Corporate Communication Effects and Crisis Type: Deriving managerial implications from theory

Abstract

Corporate crises are becoming more frequent and devastating for companies with the resultant negative publicity often generating consumer anger towards the organization and its products. This negatively impacts consumer purchase intentions, sales, market share and stock prices. Despite the fact that the organizational message communicated following a crisis may be the only element under company control at the crisis outbreak to affect outcomes, few studies have investigated message effects on consumers. In this paper it is posited that, following a crisis-precipitating event, the best organizational message to reduce negative consumer reactions may be contingent upon the perceived cause of the crisis. That is, whether the crisis cause was internal or external to the company, and whether it is controllable or uncontrollable by the company, or an ambiguous combination of these. We argue, using Weiner's (1986, 1995) attribution theory, that consumers prefer messages that reflect the level of responsibility matching the crisis cause. A managerial decision tree is proposed to guide selection of message in the fast-paced decision-making period following a crisis. In doing so, we argue for the application of a new crisis typology based on causal conditions.