Running Head: POST-CRISIS REBUILDING

Post-Crisis Rebuilding

Xin Hua

Syracuse University

Introduction

Crisis situations for an organization consist of different forms, but one thing for sure is

that: No corporations have the immune system to the crisis (Saffitz, 2010, p. 6). Post-crisis

is a term used to describe the stage that takes place after a crisis. In the past decade, the whole
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world has experienced a period of persistent enterprise crisis, including product defects and

recalls, product or service failure, insider trading, technological breakdowns, employee

tensions, and mortgage fraud (Reed, 2014; Saffitz, 2010). This literature review focuses on

the three strongest trends on post-crisis rebuilding: implementation of corporate social

responsibility, image and reputation restoration, and stakeholder relationship rebuilding.

Trend 1: Corporate Social Responsibility (CSR)

One corporations corporate social responsibility (CSR) contains its social, ethical and

environmental obligations to its supporters and the society (Saffitz, 2010). CSR activities are

a good way to help organizations build positive reputations (Coombs & Holladay, 2015).

More and more organizations use CSR as a marketing tool, which takes the responsibility

for correcting social wrongs (Goins, 2016, p. 35).

Trend 2: Image & Reputation Restoration (Brand & Trust Recovering)

Corporate image is defined as the way that the organization wants the public to think

about it, while reputation is what the public actually thinks about it (Grebe, 2012). The brand

value and reputation in company decreases dramatically after a crisis (Falkheimer & Heide,

2015; Reed, 2014).

Trend 3: Stakeholder Relationship Rebuilding

Being able to communicate accurately with its stakeholders is a critical ability to the

organizations (McDonald & Crawford, 2012). Because a crisis causes incalculable

uncertainty variables between the organization and stakeholders, which in turn leads to a high

demand for more information (McDonald & Crawford, 2012). Therefore, rebuilding

confidence for stakeholders should be included (Taneja, Pryor, Sewell, & Recuero, 2014).

Applied Theories

To analyze the complex post-crisis rebuilding issue, researchers use a broad range of

theories. Situational Crisis Communication Theory, reputation management, crisis

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communication, post-crisis response, corporate communications and corporate social

responsibility are all mentioned and related to this topic.

Applied Research Methods

Both qualitative and quantitative methods were applied to enhance the validity of the

research findings. Researchers conducted case study, experiment and survey as three basic

primary methods to do the analysis. This research is a single case study focusing on

background checks on Disney employees scandal in 2014.

Purpose

The purpose of this study is to review the recent researches on post-crisis rebuilding to

determine its implications for public relations and post-crisis management today; apply the

findings to the case study about background checks on Disney employees scandal in 2014;

and summarize the major takeaways for practices in PR industry.

Main Ideas

In many researches and theories, crisis is often taken as a whole to do the analysis.

However, post-crisis stage is lacking of research and theory that dedicated to the study of the

topic. The crisis is an unpredictable event that can have substantial long-term effects on a

particular organization if the situation is not dealt with effectively and efficiently (Taneja,

Pryor, Sewell, & Recuero, 2014).

In order to get a better understanding of post-crisis, the research concluded three trends

of post-crisis rebuilding strategies by reviewing twelve literatures. They are: implementation

of corporate social responsibility, image and reputation restoration, and stakeholder

relationship rebuilding. This review can draw upon the existing literature about post-crisis

rebuilding and develop significant ramifications to inform the actual practices.

Trend 1: Corporate Social Responsibility (CSR)

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Corporate Social Responsibility (CSR) efforts can alleviate long-term brand image

damage and rebuild its reputation and relationships among consumers to a cooperation

without prior CSR history, which can benefit both society and business (Saffitz, 2010). For

organizations, crisis brings threat to the stability of the organizations, its image, legitimacy

and ultimately survival (Saffitz, 2010). Regardless of the nature of the crisis, corporate may

suffer a serious defeat the loss of trust. Therefore, it is crucial to do the research on post-

crisis CSR strategy and what outcome the strategy may bring to the post-crisis rebuilding for

the company trust and reputation.

One interesting case study is the Dove Campaign for Real Beauty. The first ten years of

the Dove Campaign for Real Beauty in the United States to determine its impact on public

relations industry and current corporate social responsibility (CSR) and emphasizing the

importance of using new technologies in a long-term campaign. It generated the distinction

between CSR and caused marketing or traditional marketing campaigns that CSR expands the

corporate expertise and culture to social demands and interests (Goins, 2016). CSR serve a

role that help to protect a company during a crisis, at the same time, CSR also been seen as an

opportunity to rebuild its image and renew its reputation after crisis.

Moreover, CSR initiatives have the potential ability to build stronger relationships

between companies and stakeholders. CSR as a means of creating stakeholder value, which

maintained a consistent perspective with Barnett (2007) who argued that CSR consists of

specific firm investments. According to the study done by Peloza & Shang (2011), there are

three CSR initiatives categories: philanthropy, business practices, or product- related.

The role of corporate social responsibility (CSR) as a crisis risk rather than an asset in a

crisis, especially when stakeholders assume a corporations current approaches as

irresponsible. CSR efforts can be seen as asset and cushion the corporation from harm as well

as rebuild the reputation in actual crisis cases. But the buffering value of CSR was negative
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when a crisis violated CSR prospects. CSR and crises have a much more complicated

relationship than current research. At the same time, CSR itself can be a potential threat for

cooperation rather than an asset used to protect a reputation during or after a crisis.

Trend 2: Image & Reputation Restoration

We are experiencing an ages of crisis in the past decade, even the general public can

notice that that there have been continually corporate crises: product defects and recalls,

insider trading, corporate malfeasance, mortgage fraud, and other wrong-doing that has led to

global financial crises (Reed, 2014). Because of the crisis, it requests crisis managers to have

a set of communication strategies to communicate with both internal and external audiences,

such as employees, stakeholders and consumers. Traditionally, the print, radio, and television

media outlets are the most primary methods for PR professionals to communicate with its

audiences, however, corporate communications strategies have included the online social

media platform such as Facebook, Twitter, and LinkedIn. In other word, the way that the

organizations communicate to and with stakeholders, as well as the way stakeholders

consume news and information have been shaped by social media in recent years (Reed,

2014). Therefore, the image and reputation restoration not only related to how an

organization responds to the crisis, also what media outlets they use.

The AWB case serve as a negative example, which failed to demonstrate an initial crisis

response that would meet the requirements of the society and their key stakeholders. In the

case of AWB, the company avoided taking responsibility and their insincerely apology only

showed that they were trying to defend themselves. The AWB failed to comfort the key

stakeholders and community, which made the company hard to achieve forgiveness and

rebuild their reputation. When corporations dont admit their mistakes cant achieve real

reforms to solve the problems, then it will harm its reputation and image after crisis.

On the other hand, the relationship between post-crisis media communication channel
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and consumer behavior that showed brand trust levels. There is no doubt that the product

crises have the negative influence on brand trust. According to study done by Reed (2014),

there are three main corporate crisis response strategies: (a) accommodative, (b) defensive (c)

blended (a combination of accommodative and defensive). Accommodative strategy refers to

full apology, mortification or compensation. Its a behavior of admitting mistakes and asking

for forgiveness, may including some compensation. At the same time, the organization takes

full responsibility for the crisis. This strategy can help organization repair its image.

Defensive strategy refers to minimizing the perceived damage associated with the crisis

(Reed, 2014, p9). The organization may state that no serious damages or the victims

deserved what they received (Reed, 2014, p9). This strategy may include the statement of

denying any intention to injury, which will minimize the organizations responsibility for the

crisis. Therefore, accommodative and blended crisis response strategies have the positive

impact on recovering damaged brand trust at post-crisis stage. Trust played a critical role in

rebuilding corporate reputation/image and concluded the most efficient way to recover brand

trust is to use three crisis strategies through two media channels (traditional online or online

social) at post-crisis stage.

By reviewing the Findus Nordic and the Horsemeat Scandal, it shows that the important

role of a trust recovery campaign in post-crisis. A trust recovery campaign can help accelerate

the image retrieval whether it was involved with ordinary visitors or not. Also a trust

recovery campaign should be set up and launched as soon as possible after a crisis. Moreover,

parallel with external trust building campaigns, an organization should also intend to recover

the internal trust.

The reputation restoration after crisis also can apply to how nations (U.S.), which was

accused of triggering the financial crisis, has affected the global economy and repaired its

image. The study used rhetorical analysis of speeches and news reports from September 8,
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2008 (start of the U.S. financial crisis) to November, 2009 (culmination). Three out of 12

articles were found to be relevant in image repair studies, including news reports such as the

New York Times, USA Today and The Wall Street Journal. The researchers utilized image

repair theory to analyze the strategies that were used by the U.S. government to recover its

image during the 2008 financial crisis. Hiebert (2005) argued that success in diplomacy

occurs when communication is credible and when words match action (p. 320). The

consistency of speech and action will establish credibility, which can help repair U.S.

governments image after the crisis. Also the use of clarity, dialogue and ease tensions

contents via new media platform can complement the lack of mainstream media.

Trend 3: Stakeholder Relationship Rebuilding

Winning the trust from stakeholders is the essential step after crisis. Stakeholders may

upset when a crisis happens because they believe the organization has violated their

expectations, and the crisis may would affect the perception by stakeholders toward the

organization.

An inter-organizational approach to post-crisis communication will benefit the

stakeholders and provided a model for cross-industry post-crisis renewal strategy. By

reviewing a case study called the Helicopter Task Group (HTG), instead of following the

majority of post-crisis communication theory that focuses on maintaining a positive image, it

focused on promoting the dialogue between public, stakeholders and leaders, to create a

consensus to rebuild the corporate. The case study shows us the post-crisis strategy should go

beyond the crisis and apply efficient crisis communication with the wider community.

Moreover, generating safety culture and building stakeholder relationships is important for an

organization to provide internal credibility and trust.

On the other hand, it is necessary to have crisis management and a corporate leader to

communicate with stakeholders. Because a successful crisis management has to deal with a
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lot of urgent issues and their stakeholders (Taneja, Pryor, Sewell, & Recuero, 2014). Also the

first person, who reacts to the crisis, takes an essential role. Because the first phase of crisis

management and the first actions you take always turn out to be a critical phase. Every crisis

needs a proper communicational way to reach those key individuals in the organization,

which can resolve the crisis efficiently and effectively. At the same time, the corporate should

have a balance between the corporate and its stakeholders to guarantee a higher degree of

participation in between. According to the study done by Taneja, Pryor, Sewell, & Recuero

(2014) that rebuilding the confidence for employees and stakeholders in the post-crisis stage

can help renew a corporates image and reputation.

There is an integrative model of crisis communication by using Giddens theory of

structuration, which conducted a communicative impact on the micro level, the meso level,

and the macro level. The key of securing a long-term organizational reputation is to have a

well-organized crisis communication management on all of these levels (Thiessen &

Ingenhoff, 2011), because a good reputation among stakeholders can secure a faster image

restoration in the crisis situation.

The stakeholders reactions to companys crisis communication and causes, especially

the four crisis causes on stakeholders responses, are also very important. Base on Weiners

Attribution Theory (WAT) and Situational Crisis Communication Theory (SCCT), confession

can increase stakeholders sympathy, loyalty, and attitude. Although confession means the

organization takes the crisis responsibility, denial will trigger strong negative stakeholder

reactions. Furthermore, media usually is the sender of all the crisis causes to the stakeholders,

and then the media relations strategy should focus on mitigating adverse reactions.

Summary

From the literature review of CSR initiatives, reputation restoration, and stakeholder

relationships generates three trends of post-crisis rebuilding. These three trends

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(implementation of corporate social responsibility, image and reputation restoration, and

stakeholder relationship rebuilding) establish the framework for successful post-crisis

strategies and post-crisis rebuilding.

The conjunction of all three trends is a more efficient way to deal with post-crisis

situation. First, the implementation of corporate social responsibility is essential. Because

CSR initiatives are a good way to help organizations build positive reputations, which may

help rebuild its trust and reputation during crisis. Second, prioritizing stakeholders correctly

is the key to good crisis management. Sometime the crisis management teams can get too

focused on the crisis itself and forget to effectively communicate with their stakeholders.

However, during crisis management, there is the possibility of changing threat to an

opportunity, and the realization of that opportunity needs employees support the crisis

management of the company facing clients, institutions, the media and society as a whole.

The critical stakeholder reactions may get involved with their emotional reaction

(Falkheimer & Heide, 2015). There are three emotions that tend to dominate crises: anger,

sympathy, and anxiety. Anger will create maximum damage on an organization. If

stakeholders are sympathy for the crisis and the organization, the stakeholders may support

the organization and try to help in some way during the crisis. Anxiety is the most common

emotion in product harm or other crises that directly threaten stakeholders safety or interests.

Therefore, the crisis manager should establish corrective actions to prevent another crisis

from happening or any other threatened harm the stakeholders.

As I mentioned in the literature review, internal communication (employees) is also

important during a crisis. Because employees are the credible source of information about an

organization. Any of their friends or family members may have the possibility to get

information from them. If the employees are unaware of the current situation of the crisis,

then it may bring a negative perception of the organization. Therefore, the crisis manager
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should treat employees as an asset that should be informed rather than ignored during a crisis.

Strengths and Weaknesses of Research

Although the implement of CSR, stakeholder relationships and image restoration are all

important elements to post-crisis rebuilding, there are very few research integrate these three

aspects together. The implement of CSR address those CSR initiatives can bring good

reputation to an organization and can accelerate the reputation repairing speech during crisis.

Because a crisis causes incalculable uncertainty variables between the organization and

stakeholders, which in turn leads to a high demand for more information. Except for

emphasizing on external stakeholder relationship rebuilding, but also take the internal

communication into consideration. The main difficulty is defining the best way of post-crisis

rebuilding, because there are many variables are included in this certain situation.

As with most communication theories, most of the literature reviewed here is qualitative

in nature. There three major drawbacks of qualitative research methodology. First, the

research process is time-consuming. Second, sometimes it may ignore a particular important

issue. Since all interpretations and finding are limited, there may exist personal and

knowledge influence on the observations and results. Considered the nature of qualitative

research methodology that is generally open-ended, the qualitative inquiry may need more

data to be collected. Last, the data that been collected is not objectively confirmable.

However, because qualitative method is open-ended, which allow participants to raise the

most important issue to them.

However, there may still need more research to be done in the future, to do the research

in post-crisis rebuilding in depth. The strength of the integration research upon three trends is

that it provides a solid foundation for further development of significant ramifications to

inform the actual practices.

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Analysis

The following case study focus on the post-crisis management effort of the major

multinational mass media and entertainment conglomerate The Walt Disney Company in

response to the background checks on Disney employees scandal in 2014. Ever since

Disney creation in 1955, Disneyland, as a global well-known brand, has been known as "the

happiest place on earth." When people mention the word Disney, you will have a fantasy

image in your mind. Maybe you will bring the Small World, Mickey Mouth or Winne-

the-Pooh to mind.

While Disney owns its strong brand reputation, they have been attempting to restore their

image and rebuild their reputation after crisis as well. This case study will explore the 2014

Background Checks on Disney Employees Scandal, and how the established three trends

apply to the post-crisis rebuilding, and Disney react to the crisis.

The Case Study

On July, 2014, CNN reports that at least 35 Disney employees in and around Florida

have been arrested and accused of sex crimes involving children since 2006, as part of a six-

month investigation. Disney, known as the perfect family-friendly travel destiny, however, a

report on the CNN news reveals that 35 Disney employees with felonious records who

should not be eligible for employment, and Disney Theme Park employees caught in sex

stings, child porn arrests. Obviously, parents are scared by those creepers are still at the

working spot in Disney Theme Park, and start online protest to require Disney address the

issue. In addition to the online activism, lots of news outlets have also pitched on it with the

news headline like How could Disney let this happen?

The arrested Disney employees, who ranged from maintenance workers to tour guides to

security guards, were charged including possession of child pornography and trying to meet a
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minor for sex. 32 of them have already been convicted.

After CNNs report, The numbers reported by CNN represent one one-hundredth of one

percent of the 300,000 people we have employed during this time period, Disney said in a

statement. We continue to work closely with law enforcement and organizations like the

National Center for Missing and Exploited Children as we constantly strengthen our efforts.

Disney also addresses that it has extensive measures in place to block child predators

before theyre employed, including background checks and computer monitoring. According

to their press release, Disney addressed the following content:

Disney state how as a company, we strive to be a safe and enjoyable family-friendly

environment. We will acknowledge the concern recently raised by the public that

background checks have not been performed for all employees and we will express how

we have the same concern that has been brought to light. We do believe our parks and

cruises ships are safe environments for all ages with no reports of child-predator crimes,

but we actively are working to improve this perception and to assure our guests that they

will be safe while being on our grounds.

After Disney this press release, Disney also post a video version of their press release

and article version as well on their official website. They also post the link of the press

release on all of their social media platforms. Moreover, Disney started running background

checks on all current employees immediately, but appropriate manner right after crisis.

Connections and Gaps between the Literature Review and Case Study

The Disney case study contains all of the major trends emphasized in this literature

review. Disney has been practicing CSR on childhood obesity, healthy nutrition, the

environment, community, labor standards and volunteerism issues for a long time; they have

informed their stakeholders on both social media and press release; they rebuilt their trust and

image quickly after crisis.

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While this case study fits very well to the post-crisis rebuilding strategies established

here, there are still several limitations. First, because of the current nature of crisis, this study

does not have any quantitative measures to verify the impact of any Disney CSR activities on

post-crisis rebuilding. Secondly, it is difficult to measure the damage of crisis that bring to

Disney Company after crisis.

Critical Review of the Study

In overview, Disney has well-handled the crisis by utilizing three trends, instead of pre-

crisis CSR, it is lacking of post-crisis CSR activities, and therefore, still suffers from

significant image rebuilding problems. Disney has noticed the importance of CSR initiatives

for long-term to build a strong brand loyalty and company reputation, also well-

communicated with their stakeholders, especially with their consumers.

As the largest media and entertainment conglomerate in the world, Disney has the

responsibility to give back to the community who have helped it become the empire today.

CSR efforts can be seen as asset and cushion the corporation from harm as well as rebuild the

reputation in actual crisis cases. Disneys long-term pre-CSR initiatives help it build a strong

brand loyalty and an indestructible brand image. Although those CSR activities cannot

change the reality that Disney did hired some employees with felonious records, but the CSR

activities can alleviate the negative influences and use CSR as a marketing tool, which takes

the responsibility for correcting social wrongs (Goins, 2016, p. 35).

The Situational Crisis Communication Theory (SCCT) has been perfectly applied to this

case study. Due to the negligence of background investigation before recruiting, Disney has

hired employees with felonious records who should not be eligible for employment, which

may put their stakeholders at risk situation and reduce its credibility of the brand. According

to the SCCT, organizational guilt belongs to the preventable cluster, which Disney knowingly

placed people at risk, took inappropriate actions hiring ineligible employees. The company
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chooses rebuild crisis response strategies, which including compensation and apology. Base

on Weiners Attribution Theory (WAT) and Situational Crisis Communication Theory

(SCCT), confession can increase stakeholders sympathy, loyalty, and attitude.

The stakeholders of Disney include its stockholders/investors, partners, consumers,

product suppliers, organizations using Disney products, government organizations,

social/environmental groups, media and competitors. Within the literature review, with the

emergency of social media platform, the image and reputation restoration not only related to

how an organization responds to the crisis, also what media outlets they use. Therefore, to

have a better communication with their stakeholders, Disney actively post updates of the

crisis and inform all stakeholders, also respond to comments and questions via different

media outlets.

For this case, Disney has reached their stakeholders in several different ways. The press

release has two versions, both video and article version, which have post on website and

connect the link to each social media platforms as well. For stockholders/investors,

consumers and competitors, Disney use press release that been posted on the website and

other social media platforms to reach out them. But for other stakeholders such as partners,

product suppliers, social/environmental groups, organizations using Disney products and

government organizations should generate other communication methods to reach out them,

for instance, e-mail, phone, in person, face-to-face will be the best way. And for the media,

Disney should have a press conference to address this issue to all media outlets.

Takeaways for Professional Practice in PR

Post-crisis rebuilding is an often-overlooked stage of crisis management, actually

compared to pre-crisis avoidance, post-crisis rebuilding has more specific rules to follow.

Even though crisis management are a frequently cited necessity in public relation field, there

are only few studies to guide crisis mangers or public relations practitioners. Below is a list of
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key takeaways for professional practice in PR post-crisis rebuilding:

1. Establish CSR initiatives before a crisis happens or after crisis also helps.

Corporate Social Responsibility (CSR) efforts can alleviate long-term brand image

damage and rebuild its reputation and relationships among consumers to a

cooperation without prior CSR history, which can benefit both society and business

(Saffitz, 2010). According to a study done by Goins (2016), CSR initiatives are able

to improve reputation and turn stakeholders to brand ambassadors through word of

mouth. Disney company put effort in the environment, community, and labor

standards as well as volunteerism. Disney encouraged over one million people to

give back to their communities doing volunteer job by offering free tickets in

exchange for a day of volunteer service. The company established The Disney

Worldwide Conservation Fund in 1995, to support local and global non-profit

organization to protect wild animals and ecological system, and have a positive

impact on society. The long-term CSR strategies helps Disney build a strong brand

loyalty and positive reputation, which can help repair its image during post-crisis

stage.

2. Keep stakeholders informed and updated during and after crisis.

Stakeholders may upset and lose their trust when a crisis happens because they

believe the organization has violated their expectations, and the crisis may would

affect the perception by stakeholders toward the organization. Therefore, PR

practitioners should inform stakeholders and timely update what is the company

doing to deal with the crisis situation. Disney did really great job by communicating

with its stakeholders, especially consumers. While for The Walt Disney Company,

instead of focusing on consumers, Disney should also pay attention to stakeholders

such as stockholders/investors, partners, product suppliers, organizations using

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Disney products, government organizations, social/environmental groups, media

and competitors by using different media tactics to reach out them.

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