Corporate Identity and Crisis Response Strategies: Challenges and Opportunities of Communication in Times of Crisis

314 Pages·2014·3.359 MB·English

by  Olga Bloch (auth.)

Corporate Identity and Crisis
Response Strategies
Olga Bloch
Corporate Identity
and Crisis Response
Strategies
Challenges and Opportunities of
Communication in Times of Crisis
Olga Bloch
Frankfurt, Germany
Dissertation submitted to the Faculty of Humanities of the Bergische Universität Wup-
pertal, Germany, May 2013.
Supervisors:
Prof. Dr. Monika Rathert
Prof. Dr. Jürgen Schulz
ISBN 978-3-658-06221-7 ISBN 978-3-658-06222-4 (eBook)
DOI 10.1007/978-3-658-06222-4
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Acknowledgements

This dissertation could not have been written without the support of
many individuals and I want to express my deepest appreciation to them.
I owe sincere and earnest thankfulness to my advisor, Prof. Dr. Monika
Rathert, for encouraging me to collect my ideas in a productive manner
and put them on paper, for guiding my work with prompt and discreet
advice, for believing in me when I had my doubts and rejoicing with me
when each new chapter was written. It was a pleasure and an honour to
have you as my mentor.
I am truly indebted and thankful to my second advisor, Prof. Dr. Jür-
gen Schulz from Universität der Künste Berlin, for his valuable advice
and feedback.
I would like to thank my fellow doctoral students I had the chance to
share my preliminary findings with during the linguistics colloquium at
the Bergische Universität Wuppertal, for their ideas and suggestions as to
how make my arguments stronger.
Many thanks to Laura Druce, whose editing suggestions and precise
sense of language contributed to the final copy of this dissertation.
I am sincerely thankful to my friends Jörg Wehrmann and Caroline
Wolff, a wonderful couple who supported me with their unconditional
advice and faith in me during the years of my studies in Germany.
This dissertation would not be possible without steadfast support of
my husband, Jörg Günther Ewald Bloch, who was by my side throughout
the days and months of studying and researching, making this time for
me as stress-free as possible. I would like to thank family – my parents,
my grandparents and my sister - for their love and encouragement. It is
from them I learned to work hard and ambitiously, so it only seems right
that I dedicate this dissertation to them.
Table of Contents

Acknowledgements......................................................................................................... 5
Table of Contents ............................................................................................................ 7
List of Tables .................................................................................................................... 9
List of Figures ................................................................................................................. 11
Introduction .................................................................................................................... 13
Relevance of the topic and objectives of the research ............................................ 13
Research plan and design ............................................................................................ 17
1 The Notion of Crisis: Conceptual Framework ............................................. 21
1.1 Company Crisis and its Typical Features ............................................................. 21
1.2 Types of Company Crises ....................................................................................... 32
1.3 The Specifics of Modern Crises .............................................................................. 38
1.4 Crisis Stages .............................................................................................................. 43
1.5 Crisis Stage and its Features ................................................................................... 52
1.6 Outreach and Impact of the Crisis ......................................................................... 57
2 Building up a Theoretical Paradigm .............................................................. 71
2.1 General Remarks on the Theory ............................................................................. 71
2.2 Overview of the Past Research ............................................................................... 74
2.2.1 Theorisation of crisis proneness and chaos theory ........................................ 75
2.2.2 Sensemaking theory ........................................................................................... 88
2.3 Conclusions on Theoretical Framework .............................................................. 101
8 Table of Contents
3 Corporate Identity and Stakeholder Perceptions in Crisis ...................... 107
3.1 Corporate Identity and its Role in Crisis ............................................................. 107
3.1.1 Perspectives on corporate identity: constraints in accessing the concept . 109
3.1.2 Corporate identity and its relation to image and culture ........................... 130
3.1.3 Conclusions on applicability of identity concept ......................................... 141
3.2 Crisis Response Strategies ‘in the new light’ ...................................................... 145
3.2.1 What is a strategy and how it is linked to identity? .................................... 145
3.2.2 Approaches to strategy formation: traditional view ................................... 149
3.2.3 Alternative views to strategy formation: Chinese approach ...................... 163
3.2.4 Crisis response strategies ................................................................................ 172
3.3 Stakeholder Theory Applied to Crisis ................................................................. 188
4 Case Study: Crisis Response Strategies of Toyota .................................... 203
4.1 Methods of Analysis and Data Collection .......................................................... 203
4.2 Context of Crisis at Toyota .................................................................................... 209
4.3 Verification of Hypothesis 1: Invocation of Corporate Identity ....................... 218
4.3.1 General features and content of crisis response ........................................... 218
4.3.2 Manifestation of ‘corporate identity discourse’ ........................................... 226
4.4 Verification of Hypothesis 2: Crisis Response Strategies .................................. 240
4.5 Verification of Hypothesis 3: Company Audiences ........................................... 251
5 Conclusions and Implications for Further Research ................................ 287
Bibliography ................................................................................................................. 295
Annex 1: Crisis Response Strategies Potentially Used by Organisations ........ 315
Annex 2: Image Restoration Strategies .................................................................... 319
Annex 3: Crisis Response Strategies, by Postures ................................................ 321
List of Tables

Table 1: Overview of classification systems for company crisis .............................. 37
Table 2: Chaos theory versus sensemaking theory ................................................. 102
Table 3: Ten schools of thought on strategy formation ......................................... 152
Table 4: Three dimensions of strategy: Chinese versus Western thinking ........... 166
Table 5: Crisis types by level of responsibility ........................................................ 177
Table 6: Stakeholder categories ................................................................................. 190
List of Figures

Figure 1: ‘Crisis’ in Chinese characters ....................................................................... 22
Figure 2: Defining crisis: a heuristic . .......................................................................... 30
Figure 3: Three-stage crisis development model ....................................................... 51
Figure 4: Evolution of Nestlé logo ............................................................................. 128
Figure 5: The organisational identity dynamics model ......................................... 134
Figure 6: Sub-dynamics of the organisational identity dynamics model ........... 137
Figure 7: Three pillars of empirical research ............................................................ 207
Introduction

Relevance of the topic and objectives of the research

In recent history companies have faced a range of crises, with some nota-
ble examples being the collapse of Lehman Brothers, the Deepwater
Horizon oil spill in the Gulf of Mexico in April 2010 and Exxon’s 2008
financial meltdown, Enron’s accounting scandal and the financial crisis of
General Motors. These and many other examples demonstrate that, on
the one hand, crises can strike all types of organisations and, on the other
hand, the causes of crises are diverse, ranging from human mistakes,
lapses in judgment, failure to react in time, mechanical faults or simply
circumstances entirely out of the organisation’s control.
Another important trend is the growing impact of media coverage on
these crises, arousing greater public concern among stakeholders than
ever before. Today, the internet and other communication tools have
tremendously favoured rapid diffusion of information. The influence of
modern media thus often contributes to the severity of crises that organi-
sations face. Can companies get prepared for a crisis? How should com-
panies handle the situation when a crisis strikes?
Indeed, when dealing with a crisis, companies have to find answers to
a wide range of questions. How to react in the face of a full-scale catas-
trophe? How to bring destabilising events under control? How to avoid
or at least minimise damage to company image? The answers to these
and many other questions contribute to the creation of company strategy,
which finally determines the success or failure of the crisis response.