Crisis and Crisis Management

Crises can be classified into three major types:

1. Crises of the physical world, including natural disasters and failures of technology, such as nuclear power
2. Crises of the human climate, including confrontation with adversary groups and malevolent acts of governments, groups and individuals
3. Crises of management failure, arising from mismanagement, skewed values, deception and misconduct

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 Communication

Crisis 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.” 

Crisis communication is an emerging field in applied communication studies and involves dealing with mediated messages and various types of audiences at moments of heightened pressure. Ethical questions are important considerations when a crisis occurs. In a crisis situation, corporate values that are important during times of normalcy and stability may not be as critical. For instance, the normal emphasis on cost saving would no longer be appropriate when it is necessary to take urgent steps to save lives in a natural disaster.

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 Accountability

Responsibility 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.

According to Aristotle, moral responsibility was viewed as originating with the moral agent as decision-maker, and grew out of an ability to reason, an awareness of action and consequences, and a willingness to act free from external compulsion.

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 Care

Humanistic 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.

Therefore “the ethical component remains a cornerstone in humanism in that it attributes unalienable rights to everybody, independent from ethnicity, nationality, social status or gender.” The ethics of care concerns the duty of all humans to others, specifically requiring a supportive response to individuals in suffering and in need.  The notion can also be extended to the care of natural environment, as it is essential for human flourishing and our general well-being.

Based on the humanistic care principle, the first priority in any crisis is to protect stakeholders from harm, not to protect the organization reputation. All victims or potential victims should receive instructing information, including recall information. Instructing information tells stakeholders what they must do to protect themselves from the physical threat of a crisis. Examples would be telling consumers not to eat contaminated foods or warning messages alerting the public to a chemical leak. All victims should be provided an expression of sympathy, any information about corrective actions and trauma counseling when needed.

When a crisis brings harm to individuals and leads to sufferings and loss, disaster victims need to receive medical assistance, food, shelter, counseling, and short-term financial assistance. From a humanistic perspective, organizations have an ethical duty to avoid any action that could harm others. They also have a duty to be supportive to those harmed by crises. If an organization encounters a natural disaster or industrial accident that caused deaths, family members of victims and others affected could be offered memorial services and other forms of support. Post-crisis communication should include counseling and follow-up messages.

Crisis Communication Objectives

Objectives for crisis PR activities tend to be of an impact nature. The general guidelines are:

1. to provide accurate, timely information to all targeted internal and external audiences
2. to demonstrate concern for the safety of lives
3. to safeguard organizational facilities and assets
4. to maintain a positive image of the organization as a good corporate or community citizen

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.

For example, when a manufacturing company faces allegations and media inquiries relating to defective products that caused bodily injuries to consumers, the objectives of crisis communication activities should be:

• having proper internal communication in preparing for a crisis moment of media frenzy
• maintaining dialogs with different stakeholders in the middle of crisis
• explaining clearly and accurately the extent of damage and crisis management steps to stakeholders to assure that they comprehend the situation without misunderstanding or confusion

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 Response

According 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:

1.  Be quick and try to have initial response within the first hour.
2.  Be accurate by carefully checking all facts.
3. Be consistent by keeping spokespeople informed of crisis events and key message points.
4.  Make public safety the number one priority.
5.  Use all of the available communication channels including the internet, intranet, and mass notification systems.
6.  Provide some expression of concern/sympathy for victims
7.  Remember to include employees in the initial response.
8. Be ready to provide stress and trauma counseling to victims of the crisis and their families, including employees.

Attributions of Crisis Responsibility—Situational Crisis Communication Theory

Ethical 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:

1.  Can the organization be viewed as a victim of the event?
2.  Does the event occur due to factors that are unintentional or uncontrollable by the organization?
3. Is the event preventable?

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
and society, crisis management is increasingly becoming a part of every manager’s responsibility and capability. PR professionals in both the corporate world and the non-profit sector need to understand the importance of following ethical guidelines and professional standards in planning, development, and execution of crisis communications programs.

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
opportunity. The value of perceiving a crisis as an opportunity is that it encourages reflection and learning through an evaluative procedure. A learning process has the potential to bring more adaptive responses to adverse conditions and help prevent future crises.

Case Study: BP Oil Spill

Background

This 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 Response

According 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 Actions

To 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.”

Consequences

BP 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 Story

In 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 Assessment