In the modern global market place, having a good reputation is as important as having a good product. Several successful organizations have failed despite retaining consistency in the quality of their products because they lost their reputation. It takes a massive amount of resources combined with a good strategy to develop a positive reputation, but one bad story whose adverse impact is not mitigated can ruin even a great reputation (Ott & Theunissen, 2015). Conversely, even an unfounded rumour can adversely affect a company, its customer relations and the value of its stocks. It is based on the above that companies invest massively in mitigation mechanisms at the very whiff of a crisis, more so a scandalous one. However, overspending on a crisis can have as an adverse impact on the company as the reputation itself. It is for this reason that W. Timothy Coombs developed the Situational Crisis Communication Theory (SCCT) ( Coombs, 2007 ). SCCT is supposed to be a means for entrepreneurs to balance between extenuating the negative impact of a crisis, without inordinate expenditure either financially or in other company resources. As this research paper will reveal, the key to SCCT is circumspection and a careful balancing act between the potential impact of a crisis and the limiting of the resources that should be used to mitigate it.
Background: Overview of the Theory
Situational Crisis Communication Theory (SCCT) is all about finding the right balance between the right reaction to a crisis and the ruinous capacity of the crisis to the company. Perhaps the best overview of SCCT can be derived from the theories developer in Coombs (2007). According to the article, SCCT begins with being able to detect a crisis as early as possible, where applicable long before the crisis has caused any adverse damage to the organization and its reputation. SCCT does not focus on solving the crisis, but rather limiting or even eliminating the adverse impact that the crisis might visit upon the company. After detecting the crisis, the next step is to evaluate the impact of the crisis on the organization. The evaluation is based on who the organizations stakeholders are and how they are bound to receive news of the crisis. Conversely, evaluation is also based on the nature and magnitude of the crisis. Finally, Coombs (2007) also focused on whether or not the crisis is novel or the organization has had to deal with it before. The evaluation determines the number of resources that the company will invest in solving the crisis. For a simple first-time scandal, the company can merely get ahead of the situation by framing the narrative about the issue, but for serious scandals that have happened before, the company may have to invest in monumental mitigation and public relations effort.
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The Ethical Perspective
The most debilitating organizational scandals materialize when ethics are compromised when dealing with a crisis resulting in a larger crisis, and this fact was never lost of the developer of the SCCT. In Coombs (2007), an argument is made that the primary ethical obligation of any entrepreneur is to the wellbeing of the stakeholders of the company. A golden rule in SCCT thus to ensure that in the process of resolving a crisis, the wellbeing of the stakeholders is not compromised. For example, in the commodity industry, the primary stakeholder is the consumer and if the crisis directly affects the consumer, it is the obligation of the manager handling the crisis to protect the consumer even if such protection does not seem to be in the best interest of the company. Conversely, in a publicly traded company, the shareholder is a critical stakeholder who should be protected at all cost. It is imperatives for the manager handling the crisis not to compromise ethics in the process of managing the crisis (Coombs, 2007).
Anticipation and Communication
In the process of mitigating a crisis, SCCT focuses on getting the right messages to the right stakeholders, in the right way and at the right time. The article Coombs, (2015) focuses primarily on the messages and their value in the mitigation of a crisis. In most simple crises, the right message sent to the right stakeholders and at the right time can save the company a lot of time and money in the long run. Proper effort should be put in preparing the right message based on what the stakeholders need to hear (Coombs, 2015). As outlined in the ethical segment above, the concept of what stakeholders need to hear must not amount to falsehoods or the manipulation of facts. However, even a bad message can be accepted if told in a certain way while even good news can be bungled by poor delivery. To formulate the best message under SCCCT, it is important to understand each stakeholder and anticipate the reaction of that stakeholder to the crisis at hand (Coombs, 2007). It is based on an understanding and appreciation of the potential reaction that a message shall be formulated.
From an entirely different perspective, the article Ott & Theunissen (2015) presents the argument that communication during a crisis is sensitive as it happens under emotive circumstances. A good message presented in a good under normal circumstances can still backfire when used during a crisis. When dealing with emotional people about the very subject that has evoked their emotions, it is important to be judicious. In SCCT, transparency must not only be employed but also openly deemed to have been employed by the stakeholders (Ott & Theunissen, 2015). The message presented must also be consistent so that the different stakeholders get the same message about the issue, and subsequent communication does not contradict the initial message. The authenticity of voice, which can be produced through a combination of charisma, skill, and experience can also be a mitigating factor.
The Social Media Perspective
The moment the message is formulated, the next step is to determine the best and most effective way to get the message to the stakeholder. A good example of the impact of mode of communication in the modern age is social media. According to Barbe & Pennington-Gray, (2018) some social networks such as Twitter have come to be considered as sound and reliable sources of information. Social media is a powerful tool that enables an individual with minimal resources to reach millions of people in real-time. In every crisis, SCCT provides that it is important of the organization to frame the narrative about the crisis, which more often than not means getting to communicate first. By the time the company waits to issue an official statement through official channels, a different narrative may already have been disseminated using social media and with devastating impact (Barbe & Pennington-Gray, 2018). Companies should thus invest in social media and have a good positive social media following who trust the company’s social media sites such as a Twitter Handle, to the legitimate source of information from the company. This will give the company a chance to present its side of the story and have its narrative continue to mitigate the damage as an official statement is being prepared where necessary. As indicated in Coombs, (2015), the right message must be developed for the right audience and communicated in the right way. This same approach must also be adhered to in social media communication. Following it up with an official statement is critical as social media’s credibility may be in doubt unless it has collaborated.
The Need for an Apology
Under SCCT, apologizing is an important aspect of mitigating the adverse effect of an apology and may limit the adverse impact that a scandal has on the reputation of the organization. According to Dulaney & Gunn (2018), the reputation of a company is based on trust, and when that trust is lost, it is hard to regain it. When the trust between a company and its stakeholders is at risk, an apology can mitigate the adversity. Dulaney & Gunn (2018) then proceeds to present the four critical prerequisites of an apology. For a start, the apology must acknowledge the existence of an offence to be taken seriously. It must reflect sincere remorse coupled with an honest desire to make thing right. An apology must also explain as to what went wrong, but the apology must sound like a form of escapism. Finally, the apology must include reparations which the means through which the organization will make things right.
Conclusion
It is evident from the totality of the above that how a crisis is managed is critical to how the company will fare as a consequence of the scandal created by the crisis. On the one hand, a callous approach to a crisis can augment it leading to the destruction of the reputation of the company to its stakeholders. The results may be the organization losing its market or shareholders losing confidence in the company. On the other hand, overreacting to a crisis can be equally expensive and can see an organization spend monumental amounts of time and money mitigating a minute crisis of limited effect. As is evident from the research and analysis above that SCCT provides a company with the means to present commensurate reactions to every crisis. The reaction can be as limited as merely communicating the right narrative about the crisis to the stakeholders. A larger crisis can, one the other hand be given a substantive response. SCCT combines having a good understanding of the crisis and in good time. It then extends to formulating the right message about the crisis the disseminating it in the right way. An apology and a presentation of the way forward is also an important element to SCCT. Future research should, however, investigate if the ease of the mitigating impact of a crisis can make entrepreneurs careless since the impact of their undoing can easily be minimized.
References
Barbe, D., & Pennington-Gray, L. (2018). Using situational crisis communication theory to understand Orlando hotels’ Twitter response to three crises in the summer of 2016. Journal of Hospitality and Tourism Insights , 1 (3), 258-275.
Coombs, W. T. (2007). Protecting organization reputations during a crisis: The development and application of situational crisis communication theory. Corporate reputation review , 10 (3), 163-176.
Coombs, W. T. (2015). The value of communication during a crisis: Insights from strategic communication research. Business Horizons , 58 (2), 141-148.
Dulaney, E., & Gunn, R. (2018). Situational Crisis Communication Theory and the Use of Apologies in Five High-Profile Food-Poisoning Incidents. Journal of the Indiana Academy of the Social Sciences , 20 (1), 13-33
Ott, L., & Theunissen, P. (2015). Reputations at risk: Engagement during social media crises. Public Relations Review , 41 (1), 97-102.
