Week 13 Exam Prep JY PDF

EXAM PREP Week 13 1  Session overview Issue Management Crisis management what is it? – Elements in Issues and Crisis management – Stake holders and target audiences – Process approach Organisational risks – The Risk Paradox...

EXAM PREP Week 13 1  Session overview Issue Management Crisis management what is it? – Elements in Issues and Crisis management – Stake holders and target audiences – Process approach Organisational risks – The Risk Paradox – Risk perception theories used – Risk communication – Hazard & Outrage Elements of a crisis plan – Crisis Management planning – Effective crisis communications - do’s and don’ts – Disaster management Reputation Management: Situational Crisis Communication Theory Leadership and management 2 Week 1: Setting the framework 3  What is issue management? A convergence of risk and reputation that is the most dynamic and challenging in the areas of management and professional communication. 4  Modern definition of ‘issue’ An issue is any trend or development - real or perceived – usually at least partly in the public arena which, if it continues, could have a significant impact on the organisation’s financial position, operations, reputation or future interests, and requires a structured approach to achieve positive, planned outcomes. 5  Modern definition of ‘issue’ Is any trend or development – real or perceived – occurs - at least partly in the public arena which, if it continues, could have significant impact on the organisation’s: – Financial position, – Operations – Reputation – Future interests and requires a structured approach to achieve positive, planned outcomes. 6  What is an issue? Defining an issue is difficult But organisations facing an issue “know it when they see it” 3 main approaches: - Disputation - Expectation gap - Impact 7 8  What is an issue? Disputation Theme In the early days an issue was sometimes defined as ‘a contested matter that is ready for decision’. Argues that an issue arises where there is a social and/or political dispute. Today sometimes called the controversy theme. Critics claim the definition is too broad – not every dispute or contested matter qualifies as an issue. 9  What is an issue? The expectation gap theme An issue exists when there is a gap – real or perceived, between an organisations performance or the way it behaves and the expectations of key stakeholders and how they think the organisation should behave. Sometimes referred to as the legitimacy gap. Remains popular today because it is easy to understand and communicate, and aligns closely with the thinking of many activist and community groups. 10  Criticisms of the expectation gap theme Critics think that the approach is limited because it focuses on past events and behaviours. It can occasionally be confrontational rather than cooperative. Runs contrary to modern experts that believe issues management should promote social harmony. The gap itself does not constitute an issue. However, a gap in stakeholder expectation can certainly lead to an issue. Analysis of the gap can help to characterize the issue. 11  What is issues management? Is a coordinated, cross functional effort Identifying , prioritising and actively managing those developments that most impact the organisation Moving toward resolution where there is a capacity to make a difference 12  What is issues management? Issue management is about steering the ship out of troubled water, while crisis management is about saving the ship after it struck an iceberg. Communicators often have ‘ownership’ of the process and strategy development and implementation. But effective issues management needs support from across senior management within the organisation. 13  The value of a planning model Jones and Chase (1979) proposed the original recognised model: 1. Identification 2. Analysis 3. Strategy options 4. Action plans 5. Evaluation Chase (1984) expanded his model into the detailed Programme Evaluation and Review Technique (PERT) chart that included 88 distinct steps - attempt to gain ‘legitimacy’ 14 Issue Management Process 15  Types of crises Operational Environmental Management or employee misconduct Management /legal Technological Product Labour relations Social concerns Natural disasters 16 Nine types of crises 17  What is a crisis ? An event or development that can focus unwanted visibility on the organisation Is likely to endanger health or the environment or Seriously impact reputation or The ability to do business 18  Some definitions One definition: A crisis is an event or development that can focus unwanted visibility on the organisation and is likely to endanger health or the environment, or seriously impact reputation or ability to do business. Another definition: Crises are ‘high consequence, low probability, overlaid with risk and uncertainty, conducted under time pressure, disruptive of normal business and potentially lethal to organisational reputation’. 19  Crisis Characteristics Ambiguity of cause Effects and means of resolution A belief that decisions must be made swiftly Degree of impact 20  What is crisis management? Crisis management is often presented as a coordinated action that mobilises functions and resources throughout the organisation to bring the crisis under control as quickly and effectively as possible and to minimise damage. Traditional view was that crisis management was what organisations do to get ready in case a crisis strikes and how it acts after the crisis strikes. Now includes the steps an organisation takes to prevent a crisis happening in the first place, as well as the actions after the triggering event itself has been resolved. 21 Crisis management 22  Crisis Preparedness Involves: – Planning processes – Systems manuals – Training simulations Doesn’t prevent a crisis striking but helps the organisation to respond well and minimize any damage. Companies who do not have a crisis plan tend to suffer heavier losses for longer periods of time than those organisations that have a plan. 23  Focus of crisis preparedness Systems, manuals and other crisis management infrastructure. Selection and induction of the crisis management team, agreement on reporting and authority lines, checklists, pre-prepared materials, and logistical resources for the centralised crisis management centre, such as phones, radio, television etc. Familiarisation programs, such as table top exercises, live simulations and communication system testing. The man who saw it coming https://www.youtube.com/watch?v=w9jUEp_l7cE 24  Crisis Prevention Involves: – Early warning scanning – Issue and risk management – Emergency response The activities and processes designed to help reduce the likelihood of the crisis occurring at all. Early warning and scanning: audits, preventive maintenance, issue and environmental scanning, and social forecasting. Emergency response: not every crisis is triggered by an emergency but any emergency badly handled can lead to a crisis. 25  Crisis Incident Management Involves: – Crisis recognition – System activation/response – Crisis management Crisis recognition is a definite skill. One of the important roles of a crisis leader is to recognise that a crisis exists. Response systems must be activated immediately and rapidly. Managing a crisis involves: - Responding to the triggering event and mitigating subsequent damage - Stakeholder management and media response 26  Post – crisis management Involves: – Recovery, business resumption – Post crisis issue impacts – Evaluation, modification Addresses the risk of lasting financial or reputational damage that is sometimes the main concern after the crisis incident itself has been resolved. Sometimes known as business continuity Focuses on operational resumption, financial costs, market retention, business momentum and share price protection Sometimes the post crisis can be greater than during the crisis itself (crisis after crisis) Coronial inquests, judicial inquiries, prosecution, litigation, prolonged reputational damage and endless media scrutiny Final stage is evaluation and modification Royal Commission into Victorian bushfires http://www.abc.net.au/btn/story/s2661719.htm 27 Crisis management 28 Week 2: Issue Management - Development and Tools 29 Defining Issue Management – The capacity to understand, mobilise, coordinate and direct all strategic and policy planning functions, All public affairs/public relations skills = Destiny – personal and organisational 30  Theoretical frameworks Janet Bridges (2004) addressed 6 theoretical frameworks for issues management: 1. Systems theory 2. Powerful stakeholder theory 3. Legitimacy gap theory 4. Issue life cycle theory 5. Rhetorical analysis 6. Social exchange theory Bridges and other scholars also identified two mass communication theories: agenda setting and framing. 31 Theoretical frameworks 32  Agenda setting A concept that began by arguing that news media editors, reporters and broadcasters filter news events, and that their reporting sets an agenda by how much attention is given to a particular story, and its positioning within a physical or online newspaper, or the prominence it receives in a radio or television news bulletin. “The press may not be successful much of the time in telling people what to think, but it is stunningly successful in telling its readers what to think about” Bernard Cohen 1963. 33  Agenda Setting Creation of a public agenda – Built on what the public believes to be the most important issues or concerns Formation of policy agenda setting – Politicians and regulators respond to real or perceived public concerns – Move to develop and introduce new laws and regulations – = Online agendas help to shape the public policy agenda 34  Framing Is a process by which an event or message is placed within a frame – very much like a photograph or a painting – in order to focus attention on certain elements and to exclude competing, distracting or contradictory elements. Attempts to get the public to ‘see’ the event or message in a particular way. Naming or labeling can be critical factors in success or failure. Is a ‘construct of reality’ 35  Framing Bush White House – global warming to the less alarming ‘climate change’. Las Vegas change from ‘Gambling’ industry to the ‘gaming’ industry. Nuke expert on Japan: 'Definitely not good news' 36 Week 3: Identification and Prioritisation 37  Scanning and identificatio n 38  Issue sources Main stream media – Local newspapers – TV news Social/Digital media – Daily online word search – Using software programs such as Social Studio Other sources include: – Conferences - political or industry – Publications – science based or trade – Regulatory & legislative updates – The organisations own Strategic Business Units (SBUs) – Surveys and feedback of clients, customers, employees & Stakeholders 39  Issue sources Trade association meetings and newsletters CEO forums Websites from critics and opponents Industry and business allies, and joint venture partners Surveys of clients, customers, employees and other stakeholders Analysis by experts 40  Risk versus resources Often organisations will prioritise issues based on “Have we got the people to deal with it?” rather than “How important is it and how could it affect us?” A vital step is to recognise that an organisation is rarely alone when it comes to facing an issue. BP and Opal Fuel Case Study: https://www.youtube.com/watch?v=9EjcA6tlFmE 41  Risk versus resources Considerations: – Risk level - what threat is this issue to the company – How important is the issue – How might this issue affect the company – All organisations experience issues - a company is not alone – Who are the allies /those with a common interest than can support ‘us’ – Activists –corporate partnerships 42 Week 4: Issue Management - Planning 43 44 Four barriers to effective issue management 1. Remaining in reactive mode Organisations are unwilling or feel unable to make decisions or take actions 2. Legal response syndrome – The organisation treats each issue as if legal considerations override all others 3. Ad hoc management – A reluctance by the organisation to establish a formal issue management team / process 4. Unclear goals – A lack of focus on action. 45  The essential for an effective issue management plan Utility – The plan is useful and can be put into practical action Simplicity – uses unambiguous language and has a minimum of steps Clarity – not only easy to follow but also easy to explain to top management and others Relevance – focuses only on what directly adds value to addressing the issue Versatility – it is meaningful for many types of issues, regardless of scope and scale Assessability – it allows assessment of ongoing progress as well as achievement of outcomes 46  Introducing an issue management model A common error in issues management is to confuse ‘what we are trying to achieve’ with ‘what we need to do’ – that is confusing strategic objectives with tactics. Planned response needs to be designed to deliver positive outcomes. Four sequential steps of Do-it Plan: – Definition Effect, worst-case scenario – Objective Strategic, realistic – Intended outcomes and – Tactics 47 Week 5: Activism 48 Who is an activist ? What is activism? An activist public is a group of two or more individuals who organise in order to influence another public or publics through action that may include education, compromise, persuasion tactics or force. (Grunig, 1992) Activism is nothing new! But modern tools and media operations have greatly increased the capability and profile of activist groups. Doh and Guay (2006) described the rising influence of NGOs as ‘one of the most significant developments in international affairs over the past 20 years’ 49 Who is an activist ? What is activism? Activist groups include: – Community groups – Advocacy groups – Grass roots campaigners – Special interest groups – Non government organisations – Special issue lobby groups eg ROE 8 extension 50  Implementation of activism Involves: – Planning and strategy – Dealing with media – Creating an organisation BLM was ‘born’ out of a single incident – Raising funds – Organising an event or demonstration – Building coalitions and alliances https://www.greenpeace.org.au/donate/?amt=30&freq=2& amtset=30&src=DON-GIVE&bucket=Fundraising-Digital We are 100% funded by our supporters Greenpeace 51  How do activists select issues? Activist strategies - prioritising effort Activists may choose to get involved with an issue The issue may or may not directly impact on them Have different objectives to those of business May present a moral or ethical imperative for the activist group – Saving the whales – WA’s shark cull and the baited drumlines – The plight of child soldiers in Africa 52  Priorities for activists Activists prioritise issues that focus on conflict , Those issues that will be fought out in public, and Have the greatest potential to attract media attention 53  The activist criteria for selecting an issue The campaign should have a clear aim or goal The issue is easily understood by the general public The issue has high symbolic value The issue has the potential to damage the image of the target company The opponent is strong enough (to avoid an ‘underdog’ effect that evokes sympathy) The issue can be ‘packaged’ in a campaign in which the public can be involved There are solutions that are confrontations, not gradual There could be a dramatic element to the campaign to engage the media Source: Winter and Steger (1998, p83) 54 Activist strategies – defining the issue Having selected a target issue, the activist organisation can choose from a range of strategic issue management approaches. The first being ‘a single issue group’ Such issues typically revolve around a yes or no response. For example, whether the law should be changed to recognise same-sex marriage, or whether the country should be a republic. 55  Issue redefinition Clarity when defining the issue may be appropriate for ballot proposals or a one-off decision and for corporate issue managers to keep the debate focused. However, activists are constantly redefining the issue to gain and retain the initiative. Three (3) approaches to issue redefinition: – moving target, – transitional target and – multiple target 56 Issue redefinition 57  Issue redefinition The moving target approach This applies where the issue is progressively redefined but remains within a given discipline, constantly moving the grounds of debate to keep the responder off balance, often over a prolonged period of time. 58  Issue redefinition The transitional target approach This technique focuses on moving the issue away from an area that be addressed in terms of measurable facts or science or statistics, to an area where opinion and emotion prevail. 59  Issue redefinition Multiple target approach The issue is progressively redefined to continually change the grounds of debate – the multiple target approach attacks on many issues fronts simultaneously, making it harder for the organisation to respond in a meaningful way, and opening up the inevitable accusation that they ‘deliberately ignored’ one or other aspect. 60  Possible corporate responses to an activist attack Stage One: denial – do nothing - It’s not really ‘our issue’ - Our lawyers’ advice is not to do or say anything - Whatever we do or say can be turned against us - If we respond it will only ’give them oxygen’ - We don’t want to look like bullies - We should leave it to our trade association - They are so extreme they will never listen to reason - The news media will soon lose interest in the story – However : an issue ignored usually doesn’t go away Is harder to deal with the worse it becomes https://www.minderoo.org/about/#initiatives 61  Possible corporate responses to an activist attack Stage Two: anger – fight back – Tempted to launch a counter campaign to discredit the activist organisation or its leaders. – Initiate legal action – Cut off funding or influence other parties to withhold funds – Resort to dirty tricks - Astroturfing Astroturfing is the practice of masking the sponsors of a message or organization (e.g., political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participant(s). Or a PR tactic used in politics and advertising in which actors are paid to display overt and apparently spontaneous grassroots support for a particular product, policy, or event (fake news) The Consequences of Astroturfing In Australia astroturfing is regulated by Section 18 of the Australian Consumer Law, which broadly prohibits "misleading and deceptive conduct." Might entail strategies to discredit the activist organisation, or perhaps even to discredit its leaders personally. Other reactions might be to initiate costly and time consuming legal actions, or to cut off the organisation’s funding or influence others to withhold financial support. 62  Possible corporate responses to an activist attack Stage three: Bargaining - Dialogue and negotiation – Demonstrates a willingness to compromise and commitment to a win-win or mutual- gains outcome. – Two-way symmetrical model uses balanced communication to negotiate – Promotes understanding and respect between the organisation and its publics – Both parties must believe that there is value in dialogue – Some argue that activist strategies are deliberately asymmetrical. Suits activists to be seen as ‘powerless underdogs’. – Negotiation requires that both parties believe there is value in dialogue, and for activist organisations that rely on unpaid volunteers, even more important is a return on that commitment of time and resources. 63 Week 6: Crisis Management – readiness & response 64 65  Crisis management The difference between crisis management & crisis response And The difference between crisis preparedness and crisis prevention 66 Development of crisis management Originally seen as entirely responsive, and a tactical activity Was not seen as a top management responsibility – Eg what to do when a crisis strikes – Led to specialisations – investor relations, reputation management, media training for executives and so on. 67  What is a crisis ? A low probability, high impact event that threatens the viability of an organisation. Is characterised by: – Ambiguity of cause – Effects and means of resolution – A belief that decision must be made swiftly 68  Key elements Crisis preparedness – System planning , manuals, documentation, infrastructure, checklists, resources and training Crisis prevention – Audits, risk assessment, forecasting, environmental scanning, emergency response, issue management Crisis incident management – Crisis recognition, system activation, response initiation, management of the crisis itself Post crisis management – Business recover, inquiries, evaluation and modifications to processes 69  so ……. What is a crisis? An unplanned event – Not necessarily unexpected That calls for high level strategic decision making In circumstances where making the wrong decisions or not responding quickly enough could harm the organisation 70 Crisis characteristics Surprise Lack of info. at the start Escalation Pressure Loss of control Increased external scrutiny Siege mentality Panic 71  The process approach Based upon: – Realisation that the crisis has its origins long before the triggering event Many activities can help prevent the crisis happening – Continues well after the apparent ‘end’ of the crisis itself. A range of management activities after the crisis are critical to how well the organisation and its reputation recovers 72 Proactively addressing underlying systemic causes of potential crises Can include: – Management structure that inhibits /discourages upward reporting of bad news – Senior management deliberately ignoring a problem – Groupthink - senior managers agree to proceed down an incorrect past in order to maintain harmony – Silo thinking - different departments don’t talk to each other – Unwillingness to discuss ‘sensitive’ issues Eg bullying in the work place Sexual or racial harassment 73  A good plan comprises of: A readiness and response plan A crisis communication plan A business continuity or operational recovery plan 74  Before - pre-crisis stage Planning and preparation Development of relationships with the media and key stakeholders Initial communications can be drafted Spokespeople, resources and message channels can be determined Training and fine tuning of plans can be conducted Partnerships and alliances can be developed 75  Designated crisis management team Corporate leadership Specialist team members Communications Transport Legal Health/Medical Finance Environmental HR Security Operations Emergency response Business Logistics Admin Business unit managers 76  Roles and responsibilities Roles may be different from members day to day duties Clarify reporting lines as these may be different Plan should focus on decision-making and Who is responsible for each task – Members are there to contribute to the team in all respects 77  Pre-approved information Includes: – Organisational background Size of organisation, staff numbers, products/services etc – Facility fact sheets Location maps, site layout Names of managers Back up capability 78  Pre-approved information – Technical data On products and services Product specifications Material safety and data sheets Volumes stored – Media templates Pre-written and approved media statements Extracts from key policies Approved summaries of organisational background Approved history of past incidents /crises FAQ’s List of who the media should contact 79  Crisis communication Requires developing and communicating messages – under pressure of time – When information may be confusing and incomplete – Emotions are running high – The organisation is under intense public and media scrutiny 80  During – initial, maintenance, resolution Information should be provided to stakeholders as fully as possible Demonstrate the organisations approach is reasonable, caring and timely. Acknowledge the event with empathy Commit to continual prompt and full communication Media conference 81  During – initial, maintenance, resolution Initial public statements should establish the credibility of the spokesperson – directly or indirectly Watch social media.... As the crisis evolves media are likely to maintain their interest and scrutiny. Others will be asked to comment – eg politicians, “experts” , professionals 82  Do’s and don’ts of crisis communication Do: Don’t: Respond quickly Speculate about cause or Speak with a single voice effect Be informed and accurate Lie or stonewall Admit what you don’t know Be unavailable Demonstrate empathy and Treat the media as the caring enemy Stop rumours & correct Say ‘no comment’ misinformation Apportion blame or point Focus on what you are fingers going to say Let legal considerations Say when more information dominate will be available Use jargon and acronyms 83  Crisis communication Briefly state the facts as currently known – Be open and honest – Recognise that you are facing a crisis – Make communications a priority – Establish yourself as a credible source Apologise – Be sensitive to the human side of the story – Take cultural differences seriously Express sympathy – Explain yourself in uncomplicated – non technical language Express empathy – See the situation as your audiences see it Focus on actions – Reorganise operations to deal with the crisis – Use and recognise the importance of feelings and emotions 84 After – recovery and evaluation Recovery/business resumption operational recovery market share retention business momentum share- price rebuilding 85 After – recovery and evaluation Evaluation & modification Review crisis events What does the organisation know as a result of the crisis occurring Review should involve key stakeholders Post crisis issue impacts Ensure that the crisis hasn’t started a new issue – leading an org from one crisis to another 86 Week 7: Crisis Management -Planning 87 Elements of the crisis plan Crisis management plan must be a written document. However, does not need to be a complex production. The basics can be put in place relatively simply and cost effectively. Best practice today is a practical, relevant and up-to-date ‘living document’ that reflects the needs of the organisation and focuses on practical guidelines. 88  Elements of the crisis plan A good plan comprises: A readiness and response plan A crisis communication plan A business continuity or operational recovery plan (largely technical pursuit, ie restoring lost power, re-establishing online capability and recovering electronic data) 89 Common elements of the crisis plan Common elements: 1. Designated crisis management team (CMT) 2. Activation process 3. Crisis management location 4. Clear roles and responsibilities 5. Contact lists 6. Pre-approved information 7. Checklists 8. Training 90 Week 8: Crisis Management - Disasters 91  What is a disaster? A major adverse event that affects the broader society, even though it may also trigger a specific crisis for individual organisations. (Jaques) A serious disruption of the functioning of a society, causing widespread human, material or environmental losses and exceeding the coping capacities of the affected communities and government. (UN Business) 92  Impact of a disaster Polarises communities Financial cost Physical damage to property Loss of wildlife and environment Human life cost Loss of infrastructure 93 Disaster or crisis - Similarities Impact Urgency Uncertainty Limited control Risk 94  Disaster or crisis - Differences Impact – A critical element - Eg an aircraft crashing in a forest killing all on board vs an aircraft crashing in a primary school playground in an urban area killing school kids as well Perception – – Peoples frame of reference , experience and memory Eg a flood that kills 200 people is a more ‘routine’ experience in Bangladesh than if it occurred in Australia – it would be considered a crisis Scale – When the event is so big that it overwhelms local resources, requiring multiple government responses – – https://www.youtube.com/watch?v=QiF-X-Ez9Bs 95  Types of disasters Natural: – Earthquakes – Landslides and mud slides – Volcanic eruptions – Floods /Tsunamis – Hurricanes, cyclones and typhoons – Heatwaves – Wildfires, bush fires – Epidemics & Pandemics Man made: – Global warming – Terrorism – Deforestation and desertification – Genocide – Pollution – Technological failures 96  Catastrophes - a continuum of magnitude Emergency – An event , that threatens life and property – Local emergency response resources are adequate to immediate needs of the people affected Disaster – An event that involves multiple people or locations – Local response resources are not adequate Catastrophe – An event similar to a disaster where multiple jurisdictions – govt. or countries may be involved – Populations are so large that many needs go unmet - in the short term Extinction level event – A serious event that humans may not survive 97  Managing a disaster Mitigation – Reducing the likelihood of a hazard manifesting as a disaster – Has the potential to produce repeated benefits over time Preparedness – Steps taken in advance to deliver the best possible response when a disaster occurs – May require years of planning – Two main areas: government and public Response – Activities that take place immediately before, during and after the disaster – The most difficult and highest profile stage – Can be complicated and sometimes political Recovery – May include some investigation or commission – Focus is on determining exactly what happened and how to prevent it happening again 98  Week 9: Risk Management - Perception, Hazard & Outrage 99  Defining terms Risk – the chance of something happening, with its impact calculated by multiplying probability and magnitude, that is how likely it is to happen, and how serious the impact is likely to be if it does. Risk management – the systematic ongoing process by which an organisation or society identifies and catalogues risks; assesses and prioritises those risks, develops and implements programs to avoid risk, reduces 100  Broad categories of organisational risk Strategic – threatening the organisation’s ability to achieve its objectives Compliance – arising from breaches or potential breaches of relevant law or regulations Financial – the possibility of unacceptable financial loss or loss of shareholder value Health and environmental – health, safety and environmental risk to workers, the local community or society Operational – breakdown of plant or processes, fires, leaks, flood or explosions 101 Broad categories of organisational risk Reputational – damage to reputation and its impact on ability to operate Human or personal – when people do or say something wrong Supply chain – problems arising from the actions of others in the supply chain Technology – IT or e-business failures or breaches of data security. 102  Risk - what is it ? Individual/community risk: – Health and safety – Damage to the environment – Potential financial or property loss – Loss of reputation 103  What’s the difference? Risk – The chance of something happening with its impact calculated by multiplying probability ad magnitude How ‘likely’ it is to happen How serious the impact is likely to be if it does happen 104  What’s the difference? Risk Management – The systematic, ongoing process by which an organisation /society, identifies and catalogues risks Assesses and prioritises those risks Develops and implements programs to avoid risk Reduce the negative impact or accelerate recovery Continuously evaluates the effectiveness of those actions Monitors for new or emerging risks 105  What’s the difference? Risk Communication – An interactive process of exchange of information and opinion among individuals, groups and institutions involving multiple messages about the nature of risk, and other messages, not strictly about risk, that express concerns opinions or reactions to risk messages and to legal and institutional arrangement for risk management 106  The Risk Paradox The technological age has made us safer We are living more healthy lives and are living longer We worry more than ever about our health and safety = A rise of what has been terms the ‘risk society’ 107  Risk perception Expert assessment of risk differs from the view of the public Is understood and acted upon in two ways: – Risk an analysis Logic , reasons and scientific deliberation used in decision making – Risk as feelings Instinctive and intuitive reactions to danger 108  Risk = Hazard + Outrage Hazard – Typically based on science and statistics Toxicity data or mortality How dangerous it is How many people it kills Outrage – What the public regard as risk The things that people are worried about and which experts usually ignore 109  Risk communication Three categories: – Preventative Attempts to calm people down Provide assurance about he risk they might be exposed to – Precautionary Designed to inform people about the risk Make them concerned – Crisis Guides people through serious hazard situations 110  Personal perception Trust – Risks generated by a trusted source are more accepted than risks perceived to be generated by an untrusted source Voluntariness – Risks that are voluntary are more accepted than risks that are imposed Controllability – Risks under an individuals control are more accepted that those in the control of others Familiarity – Risks that are more ‘familiar’ are more accepted that those regarded as “exotic’ 111  Personal perception Fairness – Those seen as fairly distributed are more acceptable than those that are not Dread – Risks linked to diseases that are not dreaded eg Asthma, are more accepted than those linked to dreaded illness, such as cancer or the Zika virus Benefit – Those that have clear benefits are considered more accepted that risks that are perceived as having no or little benefit Performance history – If the organisation does not have an ‘shady’ past the perception of risk is perceived as acceptable 112  Risk Communication Involves the development of risk messages – May or may not include advice about: Risk reduction behaviour – eg prepare for bush fire season Four primary goals: – Increase knowledge and understanding – Enhance trust and credibility – Effect behaviour change – Resolve or avoid conflict 113  Mental Noise theory Most effective strategy is to: – Limit the number of messages to three – five – Repeat messages at least twice – Use simple language to keep the communication clear and easily understood 114 Rules of risk communication 1. Accept and involve the public as a legitimate partner 2. Plan carefully and evaluate your efforts 3. Listen to the publics specific concerns 4. Be honest, frank and open 5. Coordinate and collaborate with other credible sources 6. Meet the needs of the media incl. social 7. Speak clearly and with compassion 115 Week 10: Risk Management - Reputation 116  RISK MANAGEMENT - REPUTATION Reputation has been called the ‘risk of risks’ (Economic Intelligence Unit, 2005) Nothing damages reputation faster or deeper than a crisis or an issue mismanaged (Jacques, 2012) 117  So what is reputation? Reputation depends on the perceptions and judgments by stakeholders of past behaviours and experience. It is built over time. It can be a predictor of future behaviour. Some experts argue that reputation is the global result of an organisation’s behaviour – not something that can be directly ‘managed’. Social media has changed the way reputations are built and the ease with which they can be destroyed. 118  Defining reputation Frombun (1996) Corporate reputation is a perceptual representation of a company’s past actions and future prospects that describes the firm’s overall appeal to all of its key constituents when compared with other leading rivals Preston (2004) Reputation is an integral, but distinct, asset (or where negative – liability) and like most assets it can be enhanced by investment and innovation and it is subject to risk, depreciation and obsolescence Eccles, Newquist A company’s overall reputation is a function of its & Schatz (2007) reputation among its various stakeholders (investors, customers, suppliers, employees, regulators, politicians, NGO’s and the communities in which it operates) in specific categories (product quality, corporate governance, employee relations, customer service, intellectual capital , financial performance, handling of environmental and social issues) 119  Defining reputation Barnett, Jermier & Lafferty (2006) Corporate reputation is observers’ collective judgements of a corporation based on assessments of the financial, social and environmental impacts attributed to the corporation over time Wartick (2002) Corporate reputation is the aggregation of a single stakeholder’s perceptions of how well organisational responses are meeting the demands and expectations of many organisational stakeholders 120  So what is reputation? Brand vs reputation Brand – What you say about yourself Reputation – What other people say about you – = important because companies can get blinded by ‘brand awareness’ and may forget that the real goal is a good reputation 121  So what is reputation? Brand and reputation are intimately linked. Reputation can influence brand and brand can influence reputation. There can be a disconnect, ie high brand awareness does not necessarily equate to good reputation. The goal is not just reputation but good reputation 122  So why is good reputation important? In theory, the value of reputation is calculated by taking the market value of the company and subtracting the tangible assets. That leaves a net figure for intangibles, of which reputation is an important part. The Institute of Practitioners in Advertising (2006) reports that intangible assets such as ideas, knowledge, expertise, talent, identity, customer service and reputation comprise over 70% of the market value of companies listed on the Fortune 500 and FTSE 500. Organisational reputation is of enormous value, it is never static and is constantly at risk, so organisations need to commit resources to protect it. https://markets.ft.com/Research/Markets/DataArchiveFetchReport?Category=&Type=GMKT 123 124 A Framework for Managing Reputation Risk: The reputation-reality gap When an organisation’s good reputation far outstrips a possibly weak underlying reality a major threat arises that the gap will be exposed and reputation will be badly damaged as perception and reality begin to rebalance. A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was. English bishop Joseph Hall (1574-1656) 125 A Framework for Managing Reputation Risk: The reputation-reality gap A gap occurs when an organisations good reputation outstrips a possibly weak underlying reality – For example: a major threat arises within an organisation - the organisations reputation is at risk, the organisation is vulnerable – damage to its reputation may occur. 126 A Framework for Managing Reputation Risk: The reputation-reality gap The expectation stakeholders have of how the organisation is going to handle the threat opens the gap between the actual behaviour of the organisation and how it should behave. – https://www.abc.net.au/news/2022-10-05/essendon-afl-andrew- thorburn-ceo-resignation-reaction/101502068 127  Importance of a good reputation Is an asset Is quantifiable Is an acknowledged wealth generator Can account for at least half of an organisations value - alone Is a critical factor in how well an organisation weathers a crisis 128 Image Restoration Theory 129  Situational Crisis Communication theory (SCCT) Victim cluster involves crisis types in which harm is inflicted on the organisation as well as on stakeholders Accidental cluster involves harm from unintentional actions by the organisation, where the organisation sis not intend for the crisis to occur Preventable cluster involves intentionally placing stakeholders at risk, or not doing enough to prevent the crisis 130  SCCT Cluster Crisis Type Attributions of Reputational responsibility threat Victim cluster: Organisation is also a Natural disasters – acts of God Weak attribution Mild reputational victim of the crisis of responsilbity threat Workplace violence - current or former employees Product tampering/malevolence - caused by external agent Accidental cluster : Organisational Challenges – to appropriateness of Minimal Moderate actions leading to crisis were operations attributions of reputational threat unintentional responsibility Technical – error accidents – technology or equipment failure causes industrial accident Technical error product harm – technology or equipment failure causes product recall 131  SCCT Cluster Crisis type Attributions of Reputational threat Responsibility Preventable cluster: Human error accidents Strong attribution of Severe reputational Organisation knowingly –cause industrial responsibility threat put people at risk, accidents took inappropriate actions or broke law/regulation Human-error product harm – causes product to be recalled Organisational misdeed without injuries Organisational misdeed – management misconduct Organisational misdeed – with injuries 132 Week 12: Leadership and the Future 133  The role of leadership – Need to be able to help identify issue and crisis threats early and have the forethought to assign sufficient resources to make a difference – Need to break down functional barriers to drive the integration of issue and crisis management systems – Need to be able to recognise that issues and crisis may represent an opportunity as well as a threat – Need to provide an example to take personal responsibility for developing and implementing effective issues plans to help prevent crises happening 134  Leadership in crisis management (Cockram 2013) Focus – Provides focus in a complex and fast moving situation Identifying what really matters, allows necessary actions to move more quickly Direction – Provides direction and guidance to people when they most need it Moving them quickly towards achieving the control of the situation Decision – Makes the difficult decisions In the face of uncertainty and often with unhappy outcomes Support – Gives support to those less strong that themselves Helping to manage emotions in very tense environments 135  Leadership in crisis management (Cockram 2013) Humanity – Gives the organisation a human face Which the public needs to see in any crisis Drive – Prevents procrastination and indecision Clarity – Gives clarity to an otherwise chaotic situation Control will then follow Accountability – Ultimate accountability for the way the incident is managed Often is a double edged sword – that can result in resignation 136 SEE YOU IN EXAMS Thank you 137