Issues management and crisis communication are two very important parts of a company’s communication strategy. While issues management and crisis management may seem like the same thing on the surface, they are actually slightly different from each other (Gaunt, P., & Ollenburger, J., 1995, p. 199, 202-204). In our textbook, an issue is defined as “an unsettled matter which is ready for a decision.” It is also a situation that “requires decisive action of the organization in order to protect its reputation (Cornelissen, 2017, p. 192).
This decision process and decisive action take place as an organization analyzes its strengths, weaknesses, opportunities, and threats in relation to a given circumstance. After this, the organization must then determine who the situation is impacting and where the issue is at in terms of its life cycle. Once these factors are considered, the organization can then decide what strategy they will use in order to respond to the situation. There are also four different ways that an organization can respond to a situation. They include a buffering strategy, a bridging strategy, an advocacy strategy, and a thought leadership strategy (Cornelissen, 2017, p. 194-200).
On the other hand, a crisis is much more serious than an issue. In fact, in many cases, a crisis can develop when an organization ignores an issue for too long or when an issue has become more ‘active’ or ‘intense’ due to media influence and/or public opinion (Cornelissen, 2017, p. 193, 216). A crisis can also be defined as “a sudden and unexpected event” that can negatively influence an organization’s reputation and financial situation (Cornelissen, 2017, p. 215-216). Because of this, companies must be “decisive and immediate” in how they respond to a crisis situation if they are to reduce damage and maintain legitimacy with their stakeholders (Boyd, J., 2000, 341-352; Cornelissen, 2017, p. 192, 212-216).
There are also four different types of crisis situations that can exist “based on two dimensions.” They are internal-external and intentional-unintentional. These four types of crisis situations are important for a company to consider because they can often determine what strategy a company should use to overcome a negative situation (Cornelissen, 2017, p. 192-193, 216-222).
One example of issues and crisis management that I studied this week was the story of RBS Bank and their payment of bonuses to their top executives in 2012. What makes this story so interesting to me is that it took place shortly after a worldwide financial crisis that happened between 2007 and 2010, which was caused by “the collapse of a global housing bubble” (Cornelissen, 2017, p. 200). This collapse of the housing bubble led to problems because it created “a shortage of credit and a decline in trade.” Many people were also upset about this situation because governments had to use “billions of taxpayers money” to bail out many of the banks who caused the problem (Cornelissen, 2017, p. 200-201).
In the case of RBS Bank, I think they created an issue for themselves by attempting to pay £1m in bonuses to their CEO at a time when many people were still upset about the financial crisis (Cornelissen, 2017, p. 200-201; News, C. 4., 2012, video description). This situation probably took place because RBS failed to consider the life-cycle of the worldwide financial crisis that had just occurred (Cornelissen, 2017, p. 197, 200-201). In short, RBS made a poor decision in terms of both how much they spent in bonus payouts and the timing of when they spent it. As a result, I’m sure they lost a lot of respect with many of their stakeholders. This situation is what our book would call “a Transgression” because it was an internal decision that RBS intentionally made at the expense of their stakeholders (Cornelissen, 2017, p. 216-217).
While I do see some justification on the part of RBS Bank for wanting to reward their top CEO for good work, I also see how paying so much money to their CEO in the wake of a worldwide financial crisis could make so many people angry. I think that in order to avoid upsetting so many people, RBS should have found a better approach.
One way RBS Bank could have handled the situation would have been to disperse the bonus money to the CEO in multiple smaller chunks over an extended period of time instead of in one lump-sum all at once. They also could have paid a much smaller bonus to the CEO to avoid angering stakeholders. Either of these approaches might have improved the situation by making stakeholders feel like RBS was more careful with their financial resources.
RBS Bank could have also donated a large sum of money to a charity for people who struggle to find housing or to some other community cause. Doing this might have helped the situation by giving stakeholders the impression that RBS cared about someone else other than themselves. It also might have made the large payment to the CEO seem like slightly less of a big deal.
References:
Boyd, J. (2000). Actional Legitimation: No Crisis Necessary. Journal of Public Relations Research,12(4), 341-353.
Cornelissen, J. P. (2017). Corporate Communication: A Guide to Theory and Practice. London, GB: SAGE Publications.
Gaunt, P., & Ollenburger, J. (1995). Issues management revisited: A tool that deserves another look. Public Relations Review,21(3), 199-210.
News, C. 4. (2012, January 27). Bankers’ bonuses: Are they fair? Retrieved May 25, 2019, from https://www.youtube.com/watch?v=KtPSWNAv7uI.
