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CORPORATE REPUTATION MANAGEMENT:
CITIBANK’S USE OF IMAGE RESTORATION
STRATEGIES DURING THE U.S. BANKING CRISIS
Marsha Weber, Minnesota State University Moorhead
Sheri L. Erickson, Minnesota State University Moorhead
Mary Stone, Minnesota State University Moorhead
ABSTRACT
Image management is essential to corporations, particularly during crisis situations. The
ongoing financial crisis in the United States has led to the failure of several banking firms.
Because systemic economic problems may result from the loss of confidence in the banking system,
effective use of crisis management and image restoration strategies by the banking industry is
particularly important. This paper discusses the importance of corporate reputation management,
illustrates the use of communication theory to analyze corporate responses to crisis, and analyzes
Citibank’s responses to the company’s recent financial crisis using two crisis response frameworks,
Coombs’ Situational Crisis Communication Theory (2007) and Benoit’s Image Restoration
Typology (1995). Findings indicate that in general, Citigroup responded to negative events in an
effective manner (Coombs, 2007; Benoit, 1995) and in such a way to reduce the damaging effects
of the crisis. In many instances, Citi used corrective action strategies, in which management
indicated ways to solve problems and to prevent the crisis from happening again.
INTRODUCTION
Image management is essential to corporations and other organizations, particularly in crisis
situations. The financial crisis in the United States, which led to the failure of a large number of
banking firms, has made firm reputation management extremely important. More stakeholders
exist in bank governance than in non-financial types of businesses due to banks’ role in promoting
the stability of the economy and the liquidity function. Therefore, loss of confidence in the banking
system can cause serious, systemic economic problems. The bailout for the financial industry and
the financial rescue packages offered to select large U.S. banking firms as part of the Troubled
Asset Relief Program (TARP) and the TARP Capital Purchase Program served to appease some
concerns of bank customers and stockholders. However, the economic crisis and its aftermath
continue to cause much concern for all stakeholders of banking firms.
The first purpose of this paper is to discuss the importance of corporate reputation
management when crisis situations threaten the company’s image. The second purpose is to
Journal of Organizational Culture, Communications and Conflict, Volume 15, No. 2, 2011

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organizations used similar strategies and whether the firms were successful in their image
restoration attempts. In addition, a study of the various sectors of the banking industry could
provide information concerning the communication strategies those organizations used to repair
a tarnished image. For example, all image restoration strategies that bank regulators used to answer
media questions could be analyzed to determine if the same patterns emerged. Also, other types
of organizations and industries could be studied to determine if the communication patterns are
different than those of the banking industry.
A study of bank industry and government (regulator) reputations and their responses to
their roles in the banking crisis, could provide an interesting complement to studies of individual
firms. Winn, et al. (2008, pp. 36-37) define industry reputation as “the collective judgments of an
industry by stakeholders and the general public, where the judgment is based on assessments of the
economic, social and environmental impacts attributed to that industry over time.” An industry can
undergo collective reputation management, which refers to “all activities and behavior undertaken
by members of the collective to deliberately alter judgments about the reputation of the collective”
(Winn, et al., 2008, p. 37). Regulators (the government) play a role in industry reputation
management by attempting to allay stockholder concerns about the viability of the banking industry
and the financial system (Winn, et al., 2008).
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