Crisis Management Issues - Case Study Example

Crisis management Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 30th October, 2012. News Corporation News Corporation is a media station that for years had played a profound role in modern society before it was closed down as it provided a lot of information to both public and private institutions. In their search for information however, the media house did engage in some unacceptable ways of gathering news. It was such a major embarrassment for the company that had been seen as a role model for many to be involved in such misconduct of having unethical ways of collecting information through phone hacking. When such a company is involved in such illegal activities, it corrupts its image which is negatively affected not forgetting the trust that it had for the audience and various stakeholders of the company. News Corporation group which is based in London is not new to such practices that saw it been closed after some of its reporters were accused of giving improper reports and gaining access to information that was confidential by hacking peoples phones and bribing police officers to carry out private investigations. Information that was gotten by private means was published in tabloids and it is through these tabloids that there was revelations that some of News Corporation’s information was gotten illegally in the year 2005 (Kenneally 2011). Due to several scandals that were proofed to be true, the organization was closed after 168 years of existence when it was found out that one of its tabloids was the center of a phone hacking scheme. The report will start with an introduction of a brief history of the crisis and proceed to discuss the issues in the following format: The response strategies that were mostly used in News Corporation utilized to solve the conflict The communication strategy that was adopted in this conflict How messages varied in speakers and over time The application of SCCT theory model in the response strategy Conclusion and recommendations Response strategies News Corporation adopted three postures in their approach to resolve conflict. There was the denial posture where someone especially a manager denies the existence of any crisis having given an explanation why there is no crises going on. Scapegoating is also another type of denial posture that people inside the organization blame someone else to having committed some crisis (Coombs 2007). In the denial posture, the person who is accused to have engaged in a crisis refuses to have done the act hence blames someone or something else. In a report by Spillius and Blackde (2011),Mr. Rupert Murdoch denied allegations that had been set against the company claiming that he would not abide to the ‘total lies’ made on behalf of his company on situations of phone hacking. The management and journalists of News Corporation among them Rebecca Brooks, Anderson Coulson and five other journalists were being accused of invading private information by hacking voicemails of over 600 people which saw them deny of these allegations and claimed that they were false (Spillius and Blackde 2011). Rebuilding posture is what News Corporation adopted to be in control of the scandal that had emerged. Through this, there was compensation where there was provision of money and many apologies made from the directors where they took responsibility for the occurrence of such an incidence. The management of the company apologized to the public for the negative image it had given them and representing the company, Mr. Murdoch regretted for having made such a mistake (Bradshaw, Salamander and Stacey 2011). To show how serious the scandal had affected the organization, the company set July 16 and 17 aside to make apologies from Mr. Rupert the Executive chairman on behalf of the entire company (Kenneally 2011). An article in the Daily Mail Reporter named News of the World phone hacking: company apologizes ‘unreservedly ‘and sets up ‘victims ‘compensation fund, said that the management claimed to have been involved in phone hacking and they found it their duty to compensate the victims with an amount of $670 million (BBC 2012). Diminishment posture is also another strategy adopted in resolving conflict where there is excuse from the crisis manager to reduce the effect that has been caused in any crisis. In this strategy, a company can claim that there was no control of the situation hence the development of the crisis. Justification is also another method under the diminishment posture where the crisis manager takes the responsibility to take care of the damages that have occurred due to the emergence of the crises (Coombs 2007). Diminishment posture has been applied in crises strategy where News Corporation remuneration committee cut their bonuses in order to pay up for the damages that had occurred due to the various incidences of phone hacking. This was effective justification as it would reduce the negative image the company had as there would be a cost of $224 million that would be given out to cater for any damages caused as a result of phone hacking (Martinson and Watt 2011). Using excuse as a strategy to resolve the crises, Ms. Murdoch saw that Ms. Brooks had not acted in her capacity as a manager hence in a closed door meeting requested her to resign. As a justification, James Murdoch resigned to be the chairman of BskyB so as to caution the effects that had been caused out of the phone hacking scandal. Sir Paul Stephenson also resigned when he was accused of hiring an advisor and claimed he was doing it to the right information (Bradshaw, Salamander and Stacey 2011). Communication strategy The communication strategy that was adopted in resolving the crises response was by use of a speaker. The executive director of News Corporation Mr. Rupert Murdoch talked on behalf of the company and any news briefings or interviews about the phone hacking scandal. (The Daily Mail 2011).Frequent situations found Mr. Murdoch to be the main speaker talking about the scandal was when he had to make a representations before parliamentary hearings and in addressing other reporters on the scandal and the measures that they were taking to solve the issue. Variation of message strategy between speakers and through Time Various speakers have used different strategies to resolve the crises on phone hacking. Hutchinson 2011 says that News Corporation first experienced a phone hacking situation in 2005 where it denied getting involved in such activities. ABC news 2011, gave a story of Andy Coulson who resigned from his editorial job in News Corporation after she denied the allegations made against him on hacking information as he said that he was unaware of the illegal practices being made by staff of News Corporation. The same newspaper reported of two journalists working for the News group being involved in a case of phone hacking in 2007 where they were accused of being guilty but in this case they did not reveal if it was their managers who had given them the green light to participate in such an act. In 2009,the group’s chairman, Les Hinton continued to use the denial posture to claim that the company did not observe hacking to be among the organizations policy and claimed that only vogue reporters would be involved in such an act (Hutchinson 2011).From using the denial posture, the company through its speakers and over time now adopted diminishment posture by saying that the damage that had been caused was not too much and there would be rectification of the situation that has caused much damage to the company’s image. Recently in the beginning of 2011, the company accepted the claims that they were involved in the scandal after they found out that some of their reporters had court cases to settle and the management team justified themselves by saying the situation had not been widespread. ABC News 2012 said that the executives claimed not to be aware of the hacking hence there was no proof that the entire company was involved in the scandal. Finally rebuilding posture was adopted finding that the other two would not be effective in resolving the hacking scandal. Later in 2011, in the month of April the group represented by Michael Silverleaf the company’s lawyer said that the group was calling for an ‘unreserved apology’ and it offered to make compensations to victims who had fallen prey to the situation (The Daily Mail 2012). In July the same year, the assistant operations officer said that the publication on 10th July 2012 (Spillius and Blackde 2011). Application of SCCT theory Situational Crisis Communication Theory (SCCT) created by Coombs identifies three major issues in crisis that is the crisis type, its history and the reputation it can have on a company. There are various levels that are identified by Coombs in the kind of responsibility in any kind of crisis. The crisis response that has been applied to solve the News Corporation crises is preventable crisis response where the organization has a strong attribution to the damage that has occurred either due to human error or misdeeds that have been done by the employees in an organization. News Corporation adopted several principles formulated by Coombs in their strategy to solve the conflict (Guenthner 2012). Firstly, the organization identified the type of crisis that existed and the magnitude the crisis has affected the organization. With this, a right response strategy is adopted by the organization. In the beginning while trying to solve the conflict, there was denial of such incidences being heard in the media house and this mostly occurred where there were rumors which would not be stated with facts. If the denial strategy is not effective, Coombs (2007) asserts that the diminish strategy be adopted. The company represented by its management team claimed that the whole team of News Corporation was in control of the situation as Andy Coulson and Rebecca Brooks informed the public they were not aware of the unethical practices that the company was being claimed of practicing. Finally if the two do not work in the Coombs theory, he recommends the rebuilding strategy where there is compensation and apology. In the application of SCCT, News Corporation has compensated victims with over 6 million in the recovery of the negative reputation the company had. The company through its representatives made many apologies on behalf of the company. Recommendations and conclusion To give a conclusion on the above report on crisis response, there has to be consideration of the organization’s environment and the organization should put the stakeholders’ interest at hand. News Corporation has adopted different strategies in their quest to resolve the crisis that they had been experiencing before its closure. By adopting the theory of SCCT in solving conflict, it saw the organization become successful though it ended up being would up. In another situation that a company might experience such kind of crises, I would recommend that in any selection of crises response, one should look at the kind of information given to the victims and this will depend on the history of the existence of the conflict. This kind of strategy is effective where there is no negligible harm or the duration of the crisis has not been for a long time Also in this, the diminishing strategy can be adopted where there is no past history of the company having a bad reputation. Finally I would recommend the use of rebuilding strategy were the crisis has been known by considerable number of people and by this widespread, there has been a negative reputation of the company’s image. Having applied the above response strategies in crisis situations, it is likely that there will be success in the resolution of conflict. So as to be consistent with the right strategy to be adopted News Corporation should not have mixed denial response with either diminish or rebuilding posture because by denial and with the much evidence that had been found, it shows lack of integrity and responsibility on the part of the management. In order for there to be trust from the shareholders, the management of any organization should come up with corrective measures where the management will get much support when it comes to challenging such cases. References ABC News 2012, Key players in News of the World scandal, ABC News, 16 May, Viewed 30 October, http://www.abc.net.au/news/2011-07-06/key-players-in-news-of-the-world-scandal/2784372 BBC 2012, James Murdoch declines $6m bonus over NoW controversy. 2 September, viewed 30 October 2012, http://www.bbc.co.uk/news/business-14770818 BBC News 2011b, Rebecca Brooks 'horrified' by Dowler phone hack claims, BBC News, 5 July, Viewed, 30 October, http://www.bbc.co.uk/news/uk-14033348 Bradshaw, T, Salamander, D & Stacey, K 2011, Hacking inquiry puts heat back on Murdoch, Financial Times, 6 September. Coombs, W.T. 2007, protecting organization reputations during a crisis: The development and application of situational crisis communication theory. Corporate Reputation Review, Vol 10, No. 3, pp. 163-176. Doctorow, C 2011, The phone-hacking scandal must not be used to rein in the press, The Guardian, 14 July Guenthner, DH 2012, 'Emergency and crisis management: Critical incident stress management for first responders and business organizations’, Journal Of Business Continuity & Emergency Planning, 5, 4, pp. 298-315. Hutchinson, S 2011, September 2009: Hacking at paper 'not widespread. 12 July, viewed 30 October 2012, http://www.bbc.co.uk/news/uk-14124271. Kenneally, T 2011, The 'News of the World' Phone-Hacking Scandal: A Timeline of Tabloid Espionage, The Wrap, 6 October, viewed 30 October 2012, http://www.thewrap.com/media/article/news-world-phone-hacking-scandal-timeline-tabloid-espionage-28886. Spillius, A & Blackde, R 2011, Phone hacking: Rupert Murdoch claims 'minor mistakes' have been made, The Telegraph, viewed 30 October 2012 http://www.telegraph.co.uk/news/uknews/phone-hacking/8639270/Phone-hacking-Rupert-Murdoch-claims-minor-mistakes-have-been-made.html. 15 Jul 2011 Read More