The fall of BlackBerry: Crisis response and the influence on media reporting Alfera Handgraaf
10623809 Master Thesis
Graduate School of Communication Master’s program Communication Science supervisor: mw. Dr. L.A. van Oortmerssen
27-06-2014 University of Amsterdam
Abstract
This study focuses on the financial crisis of Blackberry and aims to understand the effect of crisis communication strategies on an organization’s media coverage. The situational crisis communication theory by Coombs (2006) is used as a guideline through this study. This study contains two different tests. First test focuses on the presence of crisis communication
strategies in Blackberry’s press releases (n=76) and blog posts (n=87). The second test analyzes Blackberry’s media reporting by researching the news coverage on Blackberry in online news articles (n=30) of three different newspapers. After conducting content analysis the results of this study indicate that Blackberry only applied few strategies. The majority of the used strategies included the integration and concern strategies. The perception towards the financial performance of Blackberry remained negative during the crisis in all newspapers. Interestingly, it became clear that the perception towards Blackberry’s marketing
opportunities and future shifted from a negative perception to a positive one. This study assumes that with the little crisis strategies found Blackberry was not ready for a crisis and failed to inform their stakeholders appropriately. Furthermore, the negative coverage on Blackberry’s financial performance seems to suggest that the crisis strategies did not influence the news articles. It is also assumed that the introduction of Blackberry’s newest application for IPhone and Samsung is the reason for the shift towards more positive coverage. To conclude, this study provides an interesting insight into the usage of crisis communication strategies of an organization coping with a financial crisis and the effect media coverage.
Introduction
A crisis is unpredictable and can threaten an organization. Crises can potentially damage the reputation of an organization and this could affect the interaction between stakeholders and organizations (Barton, 2001; Coombs, 2007). Therefore, an organization should always be ready to have a crisis communication plan.
Most crisis communication research focuses on crises such as product of recall, airplane crashes and oil spills. All these crises influence stakeholders directly. Financial crises however affect the organizations directly and stakeholders indirectly. These crises are yet to be researched. This is much unexpected since the financial status of an organization is very important for an organization (Cooley & Cooley, 2011). The financial condition of an organization defines its existence and without a healthy financial condition an organization will have no future.
Although crisis communication is researched very often the effect of crisis
communication and crisis communication strategies on an organizations’ reputation and the media coverage it receives is yet to be researched. It seems likely that the corporate reputation of an organization is affected by a crisis or negative situations (Deephouse, 2000; Carroll & McCombs, 2003). An organization’s corporate reputation is strongly related to the type of media coverage the organization receives (Carroll & McCombs, 2003). Positive media coverage improves corporate reputation or leads to a higher relative return on assets (Deephouse, 2000; Carroll & McCombs, 2003). By already having a good established
corporate reputation an organization could minimize the reputational damage. In this case the corporate reputation functions as a reservoir for bad times (Jones, Jones & Little, 2000).
Post crisis communication has the potential to repair reputation damage and even prevent future reputational damage (Coombs & Holladay, 2005). In this unstable economy a crisis can be fatal for any organization (Coombs, 2007). Thus, choosing an appropriate crisis
communication strategy can be crucial for an organization’s future (Coombs & Holladay, 2002; Coombs, 2004; Coombs, 2007).
Considering the little research on financial crises and the effect crisis strategies have on corporate reputation this study will discuss: ‘To what extent can a crisis communication strategy influence the corporate reputation of an organization during a financial crisis? More specifically, this study will discuss the bankruptcy crisis of Blackberry. Discussing a
bankruptcy in the context of crisis communication will provide a new insight into a not often studied subject. More specifically, the aim of this study is to gain information on the crisis communication strategies used by an organization coping with a financial crisis and to study the corporate reputation by analyzing the media coverage it receives. Furthermore, this study hopes to contribute to crisis communication research.
Theoretical framework Crisis management and communication
A crisis is a major incident with the probability to have a negative effect on an organization, company as well as its publics, products and reputation (Fearn-Banks, 1996; Cooley & Cooley, 2011). Research on crises and crisis communication is very diverse, it describes aspects such as: type, strategies, crisis aftermath and many more. In general, there are two types of crises: the cobra type of crisis and the python type (Ahmed, 2006). The cobra type of crisis is a sudden crisis which happens unexpectedly. The python crisis is a crisis which advances over time and by different issues (Cooley & Cooley, 2011).
How to handle a crisis is an often subject of research. One of the criticisms towards crisis management literature is that suggestions for crisis communication can vary among different authors. More specifically, Stocker (1997) suggests that crisis management should be organization-centered and therefore, starts with an analysis of the company. Others believe that the stakeholders should be top priority. Here informing and communicating with
stakeholders is believed to be most important (Seeger, 2006; Janoske, Lui & Madden, 2013; Wilcox, Cameron, Ault & Agee, 2005). It is therefore not clear which method is most appropriate for crisis management. Overall research agrees that crisis management is
considered to be very important. Despite the emphasis on crisis communication by researchers many organizations are not prepared for a crisis situation (Formentin, 2010). However, many crises can be predicted and this is beneficial for crisis communication managers (Mitroff, 1988).
Financial Crisis Communication research. Most often crisis communication research focuses on crises such as product of recall, airplane crashes and oil spills. These crises are considered to be natural disasters, production faults or human errors. Interestingly, research on financial crises is still underdeveloped (Cooley & Cooley, 2011). This is remarkable since the financial status of an organization is the heart of the company and therefore an indication of its health in the future (Frankowiak, 1992). Although research on financial crises is very limited there are some studies available that are related to the subject. Jordan (2003) developed three stages that a company goes through during a financial crisis. These stages were discovered when investigating the Ashanti Goldfield financial crisis in 1999(Jordan, 2003). The first stage was to stabilize the company and managing communication to restore calm to the investment party. In any crisis the first stage is a crucial factor (Cooley and Cooley, 2011). Secondly, the company educated and informed investors through communication channels and thirdly, the company recoupled with investors to rebuild investment interest and restore trust (Jordan, 2003).
Situational Crisis Communication Theory (SCCT). A theory that is often used within crisis communication research is the Situational Crisis Communication Theory (SCCT) (Cooley & Cooley, 2011). This theory is developed and refined by Coombs in 2006. The theory provides a framework to identify different situational clusters and crisis strategies (Coombs, 2004;
Cooley & Cooley, 2011). More specifically, the SCCT argues that the information people have about past crises is very important (Coombs, 2004). Moreover, to protect an organization during a crisis, crisis professionals shouldalter their communication to also account for previous crises that the public already has knowledge about.
The SCCT is divided into three core elements. The first core element is to define the crisis cluster. Secondly, to review the crisis response strategies and thirdly, to match the crisis situation and the crisis strategy (Coombs, 2006, Cooley & Cooley, 2011). A crisis cluster is the type of crisis an organization goes through. There are two types of crisis clusters: the victim cluster and the preventable cluster. A crisis belongs to the victim cluster when the organization is also considered to be a victim. Moreover, the organization did not
intentionally engage in the crisis (Coombs, 2006). Examples of a victim cluster crisis are: natural disaster and workplace violence. With the preventable cluster the organization is held accountable for the crisis. These crises include: human intentions, technical breakdowns and production recalls (Coombs, 2006).
The second core element involves reviewing the crisis response strategy. There are three types of responses: deny response, diminish response and the deal response. The deny response consists out of three strategies. The first strategy is to attack the accuser, secondly to deny any problems and lastly using a scapegoat. The diminish response consist of the excuse strategy and the justification strategy. During the excuse strategy the manager tries to deny any intent to do harm and when applying the justification strategy the manager tries
minimizes the perceived damage by the crisis. The deal response consists of integration strategies, concern strategies and regret strategies. When the organization praises the
stakeholders or reminds them of organization’s previous good work, the ingratiation strategy is applied. When the organization expresses concern towards the stakeholders’ wellbeing the
concern strategy is used. Additionally, when a level of regret is expressed the regret strategy is applied (Coombs, 2006; Coombs, 2007).
The last core element involves matching the crisis situation with the appropriate crisis strategy. Based on the two core elements managers should choose an appropriate crisis strategy for the specific crisis situation (Coombs, 2006). All in all the most important aspect of the SCCT is that it argues that reputational threat increases the organization should take responsibility (Coombs, 1995; Coombs & Holladay, 2002). Consequently, this means that the crisis manager should use a response strategy that indicates acceptance of responsibility and addresses victim concerns.
Financial crisis communication research and SCCT. A variety of researchers have already studied crisis communication. In 1997, Benoit offered image restoration strategies that could be used for crisis communication. He offered three different strategies; denial strategy, aviation of responsibility strategy and reduce offensiveness strategy (Benoit, 1997). The denial strategy shifts the blame from the organization to another party. Responsibility strategy minimizes the involvement of the organization and the reduce offensiveness strategy repairs the organization’s image by contributing positively to the event. This model provides three image restore approaches but, unlike the SCCT model it does not offer insight into when and how to use these strategies and how to choose the correct strategy.
In a study by Cooley and Cooley (2011) the SCCT model was used to examine the financial crisis of General Motors (GM). General Motors suffered from a bankruptcy and tried to continue the brand with a ‘new’ GM. During this process the majority of crisis
communication strategies applied by GM were the justification and excuse strategies from the diminish cluster. Further in the process GM applied strategies of the deal cluster, expressing concern and compassion for the consumers. GM did not apply any apparent denial strategies. By applying integration strategies and expressing concern and compassion General Motors
allowed for responsibility acceptance. This positively influenced the relationship with stakeholders.
During research on crisis response strategies targeting a sport crisis of the National Football League (NFL), it became clear that Coombs’ situation clusters and crisis response strategies were an appropriate tool for research (Cooley & Smith, 2012). During this crisis there was a disagreement between the players and owners of the NFL. The study researched the tweets of both owners and players of the NFL and the official press releases that were published. It became clear that the deny response cluster was used most often. The deal cluster was second most used. Both players and owners failed to take responsibility for the crisis resulting into negative media coverage. These studies offer different insights into how the SCCT model can be used in different types of crises. It also shows the importance of choosing the right crisis strategy. This strategy can influence media coverage as well as the acceptance of the crisis of stakeholders.
Since the SCCT model can be used as tool to determine which crisis communication strategies are most appropriate the result on stakeholders and corporate reputation is still unclear (Dean, 2004; Coombs, 2007). To understand the effect of crisis communication strategies on Blackberry’s corporate reputation, this study will analyze the type of media coverage Blackberry receives. The second part of the theoretical framework will elaborate on corporate reputation and media coverage.
Corporate reputation
Corporate reputation can be defined as: the aggregation of a single stakeholder’s perception of how well organizational responses are meeting the demands and expectations of many corporate stakeholders (Wartick, 1992). However, in more recent studies by Gotsi and Wilson (2001), corporate reputation is defined as: a stakeholder’s overall evaluation of a company over time. Moreover, this evaluation is established by the direct experiences the
stakeholder has with the organization. This can be established by communication and symbols that provide information about the organization or compare them with the actions of their competitors (Gotsi & Wilson, 2001).
Corporate reputation functions as the ‘good name’ of the company. In specific, the concept of corporate reputation has been extensively studied in the public relation sector (Kiousis, Popescu & Mitrook, 2007). However, there is still little research on the effect of corporate reputation as ‘good name’ when focusing on a crisis situation (Jones, Jones & Little, 2000). Jones et al. (2000) suggest that when corporate reputation functions as the good will of a company it could serve as a reservoir for difficult situations. During economic loss the corporate reputation could reduce uncertainty for both consumers and employers in certain situations (Jones et al. 2000).
Corporate reputation and news coverage. There is a strong linkage between the corporate reputation of an organization and the news coverage it receives (Carroll & McCombs, 2003).
More specifically, when a company is portrayed by successful news the reputation will improve. This can be explained by the ‘winner’ perspective: people generally want to support to winner or successful organization (Meijer & Kleinnijenhuis, 2006). On the contrary, when an organization is reported in the news because of failure or negativity its reputation will decrease (Carroll & McCombs, 2003).
The effect of negative or positive news on the reputation of an organization also heavily depends on the reputation and knowledge the stakeholder already has of the organization (Meijer and Kleinnijenhuis, 2006). If there is already an established positive relationship between the stakeholder and the organization negative news will less influence the attitude and reputation towards the organization. People with no previous association with an organization will be more affected by negative or positive news (Meijer and Kleinnijenhuis, 2006).
Effect of crisis communication on media coverage. A crisis is a threat towards the corporate reputation of a company. When a crisis damages the reputation it can affect the way
stakeholders interact with the organization (Barton, 2001). If stakeholders feel that the organization is to blame for the crisis this can lead to strong emotions. These emotions can affect behavior intentions and can result into strong feelings of anger (Coombs & Holladay, 2005). In some extreme cases these emotions result into: schadenfreude (drawing pleasure from the pain of others) towards the organization. This reduces the level of sympathy for the organization (Coombs & Holladay, 2005; Coombs, 2007).
Intensifiers such as crisis history and relationship history can increase the reputational damage during a crisis. The crisis history refers to similar and past experiences/crises the stakeholders associate with the organization. The relationship history is the quality of communication between the organization and its stakeholders (Coombs, 2006). These intensifiers have a direct effect on the reputation regardless of the chosen crisis strategy used (Coombs and Holladay, 2001; Coombs, 2006).
When managers understand the type of crisis, the crisis history and the relationship history, they will be able to foresee the reaction of the stakeholders. Based on these reactions the manager can choose an appropriate crisis response strategy that will best serve to protect the corporate reputation (Coombs, 2006). Building and maintaining a good reputation is important, because it can serve as a reservoir during crises and difficult times (Jones, Jones and Little, 2000)
The Blackberry RIM case. This research will focus on the company Blackberry RIM. Blackberry RIM, the smartphone pioneer struggled with a financial crisis themselves. Nowadays, smartphones cannot be ignored in society (Williams, 2009). Moreover, a smartphone is a complex device which is able to connect to the internet, send e-mails and messages (Ye and Lin, 2009). The number of users of smartphones is still growing
worldwide, which results in a high level of competition between different smartphone producers. Blackberry RIM was one of the four largest producers in the industry. However, because of the unstable market new players such as Samsung have taken their place (Ye and Lin, 2009). While other producers were able to reinvent their products Blackberry was not able to do so. This resulted into a loss in consumers and an unsuccessful latest product; the Blackberry Z10 (Harrison and De Vynck, 2013). As a result, Blackberry ended up in a financial crisis and was forced to lay down the consumer production part of the company (Wauch, 2013). The CEO of Blackberry stepped down and it seemed that the fate of
Blackberry was sealed. However, new CEO Chen decided that there are still opportunities for the company and decided to maintain consumer production (Hardawar, 2014). With this immense turn of events the corporate reputation of Blackberry is of great importance.
Understanding the impact of the crisis on Blackberry’s reputation will be crucial for its future. With the help of the SCCT by Coombs this research will evaluate how Blackberry handled their crisis. The SCCT model is often used to determine a crisis communication strategy the end result on stakeholders and an organization’s media coverage is still unclear (Dean, 2004; Coombs, 2007). Therefore, this study will also include a research on
Blackberry’s media coverage before and after the financial crisis. Thus, this research proposes the following research question: ‘To what extent did Blackberry’s crisis communication
strategies influence its media coverage?’
Method
This research will focus on crisis communication and media coverage; therefore this research consists of two parts. The first part is an in depth study into how Blackberry dealt with the crisis using the SCCT model as a guideline. The second part of the study evaluates the reputation of Blackberry during the beginning and the end of the crisis by analyzing different online articles of three newspapers.
Study 1
The first study focused on the crisis communication of Blackberry during the financial crisis in 2013. To answer the research question a content analysis was chosen as appropriate method. A content analysis is a systematic technique for analyzing message content and handling whereby the analyst is not necessarily concerned with the message, but with the larger questions of process and effect and communication (Budd, Thorp and Donohew, 1996). To analyze the texts the SCCT framework by Coombs (2007) will was used. This framework was incorporated in the coding sheet by Cooley and Smith (2012).
Official press releases and blog posts by Blackberry were used as research units of analysis. More specifically, this included 76 press releases and 87 blog posts from the beginning of August 2013, until the end of April, 2014. This period was chosen, because it exists of the beginning of the crisis (from August 2013 to December 2013) and the ending of the crisis (from January 2014 to April 2014). All published press releases and blog posts from these periods were coded and included in the sample, therefore no specific sample method was needed.
The texts were analyzed by using the ten crisis communication strategies from the three response clusters from the SCCT model: deny response cluster, diminish response option and deal response option. In Table 1 an overview of the crisis communication clusters with crisis strategies can be found (Cooley & Smith, 2012).
Table 1
Overview of crisis communication cluster and crisis strategies
Cluster Crisis strategy Explanation
Deny Response Cluster
Attack Strategy The organization confronts the person or group claiming
a fault of the organization. Denial Strategy Organization denies a crisis
exists.
Scapegoat Strategy Organization blames another organization or entity for the
Diminish Response Option
Excuse Strategy Organization denies intent to harm and claims to control
the event.
Justification Strategy Organization minimizes perceived damage and focuses on the realization of
future actions.
Deal Response Cluster
Integration Strategy Organization praises stakeholders and/or reminds them of previous good work
of the organization. Concern Strategy Organization expresses
concern for victims. Compassion Strategy Organization offers money
and other presents. Regret Strategy Organization takes full
responsibility for the crisis. For every text the coders firstly looked if the crisis was mentioned in the text. Thereafter, coders recorded if the strategy was present in the text and how many times. Thus, each text was be researched for type of response as well as the frequency of that response in that message (Appendix A: Content analysis codebook crisis strategies)
Study 2
The second study focused the media coverage of Blackberry before and after the crisis. Thus, it analyzed to what extent the crisis has affected the media coverage of Blackberry.
Additionally, for this research a content analysis was also chosen as appropriate method of analysis.
For this part of the research news articles from three large American newspapers were used. Initially, the decision was made to use the five largest newspapers based on the high numbers of daily circulation (Beaujon, 2013). Newspapers with the highest number of circulation reach the most people; therefore researching these newspapers will provide a sufficient overview of the media coverage on Blackberry. Additionally, newspapers without a search function that could select on period were excluded from the sample. Consequently, the three newspapers
used are: New York Times, Wall Street Journal and New York Post. The online news articles were be sampled with the use of systematic random sampling.
Additionally, the online news articles were retrieved from two periods: beginning of the crisis (from August 2013 until December 2013) and the end of the crisis (from January 2014 until April 2014). From every newspaper five articles from period 1 and five from period 2 were analyzed. A codebook based on the research of Kiousis, Popescu and Mitrook (2007) was used to identify corporate reputation attributes and sub attributes to determine the corporate reputation.
The coders firstly recorded which attribute was the main subject of the news article. Secondly, for every attribute the presence was coded. If an attribute was present the coders looked at the sub attributes and also coded for their presence. If the sub attribute was present the attribute was also coded for a positive, neutral or negative tone (Appendix B: Content analysis codebook media coverage). Table 2 lists the issue attributes and sub attributes that were used as part of the analysis (Kiousis, Popescu and Mitrook, 2007).
Table 2
List of corporate reputation attributes and sub attributes
Attributes Sub attributes
Vision and Leadership Marketing opportunities Company has excellent leadership. Company/management has clear vision for
the future.
Social and responsibility Company supports good causes. Company is environmentally responsible. Company is responsible in the community.
Emotional Appeal Feel good about company.
Company inspires admiration and respect. Company inspires trust.
Products and Services High quality products and/or services. Innovative products and/or services. Company provides good value for money. Company stands behind its products and/or
services.
Workplace environment Rewards employees fairly. Good place to work.
Financial performance Outperforms competitors.
Company has record of being profitable. Company is low risk investment.
Growth prospects. Inter coder reliability
An extra coder coded 10 of the 163 blogs and press releases and 10 of the 30 newspapers to research the level of reliability. An inter coder reliability test was run to determine the level of agreement between two coders. Krippendorff’s alpha was used to measure the level of consistency between the coders. This study will use α .800 to determine if the agreement is satisfactory. Results with Krippendorff’s alpha near .800 will also be considered satisfactory. For test 1 the four most used variables were researched. These variables were: is there a strategy of Coombs present, the total of strategies present, how many times are integration strategies present and how many times are concern strategies present. Only the variable measuring the total of strategies was below α .800, namely
α= .618. The other variables were considered to be reliable with α being: is there a strategy of Coombs: α=.808, how many times are integration strategies present: α= .996 and how many times are concern present: α=.792.
Krippendorff’s alpha was also used to analyze the reliability of the variables of test 2. For test 2 nine variables were researched for their level of reliability. Only one of the nine variables was not reliable. This variable measured the presence of financial performance namely α=.641. The variable that measured which attribute was the main topic of the article was found to be reliable with α= .765. The variable that measured the presence of product and services in an article was also found to be reliable with α=.791. Focusing on the variables ‘marketing opportunities’ and ‘company stand behind product’ both were reliable with α =.815 (marketing opportunities) and α=.897(stands behind product). Lastly the four variables measuring the perception towards the financial performance of the company were all found to
be reliable: competitors: α=.764, profitable: α=.760, low risk: α= .747 and financial growth: α=.747.
The results from the inter coder reliability test show that the variables and coding sheets used during this study are considered to be reliable. The variables ‘the total of strategies’ and ‘presence of financial performance’ with an alpha much lower than α .800 were not excluded from the study. However, when interpreting the results these reliability scores should be taking into consideration.
Results Test 1
The aim of this first test was to provide an overview of the crisis communication strategies used by Blackberry during the financial crisis. In total 163 texts were analyzed consisting of 76 press releases and 87 blog posts from August 1, 2013 to April 30, 2014. Within these 163 press releases and blog posts only 40 (24.5%) included a crisis communication strategy as used by Coombs. In total 78 strategies were found of which integration (n=43, 55.1%) strategy was used mostly. Other strategies included: concern (n=24, 30.8 %), attack (n=3, 3.8%), justification (n=2, 2.6%), denial (n=2, 2.6%), scapegoat (n=1, 1.3%), excuse (n=1, 1.3%), compassion (n=1, 1.3 %), regret (n=1, 1.3 %).
Periodical differences. The period of August 1, 2013 until April 30, 2014 was divided in two periods. Period 1 reached from August 1, 2013 until December 31, 2013, whereas period 2 reached from January 1, 2014 until April 30, 2014. The first period included a total of 78 texts of which 35 were press releases and 42 were blogs. Within this period only 17 (21.8%) of the texts included a SCCT strategy.
In period 2 a total of 87 texts were released of which 42 press releases and 45 blog posts. Interestingly, 24 (27.6%) of the 87 texts included a strategy by Coombs. During both periods the integration strategy and concern strategy were used mostly. In comparison with period 1 the second period includes a variety of strategies. The main difference between the
two periods is the presence of the deny response cluster (attack, denial and scapegoat strategies). This cluster was only present once during the first period and five times in the second period. Remarkably, during this second period attack strategy was accounted for three times. Chi square tests were conducted to analyze if the differences were statistically
significant and indicated that none of the differences were significant. Table 3
Overview of strategies in period 1 and period 2
Period 1 Attack Denial Scapegoat Excuse Justification Integration Concern Com-passion Regret Apology Yes 0 1 0 0 2 14 6 1 0 0 No 78 77 78 78 76 64 72 77 78 78 N 78 78 78 78 78 78 78 78 78 78 Period 2 Yes 3 1 1 0 0 14 11 0 1 0 No 84 86 86 87 87 73 76 87 86 78 N 87 87 87 87 87 87 87 87 87 87
Differences between blogs and press releases. To see if there was a difference between strategies used within the two texts a comparison was made between the blog entries and press releases. When focusing on the blogs, 26 (29.9%) of the 61 included a strategy of the SCCT model. As seen in table 4 most used strategies were integration and concern. The integration strategy was visible in 19 (21.8 %) and the concern strategy in 11(12.6%) of the blogs. Interestingly, compassion and apology strategies were not present in the blog posts. Table 4
Overview of the amount of blog posts that included a strategy
Attack Denial Scapegoat Excuse Justification Integration Concern Compassion Regret Apology
Yes 3 2 1 1 2 19 11 0 1 0
No 85 85 86 86 85 68 76 87 86 87
N 87 87 87 87 87 87 87 87 87 87
As a strategy could be present more than once in every text how many times the strategies were present was also counted. For the blog posts a total of 56 strategies were found. Interestingly, the most found strategy was the integration strategy, which covered more
than the half of all strategies. The concern strategy covered 30 % of all strategies as can be seen in Table 5.
Table 5
The total strategies present in blog posts and press releases
Attack Denial Scapegoat Excuse Justification Integration Concern Compassion Regret Apology Total
Blogs 3 2 1 1 2 29 17 0 1 0 56
Press releases
0 0 0 0 0 14 7 1 0 0 22
When analyzing the press releases it became clear that only 16 (21.1%) of the press releases included a strategy. The strategies that were included can be found in Table 6. Remarkably, again the integration strategy and the concern strategy were present most often. A total of 22 strategies were found within these press releases (Table 5). The results indicate that integration strategies and concern strategies were both most used in blogs and press releases. Interestingly, the amount of strategies present in blogs is much higher than in press releases. An independent t-test revealed that this difference was not statistically significant. Furthermore, another independent t-test indicated that the only significant difference between blog entries and press releases was the total of strategies (t (163) = -2, 38, p <.05). The blog releases included significantly more strategies (M= .64, SD= 1.29) than press releases (M= .27,
SD= .68). Independent t-tests on the strategies separately indicated that there was no
significant difference between blog entries and press releases. Table 6
Overview of the amount of press releases that included a strategy
Attack Denial Scapegoat Excuse Justification Integration Concern Compassion Regret Apology
Yes 0 0 0 0 0 8 6 1 0 0
No 76 76 76 76 76 68 70 66 76 76
N 76 76 76 76 76 76 76 76 76 76
The aim of the second test was to analyze the corporate reputation of Blackberry within the newspapers: New York Times, Wall Street Journal and New York Post. In total 30 articles were studied, 10 of every newspaper. Using the framework by Kiousis, Popescu and Mitrook (2007) five of the six attributes were identified. The only attribute that was not present in the articles was: social and responsibility. Attributes that were present: financial performance (n= 26, 86.7%), product and services (n=25, 83.3%), vision and leadership (n= 23, 67.7%), emotional appeal (n= 8, 26.7%) and workplace environment (n=5, 16.7%).
The subject of the articles was divided between financial performances and product and services. More specifically, 13 of the 30 articles’ subjects were about the financial performances of Blackberry and 12 focused on the products and services. The articles that focused on the financial performance of Blackberry were analyzed with help of the sub attributes. These sub attributes indicated that the perception towards Blackberry’s financial performance were generally perceived to be negative (competitors: n=10, 76.9%, profitable:
n=9, 69.2%, low risk: n= 10, 76.9 %, growth: n=9, 69.2%). Interestingly, the articles that
focused on Blackberry’s product and services were not completely negative. In specific, the perception on the sub attributes: ‘high quality and services’ and ‘provides good value for money’ were considered to be neutral. Unexpectedly, the sub attribute: ‘stands behind company’ was even found to be positive (n= 9, 75%), only the attribute ‘innovative products and services’ was mostly considered to be negative (n=4, 33%)
Periodical differences. When focusing on the two periods a cross tabulation test revealed that the main focus of the articles in period one was financial performance (n=10, 66.6%). The other attributes that were the main subject of articles during this specific period were: vision and leadership (n=2, 13.3%) and product and services (n= 3, 20.0%). Another cross
tabulation was conducted to analyze period two. In contrary, the main focus during period two was attribute: product and services (n=9, 60.6%), other attributes were: vision and leadership
(n=2, 13.3%) and financial performances (n=2, 13.3%). A chi square test was conducted to see if the two periods statistically differed from each other. This test revealed that the
difference in attributes that were the main subject in the articles did indeed differ significantly from each other ( X2= 7.534, n=30, p= .023).
Other chi square tests were conducted to see if the perception towards Blackberry changed from the second period in comparison with the first. The sub attributes of the three attributes: vision and leadership, product and services and financial performance were analyzed. Chi square tests revealed that there was no significant difference between period one and period two on all sub attributes that measured financial performance. Focusing on the sub attributes of vision and leadership it became clear that all three sub attributes significantly differed from each other. When focusing on the marketing opportunities period one the perception was negative (n=7) whereas period two was primarily neutral (n=4) and positive (n=3) ( X2=5.637, n=30, p= .060). The sub attribute leadership was considered to be neutral in period one (n=9) in comparison with positive in period 2 (n=8). The chi square test also indicated that this difference was significant ( X2= 8.486, n=30, p= .014). Lastly, the difference between the vision for the future differed significantly between the two periods ( X2= 9.692, n=30, p=.008). In this case the majority of the articles expressed a negative opinion in period 1 (n=6), whereas in period two the majority expressed a more positive opinion (n=9).
Difference between newspapers. As seen in Table 7 the newspapers in general included the same attributes. Only minor differences can be noticed. This test included multiple one way analyses of variances (ANOVA) to indicate if newspapers statistically differ on sub attribute level. It became clear that there is only a significantly difference in the mean of the sub
attribute: ‘Company management has clear vision for the future’ (F (2, 18) = 3.796, p= 0.042). A Tukey post-hoc test revealed that the tone was significantly more negative in the New York
Times (M= 1.75, SD=1.04) than in the New York Post (M=3.00, SD=.00). There was no statistically significant difference between the newspapers on all other sub attributes.
Table 7
Overview of all news articles and attributes
News paper Vision yes no Social yes no Emotional yes no Product yes no Workplace yes no Financial yes no New York Times 8 2 0 10 2 8 10 0 2 8 8 2 Wall Street Journal 9 1 0 10 4 6 8 2 1 9 9 1 New York Post 6 4 0 10 2 8 7 3 2 8 9 1 Discussion Blackberry’s crisis strategy
This research analyzed Blackberry’s financial crisis. By analyzing the blog entries and press releases with the help of the framework of Coombs (2004) it became clear that
Blackberry did not include many strategies. More specifically, the majority of the blog entries and press releases did not include a strategy. This indicates that Blackberry might not want to accept that the company was in crisis or did not know how to act upon a crisis. This finding corresponds with earlier research that companies are often not prepared for a crisis (Formentin, 2010).
From the strategies that were used by Blackberry, two strategies were used most often: integration and concern strategies. Integration strategies refer to the reference to past
company’s successes or the appreciation of their customers. Concern strategies refer to the concern that is expressed towards the victims of the crisis (Coombs, 2006). These two strategies by Coombs are specifically targeted towards the stakeholders. These strategies coincide with the crisis communication strategies General Motors used during their
bankruptcy (Cooley and Cooley, 2011). By mostly using integration and concern strategies General Motors allowed for responsibility acceptance and this positively influenced the relationship with stakeholders. Remarkably, the crisis strategies applied by Blackberry and General Motors did not correspond with the study on the NFL crisis. Here the deny response cluster was mostly used and as a result the crisis received negative media coverage (Cooley and Smith, 2012).
Based on the press releases and blog posts of Blackberry, the company failed to communicate clearly with stakeholders. The first period of a crisis is crucial for an organization’s future (Cooley and Cooley, 2014). Especially, when an organizations’
reputation is at stake, the organization should take responsibility (Coombs, 1995; Coombs and Holladay, 2002). Consequently, this means to act quickly and accordingly to the threat and address stakeholders concerns. Blackberry did not address the crisis during the first stages of the crisis. Only in October, three months during the crisis, Blackberry released a statement concerning their stakeholders and the company’s wellbeing.
From January, 2014 onwards Blackberry included more strategies than in the first period. Especially, the deny response cluster was present more often. This can be explained by the position the company was in. In 2014 the new CEO of Blackberry John Chen decided to fully commit to the brand Blackberry and to overcome all insecurities. During this period Blackberry started to deny that the future of the company was insecure and started to attack those with criticism.
This study also found a difference between blog posts and press releases. More specifically, the blog posts included more crisis strategies than the press releases. In the press releases Blackberry was more formal and focused on financial and more business oriented information. The blog posts included more informal information and the financial crisis was addressed multiple times within these texts. In comparison with press releases which
addressed the financial crisis only once. Blog posts are an efficient way to connect with your consumers especially in the fields of social media. With blog posts being more casual it enables a company to use a more personal tone (Tanaka, 2012). Addressing the financial crisis in their blog posts enables Blackberry to connect directly with their stakeholders on a personal note.
All in all, Blackberry did include some crisis communication strategies in their publications. With the majority of the strategies belonging to the integration and concern strategies Blackberry devoted attention to the stakeholders. Yet, the amount of strategies present was too low and the company did not react as quickly as possible during the first phase of the crisis.
Blackberry’s media coverage
To analyze the effect of the crisis strategies on the media coverage of Blackberry the articles of three American newspapers were analyzed. The results indicate that in general the articles focused on the financial performance of Blackberry and its products and services. Interestingly, articles that focused on the financial performance of Blackberry where
predominantly negative. The articles focusing on products and service were more in a neutral tone.
During the first period of Blackberry’s crisis almost all articles focused on the financial situation of the company. During the second period the financial situation of the company was no longer the main subject of articles, but still present. The findings indicate that when comparing the two periods the perception towards Blackberry’s financial
performance did not change and stayed overall negative. Interestingly, the coverage of the marketing opportunities of Blackberry did make an interesting shift. In specific, the first period the articles were negatively in tone, whereas in the second period the majority expressed a more positive perception towards the future of Blackberry. An explanation for
this shift could possibly be the introduction of the Blackberry Messenger application on IPhone and Samsung. This new application by Blackberry increased Blackberry’s sales and was downloaded by thousands of users (Connors, 2013). Many authors believed that this new application and application business in general might be the future for Blackberry (Austen, 2014; King, 2014)
The perception towards the level of innovation did also change between the two periods. In the first periods the articles expressed a negative perception arguing that
Blackberry was not considered to be innovative and dole. The products were outdated (Austen, 2013). During the second period Blackberry was considered to be innovative and the articles were in general very positive. Again, this could be explained by the introduction of
Blackberry’s new application on IPhone and Samsung. With thousands of people
downloading the Blackberry application Blackberry considered to be ‘hot’ again (Friedman, 2014).
Effect on Media coverage
During the first period the general coverage on Blackberry was negative. Blackberry failed to use appropriate crisis communication strategies during this period, therefore the negativity within the articles could be expected. When the organization is portrayed negatively in the news this affects the corporate reputation of the organization (Carroll and McCombs, 2003). This also depends on the knowledge of the stakeholders. If the stakeholders perceive the organization to be responsible for the crisis this can lead to strong negative feelings towards the organization (Carroll and McCombs, 2003; Coombs, 2007). Blackberry failed to inform stakeholders in an appropriate manner and time. It is assumed that this led to negative coverage in online newspapers and affected the corporate reputation.
The more positive perception towards Blackberry in the second period cannot be explained by their usage of crisis communication strategies. Interestingly, Blackberry used the
attack strategy during this period. When organizations attack each other this normally affects the reputation of the organization and its media coverage negatively (Meijer and
Kleinnijenhuis, 2006). Interestingly, the attack strategy was used in a blog post targeting T-Mobile for launching an inappropriate product offer. More specifically, T-T-Mobile offered Blackberry users to trade their Blackberry for an IPhone. As a result Blackberry’s own CEO John Chen released a blog posts arguing that T-Mobile’s ‘great offer’ was wrong and that Blackberry is outraged. Remarkably, this blog posts was deleted from the official Blackberry blog few weeks after. This assumes that Blackberry released the statement in the heat of the moment, without thinking of the consequences. Although, the blog post was only posted on Blackberry’s blog and deleted shortly after all three newspapers did cover the event. This indicates that as an organization one should think carefully about the information that is placed on the internet. Especially when it includes another organization.
The positive coverage can possibly be explained by the success of the new application that Blackberry released. The earlier mentioned application is assumed to be the reason for the more positive coverage, because it provided Blackberry with new perspectives for the future. This seems to indicate that crisis communication strategies Blackberry used did not affect the coverage in newspapers greatly. The new application was such a hit, that the news outlets could not ignore. Blackberry’s financial status remained fragile during the two periods and this is presumed to be the reason why coverage on the financial status remained negative. Limitations
Although this study found some interesting results, the study did cope with some limitations that need to be kept in mind. Firstly, this study was bound to time and feasibility implications. This study only had few months to conduct the research and therefore, was limited in the amount of online news articles, press releases and blog posts that could be studied. Future research including a larger sample would provide a more conclusive image.
This study does indicate that it is interesting to research an organization that is coping with a financial crisis. It would be interesting to analyze Blackberry for a longer period of time. This will lead to a more fitting and representative image. Providing a better insight into the effects of crisis communication strategies on media coverage.
Furthermore, study evaluates the effect of crisis communication strategies on media coverage is important to keep in mind that the coverage in newspapers does not only rely on the press releases and blogs posts an organization releases. The coverage on a subject is based on multiple factors that were not included in this study. Therefore the findings this study suggests should be examined carefully.
An inter coder reliability test revealed that two of the used variables were not reliable. These variables were not excluded from the sample, therefore could have influenced the findings of this study.
Implications
The results of this study suggest that organizations should prepare for a possible crisis. By applying appropriate crisis strategies, organizations will be able to decrease the effects of a crisis situation. Organizations coping with a financial crisis should inform the stakeholders clearly and in the beginning of the crisis. With this unstable economy there is therefore, a definite need for clear information. Moreover, organizations should therefore always aim maintain the relationship with stakeholders.
Conclusion
This study analyzed an organization coping with a financial crisis and tried to
understand the influences of crisis communication strategies on the corporate reputation of the organization. The research question this paper proposed: ‘To what extent did Blackberry’s
The absence of crisis communication strategies during the first period of the crisis seems to indicate Blackberry was not prepared for this situation. Many companies are not prepared for a crisis and therefore fail to address the problem in the crucial first phase. As a company and as crisis communication managers preparation and the ability to foresee the reactions of stakeholders are crucial factors to overcome a crisis.
In the case of Blackberry not paying attention to the crisis, the little focus on stakeholders and the little amount of crisis communication strategies in their press releases and blog posts were possibly factors that led to a lot of confusion and negativity. The
coverage on Blackberry’s financial status stayed negative during both periods. It is uncertain if the coverage on Blackberry would be more positive with the usage of more crisis
communication strategies, yet informing stakeholders in an earlier state would most likely improved the situation. It becomes also clear that releasing statements should be done
carefully. Expressing negativity towards other organizations is easily recorded and published by news outlets; therefore publishing with discretion is needed.
To conclude this study provides an interesting insight into the crisis communication strategies and coverage of an organization coping with a financial crisis. Although many organizations are not prepared for a crisis situation, this study shows that preparation and informing stakeholders appropriately are crucial factors within crisis communication.
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Appendix A: Content analysis codebook crisis strategies
Quantitative analysis
1.) Indicate if the text is blog post or press release by Blackberry: coding
Blog post 1 Press release 2
Please provide the title of the article: _______________________ 2.) Indicate the date of publication:
coding Period 1 (August 1, 2013- December 31,2013) 1 Period 2 (January 1, 2014 –April 30, 2014) 2
3.) Indicate if there is a strategy of Coombs present: coding
Yes 1
No 2
4.) Indicate how many times the attack strategy is present in this text:___ 5.) Indicate how many times the deny strategy is present in this text: ___ 6.) Indicate how many times the scapegoat strategy is present in this text: ___
7.) Indicate how many times the excuse strategy is present in this text: ___ 8.) Indicate how many times the justification strategy is present in this text: ___
9.) Indicate how many times the integration strategy is present in this text: ___ 10.) Indicate how many times the concern strategy is present in this text: ___
Appendix A (Continued)
11.) Indicate how many times the compassion strategy is present in this text: ___ 12.) Indicate how many times the regret strategy is present in this text: ___
13.) Indicate how many times the apology strategy is present in this text: ___ 14.) Indicate how many strategies are total present in the text: ___
Appendix B: Content analysis codebook media coverage Quantitative analysis
1.) Indicate from which newspaper the article is: coding
New York Times 1 Wall Street Journal 2 New York Post 3
Please provide the title of the article: _______________________
2.) Indicate from which period the article is: coding Period 1 (August 1, 2013- December 31,2013) 1 Period 2 (January 1, 2014 –April 30, 2014) 2
3.) Indicate which attribute is the main subject of the article: coding
Vision and leadership 1 Social and responsibility 2 Emotional appeal 3 Product and services 4 Workplace environment 5 Financial performance 6
4.) Indicate for every attribute if they are present in the text
Attribute coding
Vision and leadership Yes= 1 / No= 2 Social and responsibility Yes= 1 / No= 2 Emotional appeal present Yes= 1 / No= 2 Product and services Yes= 1 / No= 2 Workplace environment Yes= 1 / No= 2 Financial performance Yes= 1 / No= 2
Appendix B (Continued)
5.)Please indicate for every sub attribute the perception in the text
Sub Attribute coding
Marketing opportunities Company has excellent leadership. Company/management has clear vision for
the future.
Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Company supports good causes.
Company is environmentally responsible. Company is responsible in the community.
Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Feel good about company.
Company inspires admiration and respect. Company inspires trust.
Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 High quality products and/or services.
Innovative products and/or services. Company provides good value for money. Company stands behind its products and/or
services.
Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Rewards employees fairly.
Good place to work. Good employees.
Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Outperforms competitors.
Company has record of being profitable. Company is low risk investment.
Growth prospects.
Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99 Negative=1/Neutral=2/Positive=3/not present=99
