Impact of Culture on the Effectiveness of Crisis Communication:
A comparative study between the Netherlands and Japan
Sakurako Umezawa
Student number: 11783028 Master’s Thesis
Graduate School of Communication Master’s programme Communication Science
Corporate Communication Track
Dr. Toni G.L.A. van der Meer January 30, 2019
Abstract
For public relations professionals who work for multinationals, selecting an appropriate crisis response strategy regarding cultural differences is crucial to prevent reputational damage. Having a clear insight of how people in a host country react differently toward a specific crisis response strategy helps public relations professionals in avoiding unexpected negative public reactions. The purpose of this study is to investigate the cultural influences on the effectiveness of crisis response strategies and senders of corporate messages. An
experimental survey using the 2 (corporate response strategies: rebuild strategy vs. denial strategy) ×2(sender of crisis communication: the CEO vs. the name of the organization) between subject factor design was conducted in the Netherlands and Japan. There is a clear difference in the level of individualism and power distance between these two countries. The results revealed (1) the rebuild strategy is more effective in preventing reputational damage than the denial strategy in both individualistic and collectivistic countries; (2) Japanese people react more negatively toward the denial strategy and the name of the organization as a sender of crisis communication compared to Dutch people. This study provides tips for selecting a culturally appropriate crisis response strategy which in turn enables the public relations professionals to successfully deal with international crises.
Introduction
Public relations professionals in multinationals have a role of maintaining corporate reputation through strategic communication with their stakeholders in various countries. Especially, they are expected to take a leadership role in preventing reputational damage in crisis situations. However, according to Taylor (2000), global crisis communication is one of the most difficult challenges. Multiple multinationals are indeed struggling to deal with crises in host countries which have different cultures. One of the recent examples is the Dolce & Gabbana’s crisis in China. They experienced a backlash against their racist video ads and offensive comments. Although they tried to calm down the situation by using denial strategies, it only made public anger grow. Their crisis response strategy might have worked in Italy, but it did not meet the Chinese public expectation. As a result, they suffered severe reputational damage including a 14.1 point brand healthy index drop with Chinese consumers (Kim, 2018). The key factor in this crisis communication failure was an ignorance of cultural influence on the public perception toward the crisis response.
Crisis communication helps to reform public evaluation toward the organization and prevents reputational damage. Although Coombs (2007) provides the guideline for selecting the best crisis response strategy, he only took Western culture in consideration and paid marginal attention to non-Western cultures. An, Park, Cho, and Berger (2010) suggested that public attitude and impression toward organizations are influenced by the level of
individualism. Thus, culture affects public perceptions and values (Falkheimer & Heide, 2006). If the organization uses the same type of crisis communication, they might experience an unexpected negative public reaction in non-Western countries. In other words, a
theoretically proper strategy could exacerbate the situation if that strategy is culturally inappropriate. Hence, it is essential to understand crisis communication in a cultural context. However, research regarding crisis communication in a global context is still in its infancy (Coombs & Laufer, 2018). This study thus aims to obtain insights into the cultural influences
on the effectiveness of crisis communication by comparing a Western country (the Netherlands) with a non-Western country.(Japan)
International crisis communication research focuses mainly on the cultural effects on the public perception toward a particular crisis response strategy and shows that people from two distinct cultures react differently toward corporate crisis responses (Bowen, Freidank,
Wannow, & Cavallone, 2017; An et al., 2010). Inconsistently, however, Lee’s research (2004 & 2005) revealed that theories developed in Western countries could be applied to
non-Western contexts as well. In order to obtain further insights about this applicability, cross cultural research which involves both Western and non-Western countries is required. This study therefore focuses on the efficiency of crisis response strategies in a cultural context.
Compared to research regarding crisis response strategies, very little research have been done regarding the senders of crisis communication in an international crisis communication context. Research regarding cultural influences on the efficiency of the senders show
inconsistent findings. Some research insists that collectivistic people prefer the organization’s name as a sender in comparison to other senders since collectivistic people tend to expect the whole organization to take responsibility (Kim, 2017). On the other hand, other research found that collectivistic people who have a hierarchical and centralized culture trust the CEO more than other senders (Laufer, Garrett, & Ning, 2017). Empirical cross-cultural research is needed to solve this ambiguousness.
Considering these issues, this study will investigate how the effectiveness of crisis communication differs across cultures by comparing the public perception between the Netherlands and Japan. The research question is formulated as follows:
RQ: To what extent do cultural differences influence the effectiveness of crisis response strategies and the sender of crisis communication in regard to preventing reputational damage in a crisis situation?
Theoretical background Crisis and Corporate Reputation
A crisis is a sudden and unexpected event that threatens to disrupt an organization’s operations (Coombs, 2007). For an organization, crises are a threat to the organizational reputation since a crisis negatively changes people’s attitudes toward the organization (Coombs, 2007). Corporate reputation is how an organization is perceived by the public (Coombs & Holladay, 2002), and it is a valuable and intangible asset (Coombs, 2007). A successful organization with a strong reputation can command premium pricing, lowers marketing costs, gains competitiveness in recruiting, and prevents imitation by competitors (Fombrun & Gardberg, 2000). If an organization experiences any reputational damage, those advantages gained by a favorable corporate reputation might be lost, and a damaged
reputation might decrease consumer loyalty and positive word-of-mouth behaviors (Walsh, Mitchell, Jackson, & Beatty, 2009). It is thus crucial for any organization to maintain a good reputation.
In order to mitigate reputational damage, an organization should strategically deal with the crisis, and in this respect, communication has a crucial role. Crisis communication prevents escalation of a crisis and prevents public confusion (van der Meer & Verhoeven, 2013). It also determines public evaluation toward the organization by building a frame or reinforcing an existing frame of the crisis (Coombs, 2007). There are two elements of crisis communication: the contents of communication and the way it is delivered to the stakeholders. The former provides the stakeholders with a new understanding of the crisis while the latter, especially the sender of crisis communication, affects to which degree the stakeholders trust the corporate message. To gain a more positive public reaction, it is crucial to consider both of these elements equally carefully.
Crisis Response Strategies
Organizational crisis response strategies are what an organization says and does after a crisis (Benoit, 1997). It is viewed as a symbolic resource which attempts to protect the corporate reputation and affects the future interaction between stakeholders and the
organization (Coombs & Holladay, 1996, 2001, 2008). It is thus crucial for public relations professionals to select a crisis response strategy which fits the crisis situation (Coombs & Holladay, 1996). The Situational Crisis Communication Theory (SCCT) by Coombs (2007) provides a practical guidance for taking an appropriate response based on the level of perceived corporate responsibility. Perceived corporate responsibility is how much stakeholders believe organizational actions caused the crisis (Coombs, 1995). Previous research has consistently shown that organizations face an increased reputational threat when stakeholders perceive more corporate responsibility (Coombs, 1998, 2004; Coombs &
Schmidt, 2000; Coombs & Holladay, 2002; De Blasio & Veale, 2009).
Crisis response strategies affect how stakeholders perceive the organization, and enables organizations to shape more favorable public evaluations (Coombs, 2007). SCCT suggests three kinds of crisis response strategies: deny, diminish, and rebuild. Denial strategies include attacking the accuser, denial and using a scapegoat. It attempts to remove any connection between the organization and the crisis, and aim to make it clear that the organization did nothing wrong (Coombs, 2007). Diminish strategies focus on making excuses and
justification while rebuild strategies focus on compensation and apology, and attempts to improve the corporate reputation by offering material and/ or symbolic aid for victims (Coombs, 2007).
Denial and rebuild strategies are the opposite sides of the pole in regard to how much crisis responsibility the organization admits. While deny strategies refuse to admit any crisis responsibility, rebuild strategies fully acknowledge corporate responsibility and aims to ask stakeholders for forgiveness. Crisis communication researchers have focused on which of
these two strategies could be more effective. Coombs (1998) stated that denial strategies can be more effective to separate the organization from public attention of crisis responsibility while rebuild strategies could open the organization to legal liability by admitting
responsibility. However, recent researchers doubt the efficiency of denial strategies as De Blasio and Veale (2009) revealed that denial strategies lead to the most negative reputation compared to other crisis response strategies. This might be explained by the increase of perceived corporate responsibility. The effectiveness of crisis response strategies depends on how individuals understand the crisis. Denial strategies can evoke public anger and
aggression (Ohbuchi, Kameda, & Agarie, 1989), and the public might perceive an organization as blameworthy and self-serving which leads them to attribute more
responsibility to the organization (Lee, 2004). Thus, individuals perceive the denial strategy negatively which results in a less positive corporate reputation.
In contrast, rebuild strategies increases positive public perception (Coombs & Schmidt, 2000; Griffin, Babin, & Attaway, 1991). It increases sympathy and forgiveness (Weiner, Graham, Peter, & Zmuidinas, 1991) since rebuild strategies are more likely to be perceived as sincere and responsible by the public (Ohbuchi et al., 1989). That is, people attribute less responsibility to the organization when it uses rebuild strategies. Since the level of admission of corporate responsibility is a crucial factor which forms the public perception toward the organization, this study will focus on these two opposite strategies.
Additionally, although these studies show strong correlations between the types of crisis response strategies, perceived corporate responsibility and corporate reputation, none of them regard the mediation relationship between them. For this reason, this study will also
investigate the mediation relationship between crisis response strategies and corporate reputation through perceived corporate responsibility. The following effects are expected:
corporate reputation compared to when it uses the rebuild strategy.
H1b: Using the denial strategy leads to higher perceived responsibility and results in less positive corporate reputation compared to using the rebuild strategy.
Sender of Crisis Communication
Besides the contents of crisis communication, the sender of corporate messages is
another crucial element which decides whether the crisis response strategy works successfully. Corporate messages are delivered by a spokesperson who appears to the news media as a representative of the organization (Troester, 1991). A sender of corporate messages has a vital role of framing the organization’s crisis response in the most positive and efficient manner and enhances the image of the organization (Troester, 1991). Credible senders also contribute to effective crisis management (Coombs, 2007). Thus, an organization should carefully consider who will take the role of the sender of corporate messages, especially when an organization’s credibility is in doubt (Arpan, 2002). Although it is typically a public relations professional or organizational leader who will appear in the news stories as a spokesperson (Fry, 2012), it is still possible that an organization appoints no spokesperson or uses another type of spokesperson such as middle-level managers, or an employee with specific
professional knowledge related to the issue.
Having the CEO’s name in the media or mentioning only the organization’s name are two very opposite types of senders. In the latter case, the organization does not mention any specific person as a spokesperson while the CEO appears as a representative of the
organization in the former case. Although mentioning the organization’s name is only found in Asian countries (Kim, 2017), having the CEO as the sender is a major strategy in both
Western and non-Western countries since the CEO brings authority, morality and credibility during crisis situations (Lee, Kim, & Wertz, 2014; Seeger & Ulmer, 2001). Therefore, this
study expects that a CEO brings more positive corporate reputation than the organization’s name.
H2: Using the CEO as a sender of crisis communication enhances corporate reputation compared to using the name of the organization.
Cultural Differences: the Netherland and Japan
Although SCCT (Coombs, 2007) suggests that the best crisis response strategy depends on the level of corporate responsibility, it is also important to consider cultural elements. Since culture affect individuals’ perceptions and values (An et al., 2010, Falkheimer & Heide, 2006), it is essential to take cultural effects into account in order to increase the effectiveness of the crisis response strategy. Different cultural values lead to distinct evaluations of the organization during a crisis situation. A crisis response strategy which works successfully in some cultures may fail in other cultures. Thus, it is crucial to understand cultural
characteristics in host countries.
Hofstede (1984) defined culture as the collective programming of the mind which distinguishes the members of one group or society from those of another, and suggested four cultural dimensions: individualism versus collectivism, power distance, uncertainty avoidance, masculinity versus femininity. Among those dimensions, especially individualism and power distance have been researched in global crisis communication studies (Ang, 2001; An et al., 2010; Kim, 2017; Haruta & Hallahan, 2003).
The Netherlands and Japan are two countries which have very different characteristics in regard to these two cultural dimensions. Firstly, the Netherlands has a culture with a high level of individualism while Japan is known as a collectivistic country. Individualism is the degree to which individuals integrate into or separate themselves from a society (Hofstede, 1986). In individualistic societies, the ties between individuals are very loose and people are
supposed to look after their own self-interest while collectivistic people prefer a tightly knit social framework and look after the interest of their in-group (Hofstede, 1986). Collectivistic people are required to adapt the role of in-group and maintain the harmony while
individualistic people are expected to act as individuals (Yeo & Pang, 2017). Therefore, especially in collectivistic culture, it is important for the organization to know social norms and expectation during crisis situations in order to be regarded as a member of society.
Secondly, the level of power distance differs between the Netherlands and Japan. Power distance is defined as “the extent to which the less powerful members of a society expect and accept that respect and power is distributed unequally”, and it addresses how a society deals with inequalities among people (Hofstede, 1986). People in a culture with high power distance are more likely to accept the social hierarchy and top-down communication (Hofstede, 2001), while those who in a low power distance culture demand power
equalization and require justification of inequalities (Hofstede, 1986). The Netherlands has low power distance while Japan has high power distance. That is, Japanese culture is more centralized and hierarchical compared to Dutch society, and Japanese people tend to follow what the authorities say.
Crisis Response Strategy and Cultural Differences
As it is discussed above, effectiveness of crisis response strategies depends on individuals’ perception toward the crisis. If people have distinct cultural backgrounds, the way they understand the crisis and evaluate the organization may differ from each other. Especially when the organization uses the denial strategy, public perception could be different between Western and Asian countries. According to Maddux, Kim, Okumura and Berett (2011), the function and meaning of an apology varies between individualistic and
collectivistic cultures. Apologizing in collectivistic countries is a ritualistic routine while in individualistic countries it means acceptance of legal crisis responsibility. In collectivistic
countries where it is important to keep the harmony of society, an apology means expressing regret and sympathy toward the public for making trouble and causing concerns (Maddux et al., 2011). Hence, an apology in collectivistic countries is a normative action which is expected from the public regardless of the company’s actual responsibility.
When this expectation is broken by a company, public anger and anxiety can increase and the public might conclude that the company is not trustworthy. Eventually, it may result in higher perceived corporate responsibility and negative reputation. Therefore, it is expected that people in collectivistic countries will respond more negatively toward the denial strategy compared to people in individualistic countries.
H3a: When an organization uses the denial strategy, perceived corporate responsibility increases and in turn corporate reputation declines more in Japan than in the
Netherlands.
However, no cultural differences are expected in the differences of effectiveness
between the rebuild and the denial strategies. Lee’s research (2004 & 2005) shows that people in collectivism countries attribute more responsibility to the organization and develop
negative impressions when the denial strategy is used, while both perceive less responsibility and increased forgiveness when the rebuild strategy is used. Since these findings are
consistent with previous research conducted in Western cultures (De Blasio & Veale, 2009), Lee concluded that collectivistic people act the same as individualistic people. Therefore, this study expects no difference of public perception toward corporate response between an individualistic country and a collectivistic country.
H3b: In both the Netherlands and Japan, the rebuild strategy will lead to lower
perceived corporate responsibility and a more positive corporate reputation compared to the denial strategy.
Sender of Crisis Communication and Cultural Differences
Previous studies implied that there are cultural differences in regard to the use of
specific senders of crisis communication. Kim (2017) showed that people in South Korea tend to use the name of the organization instead of mentioning a spokesperson, while those in the US mention the name of the CEO. Kim argued that it is because collectivistic people tend to attribute the crisis responsibility to the whole organization while individualistic people think that top management should take responsibility. However, Laufer et al. (2017) found that people in a high power distance culture tend to trust the organization more when the CEO appears as the spokesperson. Given that collectivistic countries are likely to have a high level of power distance, these findings are inconsistent. Thus the cultural effect on the efficiency of different senders of crisis communication in Asia is unclear.
Haruta and Hallahan’s research (2003) shows that a CEO in a country with a high power distance has a more important role than in a country with a low power distance. That is, people in a more hierarchical and centralized society strongly demand the CEO to appear in the media to explain the crisis as a representative of the organization. Other research also supports the idea that Japanese people trust the CEO more than any other type of sender (Kim, Wang, & Ahn, 2013). Therefore, this study expects that both individualistic and collectivistic people will perceive the CEO as the sender more positively than the organization’s name.
On the other hand, it is also expected that there is a difference of perception toward using the organization’s name between individualistic and collectivistic countries. As it is commonly used in collectivistic countries, people in those countries might react positively toward using the name of the organization as well as when the organization mentions the CEO
as the spokesperson. However people in individualistic countries might perceive negatively toward using the name of the organization since they do not share the same values regarding responsibility as collectivistic people do.
H4a: The organization gains more positive corporate reputation when it uses the CEO as a spokesperson than when it uses the name of the organization in both the
Netherlands and Japan.
H4b: When the organization uses the name of the organization as sender of crisis communication, corporate reputation declines more in the Netherlands than in Japan.
Regarding the effectiveness of the two elements of crisis communication as mentioned earlier, an organization receives the most favorable reputation, regardless of the cultural differences, when the CEO is visible in the media and admits corporate responsibility for the crisis. However, it is expected that the difference between corporate reputation when using rebuild strategy with the CEO as a sender and when using the rebuild strategy with the organization’s name as a sender, will be smaller in Japan than in the Netherlands, since Japanese people perceive the CEO and the organization’s name similarly. Additionally, the most negative reputation will be gained when an organization uses its name as a sender and denies the responsibility.
H5a: In both the Netherlands and Japan, when a company uses the rebuild strategy with the CEO as a spokesperson, it will gain more positive corporate reputation in
comparison to the rebuild strategy with the name of the organization, the denial strategy with the CEO, or the denial strategy with the name of the organization.
with the CEO and when using the rebuild strategy with the name of the organization will be smaller in Japan than in the Netherlands.
H5b: In both the Netherlands and Japan, when a company uses the denial crisis response strategy with the name of the organization as a sender, it will gain less positive corporate reputation in comparison to the rebuild strategy with the CEO, the rebuild strategy with the name of the organization, or the denial strategy with the CEO.
Method Participants
A total of 225 (85 men, 138 women, and 1 unidentified) people participated in the experimental survey, of which 27.6% were Dutch citizens and 72.0% were Japanese citizens. Participants ranged in age from 19 to 72 years (M=34.46, SD=11.99). Among the participants, 54.9% have a Bachelor’s degree, 21.2% have a Master’s degree, 14.2% have a high school graduate certificate, 1.8% have a Doctoral degree, and 7.1% have other certificates as the highest level of education. 33.9% of the Dutch participants were male and the average age of them was 31.15 (Min=21, Max=71, SD=11.74). More than half of them have a Bachelor’s degree (51.9%), 37.1% have a Master’s degree, and 6.5% have a high school graduation certification, and 1.6% have a doctoral degree. Among the Japanese participants, 39.5% was male. The average age was 35.74 (Min=19, Max=72, SD=11.88). 56.9% of the Japanese participants have a Bachelor’s degree, 17.3% of them have a high school graduate certificate, 15.4% have a Master’s degree, and 1.9% have a doctoral degree.
Design
The experimental survey using the 2 (crisis response strategies: rebuild strategy vs. denial strategy) ×2(sender of crisis communication: the CEO vs. the name of the organization)
between subject factor design was used in this study. The manipulation was embedded within a scenario about an information leakage crisis of a fictional travel agency “Riovel” (See Appendix 1). The scenario describes an event that customer information including names, addresses and credit card numbers were leaked by a hacker. Information leakage is a topic which is gaining attention in both Western and Asian countries. This topic was selected because it could happen to any kind of organization and in any country. Additionally, the corporate crisis responsibility is equivocal in this scenario. This enables an organization to either admit its crisis responsibility or blame the hacker and portray itself as a victim.
The scenario consisted of a news article which contained the description of the crisis and the corporate messages. The contents and the sender of corporate message were
manipulated. The participants read one of four different scenarios which used: (1) the rebuild strategy and the CEO, (2) the rebuild strategy and the name of the organization, (3) the denial strategy and the CEO, or (4) the denial strategy and the name of the organization. Firstly, the corporate message with the rebuild strategy included an apology, sympathy for the victims, compensation, and reassurance while the message with the denial strategy contained anger toward the hacker, denial of responsibility, and an excuse that the security system was efficient enough. Secondly, the scenario with the CEO’s name as a spokesperson had a brief introduction about the CEO, including his position as the founder and when he established the organization. Different names were used for the CEO between the Netherlands and Japan. A Dutch name was used in the English texts and a Japanese name was used in the Japanese scenario in order to get rid of the effect of CEO’s ethnicity on public perception (Arpan, 2002). In the other scenario, merely the name of the organization was mentioned.
Pre test has shown that Dutch people (N=6, M=4.53, SD=.81) and Japanese people (N=14, M=4.98, SD=1.92) perceive similar levels of corporate responsibility after reading the crisis description which does not include any stimuli, t(17.97)=.75, p=.466.
and in Japanese for Japanese participants. The questionnaire was created in English, and then translated into Japanese by the researcher. The translated Japanese questionnaire was again translated into English by a native English and Japanese speaker to assure all participants would experience the same manipulation and read the same questions.
Procedure
All respondents were contacted through social media, and were provided with an URL of the online survey. Before starting the survey, an explanation about the contents of the questionnaire and the information consent including anonymity, privacy concern, data
security and contact information was provided to all participants. Respondents who agreed to participate were provided with information about the fictional company and the information leakage crisis. Participants were asked to read a randomly assigned scenario carefully. They read the same description about the crisis and one of the four different types of corporate messages, as mentioned before. After exposure, participants were asked to fill out a questionnaire measuring their perception toward the crisis and the organization. The
manipulation check items rounded out the survey, with some demographic questions asking participants their nationality, age, gender and highest educational level.
Measures
Corporate reputation.
The scale by Coombs & Holladay (2002) was used to measure corporate reputation. On a 7-points Likert scale ranging from 1(strongly disagree) to 7 (strongly agree), participants were asked to respond to the five questions (See Appendix 2). Items 2, 3, and 5 were reverse coded and the final score of corporate reputation was computed by taking the average of five items (M=3.91, SD=1.31). Internal consistency was acceptable, α=.87.
Perceived corporate responsibility.
Participants were asked to answer the two questions with 7-point Likert scales adapted by Park and Len-Rios (2010) (See Appendix2). The average score of two items was computed as a score of perceived corporate responsibility (M=5.54, SD=1.08). The resulting scale was internally reliable, α=.85.
Manipulation Check
In order to confirm if participants successfully recognized the crisis response strategy and the sender which were described in the scenario, they were asked to indicate how much they agreed with the following five statements using 7-point Likert scale ranging from 1(strongly disagree) to 7 (strongly agree): (1)”Riovel apologized about the information leakage”, (2)“Riovel admitted its responsibility for the incident”, (3)“Riovel blamed the hacker for the incident”, (4)“Riovel denied its responsibility for the incident”, and (5)“The CEO of Riovel released the comment in the news article”.
Firstly, the results showed that participants who read the corporate message with the rebuild strategy significantly agreed more that the organization apologized for the crisis (M=5.44, SD=1.50) and admitted their responsibility (M=5.15, SD=1.56) than participants who read the corporate message with the denial strategy (M=2.16, SD=1.41; M=1.93, SD=1.47), t(223)=16.90, p<.001; t(223)=15.93, p<.001. Similarly, participants who read the corporate message with the denial strategy recognized significantly more that the organization denied the responsibility (M=5.57, SD=1.78) and blamed the hacker instead of accepting their responsibility (M=5.02, SD=2.09) than participants who read the corporate message with the rebuild strategy (M=2.73, SD=1.38; M=2.91, SD=1.46), t(223)=-6.48, p<.001;
t(203.64)=-13.32, p<.001.
Secondly, participants who read the message with the name of CEO (M=4.96, SD=1.88) significantly acknowledged more that the CEO published the corporate message than
participants who read the corporate message with the organization’s name (M=3.40, SD=1.75), t(223)=6.48, p<.001.
Analyses
H1a, H2 and H4b were analyzed with independent t-tests. H1b and H3b were analyzed by using SPSS PROCCESS model 4, and model 7 was used to examine H3a. H4a was
analyzed with PROCESS model 1. One-way ANOVA and multiple ANOVA were used to analyze H5a and H5b.
Results
To test H1a which expects that the denial strategy decreases corporate reputation in comparison to the rebuild strategy, an independent t-test was conducted with the type of crisis response strategies as independent variable and corporate reputation as dependent variables. The denial strategy (M=3.15, SD=1.17) significantly decreases corporate reputation compared to the rebuild strategy (M=4.61, SD=1.02), t(217)=9.84, p<.001. Effect size is large (Cohen’s d=1.30). Thus, H1a was supported.
Secondly, H1b was tested with PROCESS model 4 (Hayes, 2013). H1b expects that the rebuild strategy leads to lower perceived corporate responsibility and results in more
favorable corporate reputation. The effect of crisis response strategies on the perceived corporate responsibility was only marginally significant (b=-.28, p=.06) while the perceived corporate responsibility has significant effect on corporate reputation (b=-.40, p<.001). In total, crisis response strategies has a significant effect on corporate reputation, b=-1.45, p<.001. The data shows that crisis response strategies impacts the perceived corporate responsibility which in turn decreases corporate reputation (b=.11, 95% CI[.00, .27]).
However, the direction of the effect turned out to be the opposite of the expected result. That is, the rebuild strategy increases the perceived corporate responsibility and diminishes
corporate reputation, and thus H1b was rejected. In addition, the mediation only partially explains the effect of crisis response strategies on corporate reputation since crisis response strategies directly influences corporate reputation (b=-1.56, p<.001). Moreover, the opposite signs of the indirect effect and direct effect imply competitive partial mediation (Zhao, Lych, & Chen, 2010).
Thirdly, an independent t-test was used to test H2 which assume that the CEO as a sender of crisis communication leads to more positive corporate reputation than the
organization’s name. The results showed that there is no significant difference of the corporate reputation between when the CEO is used as a sender of corporate message (M=3.92,
SD=1.22) and when the name of the organization is used (M=3.90, SD=1.40), t(217)=.09, p=.931. Thus H2 was rejected.
PROCESS model 4 was used to analyze H3a. The findings were consistent with the claim that nationality impacts the perceived corporate responsibility which in turn negatively effects corporate reputation when the organization uses the denial strategy (b=-.52, 95% CI[-.92, -.22]). Japanese people attribute more responsibility to the organization than Dutch people (b=.93, p<.001), and higher perceived corporate responsibility decreases corporate reputation (b=-.56, p<.001). Since the direct effect of nationality on corporate reputation was not significant (b=-.08, p=.7143), this is a full mediation.
H3b was examined in order to see the cultural influence on the mediation relationship which was investigated in H1b. PROCESS model 7 was used, and the model used crisis response strategies as independent variable, corporate reputation as dependent variable, the perceived corporate responsibility as mediator, and nationality as moderator (See Figure 1). Path A was investigated first. The results showed that crisis response strategies (b=-.74, p<.05) significantly predict the perceived corporate responsibility, but nationality does not (b=.27, p=.2222). Interaction of crisis response strategies and nationality does predict the perceived corporate responsibility, b=.66, p<.05. Thus, a moderation effect of nationality
between crisis response strategies and the perceived corporate responsibility was confirmed. The perceived corporate responsibility significantly predict corporate reputation (path B), b=-.40, p<.001, and crisis response strategies also has a direct effect on corporate reputation (path C), b=-1.55, p<.001. As a result, the researcher established a moderated mediation from crisis response strategies to corporate reputation through the perceived corporate
responsibility, dependent on nationality (index of moderated mediation: -.26, 95% CI[-.59, -.01]). While the indirect effect of the type of crisis response strategies on corporate reputation is significant for Dutch people (b=.29, 95% CI[.07, .61]), it disappears for Japanese people (b=.03, 95% CI[-.09, .18]). That is, Dutch people attribute less responsibility to the
organization and corporate reputation declines when the organization uses the denial strategy. Again, this mediation is a competitive partial mediation which only partially explains the direct effect of crisis response strategies on corporate reputation. Since the mediation effect was opposite from our expectation, H3a was rejected.
Figure 1. Moderated mediation between crisis response strategy and corporate reputation.
H4a expected that using the CEO as a sender of crisis communication enhances the corporate reputation compared to using the name of the organization both in the Netherlands and Japan. PROCESS model 1 was used with the sender as independent variable, corporate reputation as dependent variable, and nationality as a moderator. The sender (b=.38, p=.25)
and nationality (b=.03, p=.92) did not predict the corporate reputation, and there was no interaction of these variables (b=-.55, p=.1658). Thus there is no difference of the corporate reputation between using the CEO and the organization’s name in both the Netherlands and Japan. H4a was rejected.
To investigate H4b which assumed that corporate reputation declines more in the Netherlands than in Japan when the organization uses the organization’s name, an independent t-test was conducted with nationality as independent variable and corporate reputation as dependent variables. The result did not show any differences of corporate reputation between Dutch people (M=4.26, SD=1.29) and Japanese people (M=3.74, SD=1.43) when the organization uses the organization’s name as a sender of corporate messages, t(107)=1.78, p=.078. Thus H4b was rejected.
Lastly, in order to test H5a and H5b, one-way ANOVA was conducted using the type of manipulation as independent variable, and corporate reputation as dependent variable for both Dutch and Japanese people (See Table 1, 2 and 3). There were significant differences of corporate reputation between manipulation types both in the Netherlands (F(3, 58)=4.99, p<.01) and Japan (F(3, 152)=36.71, p<.001). In both countries, the manipulation which gained the best corporate reputation was the rebuild strategy using the organization’s name. Mean differences of corporate reputation between the rebuild strategy with the CEO and the rebuild strategy with the organization’s name was smaller for Japanese (Mdifference=-.38, p=.59) than Dutch (Mdifference=-.50, p=1.00) as was expected but both were not significant. Thus H5a was rejected. In addition, the manipulation which gained the worst corporate reputation in Japan was the denial strategy with the name of the organization as was expected in H5b. However, it was the denial strategy mentioning the CEO which obtained the worst reputation for Dutch people. Thus H5b was partly supported.
Descriptive analyses of the corporate reputation for each manipulation type.
Table 2
Mean differences of the corporate reputation between each manipulation type (Dutch people).
Table 3
Mean differences of the corporate reputation between each manipulation type (Japanese people).
In addition, the results of one-way ANOVA showed interesting finding. For Japanese people, there was a significant differences between the denial strategy using the CEO
(M=3.35, SD=1.13) and the denial strategy mentioning the organization’s name (M=2.59, SD=1.00), Mdifference=.76, p<.01. That is, Japanese people react more negatively toward mentioning the organization’s name than mentioning the CEO’s name when the denial strategy is used.
To investigate whether there was any interaction between the type of crisis response strategies and sender, two factorial ANOVAs were conducted for both Dutch and Japanese people. Firstly, factorial ANOVA was conducted on the influence of two independent
variables (crisis response strategies and the sender) on corporate reputation for Dutch people. The main effect for crisis response strategies yielded an F ratio of F(1, 58) =12.90, p<.001, indicating a significant difference between the rebuild strategy (M=4.60, SD=1.09) and the denial strategy (M=3.57, SD= 1.17). However, both the main effect for the type of sender, F(1, 58)=2.11, p=.152, and the interaction effect were not significant, F(1, 58)=.09, p=.77.
On the other hand, the interaction effect of the type of crisis response strategies and sender was significant for Japanese people, F(1, 152)=11.98, p<.001. For the rebuild strategy, the differences of corporate reputation between the use of the CEO (M=4.79, SD=.16) and the organization’s name (M=4.79, SD=.16) was .39 and the use of the organization’s name
enhances corporate reputation. However, for the denial strategy the difference between the use of the CEO (M=3.35, SD=.17) and the organization’s name (M=2.59, SD=.17) was .46 and using the CEO as a sender increases corporate reputation. The main effect for crisis response strategies was significant, F(1, 152)=98.90, p<.001, meaning that there was a significant difference of corporate reputation between the rebuild strategy (M=4.59, SD=.99) and the denial strategy (M=2.98, SD=1.13). The main effect for the type of sender was not significant, F(1, 152)=1.37, p=.24.
Discussion
regarding the cultural influences on the effectiveness of crisis response strategies and sender of corporate messages. This study emphasizes that efficiency of crisis communication is contingent on culture and specific strategies could lead to more severe reputational damage in some countries.
In line with the expectation, the rebuild strategy is more effective in preventing
reputational damage compared to the denial strategy. This finding is consistent with previous research (DeBlasio & Veale, 2009; Coombs & Schmidt, 2000; Griffin et al., 1991).As
expected, this finding was consistent across different cultures. Therefore it can be said that an apology increases corporate reputation in both the Netherlands and Japan. This supports Lee’s research (2004) which emphasized that Western theories regarding crisis communication could be applied in Asian countries.
However, there was indeed a cultural influence on public perception as this study revealed that Japanese people react more negatively toward the denial strategy compared to Dutch people. In Asian collectivistic countries, an apology has a function of maintaining social order and acknowledges that something inappropriate has happened, while an apology in Western countries is only used when the organization explicitly takes blame for the crisis (Maddux et al., 2011). The feeling of guilt is separated from feelings of responsibility in this context, and the act of apologizing means that the organization concerns for the victims’ suffering, acknowledges adversity, and expresses empathy and remorse (Fehr & Gelfand, 2010; Brooks, Dai, & Schweitzer, 2014). An apology in Asian collectivistic countries is thus recognized as a normative action which is expected in any crisis situation regardless of the amount of corporate responsibility. If an organization hesitates to make an apology in a crisis situation, collectivistic people might perceive the organization as socially inappropriate, which can damage corporate reputation. Therefore, in collectivistic countries, making an apology is a rather obligatory action which is essential if the organization wants to be recognized as a morally competent member of society (Haruta & Hallahan, 2013).
This study also revealed the mediation relationship between crisis response strategies and corporate reputation through the perceived corporate responsibility. Although the
researcher expected that the rebuild strategy would decrease the perceived responsibility since it increases public sympathy and forgiveness (Weiner et al., 1991), this mediation relationship showed an opposite effect. That is, the rebuild strategy increases the perceived corporate responsibility and results in a less positive corporate reputation while the denial strategy
decreases the perceived corporate responsibility and brings more positive corporate reputation. This finding is supported by Coombs’s research (1998) which states that using the rebuild strategy allows people to attribute more responsibility to the organization while the denial strategy would help to decreases the perceived responsibility. Thus, it is a double-edged sword to use the rebuild strategy. On one hand, it leads to favorable public impression toward the organization, but on the other hand, people attribute more responsibility to the organization and the organization could suffer from legal liabilities. Additionally, the relationship between the perceived corporate responsibility and the corporate reputation is consistent with previous studies (Coombs, 1998, 2004; Coombs & Schmidt, 2000; Coombs & Holladay, 2002; De Blasio & Veale, 2009). Thus, the more responsibility individuals attribute to the organization, the more corporate reputation declines.
It should be noted that this mediation effect was found especially for Dutch people. It implies that Dutch people believe that the organization is responsible for the crisis when the rebuild strategy is used while they attribute less responsibility to the organization when the denial strategy is used. For individualistic Western people, it might be natural and acceptable that the organization denies responsibility and does not apologize when they have a clear explanation. On the other hand however, using the denial strategy does not lessen the perceived responsibility in Japan. When the organization refuses to make an apology,
Japanese people think that the organization is socially inappropriate and not trustworthy. As a result, they do not believe the corporate statement that the organization is not responsible. It
should also be emphasized that the mediation relationship which was found for Dutch people only partially explains the relationship between the crisis response strategies and corporate reputation. The direct effect between them is stronger than this mediation relationship, and therefore the rebuild strategy brings more positive corporate reputation than the denial strategy in general.
Additionally, this study also investigated the role of the sender of crisis communication. Contrary to the expectation, in general, people developed similar impressions toward the organization regardless of which type of sender was mentioned in the news article.
Individuals might automatically imagine that the CEO is publishing the corporate message even if his/her name is not mentioned in the article. Thus, in their perception the CEO and the organization is the same. In order to make it obvious that the whole organization is taking responsibility and not only the CEO, ”all members of the organization “could be used in future research instead of the name of the organization because Kim’s research (2017) shows that it is also often used in collectivistic countries.
However, when the organization specifically uses the denial strategy, Japanese individuals reacted differently toward using the CEO and the organization’s name. That is, they perceive using the CEO as a sender of corporate messages more positively compared to using the name of the organization when the organization refuses to make an apology. It is consistent with the study by Haruta and Hallahan (2013) which noted that Japanese people expect the CEOs to be visible and available to both media and victims, and to be highly involved in crisis communications. Since Japanese culture is hierarchical and centralized, people expect the CEO to explain the crisis as the representative of the organization. If the CEO is not visible, people may think he/ she is hiding from public attention and is trying to escape from taking responsibility. Therefore, using the CEO as a sender of crisis
communication is also crucial in Japan as well as making an apology. In the situation in which the organization uses the denial strategy and mentions the organization’s name, they break
both of these two expectations. In that case, Japanese people might conclude that both the organization and the CEO are escaping from taking responsibility for the crisis and are not trying to respond sincerely toward their stakeholders. Hence, corporate reputation declines more in that situation compared to when the organization use the denial strategy but mentions the CEO in which at least one of two social expectations are met.
Conclusion
For public relations professionals involved in international crises, it is crucial to understand the cultural impacts on crisis communication in order to prevent a negative
corporate reputation. This study provided further insights of how crisis communication works differently between Western and non-Western countries. This study especially revealed the advantage of the rebuild strategy over the denial strategy in Japan, and cultural impacts on the effectiveness of the denial strategy and using the name of the organization as a sender of corporate messages.
This study suggests several tips which may help to select a culturally appropriate crisis communication strategy.
1) Use the rebuild strategy in both individualistic and collectivistic countries. Although it increases the perceived corporate responsibility, it brings more favorable corporate
reputation than the denial strategy.
2) Do not use the denial strategy in collectivistic Asian countries. Since an official apology is strongly expected regardless whether the organization is responsible or not, refusing to make an apology exacerbates the situation and brings severe reputational damage. An organization should first apologize to the stakeholders for making trouble, and then the organization could state that they are not responsible for the crisis (Wertz & Kim, 2010) as apologizing in Asian countries does not mean the acceptance of responsibility. It is important to consider cultural differences related to apologizing, and an organization should not hesitate
to make an official apology because it prevents public anger and reputational damage. 3) Do not use the name of the organization as a sender of crisis communication in Asian countries which have high level of power distance, especially in combination with the denial strategy. Since individuals in those countries highly expect the CEO to be visible in news media during a crisis, the name of the CEO should be mentioned in corporate messages.
Although this study contributed to the further advancement of international crisis communication research, it still has several limitations. Firstly, the amount of Japanese participants was much greater than the Dutch participants. This bias might have caused an effect on the results.
Secondly, it is unclear if the findings can be applied to other countries with similar levels of individualism and power distance. Although this study compared the Netherlands and Japan which have different levels of individualism and power distance, these two cultural elements were not measured. Future research can include those specific cultural dimensions into the model in order to gain more generalizability.
Thirdly, this study only used one crisis scenario. Similar research can be conducted with different crisis scenarios to see if the rebuild strategy is similarly effective in other types of crises. In addition, other types of news media such as TV or videos should also be considered since non-verbal communication could also impact public perception. As previous research suggested, the accent of the spoken language and non-verbal communication such as physical appearance and eye contact which are absent in written articles can impact the public
perception toward the CEO as the sender of crisis communication (Arpan, 2002; Feeley & de Turck, 1995).
Lastly, other elements which impact corporate reputation should be considered as well. SCCT by Coombs (2007) states that an individual’s knowledge about past crises of the organization or any prior relationships with the organization can impact the corporate reputation during a crisis situation. Since this study used a fictional organization, these
elements were not included. For future research, an existing organization could be used in order to measure the influence of these elements.
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Appendix 1 1.Scenario (Rebuild Strategy × the CEO)
A. Scenario in English
The travel agency Riovel recently acknowledged that the system was hacked and approximately information from 3.7 thousands customers was leaked. The system was
infected with a virus which exposed combinations of names, birthday, identification numbers, phone numbers, address, booking information and credit card numbers. It is still under
investigation whether the security system met the standard demands.
Mr. Tim Smit, the CEO of Riovel, published a comment on the corporate website. He is the founder of Riovel and established it in 1998.
“I sincerely apologize for the great inconvenience caused to our customers and related parties, and deeply regret not being able to prevent this incident. I will do all that I can to compensate them for their loss and restore their trust. We will refund fees to the customers who suffered by this incident. The security measures will be upgraded to assure this will not happen again. I hope you will give us another chance.”
B. Scenario in Japanese Riovel（リオベル）、ハッキングにより 3 万 7 千人の顧客情報が流出 旅行会社 Riovel はシステムがハッキングされ約 3 万 7 千人の顧客情報が流出したことを認め た。システムはウイルスによって浸食され、顧客名や生年月日、顧客番号、電話番号、住所、予 約情報、クレジットカード番号が外部に流出した。同社のセキュリティシステムが一定の安全基 準を満たしていたかどうかについて捜査を進めている。 Riovel の青木敏行社長は同社のウェブサイトにてコメントを発表した。青木社長は Riovel の 創設者であり、1998 年に同社を設立した。 「お客様をはじめ関係の皆様には、多大なご迷惑をおかけしましたことを深くお詫び申し上 げます。今回の事件を防止できなかったことを非常に遺憾に思います。皆様の信頼を回復できる よう、できる限りのお詫びをさせていただきます。今回の事件の被害に遭われたお客様にはツア ー料金を全額返金いたします。また、このようなことが二度と起きないよう、セキュリティシス
テムの性能をより強化いたします。 どうかもう一度チャンスをいただけないでしょうか。」
2.Scenario (Rebuild Strategy × the Name of the Organization) A. Scenario in English
Riovel hack results in loss of 3.7 thousands customers’ information
The travel agency Riovel recently acknowledged that the system was hacked and approximately information from 3.7 thousands customers was leaked. The system was
infected with a virus which exposed combinations of names, birthday, identification numbers, phone numbers, address, booking information and credit card numbers. It is still under
investigation whether the security system met the standard demands.
“We sincerely apologize for the great inconvenience caused to our customers and related parties, and deeply regret not being able to prevent this incident. We will do all that we can to compensate them for their loss and restore their trust. We will refund fees to the customers who suffered by this incident. The security measures will be upgraded to assure this will not happen again. We hope you will give us another chance.” Riovel said on its website.
B. Scenario in Japanese Riovel（リオベル）、ハッキングにより 3 万 7 千人の顧客情報が流出 旅行会社 Riovel はシステムがハッキングされ約 3 万 7 千人の顧客情報が流出したことを認め た。システムはウイルスによって浸食され、顧客名や生年月日、顧客番号、電話番号、住所、予 約情報、クレジットカード番号が外部に流出した。同社のセキュリティシステムが一定の安全基 準を満たしていたかどうかについて捜査を進めている。 Riovel はホームページで公式コメントを発表した。 「お客様をはじめ関係の皆様には、多大なご迷惑をおかけしましたことを深くお詫び申し上
げます。今回の事件を防止できなかったことを非常に遺憾に思います。皆様の信頼を回復できる よう、できる限りのお詫びをさせていただきます。今回の事件の被害に遭われたお客様にはツア ー料金を全額返金いたします。また、このようなことが二度と起きないよう、セキュリティシス
テムの性能をより強化いたします。 どうかもう一度チャンスをいただけないでしょうか。」
3.Scenario ( Denial Strategy × the CEO) A. Scenario in English
Riovel hack results in loss of 3.7 thousands customers’ information
The travel agency Riovel recently acknowledged that the system was hacked and approximately information from 3.7 thousands customers was leaked. The system was
infected with a virus which exposed combinations of names, birthday, identification numbers, phone numbers, address, booking information and credit card numbers. It is still under
investigation whether the security system met the standard demands.
Mr. Tim Smit, the CEO of Riovel, published a comment on the corporate website. He is the founder of Riovel and established it in 1998.
“I feel the outrage over the hacker’s malicious act. Information security is always our first priority and we made an effort to ensure the security of customer information. Our security system was efficient enough and was not vulnerable. This incident could happen to all companies. I hope our customers understand that there was nothing we could do to prevent this incident and we are not responsible for this incident. “
B. Scenario in Japanese
Riovel（リオベル）、ハッキングにより 3 万 7 千人の顧客情報が流出
た。システムはウイルスによって浸食され、顧客名や生年月日、顧客番号、電話番号、住所、予 約情報、クレジットカード番号が外部に流出した。同社のセキュリティシステムが一定の安全基 準を満たしていたかどうかについて捜査を進めている。 Riovel の青木敏行社長は同社のウェブサイトにてコメントを発表した。青木社長は Riovel の 創設者であり、1998 年に同社を設立した。 「ハッカーの悪意に満ちた行為に激しい憤りを覚えます。情報保護は我々の最優先事項であ り、顧客情報の安全のためにできる限りの努力をしてまいりました。私達のセキュリティシステ ムは十分に安全であり、決して脆弱なものではありませんでした。今回の事件はどの企業にも起 こりうるものです。事件防止のためにできたことは何もなく、私共に責任は一切無いということ をご理解いただけますと幸いです。」
4.Scenario (Denial Strategy × the Name of the Organization) A. Scenario in English
Riovel hack results in loss of 3.7 thousands customers’ information
The travel agency Riovel recently acknowledged that the system was hacked and approximately information from 3.7 thousands customers was leaked. The system was
infected with a virus which exposed combinations of names, birthday, identification numbers, phone numbers, address, booking information and credit card numbers. It is still under
investigation whether the security system met the standard demands.
“We feel the outrage over the hacker’s malicious act. Information security is always our first priority and we made an effort to ensure the security of customer information. Our security system was efficient enough and was not vulnerable. This incident could happen to all companies. We hope our customers understand that there was nothing we could do more to prevent this incident and we are not responsible for this incident. “Riovel said on its website.
B. Scenario in Japanese Riovel（リオベル）、ハッキングにより 3 万 7 千人の顧客情報が流出 旅行会社 Riovel はシステムがハッキングされ約 3 万 7 千人の顧客情報が流出したことを認め た。システムはウイルスによって浸食され、顧客名や生年月日、顧客番号、電話番号、住所、予 約情報、クレジットカード番号が外部に流出した。同社のセキュリティシステムが一定の安全基 準を満たしていたかどうかについて捜査を進めている。 Riovel はホームページで公式コメントを発表した。 「ハッカーの悪意に満ちた行為に激しい憤りを覚えます。情報保護は我々の最優先事項であ り、顧客情報の安全のためにできる限りの努力をしてまいりました。私達のセキュリティシステ ムは十分に安全であり、決して脆弱なものではありませんでした。今回の事件はどの企業にも起 こりうるものです。事件防止のためにできたことは何もなく、私共に責任は一切無いということ をご理解いただけますと幸いです。」 Appendix 2 Measurement Scales
Corporate reputation / Coombs and Holladay (2002)
A. Questions in English
(1: strongly disagree, 7: strongly agree) (R): reversed items
1. The organization is concerned with the well-being of its publics. 2. The organization is basically DISHONEST. (R)
3. I do NOT trust the organization to tell the truth about the incident. (R)
4. Under most circumstances, I would be likely to believe what the organization says.
