EXPLORING HOW TWO-PHASE CRISIS RESPONSE STRATEGIES
INFLUENCE PUBLIC PERCEPTIONS OF AN ORGANIZATION
IN A CORPORATE SOCIAL RESPONSIBILITY-RELATED CRISIS
By
Shu (Karen) Zhang deGategno
A Capstone Project
Presented to the Faculty of the School of Communication in Partial Fulfillment of the
Requirements for the Degree of Masters of Arts in Strategic Communication
Supervisor: Dr. Joseph Erba
American University
April 24, 2014
© COPYRIGHT
Shu (Karen) Zhang deGategno
2014
ALL RIGHTS RESERVED
ABSTRACT
Theories of crisis communication have developed tremendously in the past ten
years and have helped crisis communication practitioners rationally handle crisis
situations. These existing theories largely focus on planning single-phase response
strategies to crises. In practice, however, a crisis usually involves several, different phases
due to changing events, responses and new public reactions over time.
This study aims to test the crisis response strategies of the most dominant crisis
communication theory, Situational Crisis Communication Theory’s (SCCT), in two phases of
responses to a crisis scenario related to corporate social responsibility (CSR). Through an
experiment with 97 participants, this study seeks to explore the relationship between an
organization’s initial and later crisis responses and public perceptions of the organization
in terms of perception of crisis response, customer treatment, organization and the CSR
initiative.
The results of the experiment indicate that SCCT’s different levels of acceptance are
limited to measuring the acceptance of crisis responses and are not able to measure overall
perceptions of an organization. Separating perceptions into four dimensions provided a
more comprehensive picture of how the public perceives crisis responses. For instance, an
excuse response can be the most effective response strategy in certain circumstances. A full
apology response is not recommended in some situations. Crisis responses of no comment
or denial are so publicly unacceptable that when an organization responds with either of
these strategies, compensation has to be made in order to improve public perceptions of
the organization.
Despite some limitations, this study contributes to understanding public
perceptions of organization during crises. Specifically, its main contribution is its
experimental design using two-phase crisis responses. Participants perceive two different
responses at two different times about the same organization during the same crisis. By
taking different phases of crisis responses into account, identifying the changes of public
perception and quantifying their effects, this study expands on existing crisis
communication theories and adds practical knowledge for dealing with real-world crises.
Contents
Acknowledgement................................................................................................................................................................... ii
List of Tables............................................................................................................................................................................. iii
Introduction ............................................................................................................................................................................... 1
Literature Review .................................................................................................................................................................... 5
Defining Organizational Crisis....................................................................................................................................... 5
Responding to a Crisis ...................................................................................................................................................... 6
Corporate Social Responsibility.................................................................................................................................... 7
Relationship between CSR and Crisis ......................................................................................................................... 9
Situational Crisis Communication Theory.............................................................................................................. 12
Research Question and Hypotheses .............................................................................................................................. 16
Methods ..................................................................................................................................................................................... 18
Overview .............................................................................................................................................................................. 18
Participants ......................................................................................................................................................................... 18
Recruitment ........................................................................................................................................................................ 19
Experimental Procedures .............................................................................................................................................. 19
Measurement...................................................................................................................................................................... 21
Consent ................................................................................................................................................................................. 22
Privacy................................................................................................................................................................................... 22
Data storage ........................................................................................................................................................................ 22
Ethical concerns ................................................................................................................................................................ 23
Reliability & Validity........................................................................................................................................................ 23
Results ........................................................................................................................................................................................ 24
Discussion ................................................................................................................................................................................. 30
Conclusions .............................................................................................................................................................................. 33
Recommendations............................................................................................................................................................ 34
Implications ........................................................................................................................................................................ 36
Limitations........................................................................................................................................................................... 38
Future Research ................................................................................................................................................................ 39
References ................................................................................................................................................................................ 41
Appendices ............................................................................................................................................................................... 46
Stimuli ................................................................................................................................................................................... 46
News Story Questionnaire ............................................................................................................................................ 52
General Questionnaire .................................................................................................................................................... 54
i
Acknowledgement
I would like to thank my research professor and mentor, Dr. Joseph Erba, who was
always available to exchange ideas and discuss my research with me. He walked me
through the whole research process from the very beginning till the very end with great
patience and understanding.
I would like to thank my husband Patrick deGategno. His advice and suggestions
were extremely valuable in developing and executing this study. I certainly cannot make
this achievement without his full support, love, and care.
Thanks to my mother Xiufang Tang, who has and continues to give me all the help
and support she can. And finally, thanks to my daughter, Alexandra. She is the reason of
why I do what I do.
ii
List of Tables
Table 1: SCCT Crisis Response Strategies ................................................................................................. 13
Table 2: Crisis Response Strategies by Level of Responsibility Acceptance ............................... 14
Table 3: Four Conditions of Stimuli in This Study ................................................................................. 20
Table 4: Number of Participants in Four Conditions ........................................................................... 24
Table 5: Comparisons of Condition 2 (Denial – Excuse) ..................................................................... 27
Table 6: Comparisons of Condition 3 (Excuse – Full Apology) ........................................................ 27
Table 7: Comparisons of Condition 4 (Full Apology - Compensation) .......................................... 27
Table 8: Recommended Second Phase Responses based on Results of This Study ................. 36
iii
Introduction
Situational Crisis Communication Theory (SCCT) is considered a dominant
organizational crisis theory (Liu, Austin & Jin, 2010). It takes an organization’s previous
reputation into consideration during a crisis and gives crisis managers a convenient
schema for identifying types of crises in order to craft response strategies intended to
minimize the damage to the organization’s image and reputation (Coombs, 2007). SCCT’s
schema though was developed according to a series of experimental studies of static crises,
or crisis situations that do not change over time. SCCT works well theoretically, but it has
only been tested under conditions of such static crises. Crises rarely remain static. The
theoretical framework needs to be further explored to match the dynamic conditions of
crisis situations, crisis responses and changing public perceptions.
In practice, a crisis usually evolves into different phases because of a string of new
events, organizational responses and public reactions. For example, Malaysian Airlines’
MH370 airplane disappeared on March 14, 2014 and still cannot be found at the time of
this writing. This crisis for Malaysian Airlines has involved several phases, and could
potentially involve more before it is resolved. In phase one, the airline and the Malaysian
government did not respond immediately to the plane’s disappearance, which caused the
public to speculate while waiting for a response. In phase two, the airline and the
government began sharing a wide variety of information and publicly speculated on what
might have happened to MH370. These responses caused the families and the public to
accuse the airline and the government of hiding the truth, which further damaged their
credibility. In phase three, Malaysian Airlines and the government judged without any
evidence that “it had to be assumed ‘beyond reasonable doubt’ that the plane was lost and
1
there were no survivors” (BBC, 2014a). This “conclusion” was deemed by the global public
to be unsubstantiated and irresponsible, severely damaging the already tarnished
reputations of the airline and the Malaysian authorities (BBC, 2014b). Currently, the crisis
has achieved a fourth phase in which international search teams including Australia, China,
Japan, Malaysia, New Zealand, South Korea, the United Kingdom and the United States are
still making their best efforts to search for the missing airplane (BBC, 2014b). This
multinational search effort makes the previous Malaysian response appear even more
irresponsible by comparison.
In a dynamic crisis such as this which features multiple phases, organizations
cannot rest upon a single response and must respond to each phase if they hope to salvage
their public reputation. How should an organization craft its response strategies in each
phase? How does public perception of an organization’s previous response affect
subsequent perceptions of the organization in later phases? How should the organization
respond in order to improve the public’s previous perception towards the organization? In
the Malaysian Airlines case, what should the airline have done in response to the incident
from the beginning, and how would a different initial crisis response have influenced the
airline’s future response(s)? Existing crisis communication theories do not appear capable
of answering these questions for the following four reasons:
First, most crisis communication studies focus on the business side of the crisis
asking how organizations craft a response that will alleviate the crisis and minimize the
damage to operations (Bergman, 1994; Sturges, 1994). Crisis responses change public
impressions of organizations, but these are not simply from bad to good or from concern to
confidence.
2
Second, studies focusing on how the public reacts to an organization’s crisis
response only measure public perceptions of the organization’s general response during a
single phase of the crisis (Dean, 2004; Coombs, 2007). These studies do not seem to
account for the reflexive communication inherent in the supply–demand relationships
organizations have with their stakeholders and the public. These studies instead appear to
assume that crisis responses are transmissions to the public, that crises remain static, and
that an organization’s response will remain unchanged. In practice, however, like the
Malaysian Airlines case, crises often have several phases, and organizations have to
respond at each phase as the crisis – and the public’s perceptions of the organization –
changes.
Third, crisis case studies offer valuable insights for crisis communicators in terms of
lessons learned and best practices, but crisis responses are highly contextual, no two crises
are alike, and past experience is not uniformly applicable. There are case studies that
reflect changes of stakeholder perceptions during a particular crisis (Graham & Greenberg,
2002; Klein & Dawar, 2004). Theories such as Image Restoration Strategies (Benoit, 1995,
1997) and Impression Management Strategies (Allen and Caillouet, 1994) are drawn from
previous crisis incidents in which an organization in crisis either succeeded or failed in
salvaging its reputation. These studies and theories, however, do not offer a framework for
crisis practitioners to follow in order to either forecast public reactions or plan a dynamic
organizational response widely applicable to a variety of crises.
Lastly, SCCT, the most dynamic crisis communication theory available to
practitioners, does not as yet appear to account for changes in public perceptions during
multiphase crises. Because SCCT is an “audience-centered approach to crisis
3
communication” (p. 143) and relies on experimentation rather than case studies, it is a
significant improvement to other theories. SCCT offers guidance to crisis practitioners for
mapping crisis situations using three important considerations: initial crisis responsibility,
crisis history and prior relational reputation (Coombs, 2007). None of these considerations,
however, relates to the organization’s previous crisis response, and the theory itself seems
more focused on single-phased crisis responses.
There appears to be no research yet conducted that uses SCCT in the context of
public reactions to organizations’ crisis responses during different crisis phases. Studies of
this sort are badly needed in order to provide recommendations on situations like the
Malaysian Airlines’ to crisis managers. This is the deficit in crisis communication that this
research hopes to address.
This study is designed to test SCCT response strategies in two phases of responses
to a crisis scenario related to corporate social responsibility (CSR). The researcher seeks to
explore the relationship between an organization’s initial crisis response and later crisis
response and how they affect public perceptions of the organization. More specifically, this
study explores how public perceptions of the organization are affected by an organization’s
two-phase responses to a crisis scenario related to CSR. Through an experiment involving
97 participants, this study measures changes in public perceptions toward an organization
across four variables, including perception of the organization’s crisis response, perception
of the organization’s treatment of its customers, perception of the organization itself, and
perception of the organization’s CSR initiative.
4
Literature Review
Defining Organizational Crisis
Researchers have developed multiple definitions of organizational crises. Coombs
(2007b), however, has synthesized a definition which attempts to capture the common
characteristics other authors have used to describe this type of crisis (p. 3). Coombs
defined an organizational crisis as “the perception of an unpredictable event that threatens
important expectancies of stakeholders and can seriously impact an organization’s
performance and generate negative outcomes” (p. 2).
A few unique characteristics distinguish organizational crises from other events.
Coombs (2007b) notes for instance that a crisis is perceptual. Whether a company is in
crisis depends on whether stakeholders perceive an event is a crisis. “If stakeholders
believe an organization is in crisis, a crisis does exist, and stakeholders will react to the
organization as if it is in crisis” (p. 3). Other studies have shown that the causes of crises are
closely linked to the relationship between the organization and its stakeholders or the
general public. Dionisopolous and Vibbert (1988) assert that organizations have a public
persona and are generally perceived as individuals by their stakeholders and the public. In
this sense, a crisis primarily embodies an attack on the character of the organization.
Coombs (2007b) further notes, “Crises can violate expectations that stakeholders
hold about how organizations should act” (p.3). In a case study, Ice (1991) expands on this
idea, contending that organizations serve the expectations of a variety of stakeholders, not
some monolithic, homogenous public having only one relationship with an organization.
Instead, stakeholders have different interests, expectations, and relationships with the
organization. Thus, the stakeholders’ perceptions of a crisis depend on their existing
5
expectations of the organization and their varying interests in the crisis. As such, different
stakeholders will be affected in different ways by the crisis. Relatedly, Hobbs (1995) notes
that a crisis can be anything that damages or breaks the relationship between the
organization in crisis and its stakeholders.
Hearit (1994, 1995) defines an organization’s relationship with its stakeholders in
terms of social legitimacy, the match between an organization’s values and its stakeholders’
values. A crisis can be a threat to the organization’s social legitimacy, i.e. a disruption
perceived by the stakeholders in the match between theirs and the organization’s values.
This social legitimacy violation is a form of character attack which prompts an organization
to defend itself and repair its character (Hearit 1994 and 1995).
Responding to a Crisis
Any crisis response has as its ultimate goal restoration of the company’s image
(Allen and Caillouet 1994; Coombs 2010; Hobbs 1995). Companies use crisis response
strategies to “repair the reputation, to reduce negative affect and to prevent negative
behavioral intentions” (Coombs, 2007a. p.170).
Case studies have served as the primary method researchers have used to develop
crisis response theories. Different crisis communication researchers developed different
crisis response approaches based on case studies. For example, Allen and Caillouet (1994)
used impression management and account research – the research of messages that
designed to explain the event and influence perceptions of offending organization and
developed a list of 16 impression management strategies. Benoit (1995) similarly studied
apologia and account to develop 14 image restoration strategies. Both of these two sets of
6
strategies aimed to be used by the organization to shape the public reputation by managing
impressions of a crisis and repair reputational damage from a crisis (Coombs, 2007b).
Coombs (2007b), however, developed SCCT, which moves beyond the typical case
study approach to conduct experimental research and develop an “audience-centered
approach to crisis communication” (p.143). As will be shown later in the literature review
section, SCCT is designed to facilitate company efforts to determine its crisis responsibility
by evaluating the reputational threat (i.e. the situation) it faces and create crisis response
strategies based on the accountability it must assume in accordance with its crisis
responsibility (Coombs, 2007b).
There appears to be little experimental research conducted in support of crisis
response theories. One crisis communication experiment, however, successfully linked how
stakeholders’ perceptions of a firm in crisis are influenced to three factors: (1) the
companies’ reputation for social responsibility prior to a crisis, what Hearit (1994,
1995)would refer to as its prior social legitimacy; (2) the company’s response to the crisis,
its self-defense; and (3) their culpability for the crisis (Dean 2004). Dean found that each of
these factors has a direct relationship to stakeholder perceptions of the organization in
crisis, with reputation having the greatest effect and response having the least on the
stakeholders’ perceptions of the firm (Dean 2004). These factors clearly reflect and
reinforce Coombs’ research results, as well as his theory.
Corporate Social Responsibility
From its roots in business practices going back to the 1950s to the present, CSR as a
concept has linked organizations’ impact on society to their public reputation and overall
7
business operations. Yet there remains no clear definition of the concept found in any
scholarly study (Motwani, 2012). In the 1950s, CSR was initially referred to as social
responsibility (SR) by authors such as Howard R. Bowen because as the concept of
corporation had not yet fully developed. In the 1960s, authors such as William C. Frederick
and Joseph W. McGuire defined SR as “…certain responsibilities to society which extend
beyond…” a corporation’s economic and legal obligations (McGuire, 1963. p. 144). In the
1970s, scholars began to assert that companies could only be judged socially responsible
on the basis of “the actual policies with which they were associated” (Heald, 1970. p. xi), or
rather on the consequences of their business practices for society. Scholars in the 1970s
also began to contend that social responsibility was a long-run profit maximizer: “The
social responsibility of business is to increase its profits” (Friedman 1970).
From then on until the 1990s, further empirical research was conducted on CSR.
However, this research has not moved beyond the conclusions of scholars in the seventies.
As Carroll’s (1991) research indicates, the concept of CSR links the success of the
companies’ business operations to its public reputation by acknowledging that the
company has certain social obligations it must meet in order to maintain a positive public
image (p. 42).
Regardless of how CSR is defined, it is widely believed to include a key element that
is, CSR means going beyond what is required by law. It is more than a company’s own
interest and legal requirement, but an approach of doing well by doing good (McWilliams,
& Siegel, 2001).
It is increasingly popular in public relations for corporations to publicly claim their
business embodies corporate social responsibility (CSR) (Moir, 2001). Corporations that
8
accept these social responsibilities typically declare to the public that they promise to do so
and commit themselves to various public initiatives that are intended to prove their
sincerity to uphold these promises. By communicating good deeds, exerting considerable
positive influence on public opinion, corporations are rewarded for doing well by
embedding CSR in the business operation and enhancing people’s perceptions of the image,
reputation and credibility (Pfau et al., 2008).
For example, each focus area of Wal-mart’s CSR initiative can be linked to its
business practices. Wal-mart’s CSR initiative focuses on “environmental sustainability”,
“U.S. manufacturing”, “women’s economic empowerment”, “hunger & nutrition”, “diversity
& inclusion”, “veterans & military families” and “responsible sourcing”. “Environmental
sustainability” and “U.S. manufacturing” basically depict Wal-mart’s perspective on its
manufacturing and production practices. “Hunger & nutrition” and “veterans & military
families” addresses its retail business. And as the largest private employer in the world
(CNN, 2012), “women’s economic empowerment” and “diversity & inclusion” constitute
declarations of its human resources policies. By consistently practicing CSR initiatives, Walmart is “proud” of its efforts “…to become a more sustainable and more responsible
business” (Wal-mart website).
Relationship between CSR and Crisis
From a public relations perspective, CSR, however it is defined, is clearly an effort by
organizations to publicly project an ideal image of themselves as being socially responsible
(Batruch, 2011; Klein & Dawar, 2004). CSR is thus one aspect of an organization’s image
branding strategy, and like branding, is designed to establish and enhance an
9
organization’s public reputation (Pfau et al., 2008). CSR initiatives accomplish this ultimate
goal by managing public impressions of the organization and its business in order to
influence the public to perceive the organization’s business activities as good for society
(Klein & Dawar, 2004). In cases such as Wal-mart’s, which Coombs and Holladay (2006)
studied, CSR initiatives create a “halo effect” that “shield” companies from having
stakeholders “automatically assume the worse and assign a high amount of crisis
responsibility” in crisis situations (p. 134). In this sense, CSR seems to be a practical tool in
crisis communication to reduce the organization’s crisis responsibility and ease the tension
between the organization and its stakeholders via establishing a good organizational
reputation.
A CSR initiative appears to reduce the company’s exposure to risks of crises. Taking
into consideration various social issues through the organization’s business operations
enables the organization “to anticipate potential risks, put in place mitigating measures,
and align itself with a growing number of stakeholders” (Batruch, 2011). Thus, CSR seems
to be a measure undertaken by a company to minimize the company’s exposure to
potential future crises that could disrupt business and hurt profits.
Sometimes, however, CSR initiatives can become part of or even create a crisis.
When businesses accept their social obligations and then are involved in some incident that
public perceives has violated the business’ social obligations, CSR can backfire and threaten
the business’ reputation.
The possibility of this happening with a CSR initiative depends on how the business
and the public jointly define the business’ social responsibilities. For example, CSR Europe,
a membership-based organization of over 5,000 companies across the world aiming to
10
“bring the CSR agenda forward”, looks at these following areas in their reports and guides
(CSReurope.org):

Organizational accountability, including CSR strategy and corporate governance,
reporting and disclosure, and product and services.

Environment, including resource efficiency, energy and climate change,
environment protection and biodiversity.

Human rights, including supply chain and procurement, child and compulsory
labor, non-discrimination, and freedom of association.

Community/society, including community impact/engagement, stakeholder
engagement, education, health and wellbeing, and poverty alleviation initiatives.

Labor practices, including employment, training and education, diversity and
equal opportunities, health and safety, and active ageing.

Sustainable living in cities, including inclusive business models and sustainable
lifestyle.
Such a broad set of social responsibilities opens CSR Europe members to a wide
array of possible crises that have a CSR component to them. A few examples of crises can be
identified that violate the social obligations to which CSR Europe companies commit
themselves:

Environmental crisis: BP oil spill (Cherry & Sneirson, 2011).

Employee and labor crisis: FoxConn employee suicide cases (Xu & Li, 2013).

Organizational accountability: Toyota 2010-11 recalls (Andrews et al., 2011).
11
Situational Crisis Communication Theory
Based on attribution theory, SCCT is intended to be an evidence-based framework
for crisis managers can use during a crisis to identify factors influencing the crisis and how
stakeholders perceive the situation (Coombs, 2007b). It is an “attempt to provide crisis
managers with a resource for making informed decisions concerning ways to protect the
organizational reputation during a crisis” (Coombs & Holladay, 2002. p. 182) “The crisis
situation is the focal point of SCCT. The amount of reputational damage a crisis situation
can inflict drives the selection of the crisis response strategy.” (Coombs, 2006. p.243)
SCCT developed a crisis assessment system having two steps. First, assess the type
of crisis the organization faces (Coombs, 2007b). SCCT divides crises into three groups: (1)
victim, where the organization takes little responsibility and further, the organization itself
is the victim of the crisis; (2) accidental, which involves minimum responsibility from the
organization and is mostly contributed by other factors such as weather; (3) preventable
crisis, which makes the stakeholders strongly believe that it is the organization’s
responsibility for the crisis. These specific types of organizational crises produce “…specific
and predictable levels of crisis responsibility – attributions of organizational responsibility
for the crisis” (Coombs, 2007a. p.168).
Second, assess the threat of the incident to the organization’s reputation based on
two intensifying factors, which contribute to stakeholders’ perception of a crisis: the
organization’s history of crisis and its prior negative reputation (Coombs, 2007b). If either
of these two factors exists, people will attribute greater responsibility to the organization
for the crisis.
12
With the results of this crisis assessment, the organization can select the crisis
response strategy recommended by SCCT. These strategies are organized according to
whether the intent of the strategy is to change public perceptions of the crisis or of the
organization in crisis (Coombs, 2007b). The strategies are grouped into four postures
described in Table 1.
Table 1: SCCT Crisis Response Strategies
Denial Posture
Attack the accuser: Crisis manager confronts the person or group claiming
something is wrong with the organization
Denial:
Crisis manager asserts that there is no crisis.
Scapegoating:
Crisis manager blames some person or group outside of the
organization for the crisis.
Diminish Posture
Excuse:
Justification:
Rebuild Posture
Compensation:
Apology:
Crisis manager minimizes organizational responsibility by
denying intent to do harm and/or claiming inability to control
the events that triggered the crisis.
Crisis manager minimizes the perceived damage caused by the
crisis.
Crisis manager offers money or other gifts to victims.
Crisis manager indicates the organization takes full
responsibility for the crisis and asks stakeholders for
forgiveness.
Bolstering Posture
Reminder:
Tell stakeholders about the past good works of the organization.
Ingratiation:
Crisis manager praises stakeholders and/or reminds them of
past good works by the organization.
Victimage:
Crisis managers remind stakeholders that the organization is a
victim of the crisis too.
Table Source: Coombs, 2007b. p.140
SCCT also categorizes response strategies to reflect the amount of responsibility
each strategy is perceived to accept (Coombs, 2010). These are outlined in Table 2.
13
Table 2: Crisis Response Strategies by Level of Responsibility Acceptance
1. Full Apology: organization takes full responsibility for crisis Very High Acceptance
and requests forgiveness from stakeholders. Can include
compensation.
2. Correction Action: organization takes steps to repair the
High Acceptance
crisis damage and/or prevent a recurrence of the crisis.
3. Ingratiation: the organization reminds stakeholders of past
Mild Acceptance
good works by the organization or praises the stakeholders
in some fashion.
4. Justification: organization tries to minimize perceived
Mild Acceptance
damage related to crisis. Includes claim that damage was
minor or victim deserved it.
5. Excuse: organization tries to minimize its responsibility for
Mild Acceptance
the crisis. Includes denying intent or control over the crisis
event.
6. Denial: organization maintains that no crisis occurred.
No Acceptance
Response may include efforts to explain why there was no
crisis.
7. Attack the Accuser: organization confronts people or group
No Acceptance
who say that a crisis exists. Response may include a threat
such as a lawsuit.
Table Source: Coombs, 2010. p.159
This categorization explicitly indicates that “full apology” yields “high acceptance”.
With more and more empirical research being conducted, researchers overly promote
apology as the response (Coombs & Holladay, 2008). However, apology is the organization
admitting full responsibility for the crisis. It can be used “as evidence in court to win
lawsuits against the organization” (p. 253). With this in mind, Coombs and Holladay
attempted to clarify apology’s role compared with responses of sympathy and
compensation, in order to offer alternative response strategies to crisis managers to avoid
expensive lawsuits. The result indicate no significant difference in the effects of apology,
compensation and sympathy on public perceptions.
14
SCCT explains the dynamic between a company’s crisis response and stakeholder’s
perception to the organization in theoretical detail. As such, SCCT is adopted as the
theoretical framework for this capstone research.
The present experiment is designed with two phases of stimuli, aiming to measure
the change of perceptions according to different crisis responses. The first phase of stimuli
will test whether or not the level of responsibility acceptance is valid in a CSR related crisis;
the second phase of stimuli will be changed upon the levels of responsibility acceptance.
The result is expected to show how the public’s perceptions are changed in this CSR related
crisis considering the factor of the initial crisis response.
15
Research Question and Hypotheses
This study seeks to answer how public perception of an organization changes
according to the organization’s different responses to a crisis involving its CSR initiative.
This study first will test participants’ perceptions of the organization after giving its firstphase crisis response. The crisis response will then change based on SCCT’s level of
acceptance of different crisis response strategies after the first organization response, and
then participants will state their perceptions of the organization after the second-phase
crisis response. The changes between these two responses will be analyzed to answer the
research question.
SCCT predicts that excuse response strategy has higher level of acceptance than
denial. While “denial” has acceptance level of “no acceptance”, “excuse” has the level of
“mild acceptance” (Table 2). Hypothesis 1 is based on this conclusion.
H1: Participants will display more favorable overall perceptions of the company
after reading that the company presented its excuse for an incident than after reading that
the company denied being involved in the incident.
Hypothesis 2 is based upon the same level of acceptance table. Based on this table,
full apology response strategy has higher level of acceptance than excuse. “Full apology’s”
acceptance level is “high”, whereas “excuse” is “mild” (Table 2).
H2: Participants will display more favorable overall perceptions of the company
after reading that the company presented its full apology for an incident than after reading
that the company presented its excuse for the incident.
While SCCT predicts the level of acceptance of different crisis response strategies,
relevant studies have also explored the different perceptions to responses in the same
16
acceptance level. For instance, Coombs & Holladay (2008) found that among all response
strategies, full apology is popularly recommended by crisis communication researchers;
however, there is no significant different effectiveness between full apology and
compensation (Coombs & Holladay, 2008). The third hypothesis was made upon this
finding.
H3: Participants will display similar overall favorability towards the company after
reading that the company provided compensation in an incident than after reading that the
company presented its full apology for the incident.
Since Table 2 lists that full apology yields the highest level of acceptance, it seems
natural to make the following hypothesis:
H4: After reading the first story, participants who read the response of full apology
will display the highest acceptance comparing with participants who read the responses of
giving no comment, denial or excuse.
The results of this study are intended to provide crisis managers practical
recommendations to change or improve the crisis response strategies based on the change
of public perception to the organization, which is influenced by the organization’s previous
crisis response.
17
Methods
Overview
This experiment study explores potential changes to public perceptions based on
changes in a realistic, fictional company’s responses to a realistic, fictional CSR crisis. There
are five different responses from the company to the crisis, which are arranged in different
combinations to create four treatment conditions. One condition only has two phases of
crisis responses (table 3). All crisis responses are based on the level of public acceptance to
the responses (table 2) (Coombs, 2010).
Participants were randomly assigned to one of four conditions. They were exposed
to one (condition 1) or two stories (condition 2,3 and 4) about the same company
responding in different ways to a crisis, and answered identical set of questions after
having read each story.
Comparing the changes of the answers to the questions is the metrics to measure
the RQ.
Participants
The participants in this research belong to the public who will be affected by the
CSR crisis. In this particular crisis scenario created, the potential participants must be able
to see themselves as a local community member who consumes natural gas.
There were 97 participants who completed the questionnaire. The age range is from
18 to 77 (M=34.49, SD=13.098). Within these participants, majority of them are Caucasian
(72.2%, N =70), versus 11.3% Asian (N=11), 6.2% black (N=6), 4.1% Hispanic (N =4), and
6.2% reported “other” (N =6). Gender wise, 73.2% were female (N =71), 25.8% were male
18
(N =25), and 1% self-identified as “other” (N =1). Vast majority of participants (90.8%)
held degrees of college and above including BA, BS, MA, MS, PhD, and professional graduate
degrees (N=88), whereas 6.2% completed high school education (N=6), and 3.1%
completed 3-year College (N=3).
Recruitment
The majority participants were recruited online via Facebook and researcher’s
personal email contacts. Some initial participants “shared” the research on their own
Facebook page, and some of them forwarded the research to their own email contacts.
Recruitment also replied on a convenient sampling. Twenty students from American
University’s Crisis Communication class instructed by Prof. Corinne Hoare hand=filled and
completed questionnaires during class.
In the consent form, the participants were told that the research was aimed at
understanding their perception of one or two news stories without being told what
specifically the news stories were about. The purpose of the study was debriefed to the
participants upon the completion of the questionnaire.
Experimental Procedures
The fictitious story describing a hypothetical corporation is created based on a real
company’s CSR practice information. The corporation is a gas company’s local branch office
in the town of “Danville”, which can be seen as any town in the United States. The name of
the business, GAS Corp is fabricated. Such a company was chosen because it is a utility
company. Most adults can easily identify such a company with their own life experience
19
and could be affected by the actions of such a company. The scenario is written in a news
article format. The company’s responses to the crisis in every phase are also written in
news article formats.
Participants were randomly assigned to one of four conditions in which they read
one or two stories corresponding to different types of crisis responses, which are outlined
in Table 3.
Table 3: Four Conditions of Stimuli in This Study
Story 1
Story 2
Condition 1
no comment
N/A
Condition 2
Denial
Excuse
Condition 3
Excuse
Full apology
Condition 4
Full apology
Compensation
After reading the news stories, participants were asked to answer questions about
perceptions toward the responses, how the company treats their customers, the company
itself, and its CSR initiative. These items are measured on a 7-point semantic scale ranging
from 1 (strongly disagree) to 7 (strongly agree).
Except for the first group as control group, all other groups were given a new
stimulus as the “company” changed its response to the scenario. Participants in these three
groups were asked the same questions again. All participants were asked general questions
about how they generally perceive CSR and demographic questions.
Questionnaire was available online via Qualtrics from March 20, 2014 to March 30,
2014. It took about 10-15 minutes for each participant to finish the questionnaire. Upon the
completion, the participants were thanked and debriefed on the true purpose of this study.
20
Measurement
The scale is adapted from previous studies measuring organizational reputation,
crisis responsibility (Coombs & Holladay, 1996) and CSR (Tucker, 2009). Some items are
adapted from an Organization-Personal Relationship (OPR) study (Kim, 2001).
There are four themes as dependent variables. They are: perception of the
responses, perception of customer treatment, perception of the company, and perception
of the company’s CSR initiative. Control variable is that the company gives no comments.
In the theme of perception of responses (3 items), sample items look like this: “I
think GAS Corp’s response is honest.” (Coombs & Holladay, 1996) and “GAS Corp’s
response can solve its problems effectively.” In the theme of perception of how the
company treats its customers (5 items), sample items include: “GAS Corp is concerned with
the well-being of its public.” (Coombs & Holladay, 1996) and “I feel customers are
important to GAS Corp.” There are 2 items in the theme of perception of the company, they
are “I feel GAS Corp has positive corporate culture.” and “GAS Corp represents a good
business.” (Kim, 2001) And sample item in the theme of perception of the company’s CSR
initiative (3 items) looks like this: “GAS Corp’s social responsibility campaigns tend to do
good things for the community.” and “GAS Corp is committed to take social responsible
actions.” (Tucker, 2009)
In the general questionnaire, all participants were asked control questions (4 items)
including “How much do you care to know about community news?” and “I understand the
concept of Corporate Social Responsibility.” Also some questions about demographic (4
items) such as gender, ethnicity, age and education.
21
Consent
There was a page of text soliciting the consent of each participant at the beginning of
the questionnaire. The consent form included 10-15 minute time commitment, stating the
data will be confidential because all data will be stored in a secure location and no
information can be associated with individual respondents. The consent form also clearly
stated that participants are free to withdraw at any time and providing contact information
of the research, advisor and the IRB.
By choosing to continue the questionnaire, participants agreed with all the
information provided in the consent form.
Privacy
The data collection guarantees confidentiality because there were not any questions
asking for names, contact information, employer or anything that might reveal the identity
of the participants included. It was not possible to associate the answers with any specific
participants.
Data storage
Data was entered in a personal computer owned by the researcher, and then
transferred to a computer solely for analyzing data at American University by a researchonly flash drive. The computers are password-protected and the researcher only accesses
the internet on secure network. Data is going to be deleted two months after the
submission of the final paper.
22
Ethical concerns
This study has no potential ethical concerns or could cause any psychological risks
to the participants.
Reliability & Validity
Experimental research has been used repeatedly by both crisis communication
researchers and CSR researchers to measure perceptions of crisis responses, organization,
and CSR. In this research, several items are adapted from previous studies including
Coombs & Holladay (1996), Kim (2001) and Tucker (2009).
Cronbach’s alpha and correlations prove the reliability of all four themes:
perception of crisis response (α = 0.78), perception of customer treatment (α = 0.93),
perception of organization (correlations = 0.85) and perception of CSR (α = 0.91)
The RQ aims to measure participants’ changes of perception towards the company
based on different crisis response scenarios. The different phases of responses are based
on the level of acceptance in SCCT (Coombs, 2010) including “denial”, “excuse”, “full
responsibility” and “compensation”, with “no comment” as a control variable.
The researcher ensures the company’s response in the news stories were based on
Coombs’s (2010) definitions of each type of crisis response. Prof. Corinne Hoare, instructor
of Crisis Communication class at American University confirmed the validity of the crisis
responses.
23
Results
This study aims to measure the changes of public perceptions of four variables crisis response, customer treatment, organization and CSR, based on the responses the
organization (GAS Corp) presented through two news stories. The two phases of news
stories for all four treatment groups are shown in Table 4.
Table 4: Number of Participants in Four Conditions
Company Response
Story 1
Story 2
Treatment 1 (N =23)
no comment
N/A
Treatment 2 (N =24)
Denial
Excuse
Treatment 3 (N =26)
Excuse
Full apology
Treatment 4 (N =22)
Full apology
Compensation
Participants answered the same questions after reading each story. Facilitating data
analysis, participants’ answers to the second set of questions were cut and pasted below
the answers of the first set of questions. All the answers to the same questions were under
one column. A variable was created to attribute a nominal value to each of the seven stories.
This allowed for comparisons both within the three conditions with two stories, as well as
among the seven stories.
After testing the reliability of the items measuring each dependent variable,
composite scores were created for the dependent variables. They are: perception of crisis
response (3 items, α = .78), perception of customer treatment (5 items, α = .93), perception
of organization (2 items, r = .85, p <.001) and perception of CSR initiative (3 items, α = .91).
24
One-way ANOVAs were conducted to compare the effect of the company’s responses
on the four dependent variables – public perception of response, customer treatment,
organization, and CSR initiative between the first and second story in the three two-story
conditions. ANOVAs and Tukey’s post hoc tests revealed significant changes in participants’
perceptions in these three conditions between the two stories for all dependent variables.
All significant results reported are based on Tukey's post-hoc tests.
H1: Participants will display more favorable overall perceptions of the company
after reading that the company presented its excuse for an incident than after reading that
the company denied being involved in the incident.
ANOVA results showed that there was significant change of participants’ perception
of crisis response (F(6,160) = 15.16, p < .05). The significant change was also found for
participants’ perception of customer treatment (F(6,160) = 9.44, p < .001), for participants’
perception of organization (F(6,161) = 3.36, p < .01), also for participants’ perception of
CSR initiative based on individual story (F(6,160) = 3.71, p < .01).
Post-hoc results revealed that for the first variable - perception of crisis response,
participants reported statistically significant more favorable perceptions of the company
after having read the second news story in which the company presented its excuse for the
incident (M = 4.47, SD = 0.26) than after having read the first story in which the company
denied being involved in the incident (M = 3.26, SD = 0.26). The change was significant
(p < .05).
For the other three dependent variables – perception of customer treatment,
perception of organization and perception of CSR initiative, participants did not display
more favorable perception toward the company after having read the second news story in
25
which the company presented its excuse for the incident than after having read the first
story in which the company denied being involved in the incident. There was no
significance found in these three dependent variables (p > .05). (See Table 5)
The results proved that publics perceive a company’s excuse better than a denial in
crisis response. However, between the company responding to an incident with an excuse
and denying involvement with the incident, public perceptions toward how the company
treats its customers, the company itself and the company’s CSR initiative do not change.
Therefore, H1 was only partially supported.
H2: Participants will display more favorable overall perceptions of the company
after reading that the company presented its full apology for an incident than after reading
that the company presented its excuse for the incident.
Post-hoc results showed that for the first dependent variable – perception of crisis
response, participants reported significantly more favorable perception (p < .001) toward
the company after having read the second news story in which the company presented its
full apology for the incident (M = 5.24, SD = .25) than after having read the first story in
which the company presented an excuse for the incident (M = 3.89, SD = .25). The change
was significant (p < .05). (See table 6)
Participants also displayed more favorability (p < .05) toward the company in the
second dependent variable of perception of customer treatment after after having read the
second news story in which the company presented its full apology for the incident (M =
4.35, SD= .25) than after having read the first story in which the company presented an
excuse for the incident (M = 3.17, SD = .25).
26
In the variables of perception of organization and perception of CSR initiative, there
were no significant changes (p > .05) between given full apology and an excuse.
The results proved that public perceives a company’s full apology better than excuse
in the responses during a crisis, and the difference of these two responses make public
perceive differently on how the company treats its customers. Specifically, public perceive
that the company treats its customer better after being given a full apology than being
given an excuse to an incident.
However, between the company responding to an incident with full apology and an
excuse, public perceptions toward how the company itself and the company’s CSR initiative
still do not change. This hypothesis was also partially supported.
Table 5: Comparisons of Condition 2 (Denial – Excuse)
Dependent Variable
1: perception of crisis response
2: perception of customer treatment
3: perception of organization
4: perception of CSR initiative
Denial
M = 3.26, SD = .26
M = 2.61, SD = .26
M = 3.02, SD = .28
M = 3.13, SD = .28
Excuse
M = 4.47, SD = .26
M = 3.63, SD = .26
M = 3.63, SD = .28
M = 3.49, SD = .28
p
Full Apology
M = 5.24, SD = .25
M = 4.35, SD = .25
M = 3.98, SD = .26
M = 4.19, SD = .26
p
.020
.099
.711
.967
Table 6: Comparisons of Condition 3 (Excuse – Full Apology)
Dependent Variable
1: perception of crisis response
2: perception of customer treatment
3: perception of organization
4: perception of CSR initiative
Excuse
M = 3.89, SD = .25
M = 3.17, SD = .25
M = 3.33, SD = .27
M = 3.36, SD = .26
.003
.020
.582
.285
Table 7: Comparisons of Condition 4 (Full Apology - Compensation)
Dependent Variable
1: perception of crisis response
2: perception of customer treatment
3: perception of organization
4: perception of CSR initiative
Full Apology
M = 4.70, SD = .27
M = 4.00, SD = .27
M = 4.00, SD = .28
M = 3.77, SD = .28
27
Compensation
M = 5.24, SD = .27
M = 4.69, SD = .28
M = 4.43, SD = .29
M = 4.48, SD = .28
p
.788
.580
.934
.558
H3: Participants’ overall favorability towards the company after reading that the
company provided compensation in an incident and after reading that the company
presented its full apology for the incident will display no significant difference.
Results indicated that participants’ favorability toward the company in all four
dependent variables after having read the company compensated the victims and having
read being given full apology were not significant enough (p > .05) to be different, even
though the mean of compensation was slightly higher than full apology. Therefore, this
hypothesis is validated. (See Table 7)
H4: After reading the first story, participants who read the response of full apology
will display the highest acceptance comparing with participants who read the responses of
giving no comment, denial and excuse.
Post-hoc results showed that participants displayed more favorable perception (p
< .05) toward the company after having read the second story where the company
presented full apology (M = 5.24, SD = .25) or compensation (M = 5.24, SD = .27) than
having read the first story where the company made no comment (M = 2.54, SD = .27),
denied (M = 3.26, SD = .26) or gave an excuse (M = 3.89, SD = .25) for the incident.
Similar results were also found in the second dependent variable – perception of
customer treatment. Participants also displayed more favorable perception (p < .05)
toward the company after having read the second story where the company presented full
apology (M = 4.35, SD = .25) or compensation (M = 4.69, SD = .28) than having read the first
story where the company made no comment (M = 2.60, SD = .27), denied (M = 2.61, SD = .26)
or gave an excuse (M = 4.00, SD = .27) for the incident.
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However, full apology in the second story in both the variable of perception of
organization (M = 3.98, SD = .26) and variable of perception of CSR initiative (M = 4.19, SD
= .26) had insignificant effects after making no comment (M = 3.17, SD = .28 and M = 3.07,
SD = .29), denial (M = 3.02, SD = .28 and M = 3.13, SD = .28) and giving an excuse (M = 3.33,
SD = .27 and M = 3.36, SD = .26).
Instead, in both of these two variables, participants’ perceptions showed significant
changes (p < .05) only when the company compensated the victims in the second story (M =
4.43, SD = .29 and M = 4.48, SD = .28) or after having read that the company made no
comment (M = 3.17, SD = .28 and M = 3.07, SD = .29) or denied (M = 3.02, SD = .28 and M =
3.13, SD = .28). Full apology in the second story apparently did not make significant
changes in participants’ perceptions as expected. Also in both of these two dependent
variables, neither full apology nor compensation had a significant impact in the second
story after the company presented an excuse in the first story.
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Discussion
This study explores changes in public perceptions of an organization based on twophase responses given by the organization during a crisis. Both Dean (2004) and SCCT
stress that three factors affect the reputational threat an organization faces during a crisis:
crisis responsibility, reputation prior to the crisis and the organization’s history of crises.
This study shows that public perceptions of an organization embroiled in a two-phase
crisis are significantly affected by the organization’s previous response in the earlier phase
of the crisis. This is a new factor affecting the reputational threat an organization faces that
Dean (2004) and the SCCT do not address.
Specifically, participants better accepted an excuse only after they read about a
denial; participants better accepted a full apology only after they read about an excuse.
Interestingly, when participants were given different responses simultaneously after
reading about the incident, the response of full apology did not necessarily have the highest
acceptance. In terms of measuring the level of public perception of crisis response and
customer treatment, giving an excuse was just as sufficient as a full apology. This may have
occurred because in this particular scenario, the company’s crisis responsibility is
relatively low. Full apology also made a difference in comparison to any other response
during the first phase of the crisis in terms of getting better public perception of the
organization and its CSR initiative.
When the company followed an initial response of denial by offering an excuse,
participants seemed to accept the excuse better than the initial denial. This validates
SCCT’s acceptance levels of response strategies between a denial and an excuse; excuse
does have a higher level of acceptance than denial.
30
However, this study separated public perceptions into four variables, including
perceptions of crisis response, of customer treatment, of the organization and of the CSR
initiative. Excuse resulting in higher levels of acceptance than denial was only valid for the
first variable, perceptions of crisis response. It did not have a significant effect on any other
variables. In other words, even though the public seems to be more accepting of an excuse
than of a denial, this higher acceptance only improves public perceptions of crisis response.
It has no effect on public perceptions of the organization as a whole.
Similarly, according to SCCT, the public is more accepting of a company’s full
apology than of its excuse. This study’s results indicate that full apology yields a higher
level of acceptance only with regard to the variables of perceptions of crisis response and
perceptions of customer treatment. It did not affect the other two variables, perceptions of
the organization and perceptions of its CSR initiative. In other words, compared with an
excuse, full apology does lead the public to be more accepting of the company’s response,
and it does make the public believe that they are treated better as customers by the
organization. Full apology, however, does not improve public perceptions of the
organization as a whole or its CSR initiative.
Between responding with full apology and compensation, the experiment found that
after the company responded with a full apology in the first phase of the crisis, responding
in the second phase with compensation makes no further improvement to the public’s
overall perceptions of the organization. This could have two interpretations. On the one
hand, compensation in this particular scenario was specifically reimbursing victims’
medical expenses. This action might not have directly impacted study participants
31
themselves like full apology did. Therefore, participants may not “care” enough about
whether or not the company made compensation to result in a significant change in their
perceptions. On the other hand, this result may also suggest that publics strongly value
organizations admitting culpability for the genesis of a crisis at the outset, and that
spending money on compensating the public for the crisis may be an unnecessary further
step in terms of improving public perceptions of the organization.
The results also showed that, compared to the low acceptance responses of no
comment and denial, the only response having a significant impact on perceptions was
compensation. This finding is an interesting expansion on SCCT. While SCCT posits that the
no comment and denial have the lowest level of acceptance, it does not suggest how
organizations might change public perceptions after making these responses. The results in
this study indicate that in order to significantly improve public perceptions of the
organization or its CSR initiative after giving no comment or denial, an organization must
let the public know that it took at least some responsibility for the crisis and compensated
victims.
The results expanded upon SCCT in one further way. SCCT studies generally focus
on and measure public perceptions of crisis response strategies. As mentioned before, this
study separated public perceptions into four themes. Each theme was measured for the
organization’s different responses. The results of the experiment indicate that SCCT’s
different levels of acceptance are limited to measuring the acceptance of crisis responses
and are not able to measure overall perceptions of an organization. Separating perceptions
into four dimensions provided a more comprehensive picture of how the public perceives
crisis responses.
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Conclusions
This study provides strong evidence that SCCT response strategies are valid in
multi-stage crises, but certain results also indicate important limitations to SCCT’s utility.
First, when the organization enters a crisis with a previously good public reputation or is
believed by the public to have had good intentions, responding to a crisis with an excuse
can be as effective as a full apology or compensation in terms of maintaining positive public
perceptions of the organization. While this may seem like a blinding flash of the obvious,
the findings of this study imply that organizational crises do not happen in isolation. Rather,
organizations’ public reputations prior to a crisis directly affect public perceptions of the
organization during a crisis and influence the effectiveness of organizations’ crisis response
strategies. By correlation, an organization can improve its chances of weathering a crisis by
building and maintaining a positive public reputation when it is not in crisis. In this study,
CSR may have represented the company’s positive intention and influenced participants’
presumption of the company’s good public reputation. Participants tended not to assume
the worse of the company during a crisis due to its positive pre-crisis reputation, which is
the “halo effect” CSR brought to the company (Coombs & Holladay, 2006).
Second, SCCT holds that both no comment and denial responses are the least
acceptable responses companies can offer the public. This study found that when the
organization made no comment or denied involvement, the only response it could make in
the second stage of the crisis that would alter public perceptions of it was compensation.
Participants did not seem to accept a full apology if the company didn’t compensate the
victims. This finding implies that no comment and denial response strategies can be
potentially very costly gambits for organizations. These two strategies appear to be so
33
unacceptable to the public that companies using them early on could be left in later phases
of a crisis with few options other than full acceptance of liability, which makes them
vulnerable to costly litigation, and financial compensation. In other words, this finding
provides a more concrete idea of the low level of acceptance of no comment and denial
response strategies.
Third, concerning public perceptions of an organization’s treatment of its customers,
the effectiveness of responding with an excuse is as low as responses of no comment or
denial. An excuse may be effective in terms of salvaging the organization’s general
reputation in a crisis. When considering this type of response in light of how this
organization treats its customers though, participants felt that an excuse indicated that the
organization does not treat its customers well. Based on the crisis scenario in this
experiment, the only way for an organization to positively influence participants’
perceptions of customer treatment remains for the organization to offer a full apology
and/or compensate victims.
Fourth, when a company responds with a full apology in the first phase of the crisis,
compensation makes no further improvement to public perceptions towards the
organization. Full apology directly affects the public, whereas compensation gives money to
victims only and does not directly affect the general public.
Recommendations
The results of this study offer several interesting recommendations for crisis
managers. First, if the organization has given a full apology to the crisis, then compensation
34
does not seem to play an important role in terms of improving the public’s overall
perceptions toward the organization. Of note, in the scenario in this particular study, even
though compensating the victims does not change the public’s perception, it does not
necessarily mean that crisis managers should not cover the basic expenses of victims for
legal, ethical or other reasons. Not doing so could needlessly prolong the crisis.
Second, stakeholders and the public can be very forgiving to organizations in crisis
when the organization is has a good public reputation prior to the crisis. For such
organizations, the public would seem to accept a logical excuse as a reasonable crisis
response. Therefore, the organization does not really need to apologize. Since apology is in
part an admission of guilt for the incident and can be used as evidence against an
organization in lawsuits, this finding can help crisis managers avoid litigation resulting
from making unnecessary apologies.
Third, not commenting on a crisis or denying its existence are strongly not
recommended crisis response strategies. As Coombs (2007b) indicated, an organization is
in a crisis if the public perceives an incident as a crisis. This means that the organization
must somehow acknowledge that a crisis exists if it hopes to salvage its public image.
Furthermore, based on the results of this study, giving these responses at the onset of a
crisis will likely force an organization to make more costly responses than a simple full
apology, such as giving compensation, in later stages to change the public’s perception.
Finally, Table 8 outlines recommendations for second phase response strategies
based on the results of this experiment concerning public perceptions of an organization’s
initial crisis response.
35
Table 8: Recommended Second Phase Responses based on Results of This Study
DV1: perception of crisis response
DV2: perception of customer
treatment
DV3: perception of organization
DV1: perception of CSR initiative
Phase 1
Acceptance
Recommended
Response for Phase 2
No comment
low
Excuse
Denial
low
Excuse
Excuse
mild
Full Apology
Full apology
high
N/A
No comment
low
Compensation
Denial
low
Compensation
Excuse
mild
Full apology
Full apology
high
N/A
No comment
low
Compensation
Denial
low
Compensation
Excuse
mild
N/A
Full apology
high
N/A
No comment
low
Excuse
Denial
low
Compensation
Excuse
mild
N/A
Full apology
high
N/A
Implications
As a rare experiment designed to measure changes in crises featuring two phases,
this study considers realistic crises that commonly involve a series of evolving responses in
order to examine the relationship between public perceptions of an organization and its
36
crisis responses. The results offer general support for Coombs’s levels of acceptance to
organizations’ crisis responses (Coombs, 2010). The significant changes between stories in
the variable of perception of crisis response show that the acceptance of an “excuse” is
higher than a “denial”, a “full apology” is higher than an “excuse”. “No comment” and
“denial” have the lowest acceptance, while there is no acceptant change between “full
apology” and “compensation”. In certain circumstances brought on by the initial crisis
response, however, these response strategies do not generate levels of public acceptability
as described above. In this sense, the results of this study expand on SCCT, confirming or
explaining some phenomena that SCCT research has not yet addressed.
For example, SCCT explains that excuse yields mild acceptance by the public. This
study found that the effectiveness of an excuse depends on the timing and purpose of the
strategy. If the organization is believed to have good intentions going into a crisis, an
excuse can be very effective in recuperating the organization’s reputation. If the
organization initially responded with no comment or denied any involvement in the
incident, then an excuse will not be effective.
Also, according to SCCT, full apology and compensation have similar effects on
public perceptions of an organization. This study found that there are differences in their
effectiveness, but that these do not show until after an organization has initially offered the
public crisis responses with the lowest levels of acceptance. When this occurs,
compensation can significantly improve the public’s perception while full apology cannot.
More broadly, this study proves that organizational crisis reflect the reflexive
communication inherent in the supply–demand relationships organizations have with their
37
stakeholders and the public. In focusing designing organizational responses to static,
single-phase crises, previous crisis communications studies and theories appear to assume
that crisis responses are transmissions to the public, that crises remain static, and that an
organization need only concoct a single response strategy and stick to it. In countless real
world cases though, crises often have several phases, and organizations have to respond at
each phase as the crisis – and the public’s perceptions of the organization – changes.
Limitations
In the responses to the given crisis scenario, this study entails two stages of changes
in responses, which are designed to measure the participants’ change in perceptions. In
reality, there might be several stages of changes of responses that they can cause the public
change perceptions several times and eventually become unpredictable. This research
provides a simple direction of how the public might change their perception according to
the responses, but not necessarily concrete explanation of what the perception will be
when the crisis is over.
Another limitation of this study is that the company created in the scenario is
fictional. The participants do not have any personal relationship or emotional ties to the
company except those they imagine as a result of the fictional scenario. In this situation,
participants are less likely to respond as they would if this were a real crisis having
consequences for them or those close to them.
A third limitation to this study is that the study does not measure the effects of time
on participant responses. An actual crisis can often play out over a matter of days, weeks,
or months, and the duration of the crisis may have its own effects on public perceptions of
38
the organization in crisis. By contrast, this study’s crisis scenario is played out over the
length of time it takes a participant to read the stimuli and answer their questionnaire, ie
10-15 minutes. As a result, the responses of participants in this study are not affected by
the duration of the crisis.
Last limitation exits in the demographic of the participants of this research. Within
all 97 participants who completed the questionnaire, there were 71 female (73.2%), 70
Caucasian (72.2%), and 88 participants held degree of college and above (90.8%). The
large percentage of highly educated Caucasian female participants dominated the results.
Therefore, the results of this study may be biased and more likely to represent the opinions
of people in this particular demographic. More diverse participants are needed for future
researches.
Despite the above limitations, this study contributes to the understanding public
perceptions of organization during crises. Specifically, its main contribution is its
experimental design using two-phase crisis responses. Participants perceive two different
responses at two different times about the same organization during the same crisis. By
taking different phases of crisis responses into account, identifying the changes of public
perception and quantifying their effects, this study expands on existing crisis
communication theories and adds practical knowledge for dealing with real-world crises.
Future Research
The scenario designed in this study is a CSR-related crisis. CSR is perceived as the
organization tends to do good things to the community (McWilliams & Siegel, 2001). The
public could be influenced by this existing perception and become more “forgiving” to the
39
organization during the crisis. For future studies, researchers could design a scenario that
is not CSR related to examine how the public perceives the organization through its crisis
response strategies. One of this study’s limitations is that it does not measure the effects of
time on participant responses. Future studies could reproduce more realistic crisis
responses with a few days’ interval between responses. Finally, this study was designed to
study public perceptions across a two-phase crisis during which organizations issued two
responses. Future studies might consider adding further phases to their crisis scenarios to
further enhance the realism of the experiment.
40
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Appendices
Stimuli
Condition 1
Since Sunday, 19 people, including children and seniors, have been
hospitalized after drinking water that contained a flavoring agent called “Organic
Water Flavoring Agent”, which is produced by Happy Earth Food Inc, but
distributed freely to them by gas company GAS Corp during GAS Corp’s weekend
outdoor event as part of the company’s Healthy and Sustainable Living Campaign.
Common symptoms they experienced include severe stomach cramps, nausea, fever,
hallucinations, and loss of consciousness.
GAS Corp has been the primary gas supplier in the region of Danville for
more than 50 years. A series of events of the company’s Healthy and Sustainable
Living Campaign involve several local businesses as vendors and partners, including
Happy Earth Food Inc.
GAS Corp so far has not yet commented on the incident. Local newspaper
Danville Today was unable to reach company representatives despite several efforts
to make contact.
On Tuesday, two more people were hospitalized after drinking tap water
containing the flavoring agent bringing total of those hospitalized to 21.
46
Condition 2
(Story 1)
Since Sunday, 19 people, including children and seniors, have been
hospitalized after drinking water that contained a flavoring agent called “Organic
Water Flavoring Agent”, which is produced by Happy Earth Food Inc, but
distributed freely to them by gas company GAS Corp during GAS Corp’s weekend
outdoor event as part of the company’s Healthy and Sustainable Living Campaign.
Common symptoms they experienced include severe stomach cramps, nausea, fever,
hallucinations, and loss of consciousness.
GAS Corp has been the primary gas supplier in the region of Danville for
more than 50 years. A series of events of the company’s Healthy and Sustainable
Living Campaign involve several local businesses as vendors and partners, including
Happy Earth Food Inc.
“After an initial investigation, we found no direct relationship between the
product we distributed and these people’s illness.” said Lisa Blackburn, a
spokeswoman for GAS Corp, “The allegation is baseless and absurd.”
On Tuesday, two more people were hospitalized after drinking water containing
the flavoring agent bringing total of those hospitalized to 21.
(Story 2)
The toll of those who feel after drinking tap water containing Organic Water
Flavoring Agent rose as of today to 25.
47
GAS Corp, which initially blamed their vendor with the incident, today
responded publicly to these new developments.
“Further investigation suggested that an ingredient contained in the water
flavoring agent could have caused people’s sickness. It is not possible for any of us to
anticipate an incident like this while we believed that we were choosing the right
partner and the right product as part of our healthy and sustainable living campaign.
GAS Corp was unaware, and we are as surprised and horrified as all members of our
community.”
Condition 3
(Story 1)
Since Sunday, 19 people, including children and seniors, have been
hospitalized after drinking water that contained a flavoring agent called “Organic
Water Flavoring Agent”, which is produced by Happy Earth Food Inc, but
distributed freely to them by gas company GAS Corp during GAS Corp’s weekend
outdoor event as part of the company’s Healthy and Sustainable Living Campaign.
Common symptoms they experienced include severe stomach cramps, nausea, fever,
hallucinations, and loss of consciousness.
GAS Corp has been the primary gas supplier in the region of Danville for
more than 50 years. A series of events of the company’s Healthy and Sustainable
Living Campaign involve several local businesses as vendors and partners, including
Happy Earth Food Inc.
48
“Our investigation suggested that an ingredient contained in the water
flavoring agent could have caused people’s sickness.” said Lisa Blackburn, a
spokeswoman for GAS Corp, “It is not possible to anticipate an incident like this while
we believed that we were choosing the right partner and the right product as part of
our healthy and sustainable living campaign. GAS Corp is unaware, and we are as
surprised and horrified as all members of our community.”
On Tuesday, two more people were hospitalized after drinking tap water
containing the flavoring agent bringing total of those hospitalized to 21.
(Story 2)
The toll of those who feel after drinking tap water containing Organic Water
Flavoring Agent rose as of today to 25.
GAS Corp, which initially claimed of also being “unaware”, today responded
publicly to these new developments.
“We take full responsibility for this incident and we apologize to the families
involved and the public. GAS Corp is in contact with the families of those affected by
our free samples to make individual arrangements for their medical needs. GAS Corp
has discontinued its partnership with Happy Earth Food Inc. effective immediately.
We are also doing everything in our power to prevent a further incident from
happening.”
49
Condition 4
(Story 1)
Since Sunday, 19 people, including children and seniors, have been
hospitalized after drinking water that contained a flavoring agent called “Organic
Water Flavoring Agent”, which is produced by Happy Earth Food Inc, but
distributed freely to them by gas company GAS Corp during GAS Corp’s weekend
outdoor event as part of the company’s Healthy and Sustainable Living Campaign.
Common symptoms they experienced include severe stomach cramps, nausea, fever,
hallucinations, and loss of consciousness.
GAS Corp has been the primary gas supplier in the region of Danville for
more than 50 years. A series of events of the company’s Healthy and Sustainable
Living Campaign involve several local businesses as vendors and partners, including
Happy Earth Food Inc.
“After an initial investigation, toxic elements were found in the water
flavoring agent,” said Lisa Blackburn, a spokesperson for GAS Corp “We take full
responsibility for this incident and we apologize to the families involved and the
public. GAS Corp is in contact with the families of those affected by our free samples
to make individual arrangements for their medical needs. GAS Corp has discontinued
its partnership with Happy Earth Food Inc. effective immediately. We are also doing
everything in our power to prevent a further incident from happening.”
On Tuesday, two more people were hospitalized after drinking tap water
containing the flavoring agent bringing total of those hospitalized to 21.
50
(Story 2)
The toll of those who feel after drinking tap water containing Organic Water
Flavoring Agent rose as of today to 25.
GAS Corp, which has taken full responsibility for the incident, today responded
publicly to these new developments.
“We once again sincerely apologize to these families and the public. GAS Corp
has made arrangement with Town Hospital and the involved families to pay for all
medical expenses of those stricken by this unfortunate incident. We are also in talks
with the affected families to arrange for financial compensation to lessen the burden
of their troubles. GAS Corp has never faltered before in its commitment to improving
our community’s healthy and sustainable living. Going forward, we will strive to
strengthen our commitment to health and well-being of our community.”
51
News Story Questionnaire
(Perception of Response)
1. I think the message in GAS Corp’s response are clear.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
2. I think GAS Corp’s response is honest.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
3. GAS Corp’s response can solve its problems effectively.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
(Perception of Customer Treatment)
4. GAS Corp treats its customers fairly and justly.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
5. I can see myself becoming a customer of GAS Corp.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
6. GAS Corp is concerned with the well-being of its public.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
7. I feel customers are important to GAS Corp.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
8. If a customer has problem with GAS Corp, I am confident that GAS Corp will try its
best to find solution.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
(Perception of Organization)
9. I feel GAS Corp has positive corporate culture.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
52
10. GAS Corp represents a good business.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
(Perception of Corporate Social Responsibility)
11. GAS Corp is committed to take social responsible actions.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
12. GAS Corp’s social responsibility campaigns tend to do good things for the
community.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
13. GAS Corp plays an important role in building/maintaining the community.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
(Perception of the New Story)
14. Did you find the news article above was_______
Very difficult to read ○ ○ ○ ○ ○ ○ ○ Very easy to read
15. Did you understand the news article above?
Didn’t understand at all ○ ○ ○ ○ ○ ○ ○ completely understood
53
General Questionnaire
1. Your gender: female; male; other
2. Your ethnicity: Asian/Pacific Islander; Caucasian; Black; Hispanic; Native American;
Other:_______________
3. Your age: ______________
4. Your highest diploma achieved: High school; 3-year College; BA or BS; MA or MS;
Professional graduate degree (Ex: JD, MBA); PhD
5. How much are you involved with your community volunteerism?
Not involved at all ○ ○ ○ ○ ○ ○ ○ Very involved
6. How much do you care to know about community news?
Do not care at all ○ ○ ○ ○ ○ ○ ○ Care very much
7. I understand the concept of “corporate social responsibility”.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
8. Corporate Social Responsibility is a good practice for a corporation.
Strongly disagree ○ ○ ○ ○ ○ ○ ○ Strongly agree
54