their workplace. They both played an important role in the

resolution of their crises.

These two cases are often analyzed together because they both show effective crisis

management with values of corporate social responsibility and entrepreneurship. There was

also immediate response, supportiveness of victims, and rebuilding and renewal.

a) Malden Mills

Background

Malden Mills was a successful textile producer. The company was situated in Lawrence,

Massachusetts. It was owned and managed by Aaron Feuerstein.

The company was around ninety years old. It employed two thousand seven hundred

workers and had earnings of three hundred eighty million dollars. The company had an

excellent record of citizenship. It also remained stable, even in the face of growing

competition.

The workers were paid twenty percent above the average industry levels. Most workers

were unionized but there was no record of a strike in the company’s history.

The CEO described the company’s philosophy as “sensitivity to the human equation”. He

said that the “corporation had a responsibility to all its people”, and had also a responsibility


“to its community”. Feuerstein supported a certain number of community groups, activities

and religious organizations.47

On December 11, 1995, the plant exploded resulting in thirty six injuries among which

eight were critical. The fire affected three major manufacturing buildings, threatening the job

of nearly three thousand workers.

A large part of the facility was destroyed; so many employees’ job was at risk.

Response

The response of the CEO was immediate. He said he would rebuild the plant and still pay

employees their salaries and health benefits in the meantime. The rebuild took two month,

during which he kept his word and still paid the employees.

Feuerstein was a religious man. His religion was Judaism. He linked his personal

behavior to Old Testament teaching. In reference to fire, he often quoted the Jewish proverb

“When all is in moral chaos, this is the time to be a ‘mensch’”. Mensch is a Yiddish for a

righteous man – a man with a heart.48

Communication

The CEO was the one who talked and did the communication part.

The media coverage was good because the company had always a good reputation, and

the actions of Feuerstein during the crisis were seen as heroic.

Only one day after the fire started, the Boston Globe wrote that “with one of his buildings

still burning behind him, the sixty nine year old owner of Malden Mills spoke the works

everyone in the Merrimack Valley wanted to hear”.49

47 Seeger Ulmer 200148 Seeger Ulmer 200149 NA 2000


Even several years after the crisis occurred, the media kept in mind what he had done, and

gave him good press.

In 1996, in the New Hampshire Business Review, a journalist talked about the crisis as

follows:

“The day after an explosion and fire ravaged the Monomac building at Malden Mills, the

company's owner sounded these heroic words.50

"We're going to continue to operate here in Lawrence," said company President Aaron

Feuerstein. "We had our opportunity to run to the South many years ago. We didn't do it then.

We're not going to do it now." That was what the 1,400 employees thrown out of work by the

inferno wanted to hear. So did their families and their landlords and the nearby small

businesses that sold flowers and groceries and shoes to the people who took home Malden

Mills paychecks.51

But press accounts of the company's history told a longer, quieter tale of corporate

responsibility. In an age when capitalists leave behind entire communities in their restless

search for lower-wage workers, the Malden Mills story amounts to a heroic epic.”52

The article goes on explaining how many other companies in the sector have left for

cheaper labor, and even despite the fire, Malden Mills hasn’t.53

b) Cole Hardwoods

Background

The company Cole Hardwoods dried, warehoused and distributed a variety of native

hardwoods processed from several Indiana saw mills. The company processed around twenty

million board feet of Harwood annually. It had a net income of twenty million dollars.

50 Miller 199651 Miller 199652 Miller 199653 Miller 1996


The company employed a hundred and ten workers. The products were used for

architectural uses, furniture, cabinetry, and lumber yards in the United States and

internationally.

Milt Cole, the owner and CEO of the company, had personal drive, commitment and

powerful work ethics. His approach to business included personal loyalty and commitment,

interpersonal trust and credibility. He declared: “I believe in taking care of people. I have a

profit sharing plan and employees have never missed a year. They made the company, I can’t

do it myself”. He was also dedicated to his community. He had chaired the local United Way

community fundraising campaign and donated several scholarship to local colleges.

On June 13, 1998, a fire started at the Cole facility. The fire was one of the worst in the

history of Indiana. It lasted six days and burnt eighteen point five million board feet of green

and kiln dried hardwood. Ten buildings covering about a hundred forty thousand square feet

were destroyed, including all the company’s inventory, and lumber warehousing capacity, and

half of the company’s lumber handling equipment. The main offices and a small retail outlet

were destroyed. No one was injured during the fire.

Response

On June 15, 1998, early in the morning, Milt Cole gathered his employees and said to

them that he would immediately rebuild the facility and that he would continue to pay them

all.

As soon as the fire was over, the rebuilding began. The company continued its operations

even before the rebuilding was over. Even one year after the fire, and while rebuilding, the

company was making record profits.

Having to rebuild gave them the opportunity to improve the facility, and allow greater

profitability on less volume.


c) Similar crises, similar responses

Both crises were very similar, even if the two companies were from different size and

sectors. The similarity of the crises was what occurred, a fire. But there was also a similar

response to the crisis, and an important role of the CEOs.

Feuerstein and Cole both gave immediate response to their own crises. By responding

quickly, they reduced the uncertainty of the crisis and the potential harm that could be done to

stakeholders.

In both cases, customers were notified immediately of what was going on, and employees

assured that they would still get paid. The response occurred so quickly that the rebuilding

could start right after the fire was over.

The two companies had advantages in managing their crises, as compared to other

corporations.

The first point is that the two fires were accidental, and it was not due to a negligence of

the company. They could act fast and give quick response without fearing potential lawsuits

and image damage.

The second point is that they were privately held companies and they did not have any

pressure coming from shareholders or board of directors regarding their decision making,

especially when it comes to still paying the employees.

The two CEOs were true leaders, because they responded to the crises and exploited them

as opportunities for their businesses. They put the people first and then they rebuilt their

companies and became stronger.54

54 Seeger Ulmer 2001


Both cases were in an accidental cluster type of crisis. It was for both a technical error

accident. In these types of crises, the organization is not seen as responsible for what has

happened.

The responses of the CEOs were very quick, and they already had a good image and

reputation in their respective community, so the crisis did not damage their reputation.

They had responsible response and they rebuilt their companies. Few years after the

crisis, there was no sign of the fires, and the companies were doing well.

These examples are very good examples of what a company should do in times of crisis,

and how the CEO should get involved and act fast.


Conclusions

Crises have been around for a long time in the history of business and organizations in

general. They have sure evolved, as the world has evolved. Countries are now more

dependent on each other, so when a crisis occurs, it can touch much more persons and

stakeholders than it used to several years ago. The consequences can also be more damaging

than it used to, because with the evolution of telecommunications, people are aware of what is

happening nearly as soon as it happens.

Reputation and trust toward an organization is very important because it is what will

make people believe in the organization and support it. Without it the best company with the

best product won’t live and be able to prosper.

Consumers have become stronger because now they can get much information on a

product or service, or even on an organization and all of its doing. Information is strength. It

used to be in the hands of few people, but with the development of the internet, now anyone

can get nearly any information easily and quickly. When a crisis occurs, it is the same thing.

People will expect to get the information from the organization, because they will get it

anyway, but if it comes from the organization concerned by the crisis, they will be more

understanding towards the organization and more able to trust it further on.

Now companies and organizations are on the scene and their every move is watched by

everyone. They have to be transparent and they have to get responsible towards their

environment, the communities surrounding them and their stakeholders in general.

Corporate communication will help to create the identity, build the brand and manage the

reputation. Well, in a case of crisis, corporate communication will have the aim to keep these

assets safe.


Crises can take many different forms, but there are common particularities that define a

crisis. A crisis is often sudden and unexpected, it can harm people, or items, and the

reputation of the organization involved. Actions need to be taken in case of a crisis, and

communication plays an important role. Communication during a crisis aims at reducing the

uncertainty of the crisis, about what will be done to resolve the crisis and its consequences.

Information is the key aspect of crisis communication. The right information needs to be

provided to the key players, which themselves need to be identified properly. In order to do

that properly, a plan has to be done prior to the crisis to make sure that things go smoothly,

otherwise communication and actions might not be done well, due to the stress and potential

consequences that create pressure on the decision makers and communicators.

With the crisis plan, when a crisis occurs, people can act with less stress and pressure

because they can follow the guidelines that have been established and stick to the plan. It will

enable them to respond more quickly and with the right tone. It is what will enable the

company to keep its reputation safe.

The crisis plan will be adapted according to the crisis type. There three main categories of

crises, which are the victim crisis cluster, including natural disaster, rumors, workplace

violence, and product tampering; the accidental crisis cluster, including challenges, technical

error accidents, and technical error recall; and the intentional crisis cluster, including human

error accidents, human error recall, and organizational misdeed.

According to the type of the crisis, the organization will be seen differently. In the victim

crisis cluster, the organization will be seen as a victim too, and its reputation will be less at

stake. In the two other categories of crises, the organization will be held responsible, but in

the accidental crisis cluster, people will also acknowledge that the crisis was unintentional and

will not blame the organization as much as in the intentional victim cluster, which is the most

dangerous type of crisis for the organization’s reputation.


In any crisis type, important information that the organization needs to have is who their

stakeholders are, and who will be touched by the crisis. There are four types of stakeholders,

which are the enabling public, the functional public, the normative public and the diffused

public.

The crisis communication will also depend on the culture of the organization. The

organizational culture will have an effect on the response too. Some companies will play the

avoidance card, others the blame on someone else, and others will take responsibilities.

Several strategies are possible, including the nonexistence strategies, the distance

strategies, the ingratiation strategies, the mortification strategies and the suffering strategies.

Whether the organization has previous history of crisis will also change the current

situation. A past crisis known of the public will make stakeholders, the media, and the public

in general less understanding towards the organization. Communication will be even more

difficult because of what happened in the past crisis, and because despite the past crisis,

another crisis has occurred, leaving a feeling that the organization did not learn from its past

mistakes.

Past crisis will have an effect on attribution causes, stability, external control and personal

control / locus. People are more likely to think that the event was intentional if there is a

history of crisis.

In order for the company to keep its reputation safe in times of crisis, it is important to

consider the crisis history, the relationship history with stakeholders and the intensity of the

crisis. The relationship with stakeholders has to be maintained at all times, even when there is

no crisis. If the organization has a good and stable relationship with its stakeholders, by

providing them the information that they need and putting their needs first, then the

organization will be more likely to be trusted and supported if a crisis occurs.


Crisis communication is very close to risk communication. Risk communication happens

to prevent a risk, and crisis communication happens if the risk has transferred into a crisis.

Several models associate crisis communication with risk communication, including the

mental noise model, and the negative dominance model. These models help understand the

various audiences that the organization will have to address in case of a crisis and what best

message to deliver. Several rules help organizations in delivering the right message. These

rules are to consider the audience as a legitimate partner, to plan and evaluate the efforts

needed, to listen to the public’s concerns, to be honest, frank and open, to coordinate and

collaborate with credible sources, to meet the need of the media, and finally to speak clearly

and with compassion.

Maybe more important than what the organization should do is what it cannot do in crisis

communication. There are mistakes that absolutely have to be avoided or it could ruin the

organization’s reputation. These mistakes can be to use jargon and technical language that the

public cannot understand, attacking the audience, or sending negative non verbal messages.

Crisis communication has to be planned according to the corporate communication. The

plan should include keeping the employees aware of the situation, as well as other

stakeholders. The plan includes seven steps, which are to identify the crisis communication

team, to identify spokespersons, to train them, to establish a notification system, to identify

and know all the stakeholders, to anticipate crises, and to develop holding statements.

If a crisis occurs, the plan will help the organization to have a quick set up of the team

and clear objectives for the members of the team. Then they will have to assess the crisis

situation, to identify key messages and to ride out the storm.


Specific messages will be addressed to specific audiences. The main audiences for

organizations are the employees, the investors, the customers, the suppliers, the community

leaders, and finally the regulators and/or the government agencies.

After the crisis has occurred, the response stage comes along, and that is when the

company needs to be quick and give the right answers, otherwise the reputation could be hurt.

If the organization uses the right communication, the recovery stage will be easier.

In the response stage, decision makers have difficulties finding information because of the

stress and pressure. Flows of information increase during that period, especially if the crisis is

complex and represents many events at a time. But the number of channels that deliver this

information decreases, so the right information might be more difficult to get in time.

In the response stage, there is a model that usually happens. This model is the linear

model, in which there are four steps that are a triggering event, then observation, then

interpretation and choice and finally dissemination. But we realize that in a crisis there is

usually a going back to some of the steps of the linear model, which brings us to the spiral

model, which has the same four steps, but repeated over time when it is needed.

In order to prevent the lack of information the organization has to send people on the

crisis place to be sure to get the right information. Once they get the information they have to

interpret it the right way, and then make the right choice in order to handle the crisis well,

despite the lack of time that is inherent to a crisis.

We have seen that the response stage is not only about public relations but more about

finding the right information and using it the right way. Communication is only part of it.

Communication is the end of the process. It is very important, but if things have not been

done right before then the communication cannot be appropriate.


The role of the CEO in a crisis is very important. He or she has to be a true leader to be

able to contain all of the pressure that his company will be facing in times of crisis. He or she

will have to be at the top of his team and make the right decisions. He or she will also be the

spokesperson, and what he will say will represent the company as a whole.

Leaders in times of crisis have to be particularly careful in the actions they will take and

the behaviors they will adopt. There are mistakes that have been done in the past by many

leaders and that cannot be done because they might put the reputation of the organization at

risk. These mistakes are to mix messages from multiple experts, to provide information to the

public too late, to adopt a paternalistic attitude, to not counter rumors in time and finally to

have a public power struggle or confusion. If the leader succeeds in avoiding these terrible

mistakes, then he should be able to manage the crisis.

He or she can also use the crisis and emergency risk communication model. This model is

about being first, being right, being credible, express empathy, promote action and show

respect.

What the leader will say is also important. He or she has to make a statement right after

the crisis has occurred. This statement does not need to be very long, but it has to contain an

expression of empathy, confirmed facts about the event, what is known about the situation,

what the process implies, a statement of commitment, and finally where people can find

information.

This will show the public that the company is concerned about what has happened and

will act on the situation to make it right. The message has to be repeated so that a maximum

of people can get it. Another important point is that if the company or organization is

somehow responsible for the event that has happened then the leader has to ask for

forgiveness.


Crises have changed because of the internet. New types of crisis can result from rumors

spread all over the internet. And typical crises can take a new turn because of the internet, that

enables information, even when it is not accurate, to circulate more quickly and anywhere in

the world.

The internet is here and it is a wonderful source of information and communication, but it

can be dangerous for organizations. Organizations have to make the most of it instead of

considering it only a threat. They have to use it in their advantage. The internet can become a

new source of communication for organizations, at all times, and especially in times of crisis.

This new media has to be taken into account in the planning process as much as in the

response stage. Companies have to take advantage of this new media in which it is maybe

easier to get the message delivered the way you wanted it to be. Organizations can broadcast

videos and audio files through their websites, and much information. The crisis team will not

be the only one to communicate online. Indeed, every employee can give his view of the crisis

and what the company is doing about it online.

The internet can also be used as a mean of communication. With videoconferencing,

distance issues during a crisis can be solved. New technologies can be a great help for

organizations.

Using these means of communication can help in saving the company’s reputation. The

reputation is the most important asset for an organization. The better the reputation was before

the crisis, the more chance the organization has to keep it safe.

Organizations accumulate reputational capital over time. When a crisis occurs, the

organization has to act fast to respond to it and do everything in its power to resolve the crisis.

By doing so, the organization shows its willingness to make it right. Only after that can the

organization think about managing its reputation.


What is really important when a crisis occurs is to stick to the crisis communication plan,

which was done properly and had time be thought over. What is also important is to anticipate

criticism, because whatever the organization will do, it will be criticized, that’s inevitable.

And organizations have to remember that the crisis’s consequences are not necessarily

negative. The crisis can be negative, but if the organization handled it well then it can learn

from it and improve its operations further on.

Crisis is a cyclical process with five stages, including the signal detection, the probing

and prevention, damage containment, recovery and finally learning and reviewing.

We have seen in the examples how well known companies in the United States have

applied, or not, crisis communication theory in times of crisis.

In the EXXON Valdez case, many mistakes were done. The response was nothing but

quick. All the persons involved, including the company, the coast guards and the state, were

all scared of a potential lawsuit and because of this none of them wanted to admit guilt. They

were scared that whatever they would say in public would be used against them in a lawsuit.

But because of this, it took them time to act and repair the damages done by the oil spill.

The time that they lost was precious. During the amount of time when the parties were

just avoiding reality, many damages could have been avoided. This resulted in the oil

reaching the beaches and EXXON having to clean, and by the same time damaging the

environment with the product dedicated at cleaning the beaches.

The CEO of EXXON did not come on site. He also did not clearly express empathy or

regrets. He did not explain what the company was doing to respond to the crisis. He clearly

did it all wrong. He used the blame strategy and did not take responsibility for the crisis.


The EXXON Valdez oil spill has been one of the most damaging oil spills in history and

the lack of responsiveness from the company and the authorities has been damaging for their

reputation.

Another similar example was Jack in the Box and the E. coli crisis. In that case the

company had an even worse reaction after the crisis occurred. The CEO of the company did

talk and made quite a lot of statements after the crisis had exploded. But in each and every

one of his statements, he never admitted guilt, never showed empathy, or expressed any

compassion towards the victims of the crisis, his own customers. His only concern was to

protect his employees and his company’s reputation. But by reacting the way he did, he

seriously harmed his reputation. He put the blame on one of his suppliers and the federal

authorities. By doing this he did not take into account the protection of his stakeholders.

These two examples truly show what companies and organizations should not do in times

of crisis. Thinking about the organization’s interest first is a true mistake, and it won’t help

the organization, and will most likely harm it and its reputation.

Some other companies, on the contrary, managed to handle their crisis well by adopting

exemplary behaviors, and CEOs intervening quickly after the triggering event.

In the case of Johnson and Johnson, the CEO made the decision to recall all the products

from the stores all over the country to make sure that his customers were safe until the origin

of the crisis was found. The company had already a good reputation. It was one of the best

place to work, the company respected its employees and its stakeholders, and showed it to

them when the crisis occurred. The CEO showed a lot of compassion and empathy, and his

decision of recalling the product was even considered a heroic act, even more when knowing

that two more cyanide infested capsules were found in the batch recalled. It was the first time

on history a company would recall a product to protect consumers. The company was also

very cooperative with the authorities that were running an investigation on the Tylenol.


Because the company and the CEO had always had good relations with the media, but also

because the CEO was cooperating and giving them all the information as soon as he got it,

being transparent, the media coverage was not attacking the company.

The CEO acted quickly, he also was very compassionate, very transparent too. His

decision to recall the product saved lives and saved his company’s reputation. The crisis was

attributed to some psychopath and the company was never held responsible. When the

company put Tylenol back on the market, consumers had faith in the company and the sales

went back up. This example is always cited as a good example of a crisis handled well, even

thirty years after it happened.

Two other good examples of how to handle a crisis properly were the fires at Malden

Mills and Cole Hardwood. In these two examples fires occurred in the companies, one

harming people, and the other destroying facilities.

In both cases the CEOs showed great compassion towards their employees and their

communities. They both knew that their companies had an important role to play for their

community. They were local companies that communities depend on to live. If the companies

had closed, the entire community would have been harmed because many people in the towns

were working there, and if they had no job left, then they would not be able to consume in

other companies, and that would have been a terrible crisis for the whole town.

Both CEOs acted quickly after the fires had started. They both said that they would still

pay their employees and they did. They both said that they would rebuild and they did. Here

we can see that they made promises that they kept and with that they gained the trust of their

stakeholders.


They were not responsible for the fires but they did not put the blame on some external

forces. In fact, they did not try to look for a guilty one, but they tried to look forward and try

to find some good out of the crises.

They really made the most of the crisis because when rebuilding, they improved their

facilities. They also had a good reputation even after the crisis because of their heroic

behavior when it comes to taking care of their employees.

When it comes to crisis, ethical behavior is very important. Companies have to consider

their stakeholders and to act for them. They have to give a quick response so that people know

what is going on, and know that the company is not letting them down. People have to be sure

that they can trust the company to act in their sense, to resolve the crisis, and to act in order

for no crisis to ever happen again.

During a crisis two issues are often opposed: legal issue and public relations. While

public relations would advise companies to accept guilt and express regrets, lawyers often, if

not always, advise their clients to not accept guilt, and not talk before an investigation has

been done, otherwise whatever they have said could be used against them. It is understandable

that lawyers would not advise their customers to admit their guilt if they might be suited later

on. But for the company’s reputation to be left unstained the company has to talk to his

stakeholders, to admit what has been done wrong and to say what is going to be done to make

the situation right. Companies can win the legal battle and lose the reputational war, so in the

end their business will be at risk. Lawyers have to be aware that communication is very

important in times of crisis. While the crisis communication team would want to give

information about what lead to the crisis, what happened, who might be at fault. The legal

team on the other side would advise so keep this information because it might be used during

a trial. Companies will often follow the advice of the legal team because they fear a potential

trial. But the advice of the lawyers relies on logic and legal issues. When a crisis occurs, the


public opinion relies on how the story is framed by the media and how the company responds

to the crisis. Managing a crisis with the media is already a trial, and the public is acting like a

jury, so companies have to be transparent and show goodwill.

So companies should really be careful about their communication when they are facing a

crisis, but sill listen to what their lawyers have to say, because in some cases, their advice

might make a difference.


Recommendations

We have seen in the thesis that crisis communication is very important for companies.

Organizations have to manage their reputation even before a crisis occurs. The reputation

is the organization’s most important asset, because it is what makes people trust it and support

it. In the case of a company, it is what makes people buy from it.

The relationship with all stakeholders has to be kept in shape during all the organization’s

life. That goes for the employees, the suppliers, the customers, the shareholders and the

community. Giving them information about how the company is run, what is the strategy,

what is done for them is very important.

The employees have to trust the company they work for. They are the first customers of

the company. The employees have to be treated properly, and given sense out of their work. It

is better for the company’s reputation if its employees are proud to work for it and identify to

the strong and motivating messages.

The suppliers have to be able to trust the company that they work with, but also have to

be aware of its plans for the future and be treated right.

Consumers want to know that the company they buy from is respectful of the

environment, of human beings in general and also concerned about its stakeholders. The time

when companies were making children work and polluting as they wanted is over. Now

people will boycott a company if they learn that it has an unethical behavior. Same thing goes

for the community.

When it comes to shareholders, the notion of trust is the same as for everyone else.

Shareholders also want to make sure that the company is handling their investment well, and

putting their interest first.


If a company manages to have good, stable and healthy relationships with its stakeholders

in regular times, then its work will be definitely easier in times of crisis. Why would people

not trust a company that has been transparent with them all along?

A good relationship with the press is also very important. As well as with its stakeholders,

the company should be transparent with the press in regular times. Doing press conferences,

delivering press releases when an important event is about to come and giving interviews

when asked to will show the press, and the media in general the company’s good will. Then if

a crisis occurs, the media will remember that the company has always been faithful to them,

and maybe frame the story the way the company explains it to them. This was the case with

Johnson and Johnson, when the CEO asked the press not to deliver specific information,

which was not relevant but could have harmed the company. The media trusted him and did

as he pleased.

After the crisis has occurred comes the time of recovery. Whatever has happened during

the crisis, the company will have to recover from it. Communication will have to keep coming

out to repair the reputation. The company might have to make some changes so that no other

crisis can ever happen again. The company will have to communicate on what is done.

Many companies now have more considerations about the environment, and what they

can do to not harm it. Companies such as British Petroleum that, as EXXON Valdez, have

encountered crises related to oil spill, now want to preserve the environment. They invest

some of their money in renewable energies, using the wind, water, or sustainable products.

They have to communicate about it so that the public is aware that they are changing their

behavior.

They come in the line of social corporate responsibility, which most companies now

adopt, communicating about it mostly on their websites.


To close this thesis, I’d like to come up with a very fresh example of a crisis that

hopefully will be avoided before it can harm anyone.

In the past few days a hurricane named Irene has been around the United States. We all

remember the terrible consequences of hurricane Katrina that hit New Orleans in 2005,

destroying everything on its path and killing more than a thousand people.

In order to not see history repeat itself, the American authorities are making everything in

their power to protect people from the hurricane.

While the hurricane was coming to New York City, the city prepared itself. Cas

Holloway, the city’s new appointed Deputy Mayor of Operations, explained that shelters were

being prepared and steps taken for the fury of the hurricane. People are asked to live their

apartments and homes. The governor Andre Cuomo deployed 1,900 National Guard troops to

the region to assist with evacuation, clean up and other duties.55

Even president Barack Obama has made a statement about the hurricane and the situation

that people will have to face “If you are in the projected path of this hurricane, you have to

take precautions now. Don't wait. Don't delay. We all hope for the best, but we have to be

prepared for the worst.”56

New York City was getting ready for the storm in other ways, too. Officials said they

were revoking permits for outdoor events like street fairs and concerts. And if winds get bad

enough, they said they may shut down a half dozen of the bridges that link the city's

boroughs. At the same time, there will be another unprecedented step, a virtual shutdown of

the city's transit system - that includes the subways and buses. It also includes the commuter

rail systems that serve suburban areas like Long Island, which is also in the storm's path.

55 Associated press 201156 Associated press 2011


The city has been preparing for the hurricane to come, taking action, communicating with

the public, and making sure that people won’t get hurt. The governor has declared state of

emergency, and delivered the following message to the residents of New York: “I urge New

Yorkers to personally prepare for hurricane conditions and to cooperate with emergency

officials if needed. By working together, we will all be able to face this storm in a calm and

organized manner.”57

The authorities and crisis management and crisis communication team are working hard

on this case, because various deaths have already been reported in Connecticut, Maryland and

Florida.

Authorities are communicating as much information as they can and the media makes

report several times during the day. With the internet, many people post pictures and videos of

the hurricane online, keeping other people all over the country aware of the situation. Thanks

to their preventive actions, lives will be saved and damages will be repaired.

This shows us that a crisis can be handled when it is happening too. Hurricanes are not

new to Americans, and they cannot be avoided since they are natural disasters, but they are

part of what we consider crises. And crisis communication also applies to these types of

events. We can see that with the experience that authorities have gotten over the years with

such events, crisis management and crisis communication have been improved.

57 Associated press 2011


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