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e-Journal of Social & Behavioural Research in Business Vol. 8, Iss. 1, 2017, pp: 15-40. ”http://www.ejsbrb.org”

Strategic Communication Management of Corporate Crises: Case Analysis

Umi Khattab School of Communication and Creative Industries, University of the Sunshine Coast (USC), Australia Stine Bergseth Fonn School of Communication and Creative Industries, University of the Sunshine Coast (USC), Australia Saira Ali School of Communication and Creative Industries, University of the Sunshine Coast (USC), Australia Abstract Purpose: The purpose of this article is to investigate how Multinational Corporations (MNCs) manage crises that can potentially damage their global reputation in an interconnected world. Design/Method/Approach: A Case study approach was used to examine Nestle’s response to the campaign launched by Greenpeace International in 2010 against its chocolate brand Kit Kat and its sustainable practices in Indonesia; and Benetton Group’s response to the garment factory collapse in Bangladesh in 2013. Findings: The findings show commonality in both crises’ lifecycle patterns and stages of development, and explain how crisis management strategies deployed by both organisations contributed to the ways in which the crises were represented in the public arena. Two MNC response patterns were identified from the cases - lack of understanding of the integrated and international nature of news and social media and its power to influence public opinion, and poor choices in the deployment of crisis communication strategies. While these cases are not generalizable, they call on MNCs to reflect on their communication practices and consider the role of issue management as a long term cost effective measure to protect global reputation in a mediated world. Key words: Strategic communication; public relations; corporate crises; issue management; reputation; case study; news media. JEL Classification: M14 PsycINFO Classification: 3660 FoR Code: 1503 ERA Journal ID#: 123340

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Introduction Corporate crises are almost impossible to avoid. If, or when, a crisis occurs it is crucial for

the implicated organisation to deploy appropriate strategies to protect its reputation.

Studies in the Internet era have largely examined public understanding of corporate crises via social media (Jin, Liu and Austin, 2014; Kleinnijenhuis et al., 2013) with little attention paid to the role of news media despite its online presence and integrated use in public relations practice. The rise of issue and crisis management as an important function of public relations is attributable to numerous high-profile cases (Cornelissen, 2008) ranging from the classic Johnson & Johnson drug tampering crisis in Chicago in 1982 and the BP Gulf of Mexico oil spill in 2010 to the recent Volkswagen rigging of engine emission tests in 2015.When an organisation is at its most vulnerable point, media interest converges intensely placing it on top of the news agenda (Johnston and Zawawi, 2009, p. 308). Throughout the lifespan of a crisis, an organisation is dependent on the news media to have its side of the story told. Public opinion is often shaped by media-made stories that have the potency to damage an organisation’s reputation (Ali and Khattab, 2016; Johnston and Zawawi, 2009). While objectivity is preached in journalism, this is often not practiced as factors such as ownership and commercial imperatives influence story selection and frames. The angle of a story affects the parties involved in a crisis, either in a positive or negative manner. Regardless, the organisation undergoing the crisis is often able to influence the news media through strategic communication and information subsidies. However, most organisations do not empower public relations enough to be able to independently manufacture information subsidies; and most times public relations practitioners are not part of the dominant coalition to be able to strategically manage issues and crises. This article problematises news media impact on corporate reputation and the role of the media during an organisational crisis. With a media landscape that is in constant flux, it is essential to interpret how the news media cover crisis situations. In this light, the key research questions are:

• What role does news media play in the development of corporate crises? • How does news media impact the outcome of corporate crises? • How do corporations manage crisis situations? • What is the role of public relations in managing corporate crises?

It is important to point out at the outset that the study does not attempt to hypothesise and make causal links between, for example, corporate crises and level or nature of news media coverage; or public relations power and corporate crises. In fact, the project sets out to qualitatively examine two selected cases for an in-depth understanding of the problem, in particular to offer insights into the chronological development of corporate crises vis a vis established models and matrices, and to closely identify the role and power of the news media, public relations and other actors. As such no generalisations are possible.

Literature Review

Crises are believed to arise from looming issues. With futuristic issue management tools it is possible to reduce the impact of a crisis (Heath and Palenchar, 2009). Issue management is an effective way to engage proactively in the public arena to detect problems before they escalate into crisis proportion (Jaques, 2014, p. 7). Through environment scanning and research, it is possible to identify and monitor the development of issues that tend to emerge from prevailing environmental trends and circumstances. Issues have a lifecycle that can be proactively managed through the Life Cycle of a Strategic Issue Model (Jaques, 2014; See figure 2), an improved version of the original Issue Lifecycle Model (Hainsworth and Meng 1988 in Regester and Larkin 2002; Hainsworth, 1990; See figure 1).

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Figure 1. Issue Lifecycle Model

(Source: Hainsworth and Meng, 1988, in Regester and Larkin, 2002, p. 37)

One key criticism levelled at the original Hainsworth and Meng Issue lifecycle model is its linear outline (Jaques, 2007). The issue lifecycle model states that an issue follows a sequential path, evolving from a potential issue towards a dormant issue, implying that organisations handle only one issue at a time (Regester and Larkin, 2002). Jaques (2007, p. 148; 2014, p. 38), in his improvised version of the model (See figure 2), argues that several issues may occur at one time and may be handled simultaneously, and ‘frequently each at different phases’. Lamertz, Martens and Heugens (2003, p. 83) concur, pointing out that issues fail to progress along predictable lines. The model, nevertheless, remains an important early corporate intervention tool enabling environmental scanning as a long-term cost-effective measure.

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Figure 2. Life Cycle of a Strategic Issue

(Source: Jaques, 2014, p. 38)

In a mediatised world, issues can easily explode into crises. Not all crises, though, evolve from issues. A crisis can emerge from an unforeseen event such as an act of nature (e.g. bushfire) or an act of man (e.g. terrorism). If the unforeseen crisis is not managed effectively, it can translate into lingering issues, causing reputational damage. As an event enters the crisis phase, crisis management becomes an important action plan (Smith and Elliott, 2006; Lerbinger, 2012). Crisis management enables beneficial communication with key stakeholders such as media and government to protect and/or repair the organisation’s reputation (Lerbinger, 2012). Boin et al (2005, p. 2) define a crisis as:

‘We speak of a crisis when policy makers experience a serious threat to the basic structures of the fundamental values and norms of a system, which under time pressure and highly uncertain circumstances necessitates making vital decisions.’

Devlin (2007, p. 107) proposes three stages in the development of a crisis i.e. Pre-Crisis-, Acute-Crisis and Post-Crisis (See Figure 3) and argues that a range of strategies and tactics can be developed to proactively prevent the development of the crisis from pre to post stage. These ‘three stages of a crisis’ justify the Issue Lifecycle Model and reiterate how a crisis can transform from dormant to explosive within a short period of time without public relations input.

Figure 3. The Three Stages of a Crisis

(Source: Devlin, 2007, p.107)

Pre-Crisis: The crisis might not be visible to the outside world, but the organisation is aware of it (Sturges, 1994; Devlin, 2007) and through pro-active thinking and recognition of warning signs, is able to avoid its evolvement (Coombs, 2014).

Acute-Crisis: A trigger event occurs, pointing to the beginning of a crisis and its explosion outside of the organisation, and the likelihood of damage to the organisation’s reputation (Devlin, 2007; Coombs, 2014). At this stage, it is usually too late to prevent the crisis from

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evolving and reaching external stakeholders. Damage control is therefore initiated (Devlin, 2007).

Post-Crisis: The focus is on stakeholders, with evaluation, prognosis and reflection, and efforts directed at retrieving losses by communicating to stakeholders compassionately (Coombs, 2014; Sturges, 1994; Devlin, 2007).

Soon after a crisis is detected, it should be diagnosed and classified. By identifying specific features of the crisis an organisation is able to apply appropriate responses (Zaremba, 2010; Coombs, 2014). The Crisis Matrix developed by Coombs (1995) presents four types of crises with two measurements; Internal/External and Intentional/Unintentional (See table 1). By applying the crisis matrix tool, an effective crisis communication strategy can be developed and administered.

Table 1. Crisis Matrix

UNINTENTIONAL INTENTIONAL

EXTERNAL

Faux Pas

Terrorism

INTERNAL

Accidents Transgressions

(Source: Coombs, 1995, p. 455)

Having identified the crisis type and strategy, it is crucial to maintain control over the

situation and ensure that information provided to the media is authorised by the public relations team. Response to all enquiries from the media regarding the crisis has to be prompt to prevent journalists and activists seeking information from other sources, which can further damage an organisation’s crisis response (Coombs, 1995; Cornelissen, 2008).

Cohen (cited in Lattimore et al., 2012, p.60) contended that the media are in no position to tell the consumer what to think; instead they are successful in telling them what to think about. The public look at the news media as an indicator of what issues to focus their attention on (Wu and Coleman, 2009; Johnston and Sheehan, 2014). McCombs (cited in Johnston and Sheehan, 2014, p. 397) notes that agenda-setting is:

‘The ability to influence the salience of topic on the public agenda… The public uses these cues from the mass media to organize their own agendas and decide which issues are important… in other words the news media set the public agenda.’

Public opinion is often shaped when the media place issues on the agenda that are perceived to matter to audiences. This helps establish the salience amongst the public, and further the perception of importance of the issue over time (Carroll and McCombs, 2003). In fact, when numerous media outlets define and cover the same issue in similar ways, the opportunity of affecting the public’s agenda and shaping opinion is reinforced (Watson, 2003).

In understanding the role of media in crisis situations, agenda-setting has been extended to ‘focusing event theory’ (Ulmer, Sellnow and Seeger, 2015). A crisis moves from agenda-setting to ‘focusing event’ when it hits the highest level on the media’s agenda. This means that news moves from discussing the cause of the crisis to reassessment of existing policies or the consideration of new policies to prevent similar crises from occurring in the future (Ulmer, Sellnow and Seeger, 2015). As interest groups identify with the crisis and get involved, it may lead to a search for a solution and the mobilising of groups with positive or negative effect, and the opportunity for policy change as a priority (Birkland, 1998). The new prospects generated

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from crises can, through focusing event, help organisations and communities formalise opportunities into policies (Ulmer, Sellnow and Seeger, 2015).

Framing as a process focuses on how the media presents an issue, and how the receiver of the message creates a specific conceptualisation for the given situation (Entman, 1993; Scheufele, 1999; Chong and Druckman, 2007). Through the communication process frames are formed in subsections i.e. communicator, the text, the receiver and the culture (Entman, 1993, pp.52-53). Both journalists and public relations professionals apply the framing process, with different agenda in mind. During a crisis, for example, the news media may frame the organisation as being irresponsible, while the organisation frames itself otherwise (Ulmer, Sellnow and Seeger, 2015).

Methodology

The project deploys qualitative case study as it enables the use of mix methods and

facilitates in-depth interrogation of phenomena (Weerakkody, 2015; Daymon and Holloway, 2011). The cases purposively selected are Nestle’s response to the campaign launched by Greenpeace International in 2010 against its chocolate brand Kit Kat and its sustainable practices in Indonesia; and Benetton Group’s response to the garment factory collapse in Bangladesh in 2013. The selected cases are MNCs with business operations in the developing world, where as responsible corporate citizens, they are expected to contribute to best practice and serve as role models to local practitioners. Further while no attempt is made to generalise the study to the corporate or multinational sector as a whole, it would be interesting to analyse the communication practices of MNCs in different sectors such as food and clothing and to compare crises under varying circumstances.

Data collection relied on documentation (Yin, 1994; Yin, 2003) i.e. mainly articles from online media and corporate websites. Data collection was confined entirely to the crisis development period i.e. March-May 2010 for Nestle and April –November 2013 for Benetton Group. Almost all identified publications were analysed without need for a sampling frame (see Appendices A and B). In other words, the entire identifiable population of media content was examined.

Content analysis used in this project enabled the detection of frequently occurring words and themes within each text and therefore well-suited to determine trends and patterns within communication (Carley 1993; Hansen and Machin, 2013). The first step in the systematisation of data collection was creating emergent coding categories. The project initially developed categories before data collection and these categories were adjusted or new ones created as new items emerged using the open-coding process (see Table 2). A pre-test was conducted on a small sample with an inter-coder reliability test to ensure objectivity.

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Table 2. Category Description

SOURCES DESCRIPTION News sources

Information circulated by the news media on the Internet.

Organisational sources

Information circulated by the organisation on the Internet. Subcategories

° News stories distributed to the news media ° News and information published by the organisation

Crisis Communication Strategies

Communication patterns linked to crisis communication strategies presented by Coombs.

Crisis life cycle patterns

Patterns found in the crisis life cycle model (See figure 1) Subcategories created as patterns detected.

A content analysis coding schedule was developed. This schedule was used to evaluate content using categories such as topic, tone, visuals, organisation, and spokespersons. The schedule applied a likert scale from 1-5 (1 - negative, 3 - neutral and 5 - positive from the organisation’s point of view) (See Appendices A and B). A coder instruction sheet was developed (See Appendix D). Validity and reliability in the project were managed through multiple sources of evidence, case study databases and systematic analysis and presentation of data (Yin, 2003) (See Appendices A and B).

Findings

Nestlé Established as a condensed milk factory in Switzerland in 1866, Nestle evolved into a

Nutrition Health and Wellness Company, with about 2000 brands (Nestlé, 2014). Using the slogan, ‘Good Food, Good Life’, Nestle has tried to be ‘leader in Nutrition Health and Wellness....trusted by all stakeholders’ (Nestlé, 2014, np). In 2010, Greenpeace International launched an aggressive campaign against Nestle’s chocolate brand Kit Kat, the four-finger wafer chocolate product first created in 1935 (Nestlé, 2014). In the online campaign, Greenpeace International questioned Nestle’s sustainable practices in Indonesia.

Its goal was to raise public awareness about Nestlé’s use of unsustainable palm oil in products like Kit Kat (Greenpeace, 2010, np). The campaign targeted Nestlé’s relationship to Sinar Mas, the Indonesian supplier of palm oil, and focused on the unsustainable methods used in retrieving palm oil, alleged to have led to the destruction of the orang-utan habitat, and the Indonesian rainforests (Greenpeace, 2010). The campaign received widespread public attention and led to boycotts.

There were 43 documents identified in the public arena from March to May, 2010. Of these there were 32 news articles, four press releases and seven ‘other’ documents. In other words, 95.35 percent were news media reports, while only 4.65 percent were documents published by Nestlé (See Figure 4 and Appendix A). This reflects a communication approach of silence or media avoidance on the part of Nestle.

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Figure 4. Nestle in the Public Arena

Acute-crisis emerged as soon as Greenpeace released the video ‘Give the Orang-utans a Break’ and the report on Nestlé’s palm oil suppliers on 17 March 2010 (Greenpeace, 2010). The crisis evolved to post-crisis in May 2010 when Nestlé caved in to Greenpeace’s demands agreeing to exclude all its suppliers that appeared connected to deforestation and to review the supply chain, including sub-contractors. Within the crisis phases, key events that influenced the development of the crisis were detected (See Figure 5).

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Figure 5. Lifecycle of the Nestle Crisis

(Adapted from Hainsworth and Meng 1988, in Regester and Larkin, 2002, p.37)

Nestle in the News

News media attention focused on Greenpeace’s allegations. The findings indicate that the topics, visuals, references to Nestle and its spokesperson were all negative in and through the news media in the early period i.e. March, but changed gradually as Nestle reacted to Greenpeace’s demands (See figure 6 and Appendix A).

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Figure 6. Media Coverage of Nestlé

Visuals circulated in the public realm showcased orang-utans without homes; cut down rainforests and Kit Kat logos reading Killer, to name a few, that were extremely negative (1.37) giving Nestle an ugly face (2.11) (See Appendix C). Nestlé’s first published statement had placed responsibility on its suppliers of palm oil, attempting as such to shift blame from itself. This statement was rated negatively at 2. Towards April, media focus was on Nestlé’s shareholder meeting and the protest organised by Greenpeace outside the meeting. At this stage, the crisis had evolved. Media coverage seemed to improve in favour of Nestle, attributable to the fact that the topic in April focused on Nestlé’s shareholder meeting and its outcome in relation to Nestle placing the improvement of supplier chain on top of the agenda. Although the topic evolved to neutral, news references to Nestlé remained negative (2.11) as Nestle continued to refuse to meet Greenpeace’s demands. The ranking of Nestlé’s spokesperson rose above neutral on the scale (3.33) due to new statements published from the meeting where Nestlé was reported to have said that preserving the rainforest was most important.

In May, as soon as Nestlé fulfilled Greenpeace’s demands, media’s tone significantly changed as the focus shifted towards Nestlé’s refreshed communication approach to conducting business. As soon as Nestlé confirmed changes in the supply chain, references to the company turned positive (4.88). The positive media representation of Nestle was due to Nestlé’s new position, i.e. improving and re-evaluating the supply chain and excluding suppliers and subcontractors that operate unsustainably. Further, Nestlé dropped Sinar Mas as a supplier.

During the acute-crisis phase, news centred on Greenpeace’s online report Caught Red-Handed: How Nestlé’s Use of Palm Oil is Having a Devastating Impact on Rainforest, The Climate and Orang-utans (Greenpeace, 2010). This report fuelled the crisis, as it gave the media access to information about Nestlé’s supplier of palm oil. News narratives added salt to wound by validating Greenpeace’s allegations and claims. Media presented Nestlé as an MNC that had no consideration for using sustainable palm oil, had no care for the rainforests, the climate or the orang-utans. This damaged Nestlé’s reputation. Although the use of unsustainable palm oil is not limited to Nestlé, the company remained Greenpeace’s and media’s target.

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During the post-crisis phase, Nestlé was portrayed as a responsible company that set a good example for the rest of the food industry by changing its supply chain. News representation of Nestlé changed from profoundly negative to positive from the acute-crisis phase to the post-crisis phase.

Benetton Group Benetton Group was established in 1965 in Italy. It produces clothing and accessories and

represents three brands, United Colors of Benetton, Sisley and Playlife (Benetton Group, 2014). Its vision is to be a ‘globally responsible company in social, environmental and economic terms’ (Benetton Group, 2014: np). This second case study looks at Benetton Group’s brand United Colors of Benetton (Benetton Group, 2014) that was affected by the Rana Plaza garment factory collapse in Savar, Bangladesh in 2013.

There were a total of 99 documents from April to November 2013. Of these 87 were news articles, 11 media releases and one report. In other words, 92.92 percent of the documents in the public arena were from the news media, while 7.07 percent only from Benetton Group (See Figure 7 and Appendix B). Like the Nestle case, silence and media avoidance prevailed in the early phase of the crisis.

Figure 7. Benetton Group in the Public Arena

The Acute-Crisis commenced when Rana Plaza collapsed on April 24, 2013. It evolved to Post-Crisis after Benetton Group signed the agreement of compensation for the Rana Plaza victims. Within the crisis phases, key events are identified (See Figure 8).

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Figure 8. Lifecycle of the Benetton Group Crisis

(Adapted from Hainsworth and Meng 1988, in Regester and Larkin, 2002, p. 37).

Benetton in the News

The crisis originated in April as media attention turned to the textile industry and the unsustainable ways of manufacturing clothes and this reflected badly on Benetton Group (2.13; See Figure 9). Towards May the tone became more positive (4.11) as several companies including Benetton Group begun reviewing industry practices and signing the Agreement of Fire and Safety. In June, media coverage increased as discussion on fire and safety and compensation escalated with some organisations refusing to sign the agreement. During this time, media references to Benetton Group were neutral (3). In July, the tone of news coverage improved as almost every company connected to Rana Plaza signed the agreement of Fire and Safety for Bangladesh. In fact, Benetton received positive mention (4), as it reiterated its commitment to improving the industry and its code of conduct. In August, as new discussions emerged on compensation for the Rana Plaza victims, the tone of coverage diminished to 2.33. Several organisations, including Benetton Group, declined the invitation to the agreement meeting and appeared unwilling to offer compensation to the victims. In September, agreement regarding compensation for the Rana Plaza victims increased coverage and neutralised the tone. Several organisations chose to sign the compensation agreement immediately, but not Benetton Group. Therefore, references to Benetton Group in the news remained the same. In October-November, the Rana Plaza incident moved from Acute-Crisis to Post-Crisis as soon as Benetton Group signed the compensation agreement, with the spokesperson mentioned in positive light (4).

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Figure 9 – Media Coverage of Benetton Group

During the acute-crisis phase, Benetton Group was held answerable for the collapse of the textile factories in Rana Plaza. Although several clothing companies were connected to Rana Plaza, the media chose to focus on Benetton Group due to its initial strategy of low responsibility and denial. Media uncovered the connection between Benetton Group and Rana Plaza, and focused on the Group’s statements about not being associated with the factories. During the post-crisis phase (September-November), Benetton Group had the opportunity to promote its efforts at improving the practices of both its organisation and the textile industry as a whole. In rebuilding its reputation, Benetton Group realised that good practice would earn good media coverage.

Discussion The Greenpeace campaign created a form of faux pas crisis (Coombs, 1995), in that it

occurred as a consequence of a person or group questioning the appropriateness of an action or etiquette of a corporation. The most effective strategy in this situation is acceptance or accommodation. Nestlé did not choose this strategy.

During the acute crisis phase, Nestlé adopted the clarification tactic. Nestlé explained that it should not be the target for unsustainable practices. Nestlé attempted to alter public perception, but distanced itself from the situation and turned attention towards its supplier, Cargrill. Nestlé issued a statement pointing out Cargrill’s connection to Sinar Mas. In this statement Nestlé indirectly admitted responsibility in view of the fact that Cargrill was its supplier, which made Sinar Mas its sub-contractor. Following are extracts of Nestle’s statements:

Cargill has informed us that Sinar Mas needs to answer Greenpeace's allegations by the end of April (Tabacek, 2014, p. 20).

We, like Greenpeace and many others, abhor destruction of the rain forests, and will not source from companies where there is verifiable evidence of

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environmental damage (Steel, 2010, p. 29). [Nestlé supports a moratorium on the destruction of rainforests] which is one of the most serious environmental issues facing us today on a global level (Nestlé, 2010, p. 15). Nestlé is highly concerned about the deforestation in Indonesia and we support

a moratorium on the destruction of rainforests (Sherwen, 2010, p. 22).

Nestlé appeared to display concern for the rainforests, while denying responsibility for the use of unsustainable palm oil in products. The crisis did not reach the post-crisis phase until Nestlé changed its strategy to acceptance and accommodation. This belated approach helped to resolve the crisis. Throughout the post-crisis phase, Nestlé expressed responsibility for its affiliation with Sinar Mas, and displayed accommodative tactics stating that an investigation of the supply chain had been initiated. Additionally, Nestlé’s collaboration with the Forest Trust was a futuristic attempt to avoid issues. Following are some of Nestlé’s statements during the post-crisis phase. The first explains Nestlé’s use of the acceptance tactic, and the second explains use of the accommodative tactic.

[Nestlé] focus[es] on the systematic identification and exclusion of companies owning or managing high risk plantations or farms linked to deforestation (Environmental Leader, 2010, p.18).

Nestle [is] determined to ensure that our suppliers do not buy palm oil from Sinar Mas, for all our factories (Tabacek, 2010, p. 20).

The Benetton Group crisis, like the Nestle crisis, was faux pas, as the poor structure of the building led to its collapse. An apology strategy would have benefited Benetton.

Benetton Group initiated a non-existence strategy, indicating low level of responsibility. It attempted to explain how it was not connected to Rana Plaza. Furthermore, Benetton Group distanced itself from the situation and the media storm. Benetton Group’s lack of response to media enquiries, led to information being collected elsewhere. The media revealed that there were traces of clothes labelled United Colors of Benetton in the ruins, as well as paper trail that disclosed orders placed by United Colors of Benetton to suppliers at Rana Plaza. Even when confronted with these facts, Benetton Group continued denying. Following are some of the statement made by Benetton Group while deploying the non-existence strategy:

In reference to the tragic news on the collapse of the building in Bangladesh, Benetton Group wants to clarify that the factories involved are not suppliers to Benetton or any of its brands (The Huffington Post, 2013, p. 25).

People involved in the collapse of the factory in Bangladesh were not Benetton Group's suppliers (The Australian, 2013, p. 28).

Regarding the tragic accident in Dhaka, Bangladesh, we wish to confirm that none of the companies involved is a supplier to any of our brands (Singleton, 2013, p. 29).

Benetton Group’s second strategy was acceptance with full apology and remediation. It

acknowledged its connection to Rana Plaza and expressed remorse. Following are some of the statements made by Benetton Group using the full apology strategy:

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A one-time order was completed and shipped out of one of the manufacturers involved several weeks prior to the accident… Since then, this subcontractor has been removed from our supplier list (Strochlic, 2013, p.30).

The New Wave Company, at the time of the tragic disaster, was not one of our suppliers, but one of our direct Indian suppliers had subcontracted two orders (Estes, 2013, p. 8).

Finally, by signing the agreement for compensation to victims, the remediation strategy was

used to save its reputation. Following are statements from Benetton Group’s CEO, Biagio Chiarolanza, as part of the remediation strategy:

We decided to support this agreement so that our Group can be at the forefront of contributing to a significant and lasting improvement in working conditions and safety in Bangladesh (Benetton Group, 2013a, p. 14). The events at Rana Plaza involve the entire textile sector... This is why we were determined to be in the front line in offering our support (pending government approval) through an NGO which, during these tragic weeks, has proven its ability to provide real help for the victims and for all those affected (Benetton Group, 2013b, p. 23). Several weeks ago Benetton Group joined from the start a multi-stakeholder committee... This group set forth as an objective to create a going forward framework for the payment of compensation to victims of the Rana Plaza and similar accidents (Benetton Group, 2013c, p. 31).

Using Devlin’s (2007) three stages of a crisis and Jaques’ (2014) life cycle of a strategic issue

model, the pre-crisis stage or early warning sign is, often, only visible through issue and crisis management tools. Clearly, both the MNCs failed to act professionally in the early stage and appear not to have empowered and invested enough in public relations, lacking understanding of media’s power in the public sphere and its impact on public perception and organisational reputation. Professional communication with the news media did not occur as reflected in the delayed responses and excuses, not to mention the ‘deny and blame’ approach taken nonchalantly by both MNCs. Figures 4 and 7 reflect how both corporations were burying their heads under the sand for a long while. The Nestlé crisis occurred over three months, while the Benetton Group crisis took eight months. The former appeared to last forever because of the infinite nature of online texts. Regardless, both crises have had a detrimental impact on corporate reputation. Solutions and appropriate actions came rather late and at added cost, following negative news story frames and activist pressure. On a positive note, activist pressure and news media investigation challenge corporate practices and contribute to increased recognition of the professional role of public relations in the corporate world; reiterating that ‘good can be brought out of bad’.

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Appendices Appendix A – Nestle Database

NO. PUBLICATION TYPE TOPIC DATE SOURCE 1 Article Greenpeace’s campaign

video against Nestle 17 March 2010

Nudd 2010

2 Video Greenpeace’s campaign video against Nestle: ‘Have a Break?’

17 March 2010

Greenpeace UK 2010

3 Media release Nestlé drives rainforest destruction pushing orangutans to brink of extinction

17 March 2010

CNW 2010

4 Campaign page Ask Nestle to give the rainforest a break

17 March 2010

Greenpeace 2010d

5 Article Orangutan Greenpeace protest at Kit Kat maker Nestle

17 March 2010

The Telegraph 2010

6 Article Kit Kat spat goes viral despite Nestle’s efforts

17 March 2010

Houpt 2010

7 Blog post Nestle: Taking a bite out of rainforests

17 March 2010

Rolf 2010a

8 Media release Nestlé drives rainforest destruction pushing orang-utans to brink of extinction: Greenpeace launches online viral exposing true cost of “having a break” the KitKat way

17 March 2010

Greenpeace 2010e

9 Article Nestle accused of pulling Greenpeace ‘orang-utan finger Kit Kat ad’

18 March 2010

News 2010a

10 Article Greenpeace attacks Nestle with ‘Kit Kat’ viral

18 March 2010

Kimberley 2010

11 Article Killing orangutans to make chocolates!

18 March 2010

The Indian Express 2010

12 Article No break for Killer Kit Kat

18 March 2010

Ju 2010

13 Article Nestle, Palm Oil and the power of the Internet’

18 March 2010

Alter 2010

14 Article Nestle Drops Indonesian Supplier After Greenpeace Demonstration

18 March 2010

Soedarjo 2010

15 Article Greenpeace KitKat video goes viral

18 March 2010

Dunlevy 2010

16 Article Nestle start in campaign

over Indonesian palm oil 19 March 2010

Tabacek 2010

17 Article Nestle under fire for destroying orang-utan habitat

19 March 2010

Ecologist 2010

18. Article Nestle Replaces Oil Supplier..

19 March 2010

Molenaar 2010

19. Article Greenpeace and Nestle in a kat fight

19 March 2010

Shreeves 2010

20. Article Nestle on Facebook 19 March 2010

McCarthy 2010

21. Article Nestle sets timetable for palm oil decision

20 March Tabacek 2010

22. Article Nestle hit by Facebook “anti-social” media surge’

20 March 2010

Fox 2010

23. Article Greenpeace, Nestle in battle over Kit Kat viral

20 March 2010

Armstrong 2010

24. Article Greenpeace Urges Nestle to Drop Palm Oil supplier’

23 March 2010

Environmental Leader 2010

25. Article ’Greenpeace boycotts 23 March Dearing

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Nestle: ‘Don’t have a Kit Kat break today’’

2010

26. Article ‘Handling bad PR turns sticky for Nestle’

26 March Lee 2010

27. Article Nestlé takes a Beating on Social-Media Sites’

29 March 2010

Steel 2010

28. Media release Nestle committed to traceable sustainable palm oil to ensure no-deforestation

n.d March 2010

Nestle 2010

29. Article How Greenpeace reduced Nestlé’s Kit Kat to virtual crumbs

2 April 2010 Seibt 2010

30. Article Nestle shareholder meeting interrupted by Greenpeace orangutans’

15 April 2010

Hance 2010

31. Article Greenpeace protesters at Nestlé’s shareholder meeting

15 April 2010

Greenpeace 2010f

32. Media release Strong support for Board proposal at Nestle Annual General Meeting

15 April 2010

Nestle 2010b

33. Transcript from ABC’s new story on television

Nestle defends its use of palm oil at AGM

16 April 2010

Macey 2010

34. Article Protesting Orangutans Invade Nestle Shareholders’ Meeting

17 April 2010

Mok 2010

35. Article Orangutans protest against food giant

22 April 2010

Sherwen 2010

36. Article Nestle Commits to Sustainable Palm Oil, Ending Rainforest Deforestation

n.d May 2010

Melgren 2010

37. Blog post Nestle takes action to protect paradise

17 May 2010 Rolf 2010b

38. Media release Food and drinks giant Nestlé to stop using products from rainforest destruction

17 May 2010 Greenpeace 2010g

39. Article YouTube hit gives Nestle the finger’

18 May 2010 Breen 2010

40. Article Nestle Quits Sinar Mas after Greenpeace Campaign

18 May 2010 Environmental Leader 2010b

41. Blog post Nestle to save orangutans, tropical forests, and our climate’

18 May 2010 Greenpeace blogs 2010

42. Article Kit Kat manufacturer Nestle to stop using palm oil

18 May 2010 News 2010b

43. Article Online protest drives Nestle to environmentally friendly palm oil

19 May 2010 Hickman 2010

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Appendix B - Benetton Group Database NO. PUBLICATION TYPE TOPIC DATE SOURCE

1. Article Rana Plaza Collapse 24 April 2013 Manik & Yardley 2013

2. Article Rana Plaza Collapse 24 April 2013 Kossoff 2013 3. Article, Video Rana Plaza Collapse 24 April 2013 Mosk, Mudano &

Carter 2013 4. Article Rana Plaza Collapse 24 April 2013 Nelson &

Bergman 2013 5. Article, Video Rana Plaza Collapse:

Supplier of Fashion Retailers

25 April 2013 The Huffington Post UK 2013a

6. Article Death Toll from Rana Plaza

25 April 2013 Feminist Newswire 2013

7. Article Rana Plaza Collapse - Update

25 April 2013 Quartz 2013a

8. Article The owners of the factories ignored police evacuation

25 April 2013 Alam 2013

9. Article Calls for Corporate Accountability as Death Toll rises

25 April 2013 Hsieh 2013

10. Article Anger rises along with death toll, Rana Plaza

25 April 2013 Neuman 2013

11. Article Police-ordered evacuation and death number

25 April 2013 Associated Press 2013

12. Article, Video Employee stories about the Rana Plaza Collapse

25 April 2013 Gayle 2013

13. Article Pressure increases for Western Firms

25 April 2013 Greenhouse & Yardley 2013

14. Article Rana Plaza: Death Toll increases

25 April 2013 Alam & Garjon 2013

15. Article Factory Collapse exposes cracks in the system

26 April 2013 Chen 2013

16. Article Mango and several brands connected to Rana Plaza

26 April 2013 The Local 2013

17. Article Bangladesh factory collapse

26 April 2013 Mau 2013

18. Article Rescue of employees at Rana Plaza

28 April 2013 Reilly 2013

19. Article United Colors of Benetton clothes found at Rana Plaza

28 April 2013 The Australian 2013

20. Article Owner of Rana Plaza arrested and statements from the Clean Clothes Campaign

29 April 2013 Chua 2013

21. Article Who pays the real price for our clothes

29 April 2013 Bacon 2013

22. Article Benetton denies connection to Rana Plaza: Clothes with Benetton label found at the scene

29 April 2013 Seward 2013

23. Article Western clothiers deny responsibility

29 April 2013 Singleton 2013

24. Article United Colors of Benetton clothes found at Rana Plaza

29 April 2013 Quartz 2013b

25. Article Benetton admits connection to Rana Plaza

30 April 2013 Smithers 2013

26. Article Who’s to blame, several fashion labels identified

30 April 2013 Strochlic 2013

27. Article Promise of compensation

30 April 2013 RT 2013

28. Article Benetton paper trail 30 April 2013 Mezzofiore

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found in Rana Plaza rubble

2013a

29. Article Benetton addresses evidence of connection to Rana Plaza

30 April 2013 Mitchell 2013

30. Article Several retailers have taken responsibility

30 April 2013 Greenhouse 2013

31. Article Factory Collapse a ‘wake-up call’ for the fashion industry

1 May 2013 Cooper 2013

32. Article Benetton admits relation to Rana Plaza

1 May 2013 Mezzofiore 2013b

33. Article Summary of how the different retailers handled the crisis

1 May 2013 Lobello 2013

34. Article Q&A with the Director of the Bangladesh Center for Working Solidarity

2 May 2013 Jayapal 2013

35. Article Is there blood on your shirt?

2 May 2013 Luckerson 2013

36. Article Arrest of engineer and update on retailers taking responsibility

3 May 2013 Paul 2013

37. Article Were Rana Plaza Workers sewing Benetton Clothes?

3 May 2013 Mezzofiore 2013c

38. Article Factory collapse – a wake-up call for western retailers

3 May 2013 Akrami 2013

39. Article From Bangladesh to a mall near you

3 May 2013 Al-Mahmood, Passariello & Rana 2013

40. Article Statement from Benetton Group

4 May 2013 Bashin 2013a

41. Article Disaster at Rana Plaza 4 May 2013 The Economist 2013

42. Article Rags in the ruins 4 May 2013 Dhaka & Savar 2013

43. Article Toll passes 600 5 May 2013 BBC News 2013a

44. Article Brand risk image in disaster response.

7 May 2013 News 2013

45. Article Benetton admits role in Garment factory collapse

8 May 2013 Estes 2013

.46. Article First interview with Benetton CEO about Rana Plaza

8 May 2013 Bashin 2013b

47. Article Benetton Admits connection to Rana Plaza

9 May 2013 Evans 2013

48. Article Factory collapse toll passes 1000

10 May 2013 BBC News 2013b

49. Article Factories and buyers connected to Rana Plaza

10 May 2013 BBC News 2013c

50. Article Death toll in Bangladesh surpasses 1000

10 May 2013 Cheng 2013

51. Article Retailers are Pressed on Safety at Factories

10 May 2013 (Greenhouse 2013b)

52. Article H&M, Tommy sign Bangladesh factory safety pact

13 May 2013 Fox 2013

53. Media release Benetton Group signs fire and building safety accord

14 May 2013 Benetton Group 2013a

54. Article Pressure tells on retailers and

14 May 2013 North 2013

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government 55. Article H&M, M&S, Benetton,

ZARA Commit to Fire and Building Safety Agreement in Bangladesh

14 May 2013 Hower 2013

56. Article European retailers speak with one voice on bringing safety to Bangladesh

14 May 2013 Chang 2013

57. Article Brands that produces Clothes in Bangladesh

14 May 2013 Engel 2013

58. Article Benetton, Mango Agree to Bangladesh Safety Pact’

14 May 2013 Passariello & Banjo 2013

.59. Article Benetton agrees to sign Bangladesh safety pact

14 May 2013 Zaman 2013

60. Article Benetton, Tesco and Primark sign safety deal

15 May 2013 Taher 2013

61. Article Fashion labels join Bangladesh safety deal

15 May 2013 Miller 2013

62. Article

Take action and demand justice for victims

16 May 2013 War on Want 2013

63. Article Rana Plaza and the supply chain

20 May Bose 2013

64. Media release Established partnership with NGO BRAC

23 May 2013 Benetton Group 2013b

65. Article Protest against Benetton and Mango

25 May 2013 The Huffington Post UK 2013b

66. Article Activists target Benetton and Mango over Bangladesh factory collapse

28 May 2013 Goldfingle 2013

67. Media release Statement from CEO concerning BRAC

31 May 2013 Benetton Group 2013c

68. Article Bangladesh factory collapse leaves trail of shattered lives

6 June 2013 Burke 2013a

69. Article An end to recovery efforts, a promise of a new start

14 June 2013 Ahmed & Lakhani 2013

70. Article Bangladeshi factory deaths spark action among high-street clothing chains

23 June 2013 Butler 2013

71. Article Safety Pact for Bangladesh

8 July 2013 Mathew 2013a

72. Article 70 retailers agree on Safety Pact for Bangladesh

8 July 2013 CBC News 2013

73. Article Retailers agree on Bangladesh garment factory inspections

8 July 2013 BBC News 2013d

74. Article Top Western retailers sign plan to improve safety in Bangladesh garment factories

9 July 2013 ABC News 2013

75. Article Companies adopt safety plan for Bangladesh factories

9 July 2013 D’Innocenzio 2013

76. Article Rana Plaza survivors risk losing their homes: Take action today

August n.d. 2013

Labour Behind the Label 2013

77. Article Bangladesh Factory Victims Wait as Compensation Meeting Delayed

8 August 2013

Shannon 2013

78. Article Benetton and Mango: come to Bangladesh, and pay compensation

15 August 2013

Clean Clothes Campaign 2013a

79. Media release Will Walmart, Benetton and Mango Show They care?

4 September 2013

Clean Clothes Campaign 2013b

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80. Media release Brands fail victims of Bangladesh disasters

9 September Clean Clothes Campaign 2013c

81. Media release Statement from CEO; summary of the months after the factory collapse

11 September 2013

Benetton Group 2013d

82. Media release Retailers divided over Bangladesh factory compensation

12 September

Thomasson 2013a

83. Article No deal on Bangladesh garment disaster damages

13 September 2013

BBC News 2013e

84. Article Primark only brand to confirm compensation for Rana Plaza factory victims

13 September 2013

Griffith 2013

85. Article Primark Almost Alone in Giving Aid to Bangladesh Victims

13 September 2013

Thesing 2013

86. Article Clothing corporations need to step up for Bangladesh factory collapse victims

19 September 2013

Ghomeshi 2013

87. Article Rana Plaza Disaster Fallout: Bangladesh Garment Industry Suffers from Workers

23 September 2013

Mathew 2013b

88. Article Rana Plaza factory disaster: victims still waiting for compensation

23 October 2013

Butler & Hammadi 2013

89. Report Still Waiting: Six months after history’s deadliest apparel industry disaster, workers continue to fight for reparations

23 October 2013

Foxvog et al. 2013

90. Media release Bangladesh Accord Launces Bangla website, media release

23 October 2013

Benetton Group 2013f

91. Media release 6-month anniversary of the Rana Plaza tragedy

23 October 2014

Benetton Group 2013e

92 Article Primark pays more compensation to Bangladesh factory victims

24 October 2014

Thomasson, E 2013b

93. Article Six months after Bangladesh factory collapse, workers remain in peril

24 October 2014

Hussein 2013

94. Article 6 months later: What has changed since the Rana Plaza factory disaster?

24 October 2014

Ogrodnik 2013

95. Article Orphans and relatives stage protest demanding compensation

25 October 2013

Tomlinson 2013

96. Media release CEO, Biagio Chiarolanza, on work in support of the victims of the Rana Plaza

8 November 2013

Benetton Group 2013g

97. Media release All brands responsible should compensate the Rana Plaza victims now

16 November 2013

Clean Clothes Campaign 2013d

98. Article Global Retailers Agree on Pact to Avoid Another Rana Plaza Disaster

21 November 2013

Brinded 2013

99. Article U.S. Retailers Declined to Aid Factory Victims in Bangladesh

22 November 2013

Greenhouse 2013c

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Appendix C – Greenpeace Campaign Video

(Source: Greenpeace 2010c: Screenshot from video).

(Source: Greenpeace 2010c: Screenshot from video).

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Appendix D – Coding Instruction Sheet

CODING SCHEDULE

Background Information 1. ID number of unit of analysis coded: 0001 to 1000 2. Date of issue: day/month e.g.: 01.3.2014 is coded as 013 Origin of Information 3. Mass media source Yes coded: 1 No coded: 2 4. Organisational source Yes coded: 1 No coded: 2 5. Mentioning of the organisation and/or statements distributed by the organisation Yes coded: 1 No coded: 2 Origin of Story 6. If there is a picture in the story

Yes coded: 1 No coded: 2

7. Story types Hard news coded: 1 Items of news that are time-bound such as stories published right after the crises occurred. Commentary/analysis coded: 2 Stories that focus on the crises and provide background information about the event, discuss the consequences or implications of the crises.

Human interest/feature coded: 3 Items that are not time-bound, and deal with the crises from a human aspect. Such as personal histories etc... Press Release coded: 4

Other coded: 9 Any item that does not fit into any of

the categories mentioned above. News Story Sources 8. Local journalists Yes coded: 1 No coded: 2 Journalists from the country where the organisation’s headquarters are located. 9. International journalists Yes coded: 1 No coded: 2 Crisis Life Cycle 10. Crisis life cycle Pre-Crisis Stage coded: 1 Acute-Crisis Stage coded: 2 Post-Crisis Stage coded: 3 11. Direction: Likert scale:

1……………..5