LECTURE 10 ISSUE AND CRISIS MANAGEMENT

LECTURE 10:
ISSUE AND CRISIS MANAGEMENT
Stephen Bruyant-Langer November 30, 2011

Lecture Structure
• Background to issues and crisis management
• Defining issues and crises
• Managing issues
• Crisis management

Background to Issues and Crisis Management
• Issue and crises emerge in interactions between organizations and stakeholders in
society
• Managing issues is given in by the importance of maintaining, nurturing and protecting
reputations and stakeholder relationships
• Issues and crisis management is generally part of the more strategic dimension of the
corporate communication function’s role (Grunig and Repper, 1992)

Contemporary Issues
• Diet/obesity – food producers (Coca Cola, Nestle, McDonald’s)
• Fat cat pay/corporate governance – multinationals, large firms (Glaxo, Shell)
• 9/11 and safety – airlines (Swiss Air, Sabena)
• Buying/supply chain (sweat shop) – manufacturers (Nike, Starbucks)

Defining Issues and Crises
• An issue can be defined as (a) a concern about the organization’s
decision and operations; that may or may not also involve (b) a point of
conflict in opinions and judgments regarding a company’s decisions and
operations.
(a) For example, when Mattel recalled millions of toys in 2007
because of dangerously high levels of chemicals and toxins, the
recall became an issue of public concern about the safety of the
company’s supply chain and manufacturing in China. Mattell,
however, acknowledged the problems and hence there was no
difference of opinion with customers and members of the general
public about the severity of the issue and about the necessity of a
product recall.
(b) In contrast, the petroleum company Exxon Mobil has been at
loggerheads with scientists and environmental groups about the
issue of global warming and its own role in reducing its carbon
emissions.

• Chase (1984) - an issue as ‘an unsettled matter which is ready for a
decision whereas a trend is a detectable change which precedes an
issue’.
• Hainsworth (1990) – ‘an issue is a point of conflict between an
organisation and one or more of its publics’.
• The term ‘issues management’ was first coined by Howard Chase in
the 1970s.
• Issues management is the capacity to understand, mobilize, co-ordinate,
and direct all strategic and policy planning functions, and all corporate
communication/public relations skills towards the achievement of one
objective: meaningful participation in creation of public policy that affects
institutional destiny.
• Maturing in his thinking, Chase (1984) defined issues management as a
process of issue identification, analysis, change strategy options, action
programming, and evaluation of results.

• A crisis is defined as an issue that requires not just decisive but also
immediate action from the organization. The necessity of immediate
action may be triggered by, for example, mounting public pressures,
intense media attention or because of the direct danger (in case of an
accident, product tampering or faulty products) to employees, customers
or members of the general public.
• Weick (1988) - a crisis is an critical and intense issue that threatens the
very existence of an organization in terms of its basic assumptions,
values and ways of operating. For example, when Shell attempted to
dispose of the Brent Spar oil rig in the North Sea, its actions led to a
public boycott and to legislation that not only damaged its reputation but
also challenged the company to change its basic assumptions and
values regarding the environmental impact of its business.

Development of an Issue into a
Crisis

Managing Issues
• Issues management is first of all a corporate intelligence function, but
to realize its potential it must be treated as part of the strategic
management function - bringing issues into the heart of the strategic
decision-making process and corporate communication.
• Four steps:
(1) environmental scanning
(2) issue identification and analysis
(3) issue-specific response strategies
(4) evaluation.

(1) Environmental scanning – SWOT, DESTEP, stakeholder
engagement
(2) Issue identification and analysis
• present intensity of the issue in the public domain; how likely it
is to trigger government action or impact on public opinion; the
likelihood of the issue continuing; the ability of the organization to
influence its resolution; and the key stakeholder groups and
publics that are involved with the issue
• Stakeholders: position-importance matrix to position stakeholder
opinions on the issue
• Present intensity/stage of the issue: Healey’s ‘lifecycle’ model

Position–importance Matrix
-5
Oppose
Position on
Problematic
Antagonistic
Issue
0
Support
Low Priority
Supporter
+5
0 5 10
Least
Most
Importance

Healey’s life cycle model

(3) Issue-specific response strategies
• a buffering strategy
• a bridging strategy
• an advocacy strategy.
The choice of any one of these three options is based upon the
‘intensity’ of the issue, the importance of the issue to the
organization’s stakeholder groups, values and beliefs of
managers in an organization and costs.

• A buffering strategy is essentially an attempt to ‘stonewall the issue’ and delay
its development. This strategy is one in which organizations attempt to continue
with their existing behaviour by postponing decisions or by remaining silent.
Buffering involves trying to keep claims from stakeholders or publics in the
environment from interfering with internal operations.
• A bridging strategy, on the other hand, involves organizations being open to
change and recognizing the issue and its inevitability. Bridging occurs when
organizations seek to adapt organizational activities so that they conform with
external expectations and claims of important stakeholders and publics.
• An advocacy strategy is an attempt to try to change stakeholder expectations
and public opinions on an issue through issue campaigns and lobbying. Within
this strategy, organizations do not directly ‘stonewall’ an issue (buffering) or
adapt to external expectations (bridging) but use campaign and lobbying to alter
the opinions and stakeholder expectations on an issue so that these conform to
the organization’s present practices, output and values

(4) Evaluation. The final stage of the issues management process
involves an evaluation of how the issue has developed and how
stakeholder expectations and public opinions have changed.

Crisis Management
• An issue may evolve into a crisis when organizations do not deal with
issues in a timely or responsible manner or when stakeholders or the
general public feel that an organization has not adequately responded
to an issue.
• However, not all crises are self-inflicted by organizations or emerge
from widely debated public issues.

Crisis Types
Unintentional
Intentional
External Faux pas Terrorism
Internal Accidents Transgressions

• A faux pas is an unintentional action that an external agent (e.g.,
NGO) unintentionally transforms into a crisis. A faux pas often
begins as an issue between an organization and a particular
external agent who challenges the appropriateness of the
organization’s actions.
• When an organization does not engage in debate with this
external agent or when public opinion and stakeholder
expectations move against the organization, the issue may turn
into a crisis. Social responsibility tends to be the focal point of
most faux pas. The term faux pas comes from French and literally
means ‘false step’. It generally refers to a violation of accepted,
although unwritten, social rules and expectations.

• Accidents are unintentional and happen during the course of normal
organizational operations. Product defects, employee injuries and
natural disasters are all examples of accidents. The unintentional and
generally random nature of accidents often leads to attributions of
minimal organizational responsibility, unless of course the organization
was directly responsible for the accident.
• Accidents can be further divided into acts of nature (e.g., hurricanes,
earthquakes, epidemics, etc.) and human-induced errors (e.g., industrial
accidents). The rationale for this division is that stakeholders and publics
are less likely to attribute blame and react negatively to acts of nature
than to human-induced error

• Transgressions are intentional acts taken by an organization that
knowingly place stakeholders or publics at risk or harm. Knowingly
selling defective or dangerous products, witholding safety information
from authorities, violating laws, or ‘creative’ bookkeeping are all
examples of transgressions.
• Terrorism refers to intentional acts taken by external agents. These
intentional actions are designed to harm the organization directly (e.g.,
hurt customers through product tampering) or indirectly (e.g., reduce
sales or disrupt production). Product tampering, hostage taking,
sabotage and workplace violence are all examples of terrorism

Crisis communication
• Classifying crises into these four types is useful because it
provides a basis for identifying the most appropriate crisis
communication strategy.
• The principle for choosing an appopriate communication strategy
is the degree to which the organization is perceived by
stakeholders and the general public to be reponsible or culpable
for the crisis.
• When the perception is that the organization is not directly
responsible or culpable the organization may attempt to
distance itself from the crisis or deny that the crisis exists or is
as serious as external actors make it out to be. On the other
hand, when the organization is seen as directly responsible or
culpable for the crisis, the organization will have to defend its
position or may simply have to apologise for the crisis and
change its behavior.

Perception of low level of responsibility
Nonexistence strategies Claim of denying the crisis
1. denial A simple statement denying that a crisis exists
2. clarification An extension of the denial tactic with attempts to explain why there
is no crisis
3. attack and intimidation A tactic of confronting the person or group who claims that a crisis
exists; may include a threat to use “force” (e.g., a lawsuit) against
the accuser
Distance strategies Claim of distancing the organization from direct responsibility
for the crisis
1. excuse A tactic of denying intention or volition by scapegoating others for
the crisis
2. downplay A tactic of convincing stakeholders or the general public that the
situation is not that bad in itself or compared to other crises
Association strategies Claim of connecting the organization to things positively valued
by stakeholders and publics
1. bolstering A tactic of reminding stakeholders and the general public of
existing positive aspects of the organization (e.g., reminders of past
charitable donations or a history of fair worker treatment) in order
to offset the negatives the crisis brings to the organization
2. transcendence A tactic of associating the negatives and loss arising from a crisis
with a desirable, higher order goal (e.g., animal testing to develop
life-saving drugs)
Suffering strategy Claim that the organization suffers from the crisis
1. victimisation A tactic of portraying the organization as a victim of the crisis in
order to win public sympathy
Perception of high level of responsibility
Acceptance strategy Claim accepting responsibility or culpability for the crisis
1. full apology A tactic of simply apologising for the crisis and accepting the blame
2. remediation A tactic of announcing some form of compensation or help to
victims (money, goods, aid, etc.)
3. repentance A tactic of asking for forgiveness. The organization apologises for
the crisis and asks stakeholders and the general public to forgive its
misdeeds
Accomodative strategy Claim promising to prevent the crisis from recurring again
1. rectification A tactic of taking corrective action to prevent a recurrence of the
crisis in the future

• The unintentional nature and external challenge of a faux pas may lead
to an attribution of minimal organizational responsibility. However, an
organization can often change in response to the challenge which
means that the possibility of a perception of organizational responsibility
for the crisis does exist. When the perception of organizational
responsibility is low or weak, the organization may use a distance
strategy to further weaken the linkage between the crisis and the
organization. However, when the perception of organizational
responsibility for a faux pas is high or strong, an organization will have to
follow an acceptance or accomodative strategy. Besides apologizing for
the crisis and openly accepting the blame, this may consist of
remediation (giving compensation to victims) or rectification (taking
corrective action to prevent the crisis from happening again).

• Natural accidents are unintentional and outside of the control of
organizations. Such accidents can therefore be easily responded to with
a distancing strategy which serves to reinforce the organization’s lack of
responsibility for the crisis.
• Human-error related accidents are more difficult to justify and will require
an apology from the organization and an admission that it will take
action to prevent a recurrence of the crisis in the future.
• Transgressions are intentional actions taken by organizations which
makes organizations directly responsible for their impact. A strategy of
distancing the organization from the crisis or a non-existence strategy
that denies the existence of the crisis are thus futile. Organizations
instead need to follow an acceptance

strategy where they admit their responsibility but work to atone for the
crisis in some fashion. For example, an organization may remediate by
willingly offering some form of compensation or help to victims, may
repent by publicly asking for forgiveness, or may follow a rectification
tactic of ensuring that the crisis will not recur in the future.
Terrorist attacks are directed at the organization by external agents and
often there is very little direct organizational responsibility or culpability.
An organization may therefore adopt a suffering strategy which portrays
the organization as an unfair victim of some malicious, outside actor.
Johnson & Johnson’s famous portrayal of itself as wounded by product
tampering during the 1982 Tylenol crisis is a good example of the
suffering strategy.