Essays on Strategic Risk Decision Making Assignment

Download full paperFile format: .doc, available for editing

@20121.0 IntroductionOrganizational 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 synopsisNews 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 CorporationOrganizations 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.

Download full paperFile format: .doc, available for editing
Contact Us