Issues and Crisis Communication - Essay Example

ISSUES AND CRISIS MANAGEMENT By Location Issues and Crisis Communication Introduction In public relations, the term reputation management refers to the understanding of how to influence a organization’s or individual’s reputation in which they may include ethical applications such as asking websites to pull down negative information about the same, addressing customer complaints and making use of online platforms to influence product development. Initially, the concept began as a public relations function that did not include media relations, but this later changed with the advancement in technology in terms of social media and the internet. The most principle factor involved in reputation management is that it focuses mainly on eliminating negative search results through the monitoring of a company’s or individual’s brand and using the feedback drawn from customers. In many cases, reputation management may result from a crisis in which an organization may seek to restore their reputation to the public. The idea behind crisis communication in managing an organization’s reputation is to ensure that managers have a response plan that will be able to sustain the confidence of stakeholders making them to renew their commitment towards an organization or an individual. Ideally, a crisis from within a communication perspective is an organizational problem that attracts public attention and is one that can threaten a company’s ability to operate or its image. Crisis tends to take many forms that include environmental spillage, product recalls, natural or man-made disasters industrial strike action or acts of crime. One such company that experienced a crisis was the BP in which the Gulf of Mexico spill that started in 20 April 2010, that led to the loss of eleven lives and also impacted the marine life within the same region (Pride, Hughes & Capoor 2011, p. 61). In this regard, this essay will delve on how BP managed its reputation during the BP oil spill the stakeholder management issues that the company faced, and analyze ways in the company may apply the stakeholder theory and other models in for it regain its reputation with its stakeholders. Background information on the crisis The Deepwater Horizon Oil spill lasted for at least three months in which the deepwater oil rig exploded and sunk making this oil spill to be the largest in within the petroleum industry (Lehner & Deans 2010, p. 11). The effects of the spillage that lasted for months included the destruction of wildlife habitats, crippling of the fishing and tourism industries and the consequences of the extensive clean-up exercises. The efforts to contain the spillage from the well were futile, which led to its closure in 10 September 2010 to which reports from the site have indicated that it continues to leak. As at 2013, the number of dolphins and other marine life that continued to die from the BP oil spillage was still high in which reports indicated deformities in tuna and amberjack. Reports intimated that the methane that had high pressure within the well expanded, which led to the ignition and explosion of the drilling rig that engulfed the platform. The estimated volume of the leaked oil from the deepwater horizon oil spill was 4.9 million barrels to which BP argued that the US government had overestimated these figures. Public reaction to the crisis After the Deepwater Horizon oil spill accident, BP faced intense critic from within the USA and worldwide because of their perceived role in the incident. One of the key attempts to threatened the reputation of BP was a Facebook page by the name ‘Boycott BP’ established by Perkins Lee in June 2010, which had over six hundred and eighty thousand “likes” from users of this social media site (Smith 2010). Other than this, the crisis also influenced an online petition filed by Public Citizen accompanied by twenty thousand pledges from people that intended not to use BP products for a minimum three months. The protests were severe in the USA where Korn, an alternative metal band boycotted fuelling their tour bus with BP fuel in which the band also influenced other bands to join in the boycott. As a result, the protests led to a decrease in sales ranging from 10-40% in which Americans used the reaction of the federal government to dealing with the crisis as poor. On the contrary, the media also had its share in influencing the public opinion of BP, which is relatively the framing theory in which the media tends to articulate causes of issues to the public. The spillage made headlines for at least a hundred days after the explosion in which the media gave priority to this incident as away of showing their concern for the environment. According to research, the more an event receives media coverage the more likely for it to have an impact on the public, which explains why the BP incident sparked intense criticism and protests across USA and partly in Britain. In this case, most of the blame s indicated by the media was that BP and its CEO, Mr. Hayward were entirely to blame for the incident as much as the Obama administration had shouldered the blame earlier when the incident erupted. The media also gave conflicting information in regard to the crisis in terms of victim compensation as they indicated that BP was likely to establish a fund that would focus on helping those adversely affected by the disaster. 1. Applying the stakeholder theory in regaining good reputation with BP stakeholders In organizational management, stakeholder theory refers to the application of business ethics in addressing morals and values when trying to manage an institution. The concept was originally from Freeman Edward in the book Strategic Management: A Stakeholders Approach in which the text highlights ways in which an organization may cater for the interests of the stakeholders because of the investments made within the company (Freeman 2010, p. 48). For a business, stakeholders include suppliers, banks, shareholders, communities, employees, and financiers among a list of other entities in which a business has to create value for all of them. After the Deepwater Horizon spill, BP lost its touch with its customer base because the sales for the company were decreasing and the media portrayal influenced through the accident. From one perspective, BP was also a victim as a result of the disaster because the media did not put in much effort in highlighting ways in which the company was trying to mitigate the disaster, but they only communicated how the organization was responsible for the incident. As per the stakeholder theory, a managerial team has the responsibility of determining the interests of each stakeholder and ensuring that these interests work towards the same direction for the benefit of the organization. In BP’s case, the stakeholders for this company were environmentalists, the media, the US government, employees, and families of the employees, competitors, customers, suppliers, and fishermen among a list of numerous others. Essentially, there are two types of stakeholders, the primary and secondary ones in which the former’s action may either be harmful or attract benefits to an organization while the latter are those than are likely to be affected by a company’s actions. BP recognized the active and the aware publics and not the latent publics, which are the levels in which stakeholders are clustered (Tech & Yeomans 2009, p. 230). In essence, BP recognized these publics because these stakeholders knew about the crisis of the oil spill in the Gulf of Mexico and because they were crucial for BP in making responses towards solving such crisis. In this case, BP’s active publics were much involved in solving the crisis as compared to the aware publics whose involvement only stretched to them knowing of the crisis. Thereof, the target audience in which the persuasive communication would aim at should be those in which BP should salvage their reputation because their influence is much crucial. 2. The theory of image restoration Ideally, the founder of this theory was Benoit William in which its aim was to develop and understand messages that focus on restoring the image of a company during crisis that mostly tend to be legitimate issues (Graves & Fillingim 2004, p. 154). Despite the fact that the theory became applicable in the 90s, the theory gained popularity among communication researchers because of its relevance in managing a crisis while also seeking to regain a company’s image during the same. From Benoit’s perspective, the theory comprises of five phases, which are denial, evasion of responsibility by an organization, minimizing the offensive act, the taking of corrective action, and mortification or apologizing for an incident (Coombs & Holladay 2012, p. 31). At the time of the crisis, the CEO of BP, Mr. Hayward Tony sought to downplay the spillage by claiming that the area covered by the spill was little as compared to the entire ocean and also inclining that the effects of the incident were likely to be very modest. In a way, Hayward did not appear disturbed by the disruption that the oil spill had caused on the marine wildlife because of the pressure and publicity that BP had attracted over the incident. Ideally, BP through Mr. Hayward applied the image restoration theory in responding to the crisis through the use of rhetorical strategies in considering the nature of the attacks leveled against the company. The other individual that gave conflicting information over the Deepwater Horizon well was Mr. Suttles Doug, the chief operating officer in which the reports given by him indicated that the oil underwater was in very negligible quantities, which was not the case. However, the CEO later apologized fro the insensitive sentiments issued on behalf of the company, which was a way of regaining its reputation to the public. Further, the Chairman of BP, Mr. Svanberg Carl-Henric also issued a statement after having a meeting with President Obama in the same year indicating that BP was not a greedy company as per the stereotype that existed over large oil companies (Hayes, Kumar & Hendrix 2012, p. 358). As a way of restoring its image, BP should issue press releases as a way of communicating its current situation to the public and also to its stakeholders through its website (Juhasz 2011, p. 267). With the evolution witnessed in the communication and technology sector, BP could also make use of social media channels to restore its image and also interacting with its stakeholders. Presently, the social media is the most relied information delivery channel because it is fast as compared to any other form media in breaking news. Other than relaying information, social media can also ruin a company’s image because the information presented may not be accurate concerning an incident, but it is a sure way of countering inaccuracies in real time (Baran & Galka 2013, p.343). In the case of the Deepwater Horizon oil spill, the information and news concerning this incident got out very fast in which the manner in which the news outlets portrayed this crisis did illustrate the company in good light. However, BP continued to issue press releases as a way of curbing the damage that the media was causing to the company’s image while also countering the information provided through the news channels with facts. In so doing, BP is able to maintain its credibility to its stakeholders and also the level of trust with the same, which will guarantee a future for the company in terms of operations (Legarth & Andersen 2012, p. 13). 3. The Elaboration Likelihood framework Petty Richard and Caciopo John founded the Elaboration likelihood model aimed at persuading both the aware and the active publics involved in a crisis by understanding the responses, thoughts, and elaborations to a message. In the case of BP, the aim was not only to inform stakeholders, the public and the media through press releases about the situation that the company had found itself in, but these messages had to be persuasive enough in order for the same to understand the organization’s situation. Ideally, audiences tend to take in messages differently because of the varied levels of understanding that exist in a society hence explaining the reason why BP had to make sure that their message was elaborate and informative for them to maintain their reputation. The principle applied in this model is that if the level of involvement for the receiver of the information is high then this will mean that an organization will have to give more elaborate information so as to change their perception. On the other hand, if the receiver of the message has minimal involvement in an organization’s affairs then it is easy to change their perspective and attitude towards the same. In this case, the environmentalists, the media, board of directors, the tourism industry, and the employees are the active publics because they are the ones that responded and engaged in discussions over the Gulf of Mexico oil spill making them to have high influence in the crisis. Here, the active publics require the central route in processing arguments because of their ability to process ideas and the message communicated (OGuinn, Allen & Semenik 2012, p. 182). The implication of this is that BP has to be careful when attempting to persuade the active publics to believe in the information that they offer because any communication presented to them is subject to scrutiny and reflection. On the other hand, aware publics include employees, the fishermen, competitors, the government, employees and the families of the employees in which they tend to be less involved in crisis and only rely on messages communicated by other forces such as the media. For the BP crisis, the aware publics could have relied on information provided by a media channel, which is the peripheral route of persuasion that appeared attractive to them irrespective of whether the information they gave had the proper facts. The implication of this is that the aware publics could have made use of halo effect developed by Thorndike Edward in which they applied cognitive bias as the media influenced their overall impression of BP (Offstein, Morwick & Griffith 2009, p. 95). Changing the logo in such crisis After the crisis that BP experienced as a result of the Deepwater Horizon oil spill, the most significant challenge lied in regaining its glory and still managing to stay ahead of its competitions that saw this as the down fall of the company. The company applied various strategies as a way of ensuring that they stayed relevant in the petroleum industry, but these did not appear as to have had any significant impact on the company because its sales continued to perform dismally. However, BP could have applied the logo transformation strategy as a way of re-inventing themselves after the incident that sought to ruin to ruin its corporate image. Ideally, a logo change attracts several advantages that include signaling a shift to the consumer that may be positive because of this makes it possible for the market to differentiate a brand from its negative past (Weistroffer 2010, p. 41). In a way, BP would have been able to elicit positive responses from its customers and also build loyalty among the same because the logo change would establish a connection between the symbol and the company’s products. One of the key aspects that a logo should have is that it should be simple but still able to communicate volumes of information while also illustrating what a company stands for when viewed once. Corporate responsibility As per earlier intimated, the response to crisis is an effective way of repairing a company’s reputation and reducing the negative impact that may result from the same. The most basic aspect is that a company should take responsibility for an incident and also try to find ways of making the situation better for those affected by the crisis. Other than providing accurate information, BP also involved itself in assisting those that had lost their loved ones in the explosion and also participating in the clean up exercise for the ocean, which was part of its corporate responsibility. Initially, BP blamed Transcend Ocean Company for the spillage accident, which is not part of a company’s corporate responsibility as shouldering blame for an incident is the first step in regaining the loyalty of stakeholders. In the end, BP managed the Deepwater Horizon oil spill crisis in an effective way despite the fact that the managed exhibited aspects of blame-game and suggesting that the issue was not as major as indicated by the media. Bibliography Baran JR & Galka JR 2013, CRM: The Foundation of Contemporary Marketing Strategy, London, Routledge. Coombs, WT, & Holladay, SJ 2012, The handbook of crisis communication, Chichester, U.K., Wiley-Blackwell. 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