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How and Why Is It Important for Businesses to Engage with the Media During a Crisis?

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* How and why is it important for businesses to engage with the media during a crisis? What strategies are successful in external communications for business during such times? Compare & contrast two news stories which centre on a crisis for different businesses giving detailed analysis of each communications strategy.

This Essay will begin by reviewing crisis definitions and message strategies. Next it will explore translation strategies used by organisations involved in a crisis to communicate with stakeholders. The essay will then consider Ford–Firestone’s tire failure crisis of 2000 as an example of poor crisis management, and contrast toy maker Mattel’s recall crisis of 2007 as an example of successful crisis management. It will first lie out the rhetorical context of each case before embarking on a detailed analysis equating the effectiveness of both firms’ external communications, and in the case of Ford-Firestone, how these might have been alternatively approached in order to avoid detrimental reputational damage.

* Fink (1986, from King, 2000) defines an organisational crisis as ‘a situation that can potentially escalate in intensity, fall under close government or media scrutiny, jeopardize the current public image of the organisation or interfere with normal business operations.’ Pearson and Mitroff support this in their ‘five dimensions of a crisis’, explaining that the situation will be ‘highly visible, require immediate attention, have a surprise element, and a need for action’ (Pearson and Mitroff, 1993 from King, 2000). They also outline the five stages of a crisis; signal detection, preparation and prevention, containment and damage control, business recovery, and learning. External communications are of pivotal importance during the preparation and prevention, containment and damage control, and learning stages (set out by James, 2007 as well as Pearson and Mitroff, 1993) as these are the points when most of the companies stakeholders are involved and this is what upholds company reputation. Thus, this essay focuses on communications during these two phases. * * The purpose of strategic communication during a crisis is to reduce uncertainty about concerns such as perception, resolutions and consequences (Ray, 1999 from Stephens, Malone and Bailey). If handled effectively, organisations have the potential to benefit from a crisis, but to do so effective communication is essential. (Crable and Vibbert, 1985). Trust, reliability, sincerity and authenticity all contribute to a good reputation. Failure to demonstrate trustworthiness convincingly will damage reputation. L’Etang describes how areas of public debate or concern are closely connected to media coverage because they thrust the organisation into the public eye’ (L’Etang, 2008). ‘Organisations choice of message strategy affects both how people perceive the crisis and the image of the organisation experiencing it.’ (Ray, 1999) *
Coombs (1995, 1999) developed a model that comprehensively explains the general strategy choices that organizations-in-crisis have at their disposal. The strategies were split into five categories as follows; Nonexistence strategies attempt to eliminate the crisis by denying its existence. Distance strategies, such as making excuses, attempt to weaken the link between the crisis and the organisation. (Denial of volition is a particular distance strategy which consists of blaming someone else for the crisis (This was a strategy used by Ford & Firestone, as the essay will further explain)) Ingratiation strategies focus on ways to gain public approval, strengthening the existing organizational image and transcending the crisis to a more desirable position. Suffering strategy portrays the organisation as a victim and attempts to draw sympathy from the public. Finally, the most common strategy is Mortification, which attempts to win forgiveness and create acceptance. This includes remediation, offering compensation to the victims, repentance, and rectification clearly showing that mechanisms are in place to prevent a similar crisis from occurring again (Stephens, Malone, Bailey. 2005) Mortification strategies were utilized by Mattel. *

On the August 14th 2007, toy giant Mattel announced it’s biggest recall in history. 436 million toy cars were recalled because they were found to be covered in a dangerous lead paint, at the same time Mattel announced that they would recall a further 18.2 million toys because they contained small powerful magnets, which could harm children if swallowed. Both batches of toys were made at factories in China and half of those affected were distributed to the USA. (Story and Barboza, 2007) *
On August 9, 2000, the Bridgestone-Firestone Corporation recalled 6.5 million tyres in the wake of mounting evidence that the tires were experiencing a phenomenon known as “tread separation.” This describes a breakdown in the binding of the tire, resulting in what known as a blow out. The tyres were specially designed and fitted on Ford Explorer vehicles, which had been experiencing high rates of crashes and rollovers. A federal investigation blamed such accidents for at least 101 deaths. (Pinedo et al, 2000) Throughout the essay the companies in this case will be referred to jointly as ‘Ford & Firestone’, however it should be noted that they are separate entities.

* The two Crisis depicted above have been chosen because they are both examples of technological crisis, and both put the customers using the companies products at significant risk of harm. However, the two cases differ vastly in the way they were handled with regards to the firms external Communications. The following paragraphs will examine the differences between each firm’s response strategies.

The first mistake that Ford & Firestone made was not putting customer safety first, and then when there were reports of malfunctions not only were they slow to approach the media, they covered the issues up for ten years. (BCM Institute, date n/a) They ignored corrective engineering proposals to enhance the stability of the Explorer, with which ‘problems had been discussed in company memos since as early as 1987’ (Greenwald, J. 2001) When news of the disaster surfaced, they were slow to make any response, and other than the recalls that took place, made little efforts to alleviate the situation. In contrast, Mattel’s response time was rapid. On the first day of recall they released a broad media (television) message announcing that the problem had been found, and issuing details of the products affected (Story & Barboza, NY Times, 2007) and within days they had publicly apologised. In the following weeks Mattel fully and successfully engaged all types of media, including print, electronic and new media to deliver their message ( Shown in Figure 1. (Woo, 2011)).

* * * * * Figure 1.

* * Specifically notable is the telephone enquiry line Mattel staffed to deal with customer queries. Honing in on concerns raised by specific stakeholders including consumers, shareholders, analysts and journalists will ensure minimal harm. This theory is supported by Wright (1974) who in a study on chat room discussions about crisis on company billboards found that consumers with high involvement generate more counterarguments (to negative responses) than those with low involvement (Yoohyeung and Ying-Hsuan, 2009) Furthermore, they observe that ‘publics will perceive a crisis according to how the media portray the crisis. Failure to address an issue will surely lead to consumer dissatisfaction.

When a crisis arises it is important for firms to have already engaged in contingency planning so that they are suitably equipped to deal with the matter at hand, ‘When the crisis hit Mattel Mr. Eckert was ready with a 114-page crisis plan prepared in advance, that enabled him to shape the response and the narrative’ (Hurley, 2012). On the 26th of July (before the issue had gone to media) Mattel delivered an official report to the CPC, who agreed to help the toymaker alert the public, and together they implemented the CPC’s ‘fast track programme’ (Woo, C, 2011) which entailed making the necessary preparations to reassure customers and display the firms corrective remedies ( Figure 1). On the other hand, Ford & Firestone had ‘no crisis communications plan in place, and even when the situation escalated drawing national and international attention, they held off any formal plan’ (BCM Institute, date n/a). This made it seem like they had little control of the situation.

One of the key mistakes that both Ford and Firestone made was that they attempted to divert blame for the situation rather than accepting responsibility. Ford blamed Firestone and the newly appointed CEO Jacques Nasser denied any responsibility by claiming that it was “A Firestone tyre issue, not a vehicle issue”. (Firestone Recalls, YouTube video) This suggested the tyres to be a completely different product to the Explorers they were fitted on, even though Ford had played a huge role in dictating the specifications for the tyres, including the tyre pressure, and made several changes to Firestone’s original design (Francis, 2013). Worse still, in the few weeks after the crisis, rather than making attempts to restore the faith of their clientele, Ford blamed the consumers. This type of crisis strategy fits in to Coombs’ ‘distancing Strategies under ‘denial of volition’. In doing this, not only is the company’s image with the public harmed, ‘Bridgestone/Firestone ended its 100-year relationship as a supplier to Ford, accusing the automaker of refusing to acknowledge safety problems with the Explorer’ (Laudon, Undated). In contrast, Mattel took the blame completely upon themselves; ‘ On September 21 they issued an apology to China over the recall of Chinese-made toys, taking the blame for design flaws and acknowledging that “the vast majority of those products that were recalled were the result of a design flaw of Mattel’s, not through a flaw of the Chinese manufacturers”. (R, Hurley, 2012) Such statements allowed Mattel to maintain a positive relationship with a key component of their supply chain, despite the difficulties they had encountered. * * On September 6th 2000, the Firestones CEO at the time appeared before congress saying “I came before you to apologise”, yet, when a new CEO, John Lapy was appointed, he still refused to admit that the vehicles had been defective. Other than the statements at congress Ford made little attempt to utilize any external Communications (Firestone Recall YouTube video). Firestone recall litigation costs amounting to a loss of over $1.6 billion (Assem, 2007) and although Ford agreed to share costs, they would not give details of exactly how much they would contribute (abcNews, 2000).” The ultimate aim of issues management is to shape and respond to public policy for the benefit of the organisation (Harris, 2005 from L’Etang 2008) Lack of issues management and preparation is likely to hinder an organisation, and this can perhaps explain why Ford & Firestone were less successful than Mattel.

As demonstrated by Pearson and Mitroff, it is not just the damage containment stage in the immediate wake of a crisis that requires attention. The firm must also demonstrate Learning. Mattel’s CEO stated in their 2007 Annual Report that the organisation had continued their “commitment to strengthen efforts as a responsible corporate citizen” and that they were “adamant that it would not happen again”. They gave S. Prakesh Sethi, a fierce industry critic, free reign to make unannounced on-site inspections’ (Levick, nate n/a) Subsequently, his endorsement was all the more credible with the media, and demonstrated that Mattel were keeping close watch for future problems. This combined with a public apology, promising those effected would be “fully compensated for the inconvenience” (Slideshare) Quick response time and well developed communications strategies could explain why Mattel were still able to deliver a 6% increase in net revenues in 2007’ (Mattel Annual Report. 2008) Ford were still experiencing problems with tyre recalls a year later. (youtube video source)

*
Conclusion:
To conclude, it should be recognised that one of the most valuable assets a firm has is its reputation. In his paper on the importance of corporate reputation Chong states that it ‘influences the value of a companies equity, it’s ability to attract and retain talent and it’s fundamental licence to operate. So damage to reputation ranks near the top of a companies identified risk.’ (Chong, M. 2005) During times of crisis organization are at their most vulnerable to damaging this asset. It was Warren Buffet who said ‘ It takes twenty years to build a reputation and five minutes to ruin it’.

The cases discussed in this essay illustrate the imminent need for engaging with the media, and having a strong communications strategy in place for when a disaster occurs. A pre-empted plan ensures that organisations can react quickly to situations that may otherwise earn them a negative reputation. From the successes and failures examined there are several strategies that a firm should seek to employ should a crisis arise. Firstly, they should initiate corrective actions voluntarily and with the increasing attention on the importance of safety, the firms mantra should be ‘safety first and profits second’. Secondly, they should keep customers informed in any crisis (especially those involving public safety) and fully disclose all information. As seen in the case of Ford & Firestone, hidden information could damage trust in relationships with stakeholders. In fact, as shown by Mattel, it is advisable for organisations in crisis to keep all media channels informed and make clear any corrective actions that they have chosen to undertake. This is where media has a crucial role to play, acting as a bridge between the firm and it’s customers and other stakeholders. * * *
Word Count: 2,124

References
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