A crisis interrupts the normal flow of business and requires immediate attention from the management, because it might cause major damage to the organization. Show
A crisis can create threats to public safety, financial loss and reputation loss, and these threats are interrelated. It is often accompanied by intense media scrutiny. Coombs defines crisis as “the perception of an unpredictable event that threatens important expectancies of stakeholders and can seriously impact an organization’s performance and generate negative outcomes.” Crisis and Crisis ManagementCrises can be classified into three major types:
Crisis management is designed to protect an organization and its stakeholders from threats and/or reduce the impact of the threats. Ethical questions will bear significant consequences for the organization as well as the victims involved.
Mitroff offers a five-stage model for crisis management : “(1) signal detection, seek to identify warning signs and take preventative measures; (2) probing and prevention, active search and reduction of risk factors; (3) damage containment, crisis occurs and actions taken to limit its spread; (4) recovery, effort to return to normal operations; and (5) learning, people review the crisis management effort and learn from it.” Crisis CommunicationCrisis communication can be defined broadly as the collection, processing, and dissemination of information required to address a crisis situation. It is the “dialog between the organization and its public(s) prior to, during, and after the negative occurrence. The dialog details strategies and tactics designed to minimize damage to the image of the organization.”
Organizations have ethical responsibilities before, during and after a crisis. In the pre-crisis stage, crisis communication revolves around monitoring crisis risks, making decisions about how to manage potential crises, and training people who will be involved in the crisis management process. Crisis communication includes the collection and processing of information for crisis team decision making along with the creation and dissemination of crisis messages. The emergency nature of a crisis amid great uncertainty aggravates already difficult decision-making with the urgent need for the management to make decisions rapidly. Post-crisis communication involves assessing the crisis management effort and providing follow-up crisis messages as needed. The organization needs to release updates on the recovery process, corrective actions, and/or investigations of the crisis. Ethical Principles of Responsibility and AccountabilityResponsibility is an ethical concept that refers to the fact that individuals and groups have morally based obligations and duties to others and to larger ethical and moral codes, standards and traditions. Responsibility in a business context refers to “a sphere of duty or obligation assigned to a person by the nature of that person’s position, function or work.” The roles taken on by decision-makers imply a responsibility to perform certain functions associated with those roles. To be more specific, responsibility refers to more than just the primary function of a role; it refers to the multiple facets of that function, which includes both processes and outcomes, and the consequences of the acts performed as part of that set of obligations. A responsible actor may be seen as one whose job involves a predetermined set of obligations that need to be met in order for the job to be accomplished. Accountability is the readiness or preparedness to give an explanation or justification to stakeholders for one’s judgments, intentions and actions. “It is a readiness to have one’s actions judged by others and, where appropriate, accept responsibility for errors, misjudgments and negligence and recognition for competence, conscientiousness, excellence and wisdom.” While responsibility is defined as a bundle of obligations associated with a role, accountability could be defined as “blaming or crediting someone for an action”—normally associated with a recognized responsibility. The accountable actor is “held to external oversight, regulation, and mechanisms of punishment aimed to externally motivate responsive adjustment in order to maintain adherence with appropriate moral standards of action.” In the professional context, accountability is about answering to clients, colleagues and other relevant professionals. The demand to give an account of one’s judgments, acts and omissions arises from the nature of the professional-client and the professional-professional relationships. For communication professionals, accountability has more specific implications. Recent years have seen more practical and concrete interpretation of the concept of accountability by communication specialists. It is associated with responsiveness to the views of all stakeholders, which includes a willingness to explain, defend, and justify actions. While tracing the lines of responsibility and accountability can be difficult, in the end, if one is responsible in any way for an action, then one must accept some degree of accountability. On the other hand, if responsibility and accountability are not equitably shared and if the process by which they are assigned is not transparent, then problems will arise. In the corporate world, not every actor is blame-worthy, especially if the actor’s autonomy is limited by structure, process, or circumstance. However, lack of autonomy is not an excuse for avoiding accountability entirely. Ethical Principle of Humanistic CareHumanistic care is an ethical principle relevant to many sudden crisis events that create victims. Humanism is a philosophic tradition and value system that takes the human individual as its starting point, emphasizing the uniqueness and inherent worth of human beings. Crisis Communication ObjectivesObjectives for crisis PR activities tend to be of an impact nature. The general guidelines are:
Threat, surprise, short response time, and uncertainty could affect decision making and communication activities after a crisis. To manage a crisis situation effectively, organizations should not respond with routine solutions. PR professionals should communicate early and often following a crisis, regardless of whether or not they have critical information about the crisis. Due to the unexpected nature of crisis, stakeholders need information about what had just happened. Furthermore, stakeholders want to know what is being done to protect them from similar crises in the future. Corrective actions reassure stakeholders that they are safe thereby reducing their psychological stress.
The company should demonstrate good will, sincerity, and willingness to cooperate with government investigation, and show efforts to preserve company reputation by emphasizing its core values and integrity when the public might have doubts about the products of the company. Best Practices for Initial Crisis ResponseAccording to Coombs, the guideline for initial crisis response focuses on three points: be quick, be accurate and be consistent. Quickness and accuracy play an important role in public safety, because slow or inaccurate responses can increase the risk of injuries and possibly deaths. Quick actions can also prevent further damage and protect reputations by showing that the organization is in control of the situation. The philosophy of speaking with one voice in a crisis is an effective way to maintain accuracy. As the news media are drawn to crises and can reach a wide array of publics quickly, it is logical that media relations is a key part of crisis response. Crisis managers should also express concern/sympathy for any victims of the crisis. Expressions of concern are expected by stakeholders and recommended by crisis experts, but are not admissions of guilt. Organizations did experience less reputational damage when an expression of concern is offered verses a response lacking an expression of concern. Coombs summarizes Best Practices for Initial Crisis Response below:
Attributions of Crisis Responsibility—Situational Crisis Communication TheoryEthical crisis management requires the organization to focus its initial response on using communication to address the physical and psychological concerns of the victims. After this foundation is established, crisis managers could then turn their attentions to reputational assets. Ethical crisis communication practices involve decisions regarding accepting responsibilities and protecting organizational reputation. Situational Crisis Communication Theory (SCCT) provides guidance when crisis managers have met their initial obligations and are starting to address reputational assets. SCCT offers an evidence-based framework for understanding how to maximize the reputational protection afforded by post-crisis communication. This is based on the idea that guidance for decision making in a crisis should be supported by scientific evidence from empirical research, rather than personal preference and unscientific experience. SCCT identifies key facets of the crisis which influence attributions about the crisis and the reputations held by stakeholders. SCCT emphasizes that crisis managers match their reputation repair strategies to the reputational threat of the crisis situation. According to SCCT, the crisis manager assess the situation by asking the following questions:
In cases of natural disaster, violent incidents, rumors, and product tampering, the organization can be seen as a victim, and therefore is attributed minimal crisis responsibility. In accident crises, such as industrial accidents or technical errors causing product harm, the organization is attributed low crisis responsibility. In preventable crises caused by human errors or misdeeds, the organization is attributed strong crisis responsibility. In addition, crisis history is whether or not an organization has had a similar crisis in the past. A history of crises suggests an organization has an ongoing problem that needs to be addressed. Crisis managers should use increasingly accommodative reputation repair strategies as the reputational threat from the crisis intensifies. Successful Crisis Outcome As the incidence and severity of crises is rising with the complexity of technology Organizations could make ethical decisions to accept their responsibility, uphold accountability, enable access to information, and provide/facilitate humanitarian care when there are victims involved. These steps will also impact the process of image restoration and post-crisis organizational revival. If the ethical principles have been conscientiously and effectively applied, the following criteria of a successful crisis outcome will have been met:
As the Chinese symbol for a crisis indicates, a crisis implies both danger and Case Study: BP Oil SpillBackgroundThis lesson has addressed the key components of ethical principles in crisis communication, including the ethical principles of responsibility, accountability, and humanistic care. The case of BP oil spill in 2010 provides an important example for understanding how these principles are valued by public opinion in a crisis situation, and how the communication actions by a corporation in this type of circumstances might have long-term effect on the brand image of the organization. On April 20, 2010, a BP’s Deepwater Horizon oil rig exploded, causing what has been called the worst environmental disaster in U.S. history and taking the lives of 11 rig workers. For 87 straight days, oil and methane gas spewed from an uncapped wellhead, 1 mile below the surface of the ocean. The federal government estimated 4.2 million barrels of oil spilled into the Gulf of Mexico. Mistakes in Initial ResponseAccording to NPR, BP’s action has become a textbook example of how not to do crisis management. BP executives declared it was not their accident, blamed their contractors and made the company look arrogant and callous. CEO Tony Hayward repeated insensitive comments in public, like this one: “There’s no one who wants this thing over more than I do. You know, I'd like my life back.” He also suggested that the environmental impact of the spill would be “very, very modest.” Images of Hayward attending a yacht race just 48 hours after a hostile interrogation by a US congressional committee on the oil spill, provoked sharp criticism on both sides of the Atlantic. Although the company, formerly British Petroleum, officially changed its name to BP in 2001, Americans consider it a foreign company even though it has just as many American shareholders as British ones, and its biggest operations are in the United States. PR ActionsTo sooth angry Americans, BP aired a multimillion-dollar national TV spot in June in which Hayward pledges: "We will make this right." Hayward also promised BP would clean up every drop of oil and “restore the shoreline to its original state.” President Barack Obama said the money spent on the ads should have gone to cleanup and compensating devastated fisherman and small business owners. The ad indicated that the company didn't even follow its own internal guidelines for damage control after a spill. Its own spill plan, filed the year before with the federal government, says of public relations: “No statement shall be made containing any of the following: promises that property, ecology or anything else will be restored to normal.” BP also bought online ads that pop up when people search for information about the oil spill on Google and Yahoo. The ads, which link to BP's own oil-response sites, typically appear above or to the right of other search results. BP said the idea was to help people on the Gulf find the right forms to fill out quickly and effectively. However, many people suggest it's a move to steer searchers away from bad press for BP. Crisis management experts stated the only reliable way to repair BP's badly tarnished image should be the obvious one — to plug the hole where oil was still leaking out. It would take nearly 3 months before the leak was stopped, and nearly 5 months before the well was declared effectively dead. Public relations experts pointed out that BP ran its crisis communications in the same “ham-fisted” manner they’ve run the clean-up operation in the Gulf. "BP's handling of the spill from a crisis management perspective will go down in history as one of the great examples of how to make a situation worse by bad communications," said Michael Gordon, of New York-based crisis PR firm Group Gordon Strategic Communications. “It was a combination of a lack of transparency, a lack of straight talking and a lack of sensitivity to the victims. When you're managing an environmental disaster of this magnitude you not only have to manage the problem but also manage all the stakeholders.” ConsequencesBP attempts to convince people that it appears the Gulf of Mexico is healing itself after a while. In 2015, BP released PR materials that highlight the Gulf’s resilience, as well as a scientific report showing the area is making a rapid recovery. But evidence is mounting that five years after millions of gallons of oil spilled into the Gulf, wildlife there is still struggling to rebound. In June 2016, BP issued its final estimate of the cost of the spill, the largest in U.S. history. The total amount for the cost of the 2010 oil spill in the Gulf of Mexico was $61.6 billion. Under the settlement with BP, five states in the Gulf area and local governments will receive payments over the next dozen years. The funds will enable them to ramp up vital restoration work along the coast. BP continues to settle claims from business owners and residents who say they were harmed. Moral of the StoryIn conclusion, this is a classic case example of why organizational decision making in crisis situations should be based on ethical principles such as accountability and responsibility. Public criticism and outrage following the incident not only focused on the oil spill, but on the lack of remorse and sincerity from the top management in crisis response, particularly the lack of sympathy to the victims of the disaster. The failure by BP’s leadership to respond to the disaster with sufficient speed and attention demonstrates that crisis preparedness and ethical guidelines should become part of the organization culture. Lesson 1 AssessmentWhat media technique is used to promote the general perception of a product or service rather than promoting its functional attributes quizlet?What media technique is used to promote the general perception of a product or service, rather than promoting its functional attributes? Image advertisements.
Which of the following represents a type of corporate crisis multiple choice acts of God management indecision mechanical problems all of these answers are correct?Which of the following represents a type of corporate crisis? All of these answers are correct. Acts of God. Management indecision.
Which statement about corporate reputation is most accurate?The corporate reputation is accurately described by which statement(s)? All of these are correct: Refers to desirable qualities, Refers to undesirable qualities, Relies on the perceptions of past actions, results, and future prospects.
Why do firms create public relations departments outline the structure and activities of a typical department?Why do firms create public relations departments? Outline the structure and activities of a typical department. Role: to manage the firm's public image and, more generally, its relationship with the public. This department may also be called media relations, since much of its work involves interacting with the media.
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