The Best Way for a Company to Respond to a Crisis Situation

How do a company’s prior reputation, CEO visibility and immediate response to a crisis situation affect its publics?

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A company’s reputation, whether big or small, can have a large effect on its publics. In the field where things are now moving so quickly, with instant news platforms such as social media, it is important to maintain a company’s reputation at all times, especially during a crisis situation. How important is a company’s prior reputation, the CEO’s visibility and immediate response to a crisis? To answer these questions I read an academic journal article. I chose the following article:

Turk, J. V. S., Jin, Y., Stewart, S., Kim, J., & Hipple, J. R. (2012). Examining the interplay of an organization. Public Relations Review, 38(4), 574-583.

Method

The researchers used an experimental design to find out how important these three factors are in maintaining a company’s publics during a crisis. The three factors looked at in this study are prior reputation, CEOs visibility, and immediate response to a crisis. Using actual organizations and crises, researchers designed a 2 (reputation: good vs. bad) × 2 (crisis response: apologetic vs. defensive) × 2 (CEO visibility in immediate crisis response: visible vs. invisible) experiment to examine the variances in stakeholders’ attitudes and behavioral intentions toward a company after being exposed to online video that delivered a corporate crisis response. The researchers used 102 people for this study. Each participant received each of the eight conditions for each of the three variables.

    • To develop the stimuli, they first identified a pool of corporations with good and bad reputations, based on the most recent Reputation Quotient survey.
    • Second, they examined recent crises that had happened to these identified corporations.
    • From there, one of the researchers searched online and obtained original crisis news videos from major news networks. Video editing was conducted to ensure

1.) The condition combinations were reflected in each crisis news video
2.) Possible confusing variables were minimized
3.) The length of all videos was similar (ranging from 1 minute to 1 minute and 20 seconds)

        • The selection of the final experimental video scenarios were uploaded onto YouTube.
        • The experiment was administered in classrooms and on average took 50 minutes to complete.
        • Both before and after viewing each video, each student completed a print questionnaire.
        • Each item was measured on a 7-point Likert-type scale where 1 = strongly disagree and 7 = strongly agree.

Results

Research Question: Which, if any, is the markedly best combination of reputation, crisis response, and CEO visibility in immediate crisis response?

          • Participants reported more positive attitudes toward companies with a good reputation than those with a bad reputation.
          • Participants reported more favorable purchasing intentions toward companies with good reputations than those with bad reputations.
          • Participants reported more positive attitudes toward companies using an apologetic crisis response than those using a defensive response.
          • Participants reported more positive attitudes toward companies in which the CEOs were visible in the immediate crisis response.
          • Participants reported both the most positive attitudes and most positive purchasing behavioral intentions toward companies with a good reputation that used a defensive crisis response.
          • Participants reported both the most positive attitudes and most favorable purchasing behavioral intention toward companies with a good reputation and with a CEO visible in immediate crisis response.
          • Participants reported both the most positive attitudes and the most favorable purchasing behavioral intention toward companies with a good reputation that used a defensive crisis response and with a CEO that was visible in immediate crisis response.

Limitations

One limitation of this study is that the sample group was a group of undergraduate college students. In future research conducting the experiment with a broader age range of people could provide more accurate results. Lastly, looking at other factors that influence a public’s behavior after a crisis besides the three main topics focused on in this study could enhance the results of the research.

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