Effective applications of crisis communications are of inherent and significant importance to 21st Century organisations and companies. A crisis has been conceptualised as ‘a low probability, high impact event that threatens the viability of the organization’ (Pearson and Clair 1998 in Jaques 2007: 148). More importantly than a rigid definition, crisis communications are a part of a wider consolidation of organisational management functions (Jaques 2007: 155). Coombs (2009: 115) asserts that throughout a crisis, communication is the ‘lifeblood’, thus indicating its inherent importance to crisis management, and by extension, the organisation itself.
With its roots in activism struggles in the 1970s, crisis communications has developed from a purely responsive strategy (Heath 2002: 209) to a proactive and reactive field applied within issues communication. Its importance is seen pertinently in the political arena of organisations, where management must ensure internal stability. Similarly, in a company’s economic sphere, effective crisis communications maintains investor and consumer confidence. Furthermore, the social aspect of crisis communications is significant, whereby reputation and the legitimacy of the business are important. The primary objective of crisis management is protecting stakeholders; effective communication and messaging assists in this endeavour (Coombs 2009: 99). This is evident in the crisis communication efforts of Carnival Cruises following the 2013 Triumph crisis where an engine room fire resulted in the loss of all power. Ultimately, the value of effective crisis communications to political, economic and social sectors of a contemporary organisation cannot be overstated.
Political and managerial importance
The political importance of effective crisis communication is that it assists in retaining the managerial and internal stability of an organisation. Coombs (2009: 99) employs the analogy of an iceberg to indicate that often, the majority of a crisis is not apparent to those outside of a company. This connotes the significance of internal stakeholders in the crisis communication milieu. It is an important facet of stakeholder theory that organisations avoid focusing ‘on the ‘general public’ at the expense of more specific publics such as employees’ (Marra 1998: 6). As such, effective communication with and between employees and management during a time of crisis is crucial. Handsman argues that employees can be a company’s most important allies (2004: 15), and have the unique ability to act as small-scale spokespeople. It is thus significantly important that organisations communicate with their internal stakeholders in a crisis, as this can have a flow-on effect for external stakeholders. Communicating with internal stakeholders, additionally, helps to disseminate the appropriately framed message throughout networks, ultimately contributing to the permeability of the message that will be communicated by the primary spokesperson, speaking to the importance of such an endeavour.
Subsequently, a consistent message is important to crisis communication (Ulmer 2001: 594), and by communicating this message to employees early in the crisis an organisation can help to shape the discourse around the event before it enters the ‘knowledge vacuum’ (Coombs 2009: 103). Appropriate liaison with employees was a hallmark of the successful outcome of the Carnival Triumph crisis in 2013. With staff acting professionally and positing the message that the ship would soon dock (Drash 2013), passengers were comforted. Having already fostered strong relationships between the company and employees through training initiatives prior to the crisis, when the crisis occurred, the internal stakeholders were well positioned to react in the absence of executive staff. Furthermore, the announcement that staff would receive compensation for the incident worked to retain employee loyalty, as was seen in Ulmer’s (2001: 605) analysis of Malden Mills. The political and managerial importance of crisis communication is observed in its function as an internal stabiliser in times of uncertainty. Thus, effective crisis communication is important to an organisation’s internal stability.
Economic and financial importance
Furthermore, in the economic sphere, crisis communication’s importance lies in its ability to deal with threatening events to relieve stress on a company, its investors and its product’s consumers. Heath (2001: 1) asserts that because of the costly impact of crises, there is an incentive to ‘respond in ways that best protect capital and human resources’. Crisis communication needs to be framed in a way that minimises financial concern from investors and consumers. To do so, multiple framing strategies should be employed on different levels and for different stakeholders (Hallahan 2009: 229). Apologia is an interesting frame; it is an expensive strategy, with Coombs (2009: 113) arguing that the more accommodating a response, the more costly it will be. However, potential lawsuits and consequent financial burden may not outweigh the reputational benefit such a strategy may offer. Communication responses in a crisis may be costly, but if they are framed in a way that alleviates concern, the cost can be justified by improving the future financial situation.
Additionally, crisis communication is important at all levels of a company as external stakeholders can mirror an organisation’s internal dynamics (Weiner 2006:3). Without adequate communication strategy, Weiner (2006: 4) argues that ‘an organisation loses the public trust and goodwill upon which it has been built. Market share begins to erode. Stock prices drop.’ This was the case in February 2013 during the Carnival Triumph crisis, where the share price dropped 7 per cent by the end of the month (O’Brien 2015). This is a real risk for companies in crisis, however with effective crisis communication, Carnival managed to mitigate this risk. One of the ways they used messaging following the incident was to bring in a new CEO, Arnold Donald. He was initiated as the company’s spokesperson, and the key messaging centred around addressing incidents and prioritising safety. While this was a positive application of crisis communications, during the crisis the then-CEO Micky Arison was seen attending a Miami Heat basketball game, a team he owned. This contradicted the timeliness concept of the ‘golden hour’ (Coombs 2009: 103), and was not adequate in restoring investor and consumer confidence, leading to the later CEO change. Adequate crisis communication is thus integral in ensuring that the financial component of an organisation is not affected too heavily by a crisis, in terms of both investment and the cost of mitigating a crisis.
Social and reputational importance
Additionally, crisis communication is important to a company’s public image and reputation. It helps to protect the legitimacy and reputation of a business, both of which are directly threatened by a crisis. In actuality, exemplary crisis communication can positively affect a company’s reputation in regards to its values. Heath (2001) discusses the importance of crisis communication of effectively repairing a company’s legitimacy during and following a crisis, concluding that while there are other considerations, crisis communication is largely about ‘reputation restoration’ (Heath 2001: 12). A crisis can have social implications for an organisation, and their perception by consumers and external publics, even those who rank low on Mendelow’s power-interest grid (1999), can have a significant impact on the legitimacy of the entity, and as such, these publics need to be addressed by communication in an attempt to rebuild an organisation’s reputation.
However, crisis communication is inherently only required following the instigation of a crisis- as such, much of the communication will be reactionary, and may be devoted to apologia (Coombs 2009: 108) and restoration of the company’s brand equity. If this is effectively framed, an organisation may be able to improve its relation with consumers, as was seen with Carnival’s framing of its safety procedures and brand values. By effectively communicating its apology, taking responsibility for the incident and its efforts regarding safety by its new CEO, Carnival was able to repair its reputation, improve its social legitimacy and, connecting to the previous point, improve its financial standing with consumers and investors (Miller 2015). Another distinctive importance of crisis communication is the ability for it to actually provide opportunities for a company to increase its market share and renew confidence in the company from a stakeholder’s perspective. As Weiner (2006: 6) asserts, ‘the company that weathers a crisis well understands the opportunity that can come out of adversity’. By 2015, and without any paid media, Carnival’s brand reputation increased 85 per cent and ticket sales increased (Miller 2015). Therefore, it can be seen that crisis communication is important in that it offers organizations the opportunity to set clarify information and messaging, repair reputations and seek a positive ending to the event.
Conclusion
Ultimately, communicators are best placed to influence and shape the court of public opinion (Marra 1998) as such all contemporary companies require effective crisis communication. Coombs (2009: 99) conceptualises that ‘The primary goal of crisis management is to protect stakeholders from harm and the secondary goals and to protect reputational and financial assets’. These goals are where crisis communication’s importance lies. In the management, financial and reputational spheres of an organisation, communication is crucial in the entity’s survival and ability to ‘weather the storm’. This is achieved through communication with various stakeholders with adequately framed messages and a view to create opportunity out of hardship. Therefore, it can be seen that the value of crisis communication as part of a contemporary organisation’s larger issues management strategy cannot be undervalued.