How Companies Respond to Self-inflicted Crises. A Comparison between Countries, Types of Crises, and Response Strategies

Abstract

Self-inflicted crises (SIC)– either intentionally induced or at least carelessly accepted – can tremendously damage a corporation’s reputation and legitimacy in the eyes of the stakeholders. While academia usually advices companies to accept full responsibility, practice shows that by far not all companies rely on such a responsible strategy. In practice, corporations choose various response strategies ranging from apologies, over diminishing approaches to full denials. By investigating a large data set embracing several countries and industries covering 696 cases of SIC, the authors analyze how corporations respond to such events and compare these response strategies across countries and types of crises.

This book chapter follows a domain-spanning approach by combining corporate social responsibility (CSR), crisis management, and stakeholder management to investigate how companies aim at solving crises. Drawing on attribution theory and situational crisis communication theory, the results reveal that corporations often do not follow the prevailing recommendation to take responsibility. The authors find that in the majority of cases, internationally active corporations try to deny or diminish their responsibility for the crises. Hence, the findings suggest that the concept of CSR is not working in the case of SIC since not only the existence of such corporate behavior but also the use of denial and diminish strategies contradicts the idea of corporate responsibility. Moreover, the authors shed light on possible differences and preferences toward a specific response strategy between countries and between different types of crises.

The authors contribute to the growing literature in the field of crisis management and crisis response strategies by investigating a large data set embracing several countries and industries. In this regard, the study differs from previous qualitative studies and experimental research as it is based on a large cross-country and cross-company set of secondary data. Thereby, the study allows drawing conclusions for a wide range of corporations and countries, hence increasing its general applicability.

Citation

Oberhauser, M. and Conrad, M. (2022), "How Companies Respond to Self-inflicted Crises. A Comparison between Countries, Types of Crises, and Response Strategies", van Tulder, R., Verbeke, A., Piscitello, L. and Puck, J. (Ed.) International Business in Times of Crisis: Tribute Volume to Geoffrey Jones (Progress in International Business Research, Vol. 16), Emerald Publishing Limited, Leeds, pp. 113-130. https://doi.org/10.1108/S1745-886220220000016009