1. An introduction to Crisis Communication in the age of Globalization.
The topic of Crisis Communication interests me a great deal and I find it to be a very
relevant project topic for several reasons. As mass media and globalization become
increasingly important concepts, companies have to change their crisis
communication to fit a world that is getting smaller by the minute. A few decades
ago, a company in turmoil only had to worry about when the local newspaper caught
wind of the story as well as the angle taken by the newspaper on the situation.
Nowadays, a smaller mistake or accident committed by an organization can be blown
up to unimaginable dimensions by the mass media in record time with the help of
public medias such as the Internet. Plus, it is not only the magnitude of the crisis that
the organization has to worry about; it is also the volume of audiences who can be
told of the situation! A crisis occurring in e.g. an American subsidiary of a global
company is no longer just a crisis for the subsidiary in question. Such a situation can
result in problems for the entire company, resulting in a decrease in turnover,
employer dissatisfaction or even threatening the company’s image and values.
Naturally, this increasing power of mass media means that companies face threats,
which they have never dealt with before, and this is the reason why I find crisis
communication to be very relevant today. Furthermore, I find the topic interesting
because, as mentioned above, it can influence every aspect of a company, and if a
crisis is handled badly communication-wise, it can mean the end for an otherwise
well-functioning corporation.
In the present project, I will use a specific company and a specific crisis to explore
further into how a crisis can influence an organization’s image, as well as the
strategies used by the company to attempt to minimize damage. The company I will
implement in my project is the Danish based, global company Lundbeck. Lundbeck
is: “a pharmaceutical company conducting research into, developing, manufacturing,
marketing, selling and distributing pharmaceuticals for the treatment of disorders in
the central nervous system”
(http://www.lundbeck.com/media/facts_and_background/fast_facts/uk/default.asp?me
dia). The crisis in question started on January 21st 2011 when the New York Times
brought an article saying that the Lundbeck produced drug called pentobarbital is
being used in American lethal injections on death row inmates. This has caused an
international stir where several anti-death penalty groups have criticized Lundbeck
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severely. The crisis will be further elaborated on later, but for now I will specify the
questions, which I wish to investigate through this project:
How has the pentobarbital crisis at Lundbeck influenced the company’s image and
what strategies were implemented by the company during the crisis to minimize
damage?
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2. The Quest for Knowledge
- Research Considerations
One’s epistemological stance says something about what one considers being
acceptable knowledge. For that reason the stance you have influences all aspects of
the written product produced, from the theory and empirical data chosen to
methodology and the way you conduct your analysis.
There are two major opposing epistemological stances within social research; the ones
who believe that it is possible to use parameters from the natural sciences to study the
social world – people and their institutions – are called Positivists. The second group
are the ones who are critical of the abovementioned approach. This group believes
that in order to study people and social interaction, new and different research
procedures are required. (Bryman, 2008) In the present project I will adhere to the
latter conviction, which is called Interpretivism. Interpretivism is under the
epistemology called hermeneutics. (Ibid) This means that instead of trying to explain
social phenomena as the natural scientists would, the goal is to gain understanding of
certain actions from the actors’ point of view. (Ibid)
The interpretivist tradition has its basis in the ontological position called
Constructionism which: “asserts that social phenomena and their meanings are
continually being accomplished by social actors.” (Bryman; 2008; 692) This means
that writers with a constructionist view are of the belief that knowledge as well as
social reality is constantly being constructed and reconstructed. Naturally this point of
view entails that there is no such thing as an absolute truth to be discovered through
research and analysis. On the contrary, constructionists work from the hypothesis that
reality is context dependent and coloured by the researchers’ own notion of the
observed, which means that it is subjective and will therefore never be definitive.
(Bryman; 2008)
As stated in the beginning of this section, my epistemological and ontological stances
influence all aspects of this project. With this in mind I must stress the fact that the
objective of this project is not to give a definitive answer to my problem formulation,
but more so to gain understanding of the phenomenon investigated. Moreover, my
stances concerning what is acceptable knowledge and how to decipher human
interaction entail that I am not in a position as a researcher where I can be completely
3
objective, my analysis and conclusions will be coloured by my own opinions and
convictions, which means that had someone else done the research it would come out
looking very differently.
With this I hope the reader understands my epistemological and ontological stances. I
will now move on to an account of my chosen methodology, which naturally will
reflect the before mentioned stances.
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3. The Master Plan
- Methodology
The topic that I want to research in this project is Crisis Communication, more
specifically, the case of the crisis at the Danish pharmaceutical company Lundbeck.
With this case study I hope to be able to take my results and mirror them to general
theories and thereby account for general challenges in corporate crisis
communication.
The present project is limited in two major ways, pages and time. I only have a
limited amount of time on my hands plus a boundary of 25 written pages. This has
resulted in the decision to use secondary data as my data source, as collecting
secondary data is far less time consuming than going out and e.g. doing one’s own
interviews. Much more on the advantages and limitations of secondary data in a later
section, firstly I will give a brief introduction to my chosen theoretical framework and
how I intend to use it in the analysis.
3.1 Theoretical Approach
The theories chosen are as following:
Image Restoration Strategies: William L. Benoit. I believe that one of the most
dangerous aspects of a company crisis is the damage the crisis might do to the
company’s image. A loss of image can result in a decrease in turnover, employees
quitting, bankruptcy etc. In the case of Lundbeck, the crisis they are experiencing
involves very serious topics as e.g. human rights, and therefore I find that Benoit’s
theory on Image Restoration Discourse is highly applicable and very important in the
present case.
Credibility, Image, Identity and Ethos: Anne Katrine Lund & Helle Petersen.
Credibility is the very foundation of why we bother interacting with each other (Lund,
Petersen; 1999). If a person or a company is not credible, they certainly cannot be
trusted and therefore most people will shy away from them. Lund & Petersen has a
theory on the connection between image, identity and ethos that I find extremely
interesting, and in connection to Lundbeck it is usable because it deals with a
company’s image and identity as well as the expectations of the public, which can be
5
disrupted by a company crisis and thereby cause even bigger problems for the
company. Here I must mention that there are hundreds of definitions of what image is,
in this project I will use the definition by Lund & Petersen, which will be elaborated
in the Theoretical Framework section.
3.2 Research Method
- Qualitative Content Analysis
I have decided to attempt to answer my problem formulation with the help of
newspaper articles from the abovementioned period, as well as the content on the
webpage of Lundbeck, which will be used to see how they themselves define their
image. This form of research method is called content analysis. Content analysis is
most often used in connection with a quantitative research strategy where the
objective, through the analysis of a larger quantity of documents, is to put the content
into systematic and replicable categories (Bryman; 2008). As stated earlier, I have
chosen a qualitative research strategy in the present project, as this is the only strategy
applicable when answering my problem formulation. So, the chosen form of content
analysis here is qualitative content analysis, sometimes called ethnographic content
analysis. (Ibid) This is a research method where the goal is not to divide the
documents into categories, but to construct meaning from the documents with the help
of my own role as a researcher plus the given documents’ context (Ibid). Qualitative
content analysis seeks to pinpoint underlying themes in the analysed documents,
which in this project means themes concerning crisis communication, protection of
image and ethos as well as the image restoration strategies used.
3.3 Secondary Data
I will be using secondary data as my source. Secondary data is data, which I have not
collected myself, it is the data “out there” ready to be collected and analysed. There
are many advantages in using secondary data, as opposed to going out and collecting
new and primary data. According to Bryman (2008; 297-299) using secondary data in
a project saves a lot of time, which is especially important for students when writing
their projects, as they often have very limited time to do the project. Second of all,
secondary data can be of great quality seeing as it can have been done by someone
with much greater resources and during bigger timespans than a student would ever
be able to do. Thirdly, all the time you would have spent collecting primary data can
6
instead be spend on analysing the data. This is crucial, because it is through the
analysis that you gain understanding of the researched phenomenon and form your
conclusions. Lastly, as stated when I accounted for my epistemological and
ontological stances, I believe that in social research you never gain complete
understanding of a certain topic. This means that even though a topic already has been
analysed, it is still very interesting to do a reanalysis and thereby offer new
reinterpretations – this is possible by using secondary data (Bryman; 2008; 297-299).
As many advantages as there might be in using secondary data in a project, there are
also some important limitations. According to Bryman (2008; 300) you have to be
careful that you are familiar with the secondary data before starting to use it in an
analysis. When you do your own interview guide, conduct your own interviews and
transcribe them, you are very familiar with the data as well as all of the parameters,
upon which the basis of the finished data was formed. You do not have the same
familiarity with data collected by someone else, which is why you have to spend a lot
of time getting to know it and decipher the parameters upon which the secondary data
is collected. Just as important as familiarity with the data, is the fact that you have to
be very careful with the quality of your secondary data. Be sure that you know who
wrote the documents you are using, what audience was it done for and for which
occasion.
3.4 Research Design
- The Case Study
The present project has its basis in a single case and context, Lundbeck and the crisis
that arose when it was announced that the Danish company provides the drug, which
kills prisoners in American jails. A case study design is often associated with a
qualitative research strategy, which is also the case in this project, as the objective is
to dig deep and find the underlying reasoning behind the actions taken by Lundbeck
during this period of crisis. (Bryman; 2008; 53) Furthermore, in connection to the
relationship between research and theory, a case study tends to take an inductive
approach where the theory is generated out of the research (Bryman; 2008; 366), in
this project this means that I will be taking single comments from Lundbeck and the
anti-death penalty organizations, and from these I will make general conclusions
about their crisis communication strategies.
7
Yin (2003) distinguishes between five different types of case study designs: The
critical case, The extreme or unique case, The representative or typical case, The
revelatory case and The longitudinal case. I will settle for drawing out what the two
types stand for, wherein most of the elements of the Lundbeck crisis lies. A critical
case is one based on existing theory where the case is used to better understand and
highlight the researched phenomena. With this I mean that I will use existing theories
on crisis communication and image restoration in order to analyse Lundbeck’s
reactions to the crisis. Furthermore, any type of case study often includes certain
elements of the longitudinal case type, due to the fact that the objective in a case study
research is to gain insight into the case in question and its special and specific
circumstances, which naturally takes time. (Bryman; 2008; 56) This is also right in
this context, as I have decided to work with the entire duration of the crisis at
Lundbeck, which means from January 21st, 2011 to May 4th, 2011 (at this point the
crisis is not over per se, but I had to choose an ending date as the crisis situation is
still very much continuing to this day).
3.4.1 Selection of Case
Early on in the project process, I decided on the overall topic that I wanted to work
with. I choose Crisis Communication because it is of great interest to me, and as
stated in the introduction I find it to be a highly relevant subject in today’s globalized
world where news travels faster than ever before. My criteria for a suitable case to
study were not many, however they were rigid and very important to me. Firstly I
wanted a current crisis; secondly it had to be a crisis that I for some reason or other
found interesting, otherwise it is unbearable to work closely with it for weeks and
weeks. Lastly I needed a crisis that was big enough or important enough to gain the
medias attention, otherwise I would have no secondary data to work with. Lundbeck
met all these demands, which is why I choose to work with exactly this company and
this specific crisis.
3.4.2 The Case
Lundbeck was founded in 1915 in Copenhagen, Denmark. Today, Lundbeck is a
global company specialized in researching, developing and distributing
pharmaceuticals for the treatment of disorders in the central nervous system
(http://www.lundbeck.com/media/facts_and_background/fast_facts/uk/default.asp).
8
From the webpage of Lundbeck it is obvious that this is a company that strives to help
people and do its best in treating patients with brain disorders. Lundbeck goes to great
lengths to show its surroundings that it is a company with great integrity. This shows
e.g. in the Code of Ethics, where Lundbeck specifies their rules and positions
regarding many different aspects as animal ethics, health and safety ethics for the
employees and business ethics concerning partners and other stakeholders. Lundbeck
also underlines clearly on their webpage that they have signed the UN Global
Compact, which means that they have complied with global rules and positions on
human rights, corruption as well as other CSR initiatives
(http://www.lundbeck.com/corporate_responsibility/global_compact/executive_state
ment/default.asp).
As mentioned, the crisis started with an article in the New York Times on January
21st, 2011, which made the world aware that the drug used to kill death-row inmates
in America is being produced by the company Lundbeck from Denmark, a country
where the death penalty has been abolished since 1950
(http://da.wikipedia.org/wiki/D%C3%B8dsstraf#D.C3.B8dsstraf_i_Danmark). The
drug produced by Lundbeck is intended for, and sold as a way of treating epilepsy,
brain tumours and other brain damages, not for sedating and killing inmates.
The predicament of this situation has resulted in numerous newspaper articles, as a
case like this with big emotions and life or death questions, is like candy for the
global media. Some newspapers say that Lundbeck is innocently caught in the middle,
while others, such as various anti-death penalty groups, say that Lundbeck should
follow the example set by other pharmaceutical companies and withdraw the product.
No matter if one believes Lundbeck to be innocent or guilty, this situation has become
a crisis for the company, as they are attacked on their very basis values; helping
people.
3.5 Empirical Data
My empirical data is secondary data, collected from various newspapers, human
rights movements and from Lundbeck’s webpage. As I stated before, I have chosen to
work with a specific period of the Lundbeck crisis, to analyse upon the crisis
communication of this period and decipher which image restoration strategies
9
Lundbeck implemented during this period. Therefore, naturally all the articles and
other data are from this timespan (January 21st – May 4th, 2011).
In collecting the secondary data that I wanted to use in my analysis, it was important
for me to use as many different media as possible. Had I taken for example 10 articles
from the same newspaper, I would have ended up with a much too one-sided
conclusion. Obviously, taken my ontological stance in consideration, the analysis
section will be somewhat influenced by my own personal opinions, and the same goes
for newspaper articles. Even though journalists try their hardest to be objective, it is
almost impossible to achieve. So I have chosen articles from many different
newspapers and thereby different journalists in order to have as high a degree of
objectivity as possible. This has resulted in me working with seven articles from
seven different Danish and American newspapers.
Moreover, I wanted to represent the toughest adversaries of Lundbeck and their
actions during this crisis, which is why I have chosen to also use two articles from
two human rights movements. As I will be using material from the Lundbeck
webpage, which is obviously pro Lundbeck and has nothing negative to say about the
crisis or the company, I found it only natural to also include organization with the
complete opposite opinion of Lundbeck. Again, my choices are made in the attempt to
create as clear and objective a picture of this crisis as possible. The empirical data is
enclosed at the end of this project.
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4. Theoretical Framework
Within the field of crisis communication, one can take on a narrow or a wide
perception. According to Johansen and Frandsen (2007; 15-17) if you are an advocate
for the narrow perception of crisis communication, it means that you view a crisis as
an event, an isolated incident with a specific beginning and end. The narrow
perception dictates that crisis communication is the communication used during the
crisis, and it is mostly sender-oriented, this meaning that it is the information coming
from the company and to the public.
The wide perception on the other hand, means that focus is on both the sending and
the receiving side of crisis communication. Thereby it is possible to not only analyse
the communication coming from the company in crisis, but also the communication
coming from various media, and this is the biggest and most important difference
between the two perceptions. Furthermore, the wide perception includes the pre-crisis
period as well as the post-crisis in addition to the crisis period itself as being part of
crisis communication. This entails that companies adhering to the narrow perception
will have a tendency towards crash management and doing damage control after a
crisis has occurred, whereas a company with a wider perception of what crisis
communication is, will lean more towards a process-oriented approach where
prevention and post-learning are as important aspects as the communication going on
during the crisis (Johansen, Frandsen; 2007; 17-18).
As I will be analysing both sides of the crisis communication going on during the
crisis at Lundbeck, I take on a wide perception of what crisis communication is.
However, again as a result of my limited number of pages at my disposal, I will not be
looking much at the time before the crisis, and as Lundbeck is still in turmoil today –
naturally I cannot analyse or comment upon the post-crisis stage. The only way in
which I will handle the pre-crisis is in painting a picture of Lundbeck’s image as it
was before they were burdened with allegation of not respecting basic human rights
after it became known that their drug pentobarbital is being used to kill death row
inmates in American prisons.
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4.1 How to Restore what has been Broken
- Image Restoration Discourse by William L. Benoit.
Fundamentally there are two components, which has to be met in order to be able to
say that a company image is in danger: firstly something has to occur that is
considered offensive, and secondly, the accused company has to be held responsible
for that action. (Millar, Heath; 2004; 264) In other words, whether a company has
actually done something which is offensive is not as important as whether the act is
believed to be offensive by the audiences that matters for a company, this typically
being customers, business partners and other stakeholders. Furthermore, it does not
matter if a company is really to blame for the heinous act, if the audiences believe the
company to be accountable, it constitutes as a threat towards the company’s image.
(Millar, Heath; 2004; 264)
The image restoration strategies formulated by Benoit are based in the persuasive or
rhetorical discourse genre. Benoit has divided the strategies into five general
strategies and 14 sub-options. I will now introduce each strategy and sub-strategy and
briefly explain what they stand for. A more thorough explanation of the pros and cons
of each strategy used by Lundbeck will be given in the analysis section.
Denial: The company can simply deny that any offensive act has occurred, this is
called simple denial. Or it can shift the blame and simply pass on the blame to
someone else.
Evasion of Responsibility: Benoit divides this category into four. First provocation
where the accused company defends themselves by saying that someone else
provoked them into doing the action. The second is defeasibility where a lack of
information – not knowing better – is the company’s excuse. The third one is
accident. The audiences are less likely to punish a company if they believe that the
offensive act was caused by an accident. Lastly the company can claim good
intentions; the action in question was done with the best intentions in mind.
Reducing Offensiveness of Event: Instead of denying that anything happened, or
trying to reduce the role that the company played in the whole affaire, this strategy
attempts to reduce the act itself. By using bolstering, putting the focus on all that is
good about the company, the goal is to increase the positive feelings towards the
company and thereby downplay the negative feelings that the audiences have towards
12
the offensive act. The company can also use minimization to downplay the
seriousness of the act. Differentiation is when the company compares their act to
other bigger and worse acts and thereby make their own actions seem less offensive.
Fourthly, by transcendence the company puts the action in a more positive context. A
fifth way of reducing the event is to attack the accusers by e.g. damaging the
credibility of the accusers. Lastly a company can chose compensation to reimburse
the victims and thereby reduce their negative feelings about the event.
Corrective Action: Here the company promises to correct their wrongdoing and
prevent it from happening again.
Mortification: To simply confess and beg for forgiveness from the attacking
audiences. (Millar, Heath; 2004; 265-270)
4.1.1 Critique of Benoit
Benoit uses the narrow perception of crisis communication, as he is only interested in
the communication going from the company to the media. However, as I will only be
implementing his theory in the analysis of Lundbeck’s communication strategies this
does not matter in this case. The analysis of the communication from the outside to or about - Lundbeck will be analysed with the help of the Ethos theory by Lund and
Petersen described in the next section.
Benoit’s model is highly simplistic and quite abstract, which is obviously something
one has to be critical towards within a subject as complicated as crisis
communication. Benoit himself even points out this fact in his book Accounts,
Excuses and Apologies (1995), where the model is also from, by saying that the
model could indeed be elaborated and refined, as well as referring to other researchers
who work with far more detailed models and strategies. Burns and Bruner (2000)
wrote an article, which is the most elaborated criticism of Benoit’s model, where they
claim that the model can cause serious misunderstandings because of its linear
concept, which neglects to take the dynamics of rhetoric into consideration.
I completely agree with Burns and Bruner in their critique of the simplicity of the
model. However, in a project of this size I benefit greatly by theories that are easily
approachable and applicable. I just have to be careful in the analysis, that I do not
become too rigid or forget the fact that communication is ever fluent and context
dependent.
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4.2 Keeping up Appearances
Image, Identity and Ethos by Lund & Petersen
As stated in the Theoretical Approaches section, credibility is the most essential trade
a company has to have in the eyes of its surroundings. If credibility is lost, no one will
see the point in interacting with the company in question, as nothing it says or does
can be trusted. According to Lund & Petersen (1999), the foundation of credibility
lies in the coherence between a company’s image; the way in which the company
wants to be perceived by its surroundings, it’s identity; the way in which the company
and its culture really is, and its ethos; the way in which the surroundings perceive the
credibility of the company (Lund & Petersen; 1999; 121) Any incoherence between
these three will create a breach in the company’s credibility.
Aristotle already worked with the topic of ethos about 300 years B.C., and he
established three virtues which together form a convincing ethos: “phronesis; wisdom
and healthy judgement, areté; the moral character and good human abilities, eunoia;
benevolence towards the audiences.” (Lund & Petersen; 1999; 122) According to
Aristotle, man is not convinced by reason or emotions alone, but by the combination
of reason, personal credibility and emotions. (Ibid)
Together with the threefold division of credibility into image, identity and ethos,
Lund & Petersen (1999) has taken these three virtues and made a model of how a
company achieves the highest degree of credibility:
Identity
Credibility
Ethos



Virtues:
Competence
Character
Presence
Image
Lund & Petersen; 1999; 129
4.2.1 The Ever-Changing Ethos
This model is build upon a constructivist belief that ethos is not static, but a
constantly changing perception of a company’s culture and essence. The rhetoric
researcher McCroskey (1997) describes ethos as initial ethos; the perception we have
14
of a company before being confronted with it, derived ethos; the perception we have
as we are confronted with the company, and terminal ethos; the perception you are
left with (Lund & Petersen; 1999; 123). This constant motion shows clearly why
credibility is something a company has to work with at all times, as it can change
drastically in a very short amount of time. Put into a model, the ever-changing ethos
looks like this:
Initial Ethos
Derived Ethos
Terminal Ethos
Lund & Petersen; 1999; 123
4.2.2 Critique of Lund and Petersen
As in any model build to give a quick and easy overview of a given theory, one has to
criticize the simplicity of it. Credibility is a tricky thing; it is not something you as a
company can create alone or with the help of image consultants. To build credibility
you need the goodwill of your surroundings along with many other variables, which
has to fall into place at the same time. So naturally, credibility is not comprised of
only three variables, which is why this model is not completely adequate. However, it
is highly appropriate to use in context with the present project, as it can help in
analysing what the attacks on Lundbeck’s image does to its ethos and even its
identity. Furthermore, as is the case with Benoit, the simplicity of the model entails
that I have to be very critical in using it in my analysis. I have to ensure that I stick to
my constructivist conviction by not letting the firm frames of the models confuse the
fact that I still believe that everything is context-dependent and thereby in constant
motion. In other words, I will be using the different labels and categories as
formulated in the models, but I will not uphold to the rigidness of static strategies or
fixed notions. I will now move on to the analysis part of the project. I will not be
making any part-conclusions during the analysis – all conclusions will be drawn in the
Conclusion section that follows the analysis.
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5. The Analysis
A company crisis is an offending action taken or incident occurring, for which the
company is held responsible. Such a situation poses a threat to the company’s image
as being good and trustworthy. In order to fully understand the threat the
pentobarbital crisis poses towards Lundbeck’s image, I think it is important to
understand how the company defined their image before the crisis.
On the front page of the company’s webpage (http://www.lundbeck.com/) there is a
headline called Corporate Responsibility, where under one finds the many initiatives
the company takes in order to be a responsible and honest corporation. For instance,
as stated earlier, Lundbeck is a part of the UN Global Compact, which, amongst
others, fights for human rights. Lundbeck also has both a Code of Conduct and a
Code of Ethics to help employees, stakeholders and partners understand what is
acceptable behaviour in doing business. Lastly, having a look at the company’s
mission, vision and values statement, the same principles shine through: “Our vision
is to become a world leader in psychiatry and neurology (…) Our mission is to
improve the quality of life for those suffering from psychiatric and neurological
disorders (…) Values: Imaginative - Dare to be different (…) Passionate - Never give
up (…) Responsible - Do the right thing.”
(http://www.lundbeck.com/aboutus/our_culture/vision_mission_values/default.asp)
This is a company for whom helping people is utmost important, and it is something
they underline again and again on their webpage. Therefore it is natural that
Lundbeck lands in great turmoil when the public finds out that the company supplies
the drug pentobarbital to American prisons, who use it in their lethal injections for
prisoners sentenced to death.
The rest of this project will be an analysis of the process of this crisis, wherein I will
outline which defence- or image restoring strategies are used by the company, and if
they are useful or not, as well as the attacks by anti-death penalty organizations.
5.1 How it All Began
On January 21st 2011, The New York Times had an article saying that: “The sole
American manufacturer of an anaesthetic widely used in lethal injections said Friday
that it would no longer produce the drug, a move likely to delay more executions and
force states to adopt new drug combinations.” (NY Times, 21/1 -11) The article was
16
not about Lundbeck, but about the problems it would cause for the states using the
death penalty, as they would now be facing a shortage of the drug normally used and
would therefore be forced to postpone executions. It is not until the final two lines of
the article that Lundbeck is mentioned, and it is these two lines that started this whole
case for the Danish based pharmaceutical company: “Only one company, Lundbeck
Inc., now markets injectable pentobarbital in the United States (…)” (NY Times 21/1
-11) This article was published on a Friday, and over the weekend multiple Danish
media took up the story. On Monday the 24th of January, the Danish newspaper
Børsen had the following statement from communications manager of Lundbeck,
Anders Schroll: “The article in NY Times is pretty much the knowledge we have of the
situation for now, because it (the fact that their drug might be used in lethal
injections) is not something we have known or have had any intention of.” He
continues: “ (…) it is very hard to control or influence for what doctors or authorities
chose to use our pharmaceuticals. (…)” (Børsen, 24/1 -11) These are some of the first
comments coming from Lundbeck since the crisis started, and according to Borda and
Mackey-Kallis (Millar, Heath; 2004; 120) they are off to a bad start. Borda and
Mackey-Kallis have made a model of good crisis management, and one of the key
elements that they underline is that the company’s first response to a crisis should be
prompt, truthful and with as much information as possible. In that the
communications manager of Lundbeck comes forth and answers questions on the
company’s stance on the situation by saying that an article is all they know so far, he
is at the same time admitting that the company has not done all they can during the
weekend to make sure that they have all the facts; who is responsible for distributing
this drug to the wrong people, is it legal and so on. He continues by implementing the
image restoration strategy called defeasibility (Millar, Heath; 2004; 266) where he
tries to evade responsibility for the current situation by saying that Lundbeck has no
control over there their drugs end up. In it self I find that this is a good strategy to use
in the beginning of a crisis situation, where the audiences have still not decided how
guilty or innocent the company is. I think this strategy can convince some critics that
Lundbeck is just caught in the middle without having done anything wrong. However,
when Anders Schroll gives this comment right after having admitted that they do not
know much of the situation yet, he comes across as being evasive and perhaps even
dishonest, because how can you evade responsibility for a situation of which you do
not yet have all the facts?
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Four days after the publication of this article, the Danish newspaper Politiken brings
an article which could entail huge problems for Lundbeck in upholding their “dogood” image, a Harvard professor of medicine says: “We have no documentation that
this drug can be used to sedate humans in this manner. We don’t know the right dose.
The prisoners are not treated as human beings but as animals.” (Politiken, 28/1 -11)
Still, one can argue that Lundbeck is completely innocent in this whole situation, as
they have not willingly distributed their epilepsy drug to be used to sedate prisoners.
However, in the same article, a legal professor and death penalty expert makes this
statement and pinpoints why this is such a serious situation for Lundbeck: “This
means that this company in future will be associated with people dying. A company
producing a drug which helps people will from one day to the other become a
company which kills people.” (Politiken, 28/1 -11) This is exactly what Benoit is
talking about when he says that it does not matter if a company is guilty in doing a
heinous act or not, if the public perceives them as guilty, they have an image problem!
With the model by Lund & Petersen (1999) in mind, this is a good example of how
image, identity and ethos can become incoherent which can cause the company to
loose valuable credibility. At this point, the identity – the very culture of Lundbeck is
unchanged, it is still a company committed to helping people with brain disorders.
The image though has taken a blow, from being thought of as a cutting-edge research
and production company, Lundbeck’s surrounding now think lethal injections and
death when they hear its name. This incoherence between image and identity is
problematic as it shakes Lundbeck’s ethos - the way in which the company is
perceived to be by its partners, clientele and other stakeholders.
It is obvious by these statements made by experts in medicine and law that the crisis
is becoming increasingly hurtful for Lundbeck as the attacks intensifies. So Lundbeck
does the same, they intensify their image restoring responses and become much more
offensive in their rhetoric than they were in the very beginning: “The critic of the
executions should be directed at those who execute the death penalty. It has nothing
to do with our drug, says Anders Schroll.” (Politiken, 28/1 -11) Benoit calls this type
of defence strategy shifting the blame. (Millar, Heath; 2004; 266) Instead of
downright denying that one is responsible for an offensive act, one can shift the blame
onto someone else. Thereby you can show the public that you are innocent, whilst
also answering the unavoidable question: “well if you did not do it, who did?” The
strategy Schroll is instigating here is highly offensive and it invites the prison
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authorities in the United States to also give their say on the situation. And according
to the article, Lundbeck follows up on this invitation: “Lundbeck has sent a letter to
the prison authorities of Ohio and Oklahoma, wherein the company speaks up against
using the drug for executions. The authorities of the two states have not yet received
the letter and have no further comments” (Politiken, 28/1 -11) I find that this is the
beginning of Lundbeck’s crisis management plan, it is the first time that what they
have said have been followed by actual initiatives. However, writing letters is a far
too vague strategy compared to the harshness of the attacks and the huge threat to
their image, which they obviously face at this time. Furthermore, is seems that
Lundbeck has chosen to send the letters by mail since the prisons have not yet
received them. To me this is another mistake by Lundbeck as this crisis does not stop
and wait for the letters to arrive before it continues. It is constantly moving and
developing, and the days it takes before the letters are received and a possible
response is formulated, are dangerous for Lundbeck because it can mean that while
they are sitting and waiting, their accusers and critics rally up and form even more
serious allegations than we have seen so far.
5.2 The Crisis Accelerates
Throughout the month of February, the crisis keeps rolling for Lundbeck.
Organizations such as Amnesty International and the British based anti-death penalty
group Reprieve form harsh accusations against Lundbeck for not doing enough to
stop their drug from being used for anything else than its purpose. On February 16th,
Danish TV2 finance reports the following statement from the doctor group of
Amnesty: “Lundbeck should say to the responsible authorities that if the drug is
misused in this manner, it could mean that they are going to have to withdraw the
product.” (16/2 -11 TV2 Finans) This underlines the statement made above that
writing letters is a far too vague response to a quite serious situation. Had Lundbeck
reacted faster and stronger, maybe the company could have avoided some of the
damaging complaints and demands made by various anti-death penalty organizations
and human rights advocates. Lundbeck’s biggest problem at this time is the ethical
dilemma in which the company finds itself, and communications manager Anders
Schroll takes up this subject in the same article: “A withdrawal of the product would
not stop the use of the death penalty, it would just put sick Americans in life
threatening situations and that is obviously not ethically responsible.” (TV2 Finans
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16/2 -11) What Anders Schroll is doing here, is what Benoit calls transcendence
where you put a certain situation into another context. Instead of going along with the
context in which the anti-death penalty organizations try to put the pentobarbital crisis
- that is, a context where Lundbeck is reluctant, slow and vague in their responses,
Schroll gives it a bigger context where the well-being of the patients using this drug is
also an issue. In this way, he is quite successful in bolstering Lundbeck’s image as
being a company committed to helping people with brain disorders, instead of it being
associated with the disregard for death row inmates.
As Lundbeck has now definitively refused to take pentobarbital off the American
market, it is only natural that the anti-death penalty organizations try new ways to
convince Lundbeck to stop the misuse of their product. In the end of March 2011,
Reprieve has its lawyer draw up a five-page Q&A legal briefing on the possibility of
putting an end-user clause in the contracts that Lundbeck has with its American
buyers. An end-user clause could have: “Prevented their products being sold to state
penitentiaries for execution purposes.”
(www.reprieve.org.uk/.../2011_03_29_PUB_Lundbeck_legal_briefing_for_sharehol
ders_.pdf) In the five-page report, Reprieve goes through all the legal aspects of enduser clauses, including what it would mean for Lundbeck if they decide to follow
Reprieves recommendations. The conclusion of the legal briefing is that an end-user
agreement would: “Bring Lundbeck a step closer to full compliance with the
European Convention on Human Rights.” (ibid), which they are not upholding at the
moment, due to the fact that Lundbeck’s homeland of Denmark has: “pledged its
active commitment to the abolition of the death penalty (…) Lundbeck’s current
material support for executions is therefore in violation of the Danish government’s
obligations under international law.” (Ibid) Furthermore, the report concludes that
Lundbeck can legally impose end-user clauses, which would mean that there would
be various remedies available to Lundbeck in the event that a buyer breaches the
contract. (Ibid)
This report gets great attention from both Lundbeck and its accusers, and on the 25th
of March, Lundbeck’s Board votes on the matter. The result is a no, Lundbeck will
not impose end-user agreements in their contracts because, as CEO of Lundbeck Ulf
Wiinberg said: “it would be impossible for distributors to follow up on how every vial
is used.” (NewsChannel5.com 30/3 -11) It is becoming sort of a continuous theme in
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Lundbeck’s crisis management to be vague and evasive, and this time the defensive,
laid-back attitude of Lundbeck towards the initiatives proposed is aggravating the
anti-death penalty groups, and Reprieve calls Lundbeck’s decision: ”disappointing
and cowardly.” (Ibid)
This crisis has now been going on for over two months, without any light at the end of
the tunnel for the Danish pharmaceutical company, but they still refuse to try anything
to stop the misuse of their product. Furthermore, Lundbeck is leaning towards
denying that they have any responsibility at all in the current situation. Niels Aage
Larsen, representative of a Danish shareholders association states: “ (…) Lundbeck
has done nothing wrong (…) Like a producer of knives, they cannot know how and
where their products are being used.” (Ibid) This statement represents a total evasion
of responsibility and it comes across as quite cynical. It is simply too late in the
process to completely evade responsibility due to the fact that the crisis has gone on
for over two months, it has to mean that the public blames Lundbeck for the situation
– at least to some extend.
5.3 The Attacks Continue
The decision by Lundbeck to not impose end-user agreements sets off the anti-death
penalty organizations and they become increasingly offensive in their rhetoric. On the
day of the Board decision, Reprieve representatives wrote an article on the subject on
the webpage of Death Penalty News, where Lundbeck is attacked and blamed for the
current pentobarbital predicament: “Lundbeck and its shareholders will now be
responsible for potentially hundreds of deaths, as executing states snap up
Lundbeck’s pentobarbital, a dangerous and experimental lethal injection drug (…)
According to a source within Lundbeck, the company’s managers were so afraid that
their distributors would not like their amended contracts that they decided to avoid
taking action.” (Death Penalty News, 25/3 -11) On February 16th in TV2 Finance, I
commended Anders Schroll on using what Benoit calls transcendence to put the crisis
into another and more beneficial context for Lundbeck. However, with this article in
Death Penalty News, Reprieve does exactly the same, but with opposite intentions.
Here Reprieve is successful in magnifying the context of the crisis so that Lundbeck
is not just perceived as being responsible for killing prisoners here and now, but also
in an undetermined future. And perhaps even worse, Reprieve overrules Schroll’s
statement on why they have decided not to use end-user clauses. Where Schroll
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claimed that the decision was made because it would continue to be completely
impossible to control where every single vial of pentobarbital ends up - clause or no
clause, Reprieve now claim to have insider knowledge which says that a possible loss
in revenue is the real reason. This is by far the most serious attack on Lundbeck’s
image up until now, as it goes against all the company’s core values which is about
helping the sick and being responsible in all areas.
As Lundbeck has now refused to take the drug off the American market and to put
end-user clauses in their distributor contracts, there is not much else they can actively
do to stop this crisis, Mads Kronborg, spokesperson for Lundbeck says: “But we are
not just sitting on our hands. We have been looking into the problem and there’s
nothing we can do to control where the product ends up.” (The Copenhagen Post, 1/4
-11) By this, Lundbeck has given up, they maintain that the letters that were sent to
the executing prisons were all Lundbeck could do to stop the misuse of pentobarbital,
as withdrawing the drug would hurt patients and end-user clauses would do little to no
difference. (Ibid) This defeatist attitude is upheld by Lundbeck during the next few
weeks, until the pressure from anti-death penalty groups and human rights
organizations to do something – anything, becomes too much, and Anders Schroll,
communications managers of Lundbeck gives this statement: “It has been agreed
upon that lethal injections are the most humane way of executing the death penalty,
and if it weren’t our drugs being used, it would be someone else’s. So the only
solution must be to eliminate the death penalty all together.” (Ekstra Bladet, 4/5 -11)
This is the final fumbling attempt by Lundbeck to restore their image, by the help of a
combination of two of Benoit’s image restoration strategies: Shifting the blame and
defeasibility. Lundbeck shifts the blame to higher authorities whilst also giving the
impression that Lundbeck is only a small fish in the pond with very little ability to do
anything. This attempt seems desperate and quite ridiculous at this stage of the crisis,
because it is obvious that Lundbeck has run out of arguments not to act, so they are
now going to desperate measures in order to blame someone else for the current
situation so that they themselves can avoid taking action.
This is the point in time where I have chosen to stop my analysis of the process of the
pentobarbital crisis at Lundbeck. The company is not out of the woods yet, and in the
following section I will explain the effect this crisis has had on Lundbeck’s image
with the help of Lund & Petersen’s credibility model.
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5.4 Can they be Trusted?
Lund & Petersen (1999) use Aristotle’s three virtues to show which characteristics a
person or a company has to have in order to be credible in the eyes of its audiences. In
the very beginning of the pentobarbital crisis, Lundbeck fails in the first of the three
virtues, phronesis, when they – in their crisis communication – admit to not knowing
the full extend of the situation yet, even though it has been three days since the article
which started it all were brought. Phronesis is the competence virtue and covers
characteristics such as the ability to present oneself as secure and speak in a clear and
competent manner. (Lund, Petersen; 1999; 126) Furthermore, Lundbeck continues to
fail in showing real competence in handling a bad situation when they, instead of
taking action, chose to merely send letters to the prisons that misuse their epilepsy
drug. At this point, the image of Lundbeck has taken its first blow, because when the
company fails to be competent and committed to putting an end to a bad situation, the
audiences – in this case people from both Denmark where Lundbeck is established,
USA where the crisis is unfolding plus the United Kingdom as this is where Reprieve,
Lundbeck’s biggest critic is located – loose confidence in the company. And when
someone looses confidence they also loose their credibility, which means that from
being a company which is held in high regard by its audiences because of its
commitment to various CSR initiatives, Lundbeck has now become a company that
cannot be trusted to handle things when they turn sour. In other words, Lundbeck’s
ethos, the way they are perceived by its surroundings, has gone from good to bad.
A bad ethos will, according to Lund & Petersen (1999), inevitable create problems for
a company’s image, which is the way they wish to be perceived. So at this point in the
crisis, Lundbeck has to be quick in turning things around before this situation
damages their image permanently. What Anders Schroll, communications manager,
does, is to create a new context to put the crisis into. With his comment about it being
impossible to withdraw pentobarbital from the American market, as it would hurt the
patients relying on the drug, he is successful in getting the situation back to a place
where Lundbeck’s image, identity and ethos are somewhat coherent. Again, focus is
put on the company’s main goal and core value, to be responsible and help the people
who suffer from brain disorders. With this being the central element, people’s view of
Lundbeck can change from it being a company that does nothing because of fear and
a lack of competences, to it being a company who is forced to do nothing in order to
secure the safety of their neurology patients.
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Then comes the talk of end-user agreements, and with that the biggest threat to
Lundbeck’s image. When the company votes no to using their contracts to try and
stop the misuse of pentobarbital, their adversaries say that it is due to the fact that
Lundbeck is afraid that such clauses would hurt them financially. Again, Lundbeck is
attacked on their core value; is this company really more interested in helping the sick
than making sure that this drug is selling?
To sum up on the crisis and its impact on Lundbeck’s image; at the beginning the
company’s image is damaged because the company fails to be strong, clear and
consistent in its statements to the media. This causes a reduction of Lundbeck’s
credibility in the eyes of its surroundings, because it is no longer clear what the
company want to do or what they stand for.
In the middle of the crisis process Lundbeck is successful in telling its surroundings
what they want, which is to secure the safety of the patients using pentobarbital. This
entails that the image of a do-good company, as which Lundbeck wants to be
perceived, is once again coherent with the impression people are actually getting.
However, at the end of the part of the crisis, which I am working with, once again
there comes a huge gap between what Lundbeck say they stand for and what is
written in the media. While Lundbeck maintain that they are doing all they can to stop
pentobarbital from being misused, they risk being perceived as a company which is
cold and calculating – a company that hides behind seemingly honourable intentions,
but who are really just interested in insuring that they have no loss in revenue! This
ever-changing perception of Lundbeck in the eyes of its surroundings will be
specified in the following section.
5.5 Lundbeck Before and Now
As I have already stated, Lundbeck is a company, which, before this crisis, was
regarded by most as an honest and responsible company that took initiative to insure
optimal conditions for both employees and business partners. This is the reason why
this crisis has the potential to do huge damage to the image of Lundbeck – the higher
you fly the harder you fall. According to McCroskey (1997) ethos can be divided into
initial ethos; the perception we have of a company before being confronted with it,
derived ethos; the perception we have as we are confronted with the company, and
terminal ethos; the perception you are left with (Lund & Petersen; 1999; 123). In the
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case of Lundbeck, the initial ethos has been mostly positive. If one’s perception of the
company comes from its own webpage, the impression is, not surprisingly, extremely
positive. The derived ethos in this case, is the perception of Lundbeck we have, as the
crisis is unfolding and as can be seen in the previous section, this stage is neither all
bad nor all good, it goes up and down as the communication flows, sometimes it is
Lundbeck who has the upper hand and sometimes it is their critics, the anti-death
penalty groups. All in all, the derived ethos during this crisis situation is, as can be
expected, more negative than the initial ethos. However, a temporary reduction in a
company’s ethos is not that dangerous, what is crucial is the impression that people
are left with, the terminal ethos.
I have left the Lundbeck crisis at a time where the company is under great pressure,
because they have to prove that human rights are more important to them than profit.
The terminal ethos in this crisis is not determined yet, but lets say this is the last we
have heard from Lundbeck on this matter. In that case, the terminal ethos would be a
huge step down from the initial ethos, from being a company committed to top of the
line research and development of neurological pharmaceuticals, they would now be
known as the company that provides the drug that kills death row inmates in The
United States. In order to avoid this scenario, Lundbeck must take action quickly,
before the media looses interest in the matter, because as soon as the international
newspapers stops writing about this story, the audiences of Denmark, USA and Great
Britain will also loose interest. And if this happens at a time where Lundbeck is
perceived as the bad guy, this is the impression people are left will and will remember
in future when hearing the word Lundbeck.
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6. Conclusion
Through the course of this crisis Lundbeck uses four different image restoration
strategies, but in very different ways and with very different results. In the beginning
of the crisis, Lundbeck is very vague and reluctant in doing anything at all, so
defeasibility is used to downplay its involvement in the situation by saying that the
misuse of pentobarbital is out of Lundbeck’s control. This is followed by an attempt
to shift the blame to the prisons that actually perform these executions. At the end of
the period which I am working with in the present project, the very same two
strategies are used, but at this point, it is obvious that Lundbeck is getting desperate in
attempting to salvage its reputation, which, at this point, has been under attack for
over three months. This results in a ridiculous statement where Lundbeck’s
communications manager uses defeasibility, again by saying that there is nothing
Lundbeck can do, while also shifting the blame by claiming that the only way to stop
the misuse of pentobarbital in USA is if the death penalty is abolished! These are two
different ways of employing the same two image restoring strategies, first they are
used to calm the waters and stall until the company has all the fact straight, and at the
end they are used as a final desperate attempt to blame someone else for this
catastrophic situation, anyone else! As the crisis has been going on for more than
three months, it is obvious that Lundbeck has not been using the right defence
strategies at the right time. So the one thing I can conclude that they should have done
is act! Throughout this process Lundbeck’s only strategy has been to give apologies
as to why they cannot actively do something to stop the misuse of their drug,
sometimes the apologies have been acceptable, and has helped in turning the crisis in
Lundbeck’s favour – e.g. when Schroll used transcendence to refuse to withdraw the
drug because of the well-being of the patients relying on the drug to survive. But most
of the time the strategies have made Lundbeck look like a company that does not care
about the prisoners sentenced to die by this experimental anesthetic. Especially when
Lundbeck refused the end-user clauses, by stating that they would not be 100%
effective. This is completely unacceptable and a huge mistake by Lundbeck. At this
point, the smallest effort by the company to stop the misuse of the drug would have
helped in restoring the company’s image. If these clauses were set in place, even
though they could not stop the misuse completely, it was an easy and undisruptive
initiative by Lundbeck that would prove a lot to its audiences and critics. But
Lundbeck refused, and the only logical reason for this, that I can see, is financial.
26
This is where I have left the pentobarbital crisis, at the climax where Lundbeck’s
image and identity are farther away from each other than ever before. It has become a
matter of financial interests versus human ones. Lundbeck says that it is the human
interests that are important to them, while their actions throughout this crisis speak
otherwise. This has resulted in a deterioration of the company’s credibility, as what
they want to be perceived as (their image), and what they really are (their identity)
does no longer match, their ethos (the way Lundbeck’s audiences perceive the
company) has become very negative because no one knows if this company is telling
the truth anymore.
The strategies Lundbeck has used throughout this period are what Benoit calls Image
Restoration Strategies. However, due to the fact that Lundbeck has not handled this
crisis very well, their credibility and ethos are at this point extremely damaged. If
Lundbeck is very lucky and extraordinarily competent, they can still succeed in
restoring their image, but most likely they should rather focus on a recreation of their
image, as it will be difficult - if not impossible - to go back to how it was before
American prisons started using their drug to kill death row inmates.
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