Crisis Communication: A Case of Electronic Companies

Introduction

Just like human beings, organizations are prone to experiencing a crisis; such crises can neither be avoided nor entirely prevented. No organization is entirely immune to the occurrence of crisis, but there is agreement that the occurrence of a crisis has the potential of harming an organization’s reputation (Nwogwugwu, 2018). The rationale for crisis communication is largely because the reputation of an organization is a vital and valuable asset that is susceptible to be damaged in a crisis(Nwogwugwu, 2018). The company name is also increasingly being perceived as the most vital in determining the company’s reputation with the reputation being based on the firm’s behavior and performance (Schmid, n.d.). The company reputation of a company also can deliver growth, attract talent, and accounts for a majority of the 70%-805 gap existing between the book value and market capitalization of most companies (Eccles, Newquist, & Schatz, 2007).

Scholars in crisis communication have attempted to define/describe the term crisis, but as indicated in Nwogwugwu (2018), there is no universally accepted definition of the term crisis. However, critical characteristics are used for describing and understanding the term (Nwogwugwu, 2018). Cooley & Cooley (2011), as cited in Nwogwugwu (2018), identified surprise, threat, and short response time. They consider that a troubling event only becomes a crisis without having an element of surprise and posses a serious level of threat to the organizational priority values and forcing a short response time (Cooley & Cooley, 2011). A crisis may also include an event that disrupts routine and results in an escalation in the flow of events alongside a loss of sense of control of the situation, and increased media attention that is accompanied by scrutiny, inquiry, investigation, speculation, and the proliferation of negative publicity (Cooley & Cooley, 2011).

To reduce the reputational damage, including stakeholder agitation due to the crisis, firms are required to implement the appropriate strategies. The crisis strategy is a type of crisis communication that is focussed on how the company responds are depicted to the public and how these messages are transmitted to repair the company’s reputation(Coombs, 2007). The rationale here is that the choice of the message delivery strategy is vital in the determination of how the stakeholders understand the crisis and the organization’s image and reputation (Nwogwugwu, 2018). Effective communication is deemed to be at the core of the failure or success of the crisis response strategies as it may increase or reduce the perception of threat to the image and reputation of the organization (Nwogwugwu, 2018). Effective communication mitigates any reputational damage as the organizational response can improve/aggravate the situation hence influence the crisis perception (Coombs, 2007). Therefore, crisis communication eliminates any existing rumors and provide a factual outlook that ensures the maintenance of a positive organizational image (Coombs, 2007). The media is considered as the most appropriate channel for the transmission of such an image. The purpose of this study will be to establish the crisis communication strategies that electronic companies employ to eliminate the negative effects of a crisis through crisis communication.

Problem Statement

The technological advancements that have taken place in the last few decades have increased the demand for electronic products. Consequently, many companies have been established within the industry and, combined with the consistent changes in technology, has made the industry dynamic and highly competitive(International Labour Organization, 2014). The dynamism and competition demand reduced production times to maintain a competitive advantage. Therefore, mastering the industrial operations becomes vital.

Electronic products are an integral component of our daily lives. The product quality hence becomes an attractive attribute for consumer attraction and building a positive organizational image. Therefore, where a company’s products do not meet consumer expectations, there is a risk of a reputational crisis as having been observed in many electronic companies(International Labour Organization, 2014). To address such crises, several crisis management strategies can be undertaken, with the primary strategy being crisis communication. Crisis communication has restorative capabilities and is considered as among the best for addressing any form of reputational damage. As aforementioned, it works to deal with any rumors by providing facts regarding the crisis and moderating stakeholder perception(Coombs, 2007). Companies in the electronic industries have been confronted with multiple crises over the years that have proven successful in restoring their reputation. Therefore, there is a need to have an in-depth understanding of the strategies that these companies employed to deal with the crises.

Research Objectives

The objectives of this study will include:

1. To find out whether actively confronting errors during crisis communication can assist electronics companies in crisis management
2. To establish the communication strategies that are effective in rapidly dealing with a reputational crisis for electronics companies.
3. To determine the most appropriate crisis communication strategies for electronics companies.
4. To highlight the pros and cons of different strategies for crisis communication.
5. To analyze the types of reputational crises experienced by electronics companies.

References

Cooley, S. C., & Cooley, A. B. (2011). An examination of the Situational crisis communication theory through the general motors bankruptcy. Journal of Media and Communication Studies, 3(6), 203–211.

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.

Eccles, R. G., Newquist, S. C., & Schatz, R. (2007). Reputation and its risks. Retrieved April 24, 2020, from https://hbr.org/2007/02/reputation-and-its-risks.

International Labour Organization (2014). Ups and downs in the electronics industry: Fluctuating production and the use of temporary and other forms of employment. Geneva: International Labour Organization.

Nwogwugwu, D. (2018). Influence of crisis communication strategies on stakeholders’ perception of organizational reputation: A review of research trends. Journal of Communication and Media Research, 10(2), 125–138.

Schmid, R.(n.d.). Successful communications strategies for reputation management. [Online]

Available at: http://www.ashtontweed.com/documents/reputation-management.pdf

[Accessed 24 April 2020].