Response Strategies Employed by News Corporation - Example

Institution : xxxxxxxxxxx Title : xxxxxxxxxxx Tutor : xxxxxxxxxxx Course : xxxxxxxxxxx @2012 Table of Contents 1.0 Introduction 2 2.0 Case synopsis 3 3.0 Response strategies employed by News Corporation 4 4.0 The dominant crisis communication response strategy used 6 5.0 News Corporation most frequently used directed speaker 7 6.0 How message strategies vary among speakers 8 7.0 How News Corporation follow the SCCT model in response strategy selection 9 8.0 Recommendation 10 9.0 Conclusion 10 10. References 11 1.0 Introduction Organizational crises are becoming more rampant and devastating in todays world. In business, crises do occur daily. Crises are major threat to organizations. They are believed to have a significant damage effect to corporate reputation. Even though many crises have early warning signs that might be detected and worked upon, organizations should at times react to crises directly. Communication is an essential tool in managing a crisis. Understanding how crisis communication can be employed to protect organization’s reputation is beneficial to crisis managers. Coombs’s Situational crisis communication theory (SCCT) provides a framework through which crisis communication can be employed. By considering News Corporation’s phone hacking-scandal, the paper evaluates News Corporation’s communications strategy in relation to situational crisis communication theory (SCCT). 2.0 Case synopsis News international is a subsidiary company of News Corporation. It is a publisher of British news papers. News international and News of the world involved in phone-hacking, which the press dubbed it “Hackgate” or “Murdochgate”. Employees in these publishing companies were accused of involving in phone hacking, police bribery and practicing inappropriate influence in quest of publishing stories. In 2005 to 2007 investigations were done and concluded that the hacking activities in News international were restricted on celebrities, British royal family members and politicians. However, farther investigation proved otherwise. It was realized that a part from the celebrities, the phones of other members of the public were also accessed. This resulted into a public outcry against News Corporation and its owner Rupert Murdoch. Advertise boycotts made News of the World to close down on July 10th 2011. 3.0 Response strategies employed by News Corporation Organizations do always face challenges during crisis. One of the main challenges is to protect or rebuild the reputation that the company had already created. Protecting or rebuilding the reputation of a company is essential to its development. It is believed that a good corporate reputation attracts investors, customers and employees. According to Fombrun & van Riel (2004), reputation is a perceptual representation of an organization’s previous actions and future prospects that explain the general appeal of the firm to all stakeholders when compared to other big competitors. Coombs (2007) on the other hand argues that reputation is a total assessment stakeholders formulate regarding how good a company meets their expectations based on its previous behaviors. According to situational crisis communication theory, organization’s reputation is an essential resource threatened by crises. Protecting organization’s reputation during crisis, calls for effective response strategies (Millar, & Heath, 2003). In case of a crisis, organizations can employ several response strategies. News Corporation, for instance, employed several response strategies when faced with phone-hacking scandal. News Corporation employed diminishment posture strategy. In this strategy companies do always give excuses for their wrong doing. The crisis manager normally attempts to reduce the responsibility of the organization for the crisis. The response can incorporate denying any intention to do wrong. The crisis manager can also decide to justify the crisis. He or she can decide to either inform the public and other stakeholders that the crisis did not cause any harm or injuries or suggests that the victims received what they deserved (Coombs, & Holladay, 2002). For the case of News corporations, the company gave excuses regarding the phone-hacking scandal. It denied any intention to do harm or involve in the scandal. Several managers including the company director, Murdoch, were believed to have involved in the scandal. Following their denial, some managers were arrested while Murdoch and his son were summoned to provide evidence before the Leveson Inquiry. Among those arrested were Andy Coulson, former managing editor, Neil Wallis, former executive editor and Brooks. The company also gave some excuses for the wrong doing. It claimed that it was not aware of the scandal. As a way of showing concern, the company top official resigned to pave way for investigations. Another response strategies employed by News Corporation was rebuilding posture strategy. In this strategy companies do always agree to compensate the victims through provision of money or other gifts. The company can even go ahead and apologize for its wrong doing (Lin, 2007). For the case of News Corporation, the company decided to accept their involvement in phone hacking scandal, apologize for the act and compensate the victims. Rupert Murdoch accepted before the Leveson Inquiry that News Corporation was a ware of the scandal and a cover-up was done in the News of the World to hide the degree of phone hacking. News international, a subsidiary of News Corporation, accepted financial responsibility for phone hacking and made payments to victims of phone hacking. On 8th April 2011, News International announced that it admits liability on breach of privacy cases, committed by News of the world through phone hacking. The company apologized and compensated eight claimants. Among those who were compensated are Sienna Miller, an actress, Kelly Hoppen, Tessa Jowell, a Member of Parliament, David Mills, Andy Gray, Joan Hammell, Nicola Phillips and Sky Andrew (The New York Times, 2012). 4.0 The dominant crisis communication response strategy used According to situational crisis communication theory (SCCT), strategic communicative response protects reputational resource by evaluating the situation of a crisis and choosing crisis response strategy that best suits the crisis situation (Coombs & Holladay, 2002). In choosing the dominant crisis communication response strategy to employ, crisis managers do always start by identifying the type of strategy. This is normally done so as to assess the attributions of organizational control or personal control and the extent to which an organization has to be blamed for the crisis. It is believed that crisis managers should choose crisis response strategy that is relevant to the size of possible reputational harm a crisis might cause. The chosen crisis response strategies should ease reputational harm by showing that the company cares for the victims (Coombs & Holladay, 2012). For example, in News Corporation, two communication response strategies were identified. The two communication response strategies were rebuilding posture strategy and diminishment posture strategy. Among the two, rebuilding posture strategy was believed to be relevant to the size of possible reputational harm that the scandal might cause. Rebuilding posture strategy was the dominant response strategy employed by News Corporation so as to protect its reputation. News Corporation accepted that it made a mistake by invading in people’s privacy. It made a series of apologies as a way of restoring its reputation. News international published a full-page apology advert in British newspapers. The letter, which was signed by Rupert Murdoch, stated that even though “The News of the World” worked smart in unveiling other people’s misdeeds, it failed when it came to itself. News Corporation has been making a series of public apologies. On 15th July, when being interviewed by The Wall Street Journal, Rupert Murdoch apologized on behalf of News of the World. Murdoch claimed that Harbottle & Lewis, the legal advisers of the company, made great mistake when undertaking internal investigation on phone-hacking (The New York Times, 2012). On 16th and 17th July, News Corporation through its subsidiary, News international, published two full-page apologies in several national newspapers. One of the published apologies was inform of a letter while the other one was inform of an article. In a private meeting with Milly Dowler’s family, Rupert Murdoch apologized for hacking Milly’s voicemail. News Corporation did not only apologize for its wrong doings but also compensated the victims. Victims such as Sienna Miller, Kelly Hoppe, David Mills and Tessa Jowell were compensated by News Corporation. According to SCCT, all these communication responses fall under rebuilding posture strategy. Therefore, the most frequent communication strategy employed by News Corporation was rebuilding posture strategy. 5.0 News Corporation most frequently used directed speaker Rupert Murdoch was News Corporation most frequently used directed speaker. He in most cases spoke directly to members of the public and other stakeholders regarding phone-hacking. Murdoch acted as a company’s speaker the moment the scandal was unveiled. At first, Murdoch denied the existence of the scandal. As the investigation went on, Murdoch accepted the existence of the scandal but denied any cover-up made by his company. However, as the scandal grew bigger, Murdoch testified before Leveson Inquiry. In his testimony, Murdoch accepted that a cover-up was done in News of the World so as to hide the degree of phone hacking (Cowell, 2012). On behalf of News Corporation, Murdoch continued to speak directly to the public. Through his letter to the public, Murdoch apologized for the serious wrongdoing, committed by his company. He also admits in the letter that the company has failed to unveil itself regarding the phone scandal, even though it has been unveiling others for their wrong doing. Murdoch made an effort and held a private meeting with Milly Dowler’s family. In the meeting, Murdoch apologized for hacking voicemail of Milly Dowler. As company’s speaker, Rupert Murdoch made several announcements regarding phone hacking scandal. In an interview with The Wall Street Journal, Murdoch apologized publicly on behalf of The News of the World. On 13th July, due to the ongoing phone hacking scandal, Murdoch announced that News Corporation has withdrawn its proposal of acquiring the entire BSkyB. 6.0 How message strategies vary among speakers News Corporation had various speakers, including the director, Rupert Murdoch. The speakers employed several message strategies in restoring the company’s reputation. Murdoch for instance, employed both media and face to face conversation to pass his message. Through published News papers, Murdoch wrote apology letter to the public. He informed the public that the company apologizes for invading people’s privacy. Murdoch also met face to face with Milly’s family and apologized for hacking their murdered daughter voicemail. Different from Murdoch, News Corporation’s attorneys, who also act as speakers, applied legal means to pass the message to the public regarding phone hacking (Chase, 2012). The message strategies employed by the speakers, such as Murdoch and the News Corporation’s attorneys vary overtime. With time, the message strategy employed by Murdoch has proved to be more effective than that employed by the attorneys. The attorneys have failed to win the shareholder’s confident regarding the company’s director, Rupert Murdoch. The case, filed by shareholders regarding the involvement of Murdoch in covering up the phone hacking scandal, is still pending in court (Chase, 2012). Murdoch’s message strategy on the other hand has managed to restore public confidence. 7.0 How News Corporation follow the SCCT model in response strategy selection News Corporation followed SCCT model in response strategy selection by evaluating the level of crisis responsibility before deciding the crisis response strategy to employ. Coombs & Holladay (2002) argue that before choosing a crisis response strategy appropriate to the level of crisis responsibility, managers should first assess the level of crisis responsibility. News Corporation, before employing crisis response strategy, evaluated the level of crisis responsibility and found out that it is more responsible for the crisis. This therefore made it employ response strategies that will assist in restoring its reputation. Depending on the level of crisis responsibility, News Corporation chose apologies and compensation as response strategies appropriate to the level of crisis responsibility. According to SCCT model, crisis managers, before selecting response strategy to employ, should identify the crisis type. Coombs, in his theory, believes that identifying the type of crisis permits an initial evaluation of the level of crisis responsibility. After evaluating the level of crisis responsibility, managers should then select crisis response strategy that is appropriate to the level of crisis responsibility (Coombs, & Holladay, 2002). 8.0 Recommendation Ethically, it is recommended that psychological and physical requirements of stakeholders should be given first priority when a crisis occurs. This is because the needs of stakeholders are quite important when compared to other aspects such as company’s reputation. Therefore, managers are advised to give stakeholders’ needs a top priority. Once the needs of stakeholders are catered for, managers can then turn their attention to other priorities such as the reputation of the company. In News Corporation, during the phone hacking crisis, company’s reputation was given a top priority. However, this was unethical. The psychological and physical needs of stakeholders should have been given a top priority. 9.0 Conclusion From the discussion, it is clear that News Corporation employed two response strategies. These strategies include diminishment posture strategy and rebuilding posture strategy. Among the two strategies, rebuilding posture strategy was the dominant crisis communication response strategy used. It is also clear from the discussion that Rupert Murdoch was News Corporation most frequently used directed speaker. News Corporation had various speakers, including the director, Rupert Murdoch. The speakers employed several message strategies in restoring the company’s reputation. Murdoch for instance, employed both media and face to face conversation to pass his message. The message strategies employed by the speakers, such as Murdoch and the News Corporation’s attorneys vary overtime. With time, the message strategy employed by Murdoch has proved to be more effective than that employed by the attorneys. News Corporation followed SCCT model in response strategy selection by evaluating the level of crisis responsibility before deciding the crisis response strategy to employ. 10. References Cowell, A., 2012, Top British Politicians to Appear at Hacking Inquiry. Coombs, T. W., 2007, Protecting Organization Reputations During a Crisis: The Development and Application of Situational Crisis Communication Theory. < http://www.palgrave-journals.com/crr/journal/v10/n3/full/1550049a.html> Coombs, T. W., & Holladay S. J., 2002, Helping crisis managers protect reputational assets. < http://www.uk.sagepub.com/cornelissen3e/Online%20reading%20pdfs/Coombs.pdf> Coombs, W. T., & Holladay, S. J., 2012, The Handbook of Crisis Communication. John Wiley & Sons. Chase, R., 2012, News Corp. Seeks Dismissal Of Phone Hacking Lawsuit. < http://www.huffingtonpost.com/2012/09/19/news-corp-phone-hacking-lawsuit_n_1897778.html> Fombrun, C.J. & van Riel, C.B.M. (2004) Fame & Fortune: How Successful Companies Build Winning Reputations, Prentice-Hall Financial Times, New York. Lin, Y., 2007, Testing the Effects of Apology and Compassion Response in Product-harm Crises in Situational Crisis Communication Theory. ProQuest. The New York Times, 2012, British Phone Hacking Scandal. Millar, P., D., & Heath, L, R., 2003, Responding to Crisis: A Rhetorical Approach to Crisis Communication. Routledge. Read More