Learning/discussion objectives

• Crisis as an opportunity
• Strategies used
Image Restoration
SCCT
• Understanding “Stealing Thunder”
• How should companies/CEOs chime-in?
• Legitimacy Spillovers
 Victim Accidental
Preventable
MEDIA
PRE-CRISIS CRISIS FRAMING
REPUTATION

COMPANY
COMPANY FRAMING
IMAGE
RESTORATION
STRATEGIES

CULTURE
BUSINESS
Power
distance
Uncertainty
avoidance

POST-CRISIS
REPUTATION
 IMAGE REPAIR THEORY
Image repair theory is pursued to minimize the loss incurred. Various strategies
followed are:
(
STRATEGY ACTION http://www.thehindu.com/news/
national/karnataka/minister-caug
ht-watching-porn-in-karnataka-ass
embly/article2869723.ece
• Denying performance of the act )or shifting
Denial
responsibility to some other entity

Evasion of • Stressing in involvement of other entities; emphasizing

Responsibility the event being as an accident

Reducing • Stressing on the goods of the past; presenting the act

offensiveness as not so serious; stressing on more important facts

Corrective Action • Offering a plan or a situation to address the problem

• Apologizing, admitting to guilt and expressing remorse

Mortification
and concern
 SCCT
• Rebuilding Postures
apology and corrective action.
• Bolstering Postures
remind stakeholders of the value of the
organization’s work,
praise stakeholders, and/or emphasize how
the organization is also a victim.
 SCCT
• Denial Postures
attacking the accuser, denial, and
scapegoating.
• Diminishment Postures
excusing and justifying, “minimizing the
organization’s
responsibility” and “the perceived damage”
 Stealing the Thunder
 Weakness- raised by the company itself
Ostrich approach falls flat in the age of social
media
 Disclosing the crisis – effective crisis
communication
 Social Media can be banked upon for
immediacy
Company Name CEO Response Strategy
Barilla Pasta Guido Barilla Issued apology statements Unequivocal apology;
on company website showed respect to those
Next day repeated apology offended
through video
Toyota Akio Toyoda Public apology to the expressed grief; signalled
family members killed in company will take new
the accident and to every direction
customer affected by the
recall.
Abercrombie and Fitch Mike Jeffries Issued public statement, Part justification, part
also posted on FB – said apology
old comments taken out-
of-context
Flipkart Sachin and Binny Email to customers Apology and explanation
Bansal*
Nestlé Paul Bulcke Press Conference Denial and reassurance
Legitimacy Spillovers

Legitimacy is acceptance of an org. by its environment, accrual of which affects not only the org. in
question but also spills over to affect other, related sub-units
• Within-country Spillovers (legitimacy of a firm affected by other firms in the same home country)
• Across-Country Spillovers (when firms’ legitimacy in one country transfers to another country)

Consequences of Legitimacy Spillovers

• Actors judge firms’ legitimacy and then act to support or resist firms’ continued presence
• Firms leverage legitimacy built in one country/region to expand into less
familiar regions/countries
• Effects on Social Recognition, Market Entry, Access to Resources
• Used by Multinational firms or Firms with multiple subsidiaries