When a fire starts to burn was a hit by Disclosure in
2013. I myself only recently discovered the song and am an absolute fan. The
title of the song also reminds of something similar that happened to Samsung 3
years ago. On August 24, 2016 Samsung faced the beginning of a serious crisis.
Namely, The Samsung Galaxy Note 7 popped up in the news, however, not in the
way Samsung would have anticipated it. The Note 7 was covered in the news due
to explosion issues. These first reports of an exploding battery were soon
followed by countless pictures of smouldering Samsung devices. Roughly a week
later Samsung then announced that they would recall the series from the market.
A month later on October 11 the production got permanently stopped and people
were told to turn off the device and stop using them.
Press Release
Let’s see how Samsung first reacted on 2 September. On
this day Samsung released their first official press release (to be read here).
Situational Crisis Communication Theory
Timothy Coombs identified several crisis response
strategies and categorized these into primary and secondary responses for times
of crisis. He developed the Situational Crisis Communication Theory and tested
different scenarios.
In the academic world many authors have used his
framework to test different real-world examples. Bottomline, Coombs is probably
one of the most famous authors about crisis communication and his response
strategies are deemed as useful for organizations in order to minimize the
negative effects of the crisis on their reputation. The Samsung incident can be
mapped within the Rebuilding Posture. It is recommended to use a Compensation
and Apology strategy in this specific scenario. These two can be identified by
the following:
These two
strategies can also be recognized within the official Samsung press release.
The Samsung crisis communication specialists did their homework!
Analysing the right strategies to use is not always
the best solution for the company. In this case one has to keep in mind that
Samsung lost more than 5 billion USD with their decision of a recall of the
whole Note 7 series. In the end their response strategy, however, helped them a
lot to minimize the reputational damage taken from this crisis. This can also
be seen in the news articles that were published after the incident occurred.
None of the big newspapers talked about the financial losses that Samsung took.
Instead, they were focussed on exactly what Samsung has told them during the
press release. They assumed a faulty battery was the cause of the fire and instead
of blaming the manufacturer Samsung took responsibility.
Samsung’s
reputation
A survey of more than 1000 US consumers also indicates
that Samsung’s reputation after the incident has not declined by much.
Interestingly, previous Galaxy Note 7 owners claimed to consider buying the
Note 8 after the incident occurred. The annual revenue report
for 2016 does also suggest that Samsung did not take a big blow from the
recall, noting that the 5 billion USD are a rather small share of that. These
events, however, could have turned into any direction for Samsung really, and
specifically Apple probably had high hopes to gain market share of Samsung
again. That did not happen and in part this is due to the great communication
strategies used by Samsung officials. After the first press release, more news
was released about the specific causes of the explosions showing that no-one
was really at fault.
Conclusion
To conclude Samsung managed their crisis communication
really well. Instead of blaming the battery manufacturer, they calmed stakeholders
down and actively communicated in Twitter. Since Twitter is the outlet with
most content and volume for crisis related issues, it is almost a necessity for
all big corporations to have an active Twitter account used for interactive
communication with stakeholders.
Information about the author:
The author is a Corporate Communication student at the
University of Amsterdam. After successfully finishing his Bachelor of Arts at
the University of Leiden a keen interest in communication and specifically
Public Relations has developed. In this blog several of his viewpoints on
different PR topics will be displayed
Read more
Claeys, A. S.,
Cauberghe, V., & Vyncke, P. (2010). Restoring reputations in times of
crisis: An experimental study of the Situational Crisis Communication Theory
and the moderating effects of locus of control. Public Relations Review,
36(3), 256-262.
Coombs, W. T. (2007). Protecting organization
reputations during a crisis: The development and application of situational
crisis communication theory. Corporate reputation review, 10(3),
163-176.
Sung, M., & Hwang, J.
(2014). Who drives a crisis? The diffusion of an issue through social networks.
Computers
in Human Behavior, 36, 246–257.
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