MANAGING REPUTATION RISK AND SITUATIONAL CRISIS IN
HIGHER INSTITUTIONS OF LEARNING
Andem I. Effiong
Wilmington University, USA
E-mail: andyeffiong@gmail.com
Submission: 19/10/2013
Revision: 03/11/2013
Accept: 25/11/2013
ABSTRACT
Extant literature on crisis and corporate reputation management has
presented the Situational Crisis Communication Theory (SCCT) model as a valid
and reliable framework for managing crisis and predicting stakeholders’
perceptions of organizations’ reputation in times of crisis. In order to verify
the applicability of the model in higher institutions of learning in a
developing country context, a study was conducted in September, 2011 in two
public universities in Nigeria. The findings of the study revealed that
although the institutions did not fully adopt the SCCT, the strategies adopted in each of the
two crisis situations were similar to some of the recommendations of the SCCT
in different ways. While one institution focused on a strategy similar to what
the SCCT model describes as “rebuild crisis response strategy” with informing
and adjusting tactics, the second institution utilized a victimization or
“Victimage” strategy with strong attribution of blames; and frequent reminder
of the stakeholders of the extent of losses that the institution would incur
from the crisis. The outcome was that the institution with high emphasis on
rebuilding and information adjustment strategy recorded very little damage to
its reputation capital, during and after the crises. Conversely, the second
institution which believed in attribution of blames recorded significant losses
in reputation assets, which included withdrawal of key stakeholders and loss of
recognition of programs by some professional agencies. The implications for
crisis managers in the two institutions include the need to approach
situational crises in a holistic manner. Such holistic approach would involve a
refocus, critical analysis, planning and implementation of crisis response
strategies based on the relevant situations, events, and the people concerned.
The research was designed as a case study with focus group discussions as the
data collection method. Altogether, 16 officers including eight top and senior
administrative staff who were actively involved in the negotiation and
communication programs during the crises in the two institutions participated
in the focus group discussions.
Keywords: situational
crisis, reputation risk, stakeholders’ perceptions, stakeholders’ value,
reputation capital, reputation assets.
1.
INTRODUCTION
Reputation
is a key resource to higher institutions of learning in all parts of the world.
It is an important asset because with a good reputation, an educational
institution can attract significant endowment, reputable sponsors, and bright
scholars, among other incentives, which could boost its educational, economic,
and other development programs. Situational Crisis Communication Theory (SCCT)
offers a framework for using crisis communication to protect reputations in
organizations (COOMBS, 2004), including higher educational institutions. In the
past few years, several researchers have proposed alternative approaches to
crises management in order to safeguard organizational reputation (PFAHL;
BATES, 2008; WALTON; COOLEY; NICHOLSON, 2012; THIESSEN; INGENHOFF, 2011;
KRIYANTONO, 2012).
However,
the SCCT model has been validated and found to be relevant in several studies
on crises and post crises reputation management in many instances.
Unfortunately, most of the evidence provided in the extant literature is in
business organizations, where maintenance of reputation capital and bolstering
of the stakeholders’ values were essential (for example: COOMBS; HOLLADAY,
2002; BLANEY; BENOIT; BRAZEAL, 2002; COOMBS, 2007; FUSSELL; COLLINS; ZOCH,
2009; COOLEY; COOLEY, 2011). Moreover, despite its importance, very few
organizations seem to understand the processes and implications of adopting and
applying the SCCT model for managing crises and maintaining corporate
reputation in times of conflict (KRIYANTONO, 2012; GALLAGHER, 2013).
When
it comes to higher academic institutions, which are non-profit-oriented
educational, training, and research organizations, the situation may not be
different in most developing countries. The application of SCCT model has
either been overlooked or probably misunderstood as a crisis and reputation
management strategy by most institutions. As Gallagher (2013) also reveals,
diversity in socio-cultural norms and political orientation could impact on the
application of the SCCT model in some organizations. That proposition seems to
portray the prevailing situation in many higher academic institutions in some
developing countries.
The
aim of this paper is to present a report of a study conducted in two higher
academic institutions in Nigeria. The research aimed to (a) explore how the
approaches adopted by the institutions conformed with or diverged from the SCCT
model and its recommendations and (b) to establish the extent to which the
recommendations of the model were directly or indirectly utilized in the
institutions’ particular contexts. The paper is divided into six sections. Sections
four, five, and six cover analysis and results, discussion, and implications
respectively.
Section
two captures the literature review on the SCCT. A conceptual framework and
operationalization of the concepts used in the paper are provided. Some past
researches involving the SCCT model are also reviewed. The SCCT model is
presented and discussed in terms of its applicability and limitations in the context
of crises experienced in major international organizations within the past few
years.
The
major steps in the implementation of the SCCT model are also highlighted,
including the dimensions of crisis and the managerial actions prescribed by the
model. Section three presents retrospective case studies on how two academic
institutions in Nigeria managed their crises and the challenges experienced by
the institutions and the stakeholders. The similarities and differences in the
strategies adopted as compared with the recommendations of the SCCT model are
highlighted. The final section covers the implications, conclusions, and the
need for further research.
1.1.
Research
Questions
The
study was conducted to address the following questions:
1. What
sort of crisis did the higher institutions face?
2. What
actions did the institutions take to address the challenges and what were the
consequences?
3. How
did the public perceive the institutions before and after the crises?
4. Did
the crisis affect the reputational assets of the institutions in any way?
5. If it affected, how did it impact on the
people, tasks and the environments of the institutions?
2.
LITERATURE REVIEW
2.1.
Crisis
and Organizational Reputation
Situational
Crisis Communication Theory provides an evidence-based framework for
understanding how to protect the reputation of an organization during and after
a crisis with the use of effective communication strategy (COOMBS, 2007).
Crisis management requires the use of effective communication guidelines which
should be supported by empirical research findings rather than personal and
unscientific experience (ROUSSEAU, 2006). Crisis has been defined as “a major
threat that can have a negative effect on an organization, industry, or
shareholders if not properly handled” (BARTON, 2001, p. 2). An academic
institution like any other organization may face crisis as a part of its
operational or situational challenges
Undeniably,
crisis may have both positive and negative impacts depending on the way it is
handled. The positive impact could manifest in form of mutual understanding and
social transformation which may be constructive in nature. Negatively,
situational crisis can be destructive and expensive. Situational crisis
management helps to alleviate the risk created by negative bound crises (COOLEY;
COOLEY, 2011). Effective crises management can build confidence and trust of
stakeholders as well as the reputation of an organization. Positive reputation
can also enhance the business profile of an organization during and after
crisis, while negative reputation can hurt the interests of an organization and
its stakeholders’ value. Fombrun and van Riel (2004) have revealed that the
reputation of an organization strongly depends on the information the media
circulates and the type of interpretation the stakeholders give to such
information.
2.2.
Situational
Crisis Communication Theory Model
The
SCCT model is based significantly on Attribution Theory (WEINER, 1985, 1986,
2006). The Attribution Theory posits that people search for the causes of events
in most cases when those events present negative and unexpected consequences.
The unexpected consequences could lead to anxiety and search for the proximate
and remote causes, and the evaluation of the probable effects of negative
outcomes. Crisis can vary in nature from simple to complex. Crisis response
strategies have three objectives in protecting institutional reputation. These
are to: (1) shape the attributions of the crisis, (2) change public and
stakeholders’ perceptions of the organization, and (3) reduce negative affect
generated by the crisis (COOMBS, 1995). A response strategy may be influenced
by the nature of crisis, crisis history, and relationship history. Crisis
complexity is important in that it can significantly influence the nature and
focus of a crisis response strategy. As Thiessen and Ingenhoff (2011) posit,
success in crisis communication management must be conceptualized and addressed
on different and specific levels of complexity. The final behavioral outcome
may depend significantly on the interactions of all other variables. Behavioral
outcome may conform or differ from behavioral intentions depending on the
effectiveness or otherwise of the crisis response strategy (COOMBS, 2007). Where a crisis was poorly handled, institutional
reputation and relationship history may be negatively affected.
Reputation history could be influenced by the crisis history and
relationship history. Crisis history refers to the recorded antecedents and
consequences of earlier crisis or institutional stability (non-crisis).
Relationship history comprises the recorded events and responses which
influenced the perception of stakeholders’ relationships with an institution
during and after a crisis. Institutional
reputation can be associated with the crisis response strategies, crisis
history, and the relationship history. Conversely, an effective crisis response
would motivate internal and external stakeholders, which could engender
confidence and trust of stakeholders on the ability of an institution to tackle
future crises. A bad reputational history may
impact negatively on the organization and damage its reputation capital and
public image. A history which reflects positive action and timely intervention
by the organization may give confidence to stakeholders and provide hope for
resolutions. The reputational threat to an organization increases as
stakeholders’ attribution of crisies responsibility to the organization
intensifies (COOMBS; HOLLADAY, 2002, 2004).
From the literature reviewed, it could be inferred
that in every crisis there is some kind of emotional attachment which serves as
a motivator for positive or negative action. The positive action would involve
some search behavior on how the crisis could be solved. Negatively, there could
be dissonance by stakeholders that would culminate in attribution of
responsibility for the crisis. Stakeholder attributions of crisis
responsibility have affective and behavioral consequences for an organization (COOMBS;
HOLLADAY, 2004; MACDONALD; HARTEL, 2009).
If
the organization is deemed responsible, the stakeholders’ perceptions would
change and the organization’s reputation could be eroded. Stakeholders may cut
relationship with organizations in crisis or create negative word-of-mouth
attributions . Thus, organizational reputation and the attribution of crisis
responsibility have a strong affect on perceptions of organizational reputation
. Adopting an effective communication/information management strategy
would help organizations to cope with the trauma that reputational damage in
times of crisis could cause (STURGERS, 1994).
The situational crisis communication model has
eight variables. The variables as discussed earlier are: (1) crisis, (2) crisis
history, (3) crisis responsibility, (4) emotions, (5) crisis response strategy,
(6) prior relationship reputation, (7) organizational reputation, and (8)
behavioral intentions (COOMBS, 2007). However, some of the semantics in the
original model were slightly changed to facilitate the interpretations and
understanding of participants in the research study. The nomenclatures of two
of the variables (prior relationship reputation and behavioral intentions) were
slightly modified to relationship history and behavioral outcomes in Figure 1
below.
|
Figure 1:Crisis
Situation Model of SCCT Source: Adapted from Coombs, (2007). |
2.3.
Practical
Application of The SCCT Model
To
apply situational crisis communication strategy, an organization involved in
crisis needs to maintain a regular dialogue with stakeholders on the prevailing
situation. Such communication should include information on the remedial or
corrective actions and the projected impact of such actions (GALLAGHER, 2013).
According to Sellnow et al., (1998), knowledge of the corrective actions is a
form of reassurance to the stakeholders that the situation has been brought
under control. Such information may help to reduce stress and reassure
stakeholders and other relevant groups that their interests are being
protected. In this age of the social media and internet communication, negative
information can spread with the speed of light and sound, and the ripple
effects could be felt by internet users all over the globe (SORCE, 2002).
The
SCCT holds that as the reputational threats and the negative feelings increase
(which are functions of situational factors) crisis managers should utilize
crisis response strategies with the requisite level of accepting crisis
responsibility (COOMBS, 2007). Perhaps (depending on the situation), it would
be easy to conclude that the best strategy would be to commence a rebuilding
program immediately a crisis erupts. However, it has been revealed that the
more accomodating the response strategy is, the more expensive it may be for
the institution or organization (COHEN, 1999; PATEL; REINSCH, 2003).
Similarly,
using an apology to calm nerves initially may not give the same level of
reputation as an efficient and effective information management strategy.
Adoption of a strategy which does not protect reputation is usually more
expensive than strategies that increase reputational capital (HOLLOWAY, 2004).
The effectiveness of the SCCT crisis response strategies have been tested and
validated in many crisis situations within the past decades (COOMBS, 2006; BESOVA,
2008; FUSSELL; COLLINS; ZOCH, 2009; CLAEYS; CAUBERGHE; VYNEKE, 2010; COOLEY;
COOLEY, 2011; KRIYANTONO, 2012).
It
has been revealed that the General Motors bankruptcy crisis of 2008 was
successfully resolved through negotiations with the application of the
guidelines of the SCCT model (COOLEY; COOLEY, 2011). Similarly, some of the
SCCT strategies were successfully adopted and applied in 2010 during the Gulf
Coast oil spill for image restoration discourse to the social media and beyond
(MURALIDHARAN; DILLISTONE; SHIN, 2011; HARLOW; BRANTLEY; HARLOW, 2011). Organizations
that adopt the SCCT model should be ethical in its communication strategies. It
would be socially immoral for such organizations to begin crisis communication
by focusing on reputation issues in the first instance without first
considering stakeholders’ and relevant public interests. Crises managers should
primarily emphasize the mental and psychological concerns of the stakeholders
in times of crisis (COOMBS, 2007). Reputational assets should be seen as the
benefits which accrue from an effective crisis communication strategy.
The
proposition which emphasizes a concern for public interests is in line with the
contingency theory of accommodation (CAMERON’S, 2008; REBAR; CAMERON, 2003).
The contingency theory of accommodation assumes that although Public Relations
practitioners are considered to be communicators and advocates or defenders of
their organizations, they also have a responsibility to act as accommodators of
trust with their public (CAMERON, et al. 1997; REBER; CAMERON, 2003).
Table 1 presents the recommended crises response
strategies in the SCCT model. The strategies are classied as primary and
secondary. The primary dimensions of strategies found in earlier SCCT studies
were: (a) denials, (b) diminish, and (c)
rebuild (COOMBS, 2006). In order to maintain reputation after crisis, the model
also recommends some secondary response strategies which include: (a) reminder,
(b) ingratiation, and (c) victimage (COOMBS, 2007). Brief descriptions of the
strategic dimensions are given in the table below.
Table 1: SCCT Response Strategies
|
Types of Strategy* |
Strategic Response* |
Tactical Actions* |
Tactical Actions Description* |
|
|
Primary
crisis response strategies |
Deny crisis
response |
Attack the
accuser |
Crisis manager confronts the person/group claiming something is wrong. |
|
|
Denial |
Crisis manager asserts that there is no crisis. |
|||
|
Excuse |
Crisis manager minimizes organizational responsibility by denying
intent to do harm and/or claiming inability to control causes of crisis. |
|||
|
Diminish
crisis response |
Scapegoat |
Crisis manager blames some person or group outside the organization
for the crisis. |
||
|
Rebuild
crisis response |
Justification |
Manager minimizes perceived damage caused by the crisis |
||
|
Compensation |
Crisis manager offers money or other gifts to victims. |
|||
|
Apology |
Crisis manager accepts full responsibility and asks stakeholders for
forgiveness. |
|||
|
Secondary crisis response strategies |
Bolstering
crisis response |
Reminder |
Manager tells stakeholders about the past good works of the
organization. |
|
|
Ingratiation |
Crisis manager praises stakeholders and reminds them of past good
works/relationships. |
|||
|
Victimage |
Manager reminds them that the organization is also a victim of the
crisis. |
|||
Source:
Adapted from Coombs, (2007).
2.4.
Limitations
of the SCCT Model
Strategies
of SCCT have been found to be affected by constraints in the crisis situation (COOMBS,
2007). In the same vein, Tyler (1997) has revealed that financial constraints
can impact negatively on most crisis strategy selection efforts. Organizations
with low financial capacity should resort to less expensive strategies in time,
effort, and other resource inputs. Carroll (2004) advises crisis managers who
opt for SCCT model to choose with caution, communication strategies that are
affordable and effective.
Similarly,
Thiessen and Ingenhoff (2011) recommend that successful crisis communication
strategy should be conceptualized and addressed on distinctive levels of
complexity. While the SCCT emphasizes situational crisis relational messages to
stakeholders, it tends to overlook the integrative organizational communication
and relationship networks which involve interactive efforts with all relevant
entities including activities (tasks), people, and constituencies (proximate
and remote) in times of crisis. Furthermore, past researches have shown that
some managers may prefer “media framing” as a tactic for managing crisis, if
the framing could not be managed properly, the reputation of the sponsoring
organization would be at stake. Nevertheless, there is the need to adapt SCCT
strategies to suit different crisis situation depending on the realities that
warrant safety and credibility of information in organizations that face
situational crisis (VEIL, et al. 2005).
2.5.
Crisis
and Reputation in the Domain of Academic Institutions
While crises in higher academic
institutions appear to be a universal phenomenon, Nyamnyoh, Nkwi and Konings
(2012) have revealed that most African colleges and universities have been victims
of crises and violence emanating from peculiar factors associated with
post-colonial changes. Most of the crises are embedded in the internal and
external initiatives that have triggered activism and militancy among students.
In recent years, some of the violence could also be associated with
socio-political changes and economic situations that spell negative impact and
uncertainties on the living and study conditions of students. Most universities
also experience crises resulting from stampedes due to overstretched
infrastructures and the struggle to extend opportunities to a larger student
population with very limited resources (Nyamnjoh & Jua, 2002). The need to examine
crises and their impacts on the reputations of African colleges and universities
should therefore not be under estimated. In Nigeria, the level of student
crises in public universities is high. Most of the crises have antecedents
associated with failure of the institutions to meet student demands and high rate
of students’ unionism, which are not prevalent in privately managed
institutions of learning (ADEYEMI, 2009). Unfortunately, some of the
institutions lack the structure, resources, and adequate information systems to
deal with the challenges posed by such situational crises.
In an academic institutional context,
reputation could be enhanced or eroded by the nature of information
disseminated and the perception of the stakeholders, which include members of
the faculty, students, concerned parents, government agencies, and others in
the relevant task environment, who have relationships and interests in the
activities of the institution. Reputation may be developed through good
relationships and the nature of information which flows internally and
externally to stakeholders and the general public. The contents of such
information could reveal the effectiveness of management in handling crisis,
and the interactions of other members of the institution with their immediate
and remote constituencies. Information in times of crisis could be communicated
through verbal, written, or the electronic media, amongst other means.
It
could convey positive or negative meanings depending on the contents, the mode
of transmission, and how it is interpreted by receivers. Positive
interpretation of information about an institution by the stakeholders and the
general public could enhance the reputational assets, which include sustained
business relations, customer retention, loyalty, and goodwill, while negative
interpretation can cause an extensive damage and losses to the image of an
institution and erode the reputational capital, which Fombrun and van Riel
(2004) have also revealed, “can have a negative impact on organizations’
stakeholders’ value” (p.32).
Reputational
capital of an institution could therefore be conceptualized as difference
between the sum of the inventory of goodwill plus the accumulated value of
relationships (reputational assets), minus the total liability incurred by an
institution through losses in reputation, and the negative brand image in times
of crisis and beyond.
Crises
in higher academic institutions in most developing countries could take several
forms, like: (1) vandalism, (2) workers’ strikes, (3) lockouts by employers,
(4) non-commitment to contracts, (5) students’ cultism/terrorism, and (7)
boycott of classes, amongst others. For the purpose of the research, crisis in
institutions of higher learning was defined as, any non-routine event or
conflict that can create interruption and uncertainty; thereby affecting the
realization of defined priority goals. Uncertainty about the attainment of
established priority goals can lead to loss of confidence and trust, which are
key elements of goodwill and reputational assets; whilst business interruption
can result in significant losses that could increase an institution’s liability
and consequently, erode the reputational capital and stakeholders’ value.
3.
METHODOLOGY
The
research was conducted as retrospective case studies with focus group interviews
and discussions as the methods of data collection. The two focus groups
comprised 16 officers who were in-charge of corporate affairs, administration,
and academic activities in the two institutions. Each of the two universities
had eight representatives. There were two discussion sessions. The universities
were labeled as U1 and U2 to maintain due confidentiality
as agreed with the participants at the discussion sessions. The discussions
were arranged and conducted as conference calls with the researcher as the
moderator. Four of the participants were former MBA students who held different
administrative positions in the institutions at the time of the study. Six of
the participants were faculty members in the institutions. The participants
comprised 12 males and four females.
Participants
were asked questions that were related to the research questions. Each research
question was approached from two (negative and positive) dimensions. Thus, 10
questions were discussed based on a discussion guide developed by the
researcher. To assess the construct validity, the discussion guide and the
questions were pretested with communication officers, who attended a seminar I
conducted earlier in 2011. The wordings of the questions were also compared
with questions that were used in earlier studies (COOMBS, 2007; KRIYANTONO,
2012; DEAN, 2004). The use of focus group as a data collection method is well
supported in case study research designs and qualitative research literature (YIN,
2009; DE VAUS, 2006; O’ LEARY, 2010).
3.1.
The
Case of U1–Crisis and Response Strategies
The
first university was a public institution that was established in the 1970s.
The student population was about 10,000. The crisis involved student riot and
destruction of the school and personal properties of faculty and staff of the
institution in students’ hostels and official residential quarters. The primary
cause of the crisis was the decision of the university to increase the
undergraduate tuition fees and charges from $500 to $1,000 per academic year.
With the increase in fees, most of the students expressed apprehension on their
ability to pay, and the parents also wrote petitions to the university
authorities. The university insisted on the increase, quoting the rate of
inflation, and high costs of operation and maintenance as the bases for the
increase in tuition fees. Most students were not satisfied and the affected
parents were also not in support of the university’s action.
The
university at first launched a media campaign which aimed at winning the
support of the larger communities and the political class who were affluent
enough to pay the new tuition and charges for their wards. The belief in
management circles was that the advertisement and other communication efforts
would produce a bandwagon effect and compliance. The outcome was negative in
the first instance and the situation lingered for more than one month with both
sides marshaling out their action plans. Two months later, the situation went
beyond control. The students took the bull by the horn. Personal properties
including cars were destroyed, buildings were vandalized, and the university
campus became a battle ground. The total loss incurred by the university and
the affected employees, was estimated at over $500,000 and some lives were
lost. The reputation of the university was also at stake.
Two options became imminent (a) to close
down the institution because of the crisis or (b) to revert to the earlier
tuition rate. Knowing very well that public interest was involved, the
university decided to close down in order to avert further destruction, which
would have involved more significant losses and wastes of public funds. To
maintain its reputation, the institution also reverted to actions similar to
what Coombs (2007) calls “rebuild crisis response strategies” (p.170).
Management tried to minimize the perceived damage and offered compensations to
victims of the crisis. Active communication was also maintained on the
university website, the state television, and radio networks. The institution emphasized the benefits that
would accrue to the students with the increase in tuition fees. The benefits
posted on the institutions websites included amongst others, improved facilities,
renovation of classrooms, enhanced allowances for teaching staff, and improved
service quality. Furthermore, less emphasis was placed on attribution of crises
responsibility and no reference was made to any history of similar crises in
the past. Persuasive advertising and public relations programs were lunched to
emphasize the role of the university and her efforts in removing cultism,
maintaining peace and social values. The university remained closed for four
months.
3.2.
The
Case of U2–Crisis and Response Strategies
This
university was a smaller state university which was established in 2002. The issue involved was non commitment to
contract on the conditions of service earlier agreed between the owners of the
institution (a state government) and the academic staff union. The situation
led to a long term strike and withdrawal of services by members of faculty.
While the faculty was on strike, the university remained open with the
administrative staff and other ancillary workers on duty. The Vice Chancellor’s
office also remained open. There was no formal action by management or owners
of the university to settle the crisis peacefully. Public opinion changed,
because of the attitude of management and the owners towards the crisis. The
reputation dropped significantly whilst stakeholders complained bitterly about
the inability of the university to value their demands. After about two months
of inactivity, the state government threatened to sack the strikers, unless
they returned to work without delay. Additionally, faculty members were asked
to renounce their union membership, since the government did not recognize
union activities in the relatively new institution. Many students had to
withdraw from the university. While the strike was on, the owners also engaged
in negative campaigns and attributions of blame against those involved in the
crisis.
The
strikers did not bulge until the university authorities appointed some
prominent political persons to negotiate with the local union leaders. The
discussion continued for additional two months. The outcome of the negotiation
was the inauguration of a committee to recommend the way forward for the
university and its stakeholders. Among other things, the terms of reference
included the need to determine the merits and demerits of the state government
accepting the conditions of service demanded by the union and its members. It
also requested an evaluation of the costs and benefits of allowing the
institution’s faculty members to fully belong to the union. It took the
committee another two months to produce the report. On completion of its
assignment, the report was duly submitted to the state government that spent
additional one month to review and adopt the recommendations. The university
was closed for seven months. All lecturers, students, and other stakeholders
were adversely affected.
4.
Analysis and Results
The two
cases demonstrate situations where approaches akin to SCCT response strategies
were applied in a different manner. In the case of U1, the crisis
was resolved after four months. Although, the institution suffered serious
financial losses initially, some of which were covered by insurance policies
held by the institution and the affected individuals; the students were
recalled and the university recommenced its academic activities as usual. The
institution also received some donations and increased subvention to repair the
damages that resulted from the crisis. Based on the focus group discussions,
not much was lost in terms of reputation, because of the nature of responses
that were given to issues by the management of that institution.
With
the rebuild strategy combined with effective media communication tactics, the
stakeholders and other concerned publics were duly informed about developments
and management tactical responses to events. Opinions of the public were
positively influenced and the university recorded more gains than losses after
the crises. The students whose involvements in the crisis were not criminal
were reprimanded and latter pardoned. Those whose involvements were found to be
criminal were indicted and punished accordingly. The university gained more
recognition. The proposed tuition fee of $1000 was slashed by $250. There was
no significant loss of reputation, and most stakeholders were happy with the
outcome. The institution also gained full accreditation of its academic
programs.
The
second case illustrates how delay and victimization of the strikers resulted in
loss of reputation and negative perception by the public. The second university
had to spend over $200,000 to rebuild its image which had eroded because of the
lingering crises. Moreover, some stakeholders of the second institution lost
touch with the university. The post crises assessment indicated that the
university also lost accreditation with some professional bodies. The
university accrediting agency threatened to close down the institution
permanently, if the crisis was not resolved amicably. Some sponsors who did not
support the action of the university had to withdraw their support and
contributions.
Many
small scale business establishments that formed one of the main sources of
direct income generation for the university had to close down, because of lack
of patronage. The closure of the business outfits also had a negative impact on
the revenue of the institution during and immediately after the crisis. A
conservative estimate of the total loss in internally generated revenue was
$1,000,000 in rents and other financial charges. Additionally, much was lost in
the reputation capital because of the withdrawal of accreditation and negative
image created by the poor crisis response strategy.
5.
DISCUSSION
The
arrogant posture which the second institution seemed to display was not
unconnected with the support given by some government officials to the
attribution by management that the strike was caused by the illegal actions of
uncommitted employees. The fact that
university number one sailed through the storm successfully had been associated
with the persistence and focus of the university administration on dialogue and
effective information transmission about actions taken to resolve the crisis.
Management of the institution had to emphasize a rebuilding strategy to boost
the confidence and trust of stakeholders through effective media communication
and interpersonal relations. No
reference was openly made to past history of crises in the institution and
little or no attributions were made. Had the university faltered, the loss on
reputation capital would have been staggering, considering the size and
position of the institution in the community. The stakeholders would have
changed their opinions, which could have impacted on the institution
negatively.
The
study has also revealed that the time and nature of communication have a significant
influence on outcome of crisis response strategy. A combined strategy which
takes cognizance of stakeholders’ interest with little attribution, if
implemented at the inception of crises and followed through with effective
communication may be more successful than an intervention that emphasizes only
one approach, such as denial or justification response. The situation may be
worsened if any of the parties places emphasis on intimidation and bounded
ethicality. Bounded ethicality in crisis resolution comes into play when
individuals make decisions that harm others and when the harm is inconsistent
with the decision makers’ conscious beliefs and preferences.
As
Coombs (2007) also agrees, unethical approach to crisis resolution could have a
debilitating effect right from the onset. The study also confirms the relevance
of the media in crisis resolution. Media report can influence crisis
participants or actors positively or negatively depending on the type of news
it carries. The first university did not rely solely on the public media as
that could have put things out of control. They had to reinforce their
negotiation strategy with positive messages on the value of peace in student
development on their website and the appearance of key officials on radio and
television programs to counter any negative reputation that the crises might
have caused. As Sung and Yang (2008) suggest, an educational institution should
try as much as possible to monitor the information that are transmitted to the
public in periods of crisis. One way of doing that is by establishing a website
or an information outlet to regularly release information to the public, as was
done by the first university (U1) in the reported case
study.
6.
IMPLICATIONS
This
study has shown the need for higher educational institutions to integrate their
communication strategies into the crisis response strategies and processes.
Crisis response should not be viewed as an isolated process. Contingency
planning is required with regular overhaul of communication systems,
structures, and strategies. The need to address crises adequately from
inception should not be relegated. Even though the two crises presented in this
study were directly or indirectly associated with the actions of the
institutions, it was not very reasonable to focus on who caused the crises
without recognizing the immediate and remote impact of the crisis on the
public. Crises could be perceived as good or bad depending on how they are
managed.
Therefore,
communication strategies should not focus only on the interests of and advocacy
for the organization, but should primarily accommodate the stakeholders’ and
relevant public interests. Crises in academic institutions could either be
fortuitous or premeditated occurrences.
Academic
institutions should regard crisis situations not only as a threat but also as
an opportunity to rebuild confidence and trust in stakeholders on their brands
of activities. Although crises might constitute a threat to an institutional
reputational capital, if not properly managed, it could also present a
significant opportunity for the institution to restructure its portfolio of
reputational assets. Academic institutions need to incorporate crises
management strategies in their short and long term contingency plans. An early
recognition of crisis management as a key result area for loss control would
forestall the consequences associated with negative opinions of an ill-informed
public, which could result in the erosion of reputation capital in the long
term.
Effective
crisis management cannot be achieved where relationship communication through
dialogues are lacking. Database for crisis management requires regular updates
of relevant inputs, frequent data mining, and timely tracking of outputs to
ensure effectiveness. The processing of information on crisis should generate
operational and strategic outputs that could be easily stored, retrieved, and
transmitted or shared as necessary with stakeholders in order to maintain confidence
and credibility. The SCCT model recommends that the effectiveness of
communication depends on the characteristics of the situation, among other
factors.
This
study also revealed the need for crisis managers in the two institutions to
always evaluate and critically select an optimal communication strategy in
times of crisis by analyzing the relevant situations, events, and people
concerned in a holistic manner. Understanding prevailing situations would place
an institution in a position to choose the right messages, channels, and mode
of communication with stakeholders when handling crisis. A crisis situation may
be loaded with both expected and unpredicted consequences. The unpredicted
consequences could among others include occurrences that can throw the
organization into immeasurable losses. Planning for contingency allows the
crisis manager to systematically analyze, interpret, and possibly estimate
failure modes with a view to assigning probabilities for estimating maximum
possible and probable maximum losses. Crises management should also be
approached from attribution, accommodation, and the consequential dimensions.
The relevance of events as a factor in crisis response strategy lies on the
fact that institutions as organizations have objectives and goals which should
be achieved with resources that are usually limited in nature.
Contingent
events if not effectively managed can hamper or forestall the realization of
such goals. In the same vein, no institution can exist without the
contributions of people. The stakeholders whose values are to be protected in
situations of crisis are people. People are therefore, the critical strategic
actors and factors that should be incorporated in all reputational risk
management programs. The strategic focus should be on the reduction of losses
in times of crisis in order to bolster the reputational assets; and maintain
the long term sustainability which will facilitate the growth of the
reputational capital and stakeholders’ value after the crisis.
The
need for crisis managers in the relevant institutions to be proactive in their
crisis management programs should not be overlooked. In line with SCCT
recommendation, the essence of effective planning and control of information
pertaining to crisis cannot be over-emphasized. The planning and control
processes should take cognizance of the situation, events and people as factors
and actors in crisis and reputation management programs. Relegation of the
actors and factors in crisis and reputation management could render the chosen
crisis response strategy ineffective. As Ademisokun-Turton (1985) also posits,
future crisis management strategy requires effective thinkers and innovative
strategies as opposed to inactive and complacent crisis managers, which
presently exist in some Nigerian university social milieu.
7.
NEED FOR FURTHER STUDY
The
study reported here was exploratory in nature. The focused sample was
judgmentally drawn from the two institutions and the analysis was mainly
qualitative. Although the case studies have supported the internal validity and
applicability of the SCCT model in the crisis situations, the nature of the
sample and the method of data analysis could threaten the reliability of the
findings. A more robust study is therefore needed to further demonstrate the
applicability of the SCCT model in the context of higher learning institutions.
Such study may need to combine qualitative and quantitative data analyses in a
holistic case study with more idiographic explanation or a longitudinal survey
design. Future studies may also need to separate the effects and quantitatively
measure the inter-relationships of the independent variables in the SCCT model
on crisis response strategies and organizational reputation, which are
dependent variables. Additionally, the roles of people (actors), events, and
situations (factors) in crisis response strategies need to be more rigorously
analyzed.
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