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Introduction

Background of the Study

The world is increasingly getting competitive due to various dynamics in the business world. In this competitive environment, crisis is a factor that a firm may not precisely predict, and neither can it be overly prevented. Crisis management is one of the most challenging tasks in any organization. Most organizations would always make an effort to ensure that a crisis is avoided. Barthe (2010, p. 89) defines a crisis as an event or a situation that may lead to dangerous or unstable situations, which may affect an individual, organization or the entire society. In every organization, a crisis would probably crop up and the management team would be called upon to come up with mitigation measures. As Bennett and Strange (2011, p. 36) observe, a crisis cannot be avoided, yet it can be predicted. The management cannot say for sure that the firm has eliminated all forms of crises because a simple insensible action from one of the employees may lead to a crisis, which would affect the entire firm.

When such an incident arises, there would be need to ensure that measures, which would help mitigate the crisis, are developed so that the effect of such a crisis is made less serious.

Scholars and management professionals have developed various approaches aimed at solving various forms of crises. Most of the approaches were based on the premises of Total Quality Management principles, which proved useful in the nineties to the Japanese firms and later to other firms in the international forum. However, technological changes have forced the management teams to look beyond TQM and various approaches have been devised, which are expected to remain relevant in an increasingly competitive market. Emerging technologies have completely redefined marketing approaches in the global market (Solomon 2011, p. 116). Firms have currently come to the realization that the internet is one of the key pillars of marketing in the current world. As such, many management professionals and scholars have tried to develop ways through which new technologies could be used to manage various forms of crises in the organization.

Social Media is one of the new technologies that current firms have found relevant. Bennett and Strange (2011, p. 67) note that when Facebook was introduced as a social media, very few individuals thought that it could be relevant to firms. The management staff of various firms thought that it was a site where lazy youths could go to spend their time, especially when they lacked serious activities at hand. Such firms believed that brick-and-moter was the way to go and when it came to marketing, mass media was the preferred mode of reaching out to customers. However, this changed slowly, as many firms realized that such social Medias as Facebook would form a community to be targeted by marketers. This was especially so because in these social media, Shelley and Maria (2011, p. 27) report that over 75 % of the visitors are youths.

This community therefore, has a clear market segment, which a firm could target with appropriate products. One such firm to realize the potential of the social media was the Coca Cola Company (Bennett & Strange 2011, p. 79). This firm realized that most of its customers were the youths. As such, this firm developed television commercials that would appeal to this market segment. Many firms followed suite and currently, the social media is one of the most preferred marketing sites for many firms. However, not many firms realized that the social media could do more than just market products of a firm. According to Wright and Hinson (2011, p. 29), it is a perfect site for marketing products; the use of social media to manage a crisis is increasingly becoming relevant in the current market.

Many firms currently prefer using the social media in managing crisis.

The management would reach out to the customers and try to explain some facts that could have led to the crisis. Such crises would have effects to the firm and to its customers. They would also explain some of the measures that the firm would put in place not only to ensure that such incidents do not recur, but also compensatory measures it would plan to undertake in case customers were affected by such a crisis. This approach is turning out to be very popular as major businesses apply it in managing various crises, especially those that concern customers (Bennett & Strange 2011, p. 69). This paper seeks to investigate the use of social media in crisis management.

Problem Statement

Social media is increasingly becoming relevant to business units in various capacities. Many business organizations have come to the realization that social media is the answer to various management problems. However, scholars and management professionals are yet to come out with clear strategies on how to use social media in other areas besides marketing the products of the firm. Crisis management is one of the managerial activities that could use social media, especially if the crisis would be expected to have an impact on customers or other stakeholders, who are not immediate members of the business unit. There is need to ensure that there is a clearly defined approach that firms would take when it comes to managing crisis through the social media.

This would help eliminate the current confusion that exists in this particular area. Bennett and Strange (2011, p. 49) note that although some firms have successfully managed to implement social media as a marketing strategy, attempt of others have totally failed, leading to further crises in the firm.

This scholar notes that there is information that should reach customers and other stakeholders, while some should be retained even if they would cause the crisis. This is because by releasing some information, Barthe (2010, p. 83) notes that the firm would be exposing its weaknesses to customers, a fact that may lower their trust and hence loyalty towards the firm. Such information may also be taken up by competitors to bring down the firm, especially if such information may reveal the competitive advantage and the possible strength it has towards other firms. On the other hand, (Bennett & Strange 2011, p. 37) note that when using social media to reach out to the customers, the management should take into consideration the characteristics of the target market based on their demographics before formulating approaches on how they can best be reached. In order to come up with appropriate solutions to some of the mentioned problems, the researcher developed research questions and research hypotheses as stated below.

Research Questions and Research Hypotheses

Hakim (2000, p. 59) says that a research is like a journey to the unknown. When a researcher sets forth to conduct a research, it may not be possible to determine the exact outcome of the research, although it may be possible to make a guess. As such, a researcher would need to develop a research question that would help define the path that would be taken during the research. Research questions also help in avoiding irrelevant information that a researcher may come across while in the field. Shelley and Maria (2011, p. 79) say that in most occasions, a researcher would come across a lot of irrelevant but very interesting information that would destruct him or her. It is necessary therefore, that the researcher develops some research questions that would help in avoiding irrelevancy. The following are some of the research questions that the researcher developed for this particular research.

  1. How relevant is social media in managing crisis within a given firm?
  2. What are some of the advantages of social media in managing crisis within an organization?
  3. Why do the current management units of various corporate firms prefer the use of social media in managing crisis?

The above three questions are expected to guide the entire research, as the researcher seeks to find comprehensive answers to them. From the above questions, the researcher developed the following hypotheses that would either be confirmed or be rejected from the analysis of both the primary and secondary data.

  • H1o. Social media is not relevant in managing crisis in an organization.
  • H1a. Social media is very relevant in managing crisis in an organization
  • H2o. The managements of various organizations around the world increasingly do not use social media in the management of crisis.
  • H2a. The managements of various organizations around the world increasingly use social media in the management of crisis.
  • H3o. The future of crisis management does not lie with the development of the social media.
  • H3a. The future of crisis management lies with the development of the social media

The researcher hopes to accept the alternative hypotheses by rejecting the null hypotheses in each of the three sets.

Justification of the Research

A number of researches in this field have been done. This research is not intended to duplicate such works, neither is it intended to be a piece of academic report that would be kept in shelves after the concerned authorities have gone through and approved it. This detailed research is intended to have a positive implication to the management of various firms across the world in a market that has gotten increasingly competitive, with new inventions and innovations (Roxana & Valentin 2011, p. 113). The following are the factors that motivated this research.

Managements of organizations (both profitable and non-profit making organizations) are increasingly finding it very challenging to manage crisis especially when they were least expected. Such crisis always gets them unaware and their effects are always massive. Some organizations end up creative more crises in their attempt to manage the same. For this matter, various organizations have been grappling with the idea of developing the best strategy that would help them manage crisis in successful manners. Social media is one of the recent technological inventions that have had huge impact on the marketing sector (Solomon 2011, p. 29). Various firms have come to appreciate the fact that social media is can go beyond just marketing a firm to the target audience. Social media is gaining a new role in the corporate world. Various firms are considering the use of social media to manage crisis, especially if this involves rebuilding the image the firm that could have been destroyed by a negative publicity. This research therefore is focused on investigating the use of this new technology and its relevance in this new field. The researcher plans to draw recommendations to managements on the relevance of the social media and the best approach to take when using it to manage crisis.

Literature Review

Definition of Crisis

In order to understand the concept crisis management in organisations, a clear definition of organisational crisis must be given. Crandall et al (2010, p. 3) defined organisational crisis as is a low probability, high impact event that threatens the viability of the organisation and is characterised by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly. Thus, organisational crisis is a situation that occurs in unexpected circumstances and it should be addressed rapidly in order to lower the effects of the outcome. Seeger et al (1998, p. 49) noted that in the light of this definition, four important elements are highlighted including threat, surprise, need of change and limited time. Canton (2007, p. 96) asserts that, to achieve successful results in crisis management, knowledge of history, understanding of human nature and technical expertise play key roles.

According to Brändström et al (2002, p. 58), the past is a huge database as it includes experiences of both individuals and organisations, collective components which is the main domain of everything that happens in the world. It is believed that history highlights what happened before, what actions were taken and the outcomes (Canton 2007, p. 115). In this sense, history could be seen as very important source for the solution for crisis occasions. Although in theory it may seem to be a simple to plan of crisis management strategies based on historic events, it gets complicated when it gets more depth in the term organisational crisis.

Shrivastava (1993, p. 91) noted that as large organisations operate in multiple areas/industries including marketing, finance, public relations/FMCG, the integration between them is important for success. Thus, there are more to come rather than history. Pauchant and Mitroff (1992, p. 82) observes that there are three main aspects that should be taken into consideration which are the main causes of any type of crisis, including psychological, social and technological. According to Pearson and Clair (1998, p. 18), despite the fact that these aspects should handled together, most of the organisations and researches mainly focus on only one aspect.

From the psychological point of view, it is essential to mention that crisis mostly consists of cognition and trauma, based on individuals experiences (Pearson & Clair, 1998, p. 82). These individuals could be either employees or other stakeholders which includes customers. Dominos Pizzas crisis in 2009 was caused by an uploaded video on YouTube that was about contamination of pizzas in one of their branch. This could be a good example for this point of view. Park et al (2012, p. 119) stated that this crisis was caused by ill-minded employees. It spread to more than half million people, and this affected cognition of customers to Dominos Pizza and caused trauma. As a result, although Dominos successfully managed this crisis with use of social media, people started to blame Dominos Pizza management, and this threatened their loyalty to Dominos Pizza.

When it comes to social point of view, the reasons for emergence of crisis could be collective breakdown which consists of collapse in the social order, followership, ordinary beliefs and values (Pearson & Clair, 1998, p. 17). Moreover Pearson & Clair (1998, p. 48) argues that the end result of social crisis would be replacement of old beliefs and values. Thus, crisis happens in order to change beliefs and values, especially when the public is not satisfied anymore and asks for something new. The First French Revolution which happened in 1789  1799 could be a great example of social crisis. According to Schwartz (2012, p. 89), there were mainly six reasons for the crisis including clash between aristocrats and bourgeoisies. As a result of this revolution, new models of government and civil rights were established, there were socio-economic changes, and there were great changes in ideas and political culture (Schwartz, 2012, 90).

The technological point of view suggests two points. First, rather than understanding technology as advanced tools; it is understood as advanced management policies, procedures, routines and practices (Pearson & Clair 1998, p. 73). Second, it is seen as great production, for example advanced way of communicating with customers, and at the same time it is seen as a great destruction. Thus, technology could either be crisis controller or be crisis creator. In Exxon case in which one of their tankers spilled at least 500,000 gallons, this was caused by technological advances. Similarly, Toyotas success story in recall crisis which was caused by technology again, solved by advanced communication systems, could be good positive example. According to Hines (2010, p. 39), Toyota used social media to address to problems of their customers by being active 24/7, responding to all problems they face during this process in both Twitter and Facebook. Moreover, Hines (2010, p. 57) observes that this effective use of social media sites give boost to Toyotas word of mouth reputation and volume of social searches.

Definition of Public Relations

According to Pelsmacker et al (2005, p. 28), marketing communication mix is a mixture of activities that is used in order to increase sales and brand equity. Pickton and Broderick (2005, p. 19) states that marketing communication mix or promotion mix consists of six important elements which are advertising, personal selling, direct marketing, internet promotion, sales promotion and public relations. Moloney (2000, p. 29) says that there is no clear definition of practice and theory of public relations as there is cultural differences between lands. However, Vercic et al (2001, p. 58) says that it is possible to get a universal definition with the help of two approaches in public relations which are United States approach and European view. Vercic et al (2001, p. 38) notes that United States based definition are only based on relationship management. Hutton (1999, p. 28) explained that public relations should be defined in three-dimensional framework in order to analyse theory and practice of public relations by encouraging integration in the field. Thus, combination of United States approach and European view could give a clear definition. In this sense Jobber (2010, p. 595) defined public relations as follows:

A company is dependent on many groups if it is to be successful. The marketing concept focuses on employees and distributors, but the needs and interests of other groups such as customers, shareholders, the local community, the media, government and pressure groups are also important. Public relations are concerned with all of these groups and may be defined as: The management of communications and relationships to establish goodwill and mutual understanding between and organization and its public.

The definition above includes more than marketing as it goes beyond marketing and changes into whole business. White (1991, p. 117) noted that public relations prepares a great ground to execute marketing strategies with the help of good communication with interior and exterior subjects of the company including media, public, government, customers, distributors, suppliers/stakeholders, shareholders, banks. In order to provide good communication with interior and exterior subjects, companies use several activities.

These activities include publicity, corporate advertising, seminars, publications, lobbying and charitable donations (Jobber, 2010, p. 29). Lesly (1998, p. 68) discussed that companies need good public relations and doing these activities in order to increase prestige and reputation, promote the products, deal with issues and opportunities, show kindness to government, employees, customers, suppliers and distributors, overcome misconceptions, deal with unfavourable publicity and finally to attract and keep good customers. The main purpose of this dissertation is to understand how public relations strategies deal with issues and create opportunities. As all these purposes are integrated each other, if company dealt with issues and as a result if they could create opportunities, they would provide aid for all other missions partly.

Theoretical Approach to Public Relations: Open Systems Approach & Two-Way Symmetrical Communication

Before mentioning Open Systems Approach (OSA), it essential to explain Closed Systems Approach (CSA) in order to understand differences and benefits that they provide in different ways. First, in thermodynamics it is assumed that closed systems will never transfer matter inside or outside, so the system will always keep the same amount of matter (Perrot 2008, p. 58). Thus, the reaction completes without changing in terms of the amount of matter. According to Cutlip et al (2006, p. 93) some of the public relations strategies are just like closed systems in thermodynamics and they give their reactions regardless of the occasion. Thus, it could be same and routine. Another point, closed systems give reaction when the system receives a new input, in thermodynamics case it could be change of pressure or heat (Perrot 2008, p. 18). When it is looked from the public relations point of view, it is rational to mention that these strategies are highly based on the changes of input (Cutlip et al 2006, p. 29). This type of public relations strategies called reactive programs and they are set to give reaction when there is something to respond.

As this dissertations main purpose is to highlight how use of social media affects crisis management strategies, the theory open systems should be mentioned as it contains a feedback system which exactly public relations strategies need and involves social media in it. Unlike closed systems, in thermodynamics it is assumed that opened systems can transfer matter inside or outside which means it can be different in terms of the amount of matter at the end of the reaction. Center & Jackson (2003, p. 30) stated that oppositely to CSA, the companies which adopted OSA  proactive programs are eager to regulate and modify themselves according to changes in the environment. Lerbinger (2006, p. 18) noted that OSA could be achieved by integrating public relations and public affairs. As a result of this integration, organisations can attain absorbency through interacting with environment and society. Hendrix (2004, p. 37) argued that companies sometimes can choose CSA over OSA as it seems cheaper in terms of management in the short run, however most of the times responding to a spontaneously emerging crisis with reactive program costs much more expensive. Furthermore, proactive programs provides companies to deal with a problem and can arise opportunities out of that crisis (Hendrix 2004, p. 61). As it is one of the most important tasks for public relations and crisis management, it is essential to say being proactive is very important.

In order to apply proactive programs two-way symmetrical communications becomes crucial (Grunig 2002, p. 72). Before explaining two-way symmetrical communications, its base concept, dialogic communication theory should be explained. It is essential to mention dialogic communication theory as Kent and Taylor (1998, p. 38) mentioned, it is the product and two-way symmetrical communications is the process. If the product itself is not understood clearly, it would be hard to understand process. Johannesen (1971, p. 93) defined dialogue as a conversation between 2 or more people and described dialogue perspective as focusing on behaviours of those participants to each other. According to Kent and Taylor (1998, p. 118), in order to have a successful dialogue, the participants main objective should be communicating with each other. Thus, if there was a misunderstanding between parties, it would become useless to have that dialogue. Also, Habermas (1984, p. 82) supported this view by stating that there could be a dialogue if and if only parties agree to work together in their way to goal. To sum up concept dialogue, it is an occasion where parties should have common goal which is to have a communication and should cooperate in the means of this goal. This is the first step to have two-way symmetrical communications.

According to Wilcox et al (2003, 92), the main purpose of two-way symmetrical communications is to ensure communications is two-way with impartial effects. With the aim of this purpose, it is important to understand how public identifies the organisation and to highlight what end results companies do have for the public regarding to public relations strategies of the company (Wilcox et al 2003, p. 48). As two-way symmetrical communications system is mainly based on a feedback program which involves sender and receiver, Hendrix (2004, p. 36) promoted two-way symmetrical communications system to most effective system of persuasion as it includes great level of engagement. Besides it has great level of source and receiver engagement, according to Gonzalez  Herrero & Pratt (1996, p. 58) if company is clearly seen as proactive, the company can minimise to get into crisis and it can lower the perception of guilty simultaneously. Wilcox et al (2003, p. 31) noted that this system has been used since 1960s and 1970s by several organisations and is the most effective system that Grunig proposed when it is compared with other three systems. This system is very crucial for the use of social media for the companies, as the use of social media necessitates good feedback mechanism as well.

Definition of Social Media

The term social media was broke down into two parts, social and media by Safko (2010, p. 56). It is stated that first term, social, meant to be human-beings need of get in contact with other human-beings. Second term, media, is the tools that human-beings use in order to get in contact with other human beings. Hence, as a whole social media means, using of all technologies effectively to create a bound between human-beings in order to satisfy basic social needs such as creating a connection and relationship between them. As a part of social media, there is a term called by social network sites and defined by boyd and Ellison (2008, p. 211) as: social network sites as web-based services that allow individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system. The nature and nomenclature of these connections may vary from site to site. There are many social network sites currently such as Facebook, Twitter, YouTube, Instagram etc. and there were many social network sites as well before these social network sites emerged including SixDegrees, Live Journal, MiGente etc (see figure 2.4.1.). Figure 2.4.1 only shows the important social networking sites, however according to Kaplan & Haenlein (2009, p. 48) it started in 1979 with the launch of Open Diary. Same authors stated that the social media that we know shaped after the invention of MySpace and Facebook.

As the definition suggests the backbone of the system is the same for all network sites however aim and nomenclature could make difference. According to Tuten (2008, p. 20) the main similarity of social communities is they are social. Moreover Tuten (2008, p. 21) stated: they thrive when the members participate, discuss, share, and interact with others as well as recruit new members to community. Sunden (2003, p. 49) noted that very basic feature that all social network sites have is, unique profile page where people construct themselves in online environment. The necessary information is age, location, sex, interest and a section to add extra points to explain more about them (Sunden 2003, p. 49). For example, in Facebook people type additional info in the about me section and in Twitter people type their additional info in the bio section which appears in their profile page.

Next step that Boyd & Ellison (2008, p. 29) explained is the having connection in these sites which refers to friends most of the time. However, people do not have to be friends necessarily, the term friends refers to any connections even those people had only met and have nothing beyond (Boyd 2006, p. 49). For instance, in Facebook these connections called Friends, in Twitter it is Followers and in LinkedIn it is Connections. According to Safko (2010, p. 110) there are 15 social media categories including social networking, publishing, photo sharing, audio sharing, video sharing, microblogging, livecasting, virtual worlds, gaming, productivity applications, aggregators, Really Simple Sindication, search, mobile and interpersonal. Every sub social networking is for different purpose. In example, through YouTube; people can share, promote and comment on video clips, through Decision Virginia; people can discuss political issues, through Facebook; people can share their life events with others including photo, video posts and comments.

Social Medias Relationship with Marketing

According to American Marketing Association (2007, p. 119) marketing is: the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. As it was explained in the theoretical approach to public relations, dialogue happens between 2 or more people and to have successful dialogue people should share same targets. Marketings very main objective is create and increase the value by exceeding customer expectations, however communicating and delivering play key role in this process. As there is misunderstanding between parties, brand image will be misleading as well.

As it was noted in 2.4 definitions of Social Media, people started to use several abstract, web based social environments. They started to share memories, life experiences by posting photos, videos and texts, started to share their taste of music or started finding jobs by creating their business profiles in business network sites. As a result of this, a new era in the Internet started and people are not only using internet for information, they started get in contact with each other through web.

Few years ago, marketing experts were discussing companies should not focus purely on social media as people assume that everybody was involved in social media. Forbes (2011, p. 39) discussed this matter under the heading Myth 1 and stated that although 80 per cent of the people heard about social media, everyone is not involved in with it. Meredith (2012, p. 28) discussed that currently the situation rapidly changed and it is a common decision that many people use social media however, now there is a discussion that only young people use social media. Same author stated that this belief is wrong and 50 per cent of the users of Facebook are older than 35 and Qualman (2012, p. 28) noted that fastest growing age range in terms of membership age is 55  65 years old range. According to Noor Al  Deen & Hendrics (2010, p. 117), social media websites such as Facebook, YouTube, Twitter, MySpace and others have grown and still growing sharply and at the same time adoption of the organisations and people is incredible. Here are the some facts about social media stated by Qualman (2012, p. 39).