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Social Media and Crisis

Communication
Issue Management and Risk
Prevention
Sept 21, 2016

Societal

Political

Legislative

Regulation/

expectations

developments

actions

Litigation

Case: Mattel toy recall


The toy recall became an issue of public concern about the safety of
the companys supply chain and manufacturing in China

Q: What are the issues?


Q: Who are the stakeholders?
Q: How can Mattel do better in issue management/communication

System Theory

A biological system
Tear down the silos
Systems are dynamic
Participation in the system
is mandatory
Human communication
system are open systems
The environment within
and surrounding the supra
system, systems, and
subsystems shape those
parts, and the reverse is
true

Proactive Management Functions


and Crisis Management

Proactive Management Functions and


Crisis Management
Crisis management draws upon existing resources in organization to prevent
wasted time, effort and money. Crisis prevention is facilitated by tapping into
3 management functions

Issue Management

An issue is a trend or
condition A proactive
attempt to have an issue
decided in a way that is
favorable to an organization
internal concerns, external
issues. Some issues can
develop crises.

Reputation
management

Risk management

Example: McDonalds
Environmentalists complain the use of polystyrene
clamshell burger boxes.
McDonalds initiated a recycling program; however,
consumers did not response well. (1991)
Then, McDonalds changed its procedure rather than
trying to change stakeholders opinions.

Defining an issue
1.

A public concern about the organization's decision and


operations

2.

May also involve a point of conflict in opinions and


judgements regarding those decisions and operations

3.

An unsettled matter which is ready for a decision

An issue is any trend or development real or perceived usually at


least partly in the public arena which, if it continues, could have a
significant impact on the organization's financial position, operations,
reputation or future interests, and requires a structured approach to
achieve positive, planned outcomes.
Tony Jaques, Issue & Crisis Management, 2014. p. 4

Issues (each team contributes one from the newspaper)


Team

Issue

Flat prices in Hong Kong were boosted by 35% (too expensive)

Polar bear living in the Guangzhou shopping mall (animal rights)

Uber ghost drivers in mainland China (fake pictures and no pick up)

Legislative council in Hong Kong (mismatching the number of votes)

Relocation of famous Tokyo fish market due to soil pollution has been
stopped

Chanel store in Hong Kong got robbed (security)

Samsung Note 7 in Hong Kong (battery melts)

Jones and Chase Issues Management Model

Issue

Review
Assess
Consult
(Re) priorities

Identification

Evaluation

Assign tasks
Tactical
implementation
Stakeholder
communication
Report progress

Action Plans

Scanning (i.e. DESTEP, SWOT)


Monitoring (i.e. social media)
Stakeholder input

Analysis &
Prioritization

Strategy

Options

Identify
Characterize
Formal criteria
Ranking

Goals and objectives


Identify allies
Allocate resources
Criteria for success

Worksheet 1: SWOT Analysis

Proactive Management Functions and


Crisis Management
Crisis management draws upon existing resources in organization to prevent
wasted time, effort and money. Crisis prevention is facilitated by tapping into
3 management functions

Issue Management

A reputation is an evaluation
stakeholders make about an
organization. Stakeholders
draw on indirect and direct
experiences when crafting
their personal views of an
organizations reputation.

Reputation
management

Risk management

Stakeholders: primary (employee, investors,


customers, suppliers, etc.) and secondary (those
who can affect or be affected by the actions of an
organization)

Reputation Management
Reputation = Sum of Images =
Performance + Behavior + Communication
This definition helps make it clear that performance
and behavior,
as well as communication ,
are critical components of reputation.

11

Reputation Management
Key Attributes of Reputation from Fortune Magazine
2016

2011

Innovation

Innovation

People Management

Quality of management

Use of Corporate Assets

Employee performance

Social Responsibility

Financial performance

Quality of Management

Social responsibility

Financial Soundness

Product quality

Long-Term Investment Value

Communicativeness
(transparency)

Quality of Products/Services

Governance

Global Competitiveness

Integrity (responsibility,
reliability, credibility,
trustworthiness)

The attributes can be customized by constituency

12

Comprehensive Reputation Management


Comprehensive Reputation
Management

=
A long-term strategy for measuring,
auditing, and managing an
organizations reputation as an asset.
Comprehensive Reputation Management is to
reputation what risk management is to other assets
Organizations intrinsic identify
(what it stands for)

External images
(not brand management, not
corporate identify program)
13

Reputation Mis-Management: Financial Crisis


Reputation = Performance (P) + Behavior (B) +
Communication (C)
The Performance Failure

Reputation

The Behavior Failure


The Identity Failure
The Communication Failure
Risk
14

The expanded Reputation Formula


Reputation = ( Performance + Behavior +
Communication) x Authenticity factor (Af)
To be authenticity is to have integrity. The Af factor is the indicator of how
well an organization lives up to its intrinsic identity

Reputation

What is the intrinsic


identity? What is the
standard?

Authenticity
(Adhering to Intrinsic Identity)

15

"It takes twenty years to build a reputation


and five minutes to ruin it. Think about that,
you'll do things differently. -- Warren Buffet

16

Proactive Management Functions and


Crisis Management
Crisis management draws upon existing resources in organization to prevent
wasted time, effort and money. Crisis prevention is facilitated by tapping into
3 management functions

Issue Management
Risk management represents
attempts to reduce the
vulnerabilities faced by an
organization. Vulnerabilities are
weaknesses that could develop
into crises.
Risk management is more an
internal rather than external
focus. The base for risk
management is risk assessment.

Reputation
management

Risk management

Case: BP Texas City Explosion


Accident Type: Oil and Refining - Fire and Explosion

Risk Management
Organizations faces a variety of risk factors, such as personnel,
products, the production process, facilities, competition,
regulations and customers (exist as a normal part of an
organizations operation)
Once a risk is identified, decisions are made about risk
aversion, the elimination or reduction of a risk
Two factors drive the use of risk-aversion decisions:
1. Compare the costs of the risk (e.g. costs of death, injuries,
litigation and property damage) to the costs of risks
reduction (e.g. equipment and actual work needed to
prevent or reduce the risk). BP case.
2. Choosing to engage in risk aversion (from chemical safety to
email use), risk management becomes crisis prevention

Risk Management
Risk aversion example: three common risk-reduction
strategies for safer practices
a) reduce the amount of hazardous materials on site
b) substitute a less hazardous substance
c) use a less hazardous process or storage condition

Using inherently safer practices is one among of approaches


for eliminating or reducing risk. When a risk becomes
manifest, a crisis can occur. Crises often create new risks.
Training is another effort to avoid risk
Risk Communication: a communication infrastructure, transactional
communication process among individuals and organizations regarding
the character, cause, degree, significance, uncertainty, control and overall
perception of risk

A dialogue b/w the organization creating the risk and the


stakeholders who are asked to bear the risk

Proactive Management Tetrahedron


Reputation

Crisis
Issues
Management

Risk
Management

Worksheet 2: PEST Analysis

The Crisis Prevention Process

The development of an issue


into a crisis
Intense media
attention
or
Coalition of
stakeholders
mobilizing
themselves

Ex. Latent issue: animal test

Increases
the
pressure
on an
organiza
tion to
do
something

Intensity pressure to act

Life Cycle of a strategic issue


Societal

Political

Legislative

Regulation/

expectations

developments

actions

Litigation

Origin/
Potential

Emergency/
Amplification

Current/
Crisis

Issue Power Curve


Issue
Management
Curve

Resolution/
Decline

Affectability/
Issue Gap

Development options narrow over time


Tony Jaques, Issue & Crisis Management, 2014. p. 38

The Crisis Prevention Process


Identify the sources to scan

Collect the information

Analyze the information

Trends in the Crisis Management


Landscape
Landscape Survey
Less Strategic Control

More Strategic Control

The Internal
Landscape

The External
Landscape

Crises have
become more
transboundar
y in nature

Terrorism
remains an
ongoing threat

Social media
and the
internet
intensify the
effects of a
crisis

Humaninduced
missteps are at
the core of the
majority of
crises

Environmental
damage and
sustainability of
resources cause
crises to have a
global impact

Globalization
increases the
risk of
organizational
and societal
crises

Potential Crisis Sources to Monitor


Issues Management Sources
TRADITIONAL News
Media: Newspaper, television news, news and business magazines
Trade journals: Medical and science journals
Newsletters: Government publications
Public opinion polls: Public opinion experts
Stakeholder actions
ONLINE
News and business wires
Online newspapers, magazines, and trade publications
Archives for professional associations, special interest groups, and government agencies
Consumer-generated media: Websites, blogs, and discussion groups
Newsgroups
Risk Assessment Sources
Total quality management, Liability exposure , Natural disaster exposure
Environmental crisis exposure, Criminal exposure , Product-tampering exposure
Legal compliance audits, Financial audits , Ethical climate surveys
Workers compensation exposure Safety, accident records, dBehavioral profiling
Internet use monitoring
Reputation Sources
Consumer-generated media: Websites, blogs, and discussion groups

The Crisis Prevention Process


Identify the sources to scan

Collect the information

Analyze the information

Effective Content Analysis


1

Develop a coding categories


Each category need a thorough written definition (exclusive:
no message should fit into more than one category)

People to be trained to use the coding system


Coders place similar messages in the same categories (This
consistency is called reliability)

Companies examine the data (i.e. customer complaints)


Qualifies the recoding/content analysis as a form of
information collecting

The Crisis Prevention Process


Identify the sources to scan

Collect the information

Analyze the information

Expectation Gaps
Performance Gap: Organization actions do not match stakeholder expectations
Organizational Actions

Stakeholder Expectations

Perception Gap: Organizational actions do match stakeholder expectations, but


stakeholders do not see the match
Organizational Actions

Stakeholder Expectations

END