Crises and Crisis Management: Integration, Interpretation, and Research Development
Abstract
Organizational research has long been interested in crises and crisis management. Whether focused on crisis antecedents, outcomes, or managing a crisis, research has revealed a number of important findings. However, research in this space remains fragmented, making it difficult for scholars to understand the literature’s core conclusions, recognize unsolved problems, and navigate paths forward. To address these issues, we propose an integrative framework of crises and crisis management that draws from research in strategy, organizational theory, and organizational behavior as well as from research in public relations and corporate communication. We identify two primary perspectives in the literature, one focused on the internal dynamics of a crisis and one focused on managing external stakeholders. We review core concepts from each perspective and highlight the commonalities that exist between them. Finally, we use our integrative framework to propose future research directions for scholars interested in crises and crisis management.
An organizational crisis—an event perceived by managers and stakeholders as highly salient, unexpected, and potentially disruptive—can threaten an organization’s goals and have profound implications for its relationships with stakeholders. For example, BP’s Gulf oil spill harmed its financial performance and reputation, and it redefined its relationship with customers, employees, local communities, and governments. Similarly, Target’s consumer data breach caused financial and reputational damage to the company, and the crisis spurred large-scale changes in the way electronic records are now processed and stored. Because of these implications, organizational research from a variety of disciplines has devoted considerable attention to crises and crisis management, working to understand how and why crises occur (Coombs & Holladay, 2002; Perrow, 1984; Weick, 1993), and how organizations can manage them to reduce harm (Bundy & Pfarrer, 2015; Coombs, 2007; Kahn, Barton, & Fellows, 2013). Organizational research has also considered a number of important crisis outcomes, including stakeholders’ perceptions of organizational reputation, trust, and legitimacy (Coombs, 2007; Elsbach, 1994; Gillespie & Dietz, 2009; Pfarrer, DeCelles, Smith, & Taylor, 2008), organizational learning and adaptation (Lampel, Shamsie, & Shapira, 2009; Veil, 2011), and financial performance and survival (D’Aveni & MacMillan, 1990; Marcus & Goodman, 1991).
However, despite sustained interest across multiple disciplines, recent commentary on the field suggests that “we have only just begun to scratch the surface in our understanding” of crises and crisis management, and encourages further consideration of the theoretical mechanisms at work (Coombs, 2010: 479; Pearson, Roux-Dufort, & Clair, 2007). Additionally, research in this area has been criticized for its lack of theoretical and empirical rigor, given that many of its conclusions and prescriptions are derived from case studies or anecdotal evidence (Coombs, 2007; Sellnow & Seeger, 2013). Finally, many scholars continue to lament a silo effect, noting that researchers from different perspectives often talk past one another without capitalizing on opportunities to build cross-disciplinary scholarship (James, Wooten, & Dushek, 2011; Jaques, 2009; Kahn et al., 2013). As such, there is little consensus and integration across fields of study, numerous and sometimes conflicting prescriptions abound, and debates continue regarding the relevant antecedents, processes, and outcomes associated with crises and crisis management.
The purpose of this article is twofold: First, we review and integrate the literature on crises and crisis management from multiple disciplines, including strategic management, organization theory, and organizational behavior as well as public relations and corporate communication. Second, we contribute to scholarship by specifying a framework that incorporates two dominant perspectives found in the literature. The first perspective is internally oriented toward the technical and structural aspects of a crisis, while the second perspective is externally oriented toward managing stakeholder relationships. Our review reveals that these perspectives have developed largely independently, and we identify numerous opportunities for integration. Ultimately, our framework serves as a foundation for future cross-disciplinary research as well an effective tool for practitioners.
Method and Review Framework
To conduct our review, we performed an extensive and integrative search of articles published in major organizational academic journals, with certain boundary conditions to make the review pertinent to management and organizational scholars. Pearson and Clair’s (1998) Academy of Management Review article has been a foundation of subsequent developments in the literature; therefore, we used their article as our starting point. We cover the time period from 1998 to 2015 with a few exceptions, primarily to reference seminal research.
Following the recommendations of Short (2009), we primarily focused our review on the following journals: Academy of Management Journal, Academy of Management Review, Administrative Science Quarterly, Journal of Management, Journal of Management Studies, Organization Science, and Strategic Management Journal. To identify relevant articles from these outlets, we conducted full-text searches on the terms crisis, crises, and crisis management. We then identified and categorized critical themes to generate a set of articles for inclusion. This involved removing articles that did not primarily focus on crises or crisis management in their research questions, hypotheses, or propositions. We also extended our methodology by searching the references of the articles identified in our initial search as well as searching for research that cites these articles (cf. Johnson, Schnatterly, & Hill, 2013; Short, 2009). This led us to include a number of influential books, relevant articles in other respected journals, and research from public relations and communication. Overall, we sought to collect the work that is most relevant to management and organizational scholars.
Despite a diversity of perspectives and intellectual traditions, our analysis of the multiple definitions of crises and crisis management over the past 20 years reveals convergence (see Heath, 2012; James et al., 2011; Jaques, 2009; Pearson & Clair, 1998; and Sellnow & Seeger, 2013, for detailed definitional reviews). Drawing from this convergence, we define an organizational crisis as an event perceived by managers and stakeholders to be highly salient, unexpected, and potentially disruptive. We also recognize that crises have four primary characteristics: (a) crises are sources of uncertainty, disruption, and change (cf. Bundy & Pfarrer, 2015; James et al., 2011; Kahn et al., 2013); (b) crises are harmful or threatening for organizations and their stakeholders, many of whom may have conflicting needs and demands (cf. Fediuk, Coombs, & Botero, 2012; James et al., 2011; Kahn et al., 2013); (c) crises are behavioral phenomena, meaning that the literature has recognized that crises are socially constructed by the actors involved rather than a function of the depersonalized factors of an objective environment (cf. Coombs, 2010: 478; Gephart, 2007; Lampel et al., 2009); and (d) crises are parts of larger processes, rather than discrete events (cf. Jaques, 2009; Pearson & Clair, 1998; Roux-Dufort, 2007). Additionally, we recognize that crisis management broadly captures organizational leaders’ actions and communication that attempt to reduce the likelihood of a crisis, work to minimize harm from a crisis, and endeavor to reestablish order following a crisis (Bundy & Pfarrer, 2015; Kahn et al., 2013; Pearson & Clair, 1998).
Definitional convergence aside, a number of scholars prior to and throughout our review period have noted a lack of integration across disciplines and perspectives (cf. Jaques, 2009). For example, Shrivastava (1993: 33) highlighted a “Tower of Babel” effect, arguing that there are “many disciplinary voices, talking in so many different languages to different issues and audiences” that it becomes difficult to build cross-disciplinary theory and policy guidelines. More recently, Pearson and colleagues (2007: viii) worried that the “virtual galaxy of critical concepts” resulting from this lack of coordination not only may impede on the ability to build theory and aid practice but also risks the “legitimacy and credibility” of the field as a whole. James and colleagues (2011: 457) echoed this concern in their review of crisis leadership, noting that “fragmentation has prevented a widely accepted understanding of, or commitment to, a common research paradigm in the field of crisis management.”
From our review of the literature, we have identified two primary perspectives that focus on different aspects of crises and crisis management and that draw from different theoretical traditions to answer distinct research questions. The first perspective, which we label the internal perspective, focuses on the within-organization dynamics of managing risk, complexity, and technology (e.g., Bigley & Roberts, 2001; Gephart, Van Maanen, & Oberlechner, 2009; Pearson & Clair, 1998; Perrow, 1984; Starbuck & Milliken, 1988). For these scholars, crisis management involves the coordination of complex technical and relational systems and the design of organizational structures to prevent the occurrence, reduce the impact, and learn from a crisis. In contrast, the second perspective, which we label the external perspective, focuses on the interactions of organizations and external stakeholders, largely drawing from theories of social perception and impression management (e.g., Bundy & Pfarrer, 2015; Coombs, 2007; Elsbach, 1994; Pfarrer, DeCelles, et al., 2008). According to this perspective, crisis management involves shaping perceptions and coordinating with stakeholders to prevent, solve, and grow from a crisis.
While sharing a number of core assumptions and commonalities that we detail below, the internal and external perspectives have largely evolved independently. Therefore, we frame our review around these two dominant perspectives and highlight a number of opportunities for integration. We present our framework in Figure 1, which categorizes the literature into internal and external perspectives and is situated around three primary stages of a crisis: precrisis prevention, crisis management, and postcrisis outcomes. The articles featured in our review are outlined in Table 1, and more detailed tables are available in the online appendix.
Figure 1 Internal and External Perspectives of the Crisis Process
Note: The dashed arrows represent understudied relationships and opportunities for future research.
We detail our model below while synthesizing commonalities among the perspectives and offering directions for future research. First, we review the literature that has considered how organizations can reduce the likelihood of a crisis, which we label the precrisis prevention stage. In particular, we highlight research on organizational preparedness from the internal perspective and research on stakeholder relationships from the external perspective. This research is also summarized online in Tables 1a and 1b.
Second, we focus on the crisis management stage, which considers the actions taken by managers in the immediate aftermath of a crisis.1 From our literature review, we recognize that the internal perspective focuses on crisis leadership, while the external perspective focuses on stakeholder perceptions of the crisis. This research is also summarized online in Tables 2a and 2b.
The final component of our model focuses on the postcrisis outcomes stage. The literature from the internal perspective has highlighted the role of organizational learning following a crisis, while the literature from the external perspective focuses on social evaluations as outcomes (e.g., assessments of reputation, legitimacy, and trust). Although not pictured in Figure 1, we also note that both perspectives consider other tangible organizational outcomes, such as turnover and performance. This research is also summarized online in Tables 3a and 3b.
Stage 1: Precrisis Prevention
Internal Perspective: Organizational Preparedness
Precrisis prevention research from the internal perspective generally draws from the work of Perrow (1984) and others to highlight the inevitability of crises due to the complexity of modern organizational life. We highlight two specific topics: organizing for reliability and the roles of organizational culture and structure in how an organization can prepare for a crisis.
Organizing for reliability
One influential stream of research focuses on high-reliability organizations (e.g., Bigley & Roberts, 2001; Gittel, Cameron, Lim, & Rivas, 2006; Weick & Sutcliffe, 2001; Weick, Sutcliffe, & Obstfeld, 1999). The overarching thesis from this stream is that organizations can orient themselves—via changes in culture, design, and structure—to prevent system breakdowns that may lead to crises. In this sense, a high-reliability organization has the capability to manage unexpected events, which results from a cognitive and behavioral process of collective managerial “mindfulness” (Weick et al., 1999: 37; Weick & Sutcliffe, 2001). While often studied in volatile industries or environments (e.g., nuclear power, military, NASA, air traffic control, SWAT teams, and emergency health care), “high reliability” can apply to any organization interested in managing complexity and seeking to avoid crises.
For example, Bigley and Roberts (2001) focused on three aspects of high-reliability organizations: mechanisms that allow for the alteration of formal structures, leadership support for improvisation, and methods that allow for enhanced sensemaking. As the authors noted,
to the extent an organization has the capacity to implement preplanned organizational solutions rapidly enough to meet the more predictable aspects of an evolving incident, potential reaction speed is increased, depletion of cognitive and other resources is reduced, and the probability of organizational dysfunction is limited. (Bigley & Roberts, 2001: 1297; also see Madsen, Desai, Wong, & Roberts, 2006; Roberts, Madsen, & Desai, 2007)
Building on this premise, other scholars have focused on the factors that may limit an organization’s ability to organize for reliability, such as managers’ emotional and cognitive limitations (Kahn et al., 2013; Roux-Dufort, 2007), the number of organizational disruptions (Rudolph & Repenning, 2002), the availability and use of organizational resources (Marcus & Nichols, 1999), and the roles of practices and structures used to promote reliability (Lin, Zhao, Ismail, & Carley, 2006; Vogus & Welbourne, 2003).
Organizational culture and structure
Research from the internal perspective has also recognized additional factors that may make crises more likely, including an organization’s culture, governance, and compensation structure (Ashforth & Anand, 2003; Greve, Palmer, & Pozner, 2010; Harris & Bromiley, 2007; O’Connor, Priem, Coombs, & Gilley, 2006; Pfarrer, DeCelles, et al., 2008; Pfarrer, Smith, Bartol, Khanin, & Zhang, 2008; Schnatterly, 2003; Zhang, Bartol, Smith, Pfarrer, & Khanin, 2008). For example, Greve and colleagues (2010) and Ashforth and Anand (2003) argued that an organization’s culture can be more accepting of misconduct, often resulting from managerial aspirations or power contests. Similarly, in her study of corporate governance structures, Schnatterly (2003) found that certain governance practices—including the clarity of policies and communication—were more effective at preventing white-collar crime than other governance structures, such as increasing the percentage of outsiders on the board. Finally, research has also shown that certain executive compensation arrangements—including the use of out-of-the-money stock options—may encourage financial fraud and risk taking to increase the likelihood of a crisis (e.g., Harris & Bromiley, 2007; O’Connor et al., 2006; Wowak, Mannor, & Wowak, 2015; Zhang et al., 2008).
Summary
Three elements emerge from the internal perspective’s focus on organizational preparedness: First, organizing for high reliability is often treated as a cognitive and behavioral task. Second, numerous studies suggest that high-reliability organizations are more capable of preventing crises. Third, other factors may influence the likelihood of a crisis occurring, including organizational culture and structure. While not directly studied, it can be assumed that the cultural and structural factors increasing the likelihood of a crisis also make it more difficult to organize for reliability. Testing this assumption provides an excellent opportunity for future research. For example, scholars could consider how different compensation or governance structures influence the process of organizing for reliability.
We also note that research on high-reliability organizations specifically, and organizational preparedness in general, has been criticized for lacking specificity (Leveson, Dulac, Marais, & Carroll, 2009). For example, Bigley and Roberts (2001: 1295) recognized the “somewhat abstract” nature of their theory and suggested that a more “comprehensive and detailed treatment” of high-reliability organizations is needed. Our review of the literature suggests that this detailed treatment has yet to fully materialize. Additionally, most high-reliability studies are case based and focus on atypical, highly volatile environments, limiting their generalizability (Leveson et al., 2009). As such, examinations of more “typical” organizations remain underdeveloped (cf. Vogus & Welbourne, 2003).
External Perspective: Stakeholder Relationships
In contrast to the internal focus on organizational preparedness, precrisis research from the external perspective highlights the role of stakeholder relationships. We identified two streams within this area that focus on positive and negative relationships, respectively.
Positive stakeholder relationships
Precrisis prevention research from the external perspective argues that maintaining positive relationships with stakeholders can reduce the likelihood of a crisis (Clair & Waddock, 2007; Coombs, 2007; Pfarrer, DeCelles, et al., 2008; Ulmer, 2001; Ulmer & Sellnow, 2002). For example, Clair and Waddock (2007: 299) proposed a “total responsibility management” approach, which focused on the importance of recognizing an organization’s responsibilities to stakeholders in order to enhance crisis detection and prevention (also see Alpaslan, Green, & Mitroff, 2009). Using similar logic, Kahn and colleagues (2013) theorized how relational cohesion, flexibility, and open communication between internal and external stakeholders can help prevent crises (also see Ulmer, Sellnow, & Seeger, 2011). Finally, Coombs (2015: 107) noted that “stakeholders should be part of the prevention thinking and process,” and that stakeholders can help in both identifying and mitigating the risks that may lead to a crisis.
Whereas research in this area is theoretically diverse, empirical investigations remain limited. While some studies provide evidence that positive stakeholder relationships can mitigate the potential damage from a crisis—including Ulmer’s (2001) examination of an industrial fire at Malden Mills and Coombs and Holladay’s (2001) study of stakeholder relationships in accident crises—few have directly examined the link between positive relationships and the likelihood of a crisis occurring. For example, future research could examine the relationship between corporate social performance (CSP) and the likelihood of a crisis. That is, if CSP is an indicator of having positive stakeholder relationships, then organizations with higher CSP scores should experience fewer crises, all else equal.
Negative stakeholder relationships
In contrast to the positive view detailed above, other scholars have considered the negative side of stakeholder relationships. For example, Mishina, Dykes, Block, and Pollock (2010) found that prior positive organizational performance increases stakeholders’ expectations for future positive performance and that organizations may engage in illegal behavior in order to meet these expectations (also see Lehman & Ramanujam, 2009). Greve and colleagues (2010: 64) highlighted this social pressure as an example of “strain theory,” which posits that “actors resort to misconduct when they are unable to achieve their goals through legitimate means.” As such, the pressures associated with meeting stakeholders’ expectations may encourage organizational behavior that can lead to a crisis.
Additionally, scholars have also considered how negative relationships with stakeholders may trigger a crisis in the form of retaliatory action, including protests, activism, boycotts, and lawsuits (James & Wooten, 2006; Lind, Greenberg, Scott, & Welchans, 2000; McDonnell & King, 2013). For example, James and Wooten (2006) considered negative relationships in the context of discrimination lawsuits, and McDonnell and King (2013) studied the influence of an organization’s positive and negative relationships in the context of consumer boycotts.
Summary
The external perspective’s focus on stakeholder relationships in the precrisis prevention stage suggests the following: Fostering positive stakeholder relationships is essential, as negative relationships can cause or escalate crises. Positive relationships also need to be founded on reasonable expectations and open lines of communication in order to avoid the strain associated with untenable goals. Establishing such a foundation is likely the responsibility of both organizations and stakeholders, as organizations must focus on managing expectations and communicating transparently, while stakeholders need to be mindful of inflated expectations and associated biases (Bundy & Pfarrer, 2015). Of course, while managing expectations may help prevent a crisis, this may have negative implications on organizational performance. For example, shareholders may perceive attempts to manage expectations negatively, particularly in the aftermath of positive performance. As such, an opportunity for future research would be to investigate the potential tradeoffs that exist between organizations’ attempts to manage stakeholders’ expectations, the likelihood of a crisis, and financial performance.
Synthesizing the Perspectives
The internal perspective’s focus on organizational preparedness and the external perspective’s focus on stakeholder relationships share a number of commonalities. For example, organizing for reliability is a process of developing managerial mindfulness generally focused on the internal operational environment. Similarly, research on stakeholder relationships emphasizes the importance of being mindful of relational expectations and obligations. Both perspectives also focus on identifying behavioral and social constraints that may interfere with mindful organizing and relationship building (e.g., biases, limitations, and expectations).
Despite these commonalities, we found only limited evidence of research that considers both perspectives together (cf. Clair & Waddock, 2007; Gittell, Cameron, Lim, & Rivas, 2006; Kahn et al., 2013; Jacques, Gatot, & Wallemacq, 2007; Pfarrer, DeCelles, et al., 2008; Roux-Dufort, 2007). Thus, questions for future research remain. For example, how might efforts to organize for reliability influence the way in which an organization manages its external stakeholder relationships? We know that organizing for reliability requires a focus on flexibility and core responsibilities (Weick et al., 1999). Both of these traits are also critical for positive stakeholder relationships (Clair & Waddock, 2007; Ulmer et al., 2011). Therefore, it appears that organizing for reliability should enhance an organization’s ability to foster positive external stakeholder relationships and that the presence of these positive relationships would enhance an organization’s ability to organize for reliability.
An alternative possibility arises, however, when considering managers’ bounded rationality and cognitive limitations (Cyert & March, 1963; Weick & Sutcliffe, 2006). Executives focused on developing internal structures to manage complex systems may be limited in their ability to foster a wide range of positive stakeholder relationships. Similarly, managers focused on their various stakeholders may be unable to focus on managing complex internal systems. As such, it is possible that a balanced focus on internal and external crisis prevention may be difficult to accomplish in practice.
Stage 2: Crisis Management
Moving from the precrisis prevention stage, a significant portion of research from the internal and external perspectives has focused on the processes associated with the crisis management stage (see Figure 1 and Table 1 as well as Tables 2a and 2b in the online supplemental material). Before considering the differences between the internal and external perspectives, we note that the factors that work to prevent a crisis, including organizational preparedness and positive stakeholder relationships, may also facilitate crisis management after a triggering event. As such, many of the manuscripts reviewed above are also applicable here.
Internal Perspective: Crisis Leadership
As Kahn and colleagues (2013: 377) noted, “traditional models of crisis management are rooted in a classic engineering mandate: identify and fix the problems in inputs and operations that lead to ineffective outputs.” While crisis management research has largely moved beyond this mandate, the internal perspective continues to emphasize a “fix-the-problem” approach, often by focusing on the factors that influence within-organization crisis leadership. For example, James and colleagues (2011: 458) highlighted the importance of “crisis handlers,” focusing not just on the “tactical aspects of management” during a crisis but also on the “responsibilities of leading an organization in the pre- and post-crisis phases.” In particular, the authors emphasized the relationship between crisis perceptions and crisis leadership, suggesting that leaders who frame crises as threats react more emotionally and are more limited in their efforts, while leaders who frame crises as opportunities are more open-minded and flexible (also see Brockner & James, 2008; Dane & Pratt, 2007; James & Wooten, 2005, 2010; Mitroff, 2007; Sayegh, Anthony, & Perrewe, 2004; Vaaler & McNamara, 2004). Others have focused on characteristics of the crisis leader—such as charisma—and how such characteristics may influence internal cohesion during a crisis (Howell & Shamir, 2005; James et al., 2011; Pillai & Meindl, 1998).
Scholars have also considered how leaders at high-reliability organizations manage a crisis, recognizing that the ability to adapt and change mental models in an emergency situation can enhance coordination and effective communication (Majchrzak, Jarvenpaa, & Hollingshead, 2007; Roberts et al., 2007). This suggests that not only does organizing for reliability help to prevent a crisis, but it can also enhance leadership efforts in the event that one occurs.
Conditional factors on crisis leadership
Research has also considered a number of conditional factors that may affect internal leadership during a crisis. For example, Withers, Corley, and Hillman (2012) suggested that a quality board may reduce the impact of a crisis and enhance leadership efforts. Similarly, Dowell, Shackell, and Stuart (2011) found that organizations with independent and smaller boards, which are more capable of enacting dynamic change, were less likely to experience failure following a crisis. The authors also found that more powerful CEOs, who are better able to make rapid decisions, reduced the likelihood of failure.
Moving beyond governance factors, Lin and colleagues (2006) demonstrated that the complexity of an organization’s structure and task environment combines to influence crisis management efforts, both positively and negatively. S. Lee and Makhija (2009) emphasized the role of strategic flexibility in crisis management, which, like organizing for reliability, can enhance leadership efforts. Others have considered how more tangible aspects of an organization, such as size and age, influence crisis management, the greater of which may inhibit leadership efforts during a crisis (Lange & Washburn, 2012; Rhee & Valdez, 2009). Finally, researchers in corporate communication and public relations have recently begun to focus on the role of internal crisis communication, showing the negative effects of neglecting employees during a crisis (Mazzei & Ravazzani, 2015) as well as the positive effects of engaging with them (Mazzei, Kim, & Dell’Oro, 2012), including the possibility of employees becoming outspoken defenders of the organization (Frandsen & Johansen, 2011; Johansen, Aggerholm, & Frandsen, 2012).
Summary
The internal perspective suggests that leaders are critical to the crisis management process and that a number of factors influence their ability to lead. However, much like the research on organizational preparedness, research on crisis leadership is often criticized for its lack of specificity. Indeed, attempts to empirically examine the recommendations of this literature, such as the development of organizational structures to aid with information processing and resource allocation, have not found strong support (cf. Lin et al., 2006). As Lin and colleagues (2006: 611) noted, “more exploration is needed to extend current organizational theories” of crisis management, and “the way in which organizations should be designed to encourage adaptation” needs to be reconsidered (2006: 614). In their critique, they highlighted that critical and specific questions about how organizations should structure and coordinate to enhance crisis leadership remain unanswered (Lin et al., 2006).
Additionally, how different internal factors combine to influence crisis management also remains unclear. For example, as we noted above, research suggests that both a strong board (Withers et al., 2012) and a powerful CEO (Dowell et al., 2011) should enhance internal crisis leadership. However, strong boards may work to curb CEO power, and powerful CEOs often seek to reduce board impact (Shen, 2003). Furthermore, research also shows that powerful CEOs may take more risks (Zahra, Priem, & Rasheed, 2005), which may enhance the likelihood of a crisis (Mishina et al., 2010). Thus, the factors that lead to more effective internal crisis management may also paradoxically lead to more crises.
External Perspective: Stakeholder Perceptions
In contrast to the focus on internal crisis leadership, a great deal of research from the external perspective has focused on how stakeholders perceive and react to crises and how organizations influence these perceptions. Below we consider multiple elements of this research.
Crisis response strategies
Numerous studies captured in our review focus on how organizations use crisis response strategies, or the “set of coordinated communication and actions used to influence evaluators’ crisis perceptions” (Bundy & Pfarrer, 2015: 346). Much of this literature draws from attribution theory, which states that individuals are motivated to search for the causes of unexpected and negative events, and these attributions of responsibility can invoke negative emotions and reactions (Weiner, 1986). Utilizing this logic, Coombs’ situational crisis communication theory (SCCT) argues that the more responsibility stakeholders attribute to an organization for a crisis, the greater their negative perceptions (Coombs, 1995, 2007; Coombs & Holladay, 2002). Experimental research confirms this premise (Coombs & Holladay, 1996, 2001, 2002, 2006; Dean, 2004), and a number of management studies have drawn from the tenets of attribution theory and SCCT to consider the role of crisis attributions (e.g., Bundy & Pfarrer, 2015; Lange & Washburn, 2012; Mishina, Block, & Mannor, 2012; Withers et al., 2012).
While attributions are critical for understanding stakeholders’ perceptions of a crisis, research also recognizes that attributions are “a negotiated feature of crisis management, and, therefore, subject to social influence” (Bundy & Pfarrer, 2015: 352). Thus, an organization’s response strategy plays a central role in this process. Scholars have developed a number of typologies to capture organizations’ responses (e.g., Benoit, 1995; Coombs, 1995, 2006; Elsbach, 1994, 2003; James & Wooten, 2006; Lamin and Zaheer, 2012; Marcus & Goodman 1991; Pfarrer, DeCelles, et al., 2008; Sutton & Callahan, 1987; Zavyalova, Pfarrer, Reger, & Shapiro, 2012).
Given their similarities, a useful way to integrate them is along a continuum from defensive to accommodative. As highlighted by Bundy and Pfarrer (2015: 352), “response strategies that accept less responsibility—generally labeled defensive—attempt to [reduce] an organization’s perceived association with a crisis,” while “strategies that accept more responsibility—generally labeled accommodative—[acknowledge] an organization’s causal role in a crisis.” Examples of defensive strategies include denial, defiance, and scapegoating. Examples of accommodative strategies include apologies, expressions of sympathy, and promises of corrective actions. Examples of strategies in the middle of the continuum—which emphasize limited organizational responsibility—include decoupling and reducing offensiveness via justifications and excuses.
Research has also considered the effects of timing and the source of the crisis response. For example, research has empirically shown that negative perceptions are reduced when the organization is the first to release crisis information (Claeys & Cauberghe, 2012; Pfarrer, Smith, et al., 2008). Other scholars have shown that organizations may engage in anticipatory response strategies to soften negative reactions, including bundling negative news with more positive information (Elsbach, Sutton, & Principe, 1998; Graffin, Carpenter, & Boivie, 2011; Graffin, Haleblian, & Kiley, 2016). Still others have focused on stage models that feature an organization’s response strategy as a central element for reintegration (cf. Bertels, Cody, & Pek, 2014; Brown, Buchholtz, & Dunn, 2016; Elsbach, 2012; Gillespie & Dietz, 2009; Gillespie, Dietz, & Lockey, 2014; Pfarrer, DeCelles, et al., 2008; Poppo & Schepker, 2014; Rhee & Kim, 2012).
Finally, it is important to recognize that crisis response strategies can involve functional communication and actions, including information that helps stakeholders avoid harm, in addition to more symbolic management efforts that attempt to manage the organization’s public image (cf. Bundy & Pfarrer, 2015; Coombs, 2015; Zavyalova et al., 2012). Despite this recognition, however, we see little research that has considered an organization’s behavioral response in combination with its verbal response (James & Wooten, 2006; Ulmer, 2001). Instead, the vast majority of researchers, particularly those using quantitative empirical designs, focus only on crisis communication or on organizational actions directed at stakeholders. Additionally, we note that much of the research in this domain has not considered how stakeholders’ biases, heuristics, and emotions influence their perceptions and the effectiveness of response strategies. This, however, is beginning to change. For example, Jin and colleagues (Jin, 2010; Jin, Pang, & Cameron, 2012) showed that stakeholders respond with different emotions that may influence the effectiveness of a response strategy (also see Bundy & Pfarrer, 2015; Claeys & Cauberghe, 2014; Coombs & Holladay, 2007; Sinaceur, Heath, & Cole, 2005).
Crisis type
One of the critical factors influencing stakeholders’ perceptions is the type of crisis being experienced (Coombs, 2007). As Bundy and Pfarrer (2015: 351) argued, individuals categorize crises into types as part of a “heuristic simplification process in which evaluators intuitively combine past experiences and expectations to reduce the complex nature of a crisis into easier-to-understand cognitive schemas.” Like with response strategies, this recognition has given rise to numerous typologies that focus on the situational characteristics of the crisis, including its perceived controllability, severity, undesirability, and intentionality (e.g., Brown et al., 2016; Bundy & Pfarrer, 2015; James & Wooten, 2006; Lange & Washburn, 2012; Mitroff, Pauchant, & Shrivastava, 1988; Shrivastava, Mitroff, Miller, & Miglani, 1988). For example, SCCT classifies crises into three categories based upon perceived crisis responsibility: victim crises (weak crisis responsibility), accidental crises (moderate crisis responsibility), and preventable crises (strong crisis responsibility). Empirical findings confirm that stakeholders make these types of judgments (Coombs & Holladay, 2004).
Endowed positive evaluations
Another factor influencing how stakeholders react to crises is an organization’s endowment of positive evaluations (e.g., reputation, legitimacy, status, celebrity, social approval, and trust). Research has argued and shown that positive evaluations can act as either a “buffer” to reduce negative perceptions or as a “burden” to increase negative perceptions (cf. Bundy & Pfarrer, 2015; Coombs, 2007; Coombs & Holladay, 2006; Dean, 2004; Decker, 2012; Jones, Jones, & Little, 2000; H. Kim & Yang, 2009; McDonnell & King, 2013; Mishina et al., 2012; Pfarrer, Pollock, & Rindova, 2010; Rhee & Haunschild, 2006; Rhee & Valdez, 2009; Schnietz & Epstein, 2005; Zavyalova, Pfarrer, Reger, & Hubbard, 2016: 255-256). In the case of a buffer, stakeholders’ affinity toward an organization may cause hesitation in attributing responsibility or may dampen negative perceptions. In the case of a burden, stakeholders’ heightened attention and expectations may cause negative perceptions when those expectations are violated.
Empirical evidence on the buffer-versus-burden argument is equivocal. Some research supports the argument that favorable social evaluations can buffer organizations from negative perceptions. For example, Coombs and Holladay (2001, 2006) found a negative correlation between stakeholders’ perceptions of crisis responsibility and an organization’s endowed reputation, and Pfarrer and colleagues (2010) found that high-reputation and celebrity organizations suffered fewer market penalties than other organizations following a material negative earnings surprise (also see Love & Kraatz, 2009; McDonnell & King, 2013). However, other empirical research has found that reputation and other social evaluations may act as a burden (Brooks, Highhouse, Russell, & Mohr, 2003; Dean, 2004; Graffin, Bundy, Porac, Wade, & Quinn, 2013; Rhee & Haunschild, 2006; Wade, Porac, Pollock, & Graffin, 2006). For example, Rhee and Haunschild (2006) found that high-reputation automobile manufacturers were punished more than other organizations following a product recall.
These conflicting findings can be explained in a number of ways. The most plausible explanation is that the relationship is conditional, with different social evaluations acting as both a burden and a buffer depending on certain factors, such as the magnitude or type of crisis (Coombs & Holladay, 2006; Graffin et al., 2013; McDonnell & King, 2013), an organization’s response strategy (Bundy & Pfarrer, 2015; Dean, 2004), an organization’s crisis history (Coombs, 2007; Pfarrer, DeCelles, et al., 2008), and heterogeneity among stakeholders (Lamin & Zaheer, 2012; Mishina et al., 2012). For example, Rhee and Haunschild (2006) found that reputation was a burden in the context of automobile recalls. However, their findings held only with “severe” recalls “representing significant hazard” to consumers (Rhee & Haunschild, 2006: 106). Perhaps the severity of the crisis enhanced the likelihood that reputation would act as a burden. In contrast, Pfarrer and colleagues (2010) found that reputation acted as a buffer in the context of earnings surprises. In this case, perhaps reputation acted more as a buffer for investors, who perceived the violation as less severe. In addition, neither study considered the organization’s response strategy, which may have exerted an endogenous influence on the findings (among other potential factors). Therefore, research that considers the multiple conditions that influence stakeholders’ perceptions is needed.
Stakeholder identification
Stakeholders’ level of identification with an organization has also been shown to influence their perceptions of a crisis (Zavyalova et al., 2016). For example, stakeholders’ high identification with an organization can lead them to “circle the wagons,” while low identification can lead stakeholders to point the finger at an afflicted organization (Zavyalova et al., 2016: 271). However, the benefit of high identification has been shown to reduce as a crisis intensifies (Zavyalova et al., 2016). Others have focused more on processes related to identification. For example, Gutierrez, Howard-Grenville, and Scully (2010) detailed a process of split identification in their study of the Catholic Church, which allows stakeholders to remain normatively committed to an organization while simultaneously criticizing its practices and structures. Petriglieri (2015) identified a related process in her study of the BP Gulf oil spill in which organizational members reassess their relationship with a crisis organization in detailed pathways toward reidentification or disidentification. Finally, Lange and Washburn (2012) considered how stakeholders’ identification with either the affected parties or the implicated organization can influence attributions, and Withers and colleagues (2012) examined identification in predicting how directors react to a crisis.
Powerful stakeholders and the media
Research has argued and shown that powerful and active stakeholders play a role in influencing the perceptions of other stakeholders (Pfarrer, DeCelles, et al., 2008; Zavyalova et al., 2012). For example, stakeholders can use their positions to sway public opinion via boycotts and protests, and “social control agents,” such as regulatory agencies, can influence other stakeholders’ crisis perceptions (Greve et al., 2010: 56; McDonnell & King, 2013; Yue et al., 2013). The media also play a central role in how crises are interpreted (Adut, 2005; Greve et al., 2010; Hoffman & Ocasio, 2001; Rhee & Valdez, 2009; Wiersema & Zhang, 2013). For instance, Graffin and colleagues (2013) showed how the media were important for the public in making sense of a scandal. Additionally, research is beginning to consider the influence of social media on an organization’s crisis management efforts (cf. Utz, Schultz, & Gloka, 2013; Veil, Buehner, & Palenchar, 2011).
Crisis spillover
Finally, several scholars have also focused on crisis spillovers, or when an innocent organization is contaminated by a crisis due to shared characteristics, such as industry membership (cf. Barnett & King, 2008; Greve et al., 2010; Haack, Pfarrer, & Scherer, 2014; Jonsson, Greve, & Fujiwara-Greve, 2009; Yu, Sengul, & Lester, 2008). For instance, Zavyalova and colleagues (2012) found that innocent organizations received more negative press following toy recalls by competitors, and Barnett and King (2008) found that chemical spills from one organization contaminated stakeholders’ perceptions of other industry participants. Defensive and ceremonial actions can limit this spillover effect (Desai, 2011; Zavyalova et al., 2012), as can the presence of strong governance and self-regulatory institutions (Barnett & King, 2008; Paruchuri & Misangyi, 2015). However, organizational similarity can exacerbate this effect, including via director interlocks, shared organizational forms, high association, and geographic overlaps (Desai, 2011; Diestre & Rajagopalan, 2014; Kang, 2008; Paruchuri & Misangyi, 2015; Yu et al., 2008). Research has also shown that stakeholders’ crisis perceptions may be mitigated by the regularity of occurrence within an industry or the broader environment. This dampening effect has been found with downsizing (Ahmadjian & Robinson, 2001; Love & Kraatz, 2009), options backdating (Wiersema & Zhang, 2013), product recalls (Zavyalova et al., 2012), and financial restatements (Scholz, 2008).
Summary
Several takeaways emerge from the literature on stakeholder perceptions during the crisis management stage: First, stakeholders’ perceptions are largely predicated on their attributions. Second, research has argued and shown that an organization’s response strategy can influence stakeholders’ perceptions. Third, a number of additional factors influence crisis perceptions (including the crisis type and endowed social evaluations, among others).
As with other segments of the literature, this area has been criticized because many of the studies are either theoretical or case based, and those that are empirical typically consider only one or a few of the factors discussed above. Therefore, our understanding of the “big picture” remains incomplete. This research has also been questioned from a normative point of view, such that (a) a focus on managing perceptions may distract from more functional aspects of crisis management, like finding and correcting the underlying problems, and (b) this focus may also encourage organizational defensiveness (Bundy & Pfarrer, 2015). We consider both of these issues in our Future Research Development section below.
Synthesizing the Perspectives
The internal and external perspectives share commonalities in the way they approach crisis management. For example, a key conclusion from both perspectives is that managers’ and stakeholders’ cognitive capabilities are reduced in a crisis. In addition, both perspectives have emphasized the emotional reactions that accompany a crisis, which may induce pessimism, defensiveness, feelings of trauma and betrayal, ignorance, and grief (Kahn et al., 2013; Mitroff, 2007; Roux-Dufort, 2007; Vaaler & McNamara, 2004). Such reactions make crisis management more difficult, exacerbating internal and external coordination efforts.
In sum, the internal and external perspectives focus on different factors that may influence sensemaking during a crisis. A key difference between the perspectives, however, is that the internal view focuses on managers’ sensemaking efforts to resolve the crisis, and the external view focuses on stakeholders’ sensemaking and perceptions. Yet, like with the precrisis prevention stage, we see only limited attempts at integration (cf. Frandsen & Johansen, 2011; Johansen et al., 2012; Kahn et al., 2013; Mazzei et al., 2012; Mazzei & Ravazzani, 2015; Petriglieri, 2015). Thus, a number of opportunities exist. For example, crisis response strategies are likely more effective when paired with sincere internal efforts to remedy the problems that led to the crisis (Gillespie & Dietz, 2009; James & Wooten, 2006; Pfarrer, DeCelles, et al., 2008; Rhee & Kim, 2012). Moreover, effective leadership of external stakeholders is also likely to translate into effective leadership of internal audiences, and vice versa (cf. Bies, 2013). For instance, an organization that communicates compassion to crisis victims may provide a source of motivation and pride to its employees (Seeger & Ulmer, 2002). We consider these and additional opportunities in our Future Research Development section below.
Stage 3: Postcrisis Outcomes
Moving from the crisis management stage, we now consider postcrisis outcomes (see Figure 1 and Table 1 as well as Tables 3a and 3b in the online supplemental material). Research from the internal perspective has focused primarily on organizational learning, while the external perspective has focused primarily on social evaluations. As mentioned above, it is important to recognize that the factors associated with the previous stages can also influence crisis outcomes. As such, many of the manuscripts reviewed in Stages 1 and 2 are also applicable here.
Internal Perspective: Organizational Learning
As part of its focus on reliability and leadership, the internal perspective emphasizes organizational learning as a critical crisis outcome. For example, James and colleagues (2011) highlighted the importance of moving beyond the status quo to generate new competitive opportunities by learning from a crisis. Ulmer and colleagues’ (2011: xiii) discourse of renewal theory also emphasizes the “potential for opportunity, renewal, and growth” as an outcome of crisis management. Below we consider several elements of this literature.
The learning process
Lampel and colleagues (2009) described learning as a deliberate and an emergent process that can focus both on the event itself and also on developing organizational capabilities beyond the crisis event. However, learning from crises presents a challenge. On the one hand, crises can trigger a focus on building new knowledge (cf. Christianson, Farkas, Sutcliffe, & Weick, 2009). For example, Madsen and Desai (2010) concluded that crises can increase motivation and probabilistic search for causes and solutions, and Zahra and George (2002) argued that crises can increase individuals’ absorptive capacity and ability to learn. Relatedly, Madsen (2009) showed that prior experience reduces the likelihood of experiencing a crisis in the future.
On the other hand, because crises are unexpected and rare, they may lead to “erroneous inferences” and resistance to learning (Lampel et al., 2009: 840). For example, a crisis may induce a reliance on prior beliefs and cognitive rigidity, which may reduce innovative thinking and creativity (Amabile & Conti, 1999; Billings, Milburn, & Schaalman, 1980; D’Aveni & MacMillan, 1990; Starbuck, 2009; Veil, 2011). Similarly, Shepherd (2003) discussed how business failure, as a form of crisis, could prompt grief, which interferes with the ability to learn from the event. Finally, Haunschild, Polidoro, and Chandler (2015) showed that crisis learning may focus on certain aspects (such as safety) at the expense of others (such as innovation), and that the effects of learning decline over time.
Conditions on the learning process
While research remains somewhat equivocal on the ability of organizations to learn from a crisis (e.g., Lampel et al. 2009), there is evidence that learning is highly conditional. For example, Madsen and Desai (2010) argued that the magnitude of a crisis may serve as a source of motivation to increase learning. Using airline accident data, Haunschild and Sullivan (2002) showed that crises with heterogeneous causes led to better searches for causality and helped avoid simplistic attributions. Baum and Dahlin (2007) showed that performance farther from aspirations induced more learning after a crisis, while performance near aspirations led to less. Rerup (2009) argued that attention-focused organizational designs increased learning (also see Veil, 2011). Finally, others have considered how public inquiries and discourse influence learning (cf. Elliott & Smith, 2006; Gephart, 2007; Maguire & Hardy, 2013).
Research also suggests that learning is a multilevel phenomenon. For example, Wilson, Goodman, and Cronin (2007) theorized about group dynamics in the learning process (also see Brockner & James, 2008; Vera & Crossan, 2004). Similarly, Beck and Plowman (2009) highlighted the role of middle managers in the learning process, and Kahn et al. (2013) argued that learning is achieved only through effective multilevel relational management.
Vicarious learning
Finally, a number of scholars have focused on vicarious learning that results from crises experienced by peer organizations. For example, J. Kim and Miner (2007) showed that vicarious learning was more effective when peer organizations were in the same geographic market. Similarly, Madsen (2009) showed that vicarious learning was possible but that this type of learning depreciates with time, and Baum and Dahlin (2007) showed that vicarious learning was a function of aspirations and social relationships. Given the similarities between vicarious learning and industry spillovers, we see their interplay as an excellent area for integration. For example, scholars could consider whether learning is facilitated in cases of spillover, as organizations seek to help each other remedy core problems, or whether learning is diminished, as organizations distance themselves from peer offenders to avoid a negative association.
Summary
Postcrisis research from the internal perspective shows that learning from a crisis is possible, subject to conditions that may influence the types of lessons learned and the degree to which lessons are internalized. As a “relatively new” topic (Lampel et al., 2009: 835), there are a number of opportunities for future research. One opportunity could examine the contingencies simultaneously, perhaps in a fuzzy-set qualitative comparative analysis model (an idea to which we return in our Future Research Development section below). Lampel and colleagues also suggested that research in this space is “confined almost entirely to the task environment in which these organizations operate” (2009: 843). To get beyond within-organization processes, they suggested that more research needs to embrace broader group, industry, and institutional processes of learning.
External Perspective: Social Evaluations
Much of the research from the external perspective considers an organization’s social evaluations as key outcomes of a crisis, including assessments of organizational reputation, legitimacy, and trust. The general consensus is that crises hurt social evaluations (cf. Love & Kraatz, 2009; Pfarrer et al., 2010; Rhee & Haunschild, 2006; Zavyalova et al., 2012; Zyglidopoulos, 2001). However, as we alluded to above, there is variance in the findings, and a number of researchers have considered conditions that might influence the degree of damage. Research in management and communication has particularly focused on the influence of an organization’s crisis response strategy, which we consider next.
Crisis response strategies and social evaluations
Research has argued and shown that stakeholders’ negative perceptions are minimized when an organization’s response strategy matches stakeholders’ attributions of responsibility for the crisis (Bundy & Pfarrer, 2015; Claeys & Cauberghe, 2014; Coombs, 1995; Coombs & Holladay, 1996, 2004). For example, when stakeholders perceive high crisis responsibility, an organization is advised to provide a more accommodative response strategy in order to minimize stakeholders’ negative reactions (Bundy & Pfarrer, 2015; Coombs, 2007; Dardis & Haigh, 2009). Research in management has also considered the influence of crisis response strategies on specific social evaluations. For example, Pfarrer, DeCelles, and colleagues’ (2008) four-stage process focused on how an organization restores its legitimacy and reintegrates with stakeholders following a crisis, while Zavyalova and colleagues (2012) focused on the crisis management strategies an organization used following a toy recall to mitigate losses to its media reputation and social approval. Lamin and Zaheer (2012) found that the efficacy of a response strategy depends on the audience, either Wall Street or Main Street. Similarly, Mishina et al. (2012) argued that the effectiveness of a response strategy is contingent on the nature of the reputation assessment, recognizing that organizations have different reputations with different stakeholders.
Research on stakeholders’ perceptions of trust also reveals some important contingencies of response strategy effectiveness. For example, P. Kim, Ferrin, Cooper, and Dirks (2004) showed that more accommodative strategies were most effective for repairing trust after competence-based violations, while more defensive strategies were most effective after integrity-based violations (also see Brown et al., 2016; Gillespie et al., 2014; Gillespie & Dietz, 2009; P. Kim, Dirks, Cooper, & Ferrin, 2006; Tomlinson, Dineen, & Lewicki, 2004; Tomlinson & Mryer, 2009). Focusing on reputation, Mishina and his colleagues (2012) extended this logic to the organizational level of analysis. Relatedly, research in public relations and communication has recognized that stakeholders’ emotional reactions to a crisis affect their cognitive appraisals and shape their social evaluations of an organization (Coombs & Holladay, 2007; Jin, 2010; Jin et al., 2012; Sinaceur et al., 2005). In particular, this research suggests that stakeholders’ emotions are heightened when they perceive a crisis as more severe, which makes it more difficult for the organization to repair it relationship with these stakeholders.
Summary
Two primary takeaways emerge from the research investigating social evaluations as postcrisis outcomes: An organization’s response strategy can be critical for managing social evaluations, and the more responsibility for a crisis that is attributed to the organization, the more damage can be expected.
While interest in this area is growing, there remain a number of opportunities. For example, even in the presence of a well-executed crisis response strategy, organizations are likely to experience negative social evaluations (Bundy & Pfarrer, 2015). However, in rare instances, a well-handled crisis can improve social perceptions (cf. Ulmer, 2001). Unfortunately, research has yet to systematically identify how and under which conditions social evaluations might improve after a crisis (cf. Ulmer et al., 2011). In other cases, a crisis can lead to stigmatization, a perception that an organization possesses a fundamental, deep-seated flaw (Devers, Dewitt, Mishina, & Belsito, 2009; Pozner, 2008). Again, however, it is not clear under which conditions a crisis may be more or less stigmatizing. We recommend that examining extreme positive or negative social evaluations may provide critical insight to the literature.
Synthesizing the Perspectives
Like with the research on precrisis prevention and crisis management, we see little integration between the internal and external perspectives in the postcrisis outcomes literature. Given that both perspectives focus on evaluations—in terms of learning outcomes and social judgments—we see potential in looking at them in combination. For example, consider an organization that willingly shares its lessons learned with other organizations. Such an effort may foster goodwill and increased participation from external audiences, who are likely to perceive this behavior as a genuine act of penance (cf. Gephart, 2007; Pfarrer, DeCelles, et al., 2008).
Future research could also consider the role of learning when an organization successfully limits damage to its social evaluations following a crisis. In this case, an organization may be less motivated to learn from the crisis, thereby increasing the likelihood of crisis reoccurrence. Alternatively, research has suggested that crises can increase feelings of anger or resentment among stakeholders (Mitroff, 2007; Coombs & Holladay, 2005). Such feelings may cause stakeholders to be more obstructionist in their reactions to a crisis, focusing on seeking justice and assigning blame as opposed to promoting opportunities for growth (Bertels et al., 2014; Pfarrer, DeCelles, et al., 2008). Given that stakeholder participation is crucial to the learning process (cf. Gephart, 2007), such a response is likely to hinder organizational learning.
Additionally, the investigation of crises’ more tangible outcomes may provide an excellent opportunity for integration of the internal and external perspectives in the postcrisis stage. For example, much of the research on board and managerial turnover is externally oriented and considers how the removal of leaders is an act of organizational penance that resonates with stakeholders (Arthaud-Day, Certo, Dalton, & Dalton, 2006; Connelly, Ketchen, Gangloff, & Shook, 2016; Cowen & Marcel, 2011; Gangloff, Connelly, & Shook, 2016; Gomulya & Boeker, 2014; Marcel & Cowen, 2014; Pozner, 2008; Wiersema & Zhang, 2013; Withers et al., 2012). Incorporating an internal perspective, it would be valuable to consider the influence of board and managerial turnover on both organizational learning and social evaluations. For example, while turnover may improve reputation, learning may suffer, given the loss of key sources of knowledge and insight.
Finally, crisis management research continues to focus on financial and social performance as well as organizational survival as critical tangible outcomes (Diestre & Rajagopalan, 2014; Dowell et al., 2011; Lamin & Zaheer, 2012; F. Lee, Peterson, & Tiedens, 2004; Madsen, 2013; Paruchuri & Misangyi, 2015; Pfarrer et al., 2010; Zyglidopoulos, 2001). Even when the performance implications of a crisis are not directly studied, they are often considered via other outcomes of interest that influence performance, including organizational learning and social evaluations. Despite this recognition, we believe a model that simultaneously considers the influence of a crisis on learning, social evaluations, and performance would be valuable.
Future Research Development
As our review has explicated, crises have substantive implications for organizations and stakeholders. However, fragmentation persists in the literature, and our review revealed that researchers continue to focus on disparate perspectives with limited attempts to build more integrated and generalizable scholarship. To address these issues, we developed a comprehensive framework of the crisis process (Figure 1), provided detailed tables of the literature associated with each perspective (Table 1 and Tables 1a through 3b available online), offered a summary and synthesis of the internal and external research in each stage of the crisis process, and highlighted a number of future research opportunities throughout our review.
Over the course of our review, we also recognized that several main categories emerged as key areas of opportunity for future research. First, future scholars can focus on integrative opportunities, not only by integrating the internal and external perspectives but also by considering how macro-organizational, micro-organizational, and other disciplinary research (including research from public relations and communication) can be integrated. Second, our framework can serve as a foundation for future scholars to conduct more multilevel research on crises and crisis management, focusing on how individual-, organizational-, and environmental-level factors interact to influence the crisis and crisis management process. Third, our review revealed a number of contingent factors that influence the processes associated with crises and crisis management. Despite empirical challenges that have led researchers to examine these factors mostly in isolation, we believe that future research should consider more complex theoretical and empirical models in which multiple factors are considered together.
Integrative Opportunities
Our review indicates that research on crises and crisis management continues to exist in silos, focusing on either an internal or an external perspective. Therefore, as noted throughout our review, a number of opportunities remain for future research to integrate these perspectives. We identified several potential research questions, including the following: How does organizing for reliability influence an organization’s external relationships? Can external crisis response strategies improve internal leadership efforts, and vice versa? Does increasing the transparency of an organization’s learning efforts help with defending an organization’s reputation? How does turnover simultaneously influence the ability to learn and improve reputational assets?
Another integrative opportunity for future research involves recognizing that crisis management “best practices” may be invisible to scholars who focus only on crisis failures, regardless of which perspective they employ (Bierly & Spender, 1995; Pearson & Clair, 1998). Researchers could advance crisis management scholarship by studying organizations that have proactively averted crises, perhaps by focusing on perspectives that emphasize both organizational resilience and stakeholder management. Research should also consider empirical opportunities beyond case study designs. For example, an empirical approach could use propensity score matching techniques (Guo & Fraser, 2010) to longitudinally compare organizations that experienced a crisis with similar organizations that did not. Significant differences between the two groups—in terms of predicting the likelihood of crisis—could shed light on the organizational and relational characteristics that help prevent crises while also being sensitive to endogeneity issues.
Additionally, research can build on elements of organizational learning and renewal to consider the factors that may make a crisis a positive phenomenon. As Pearson and colleagues (2007: vii) noted, “over time, many organizations have learned that optimally managed crises can bring positive recognition and enhanced stakeholder value, while poorly managed crises can short-circuit organizational viability.” Examples include Malden Mills’ handling of an industrial fire (Ulmer, 2001) and Johnson & Johnson’s handling of Tylenol product tampering (Snyder & Foster, 1983). However, it is not yet clear how different technical, structural, relational, and cognitive factors align to create such opportunities (see Mitroff, 2005, for more practical guidance). Are these positive outcomes based on unique circumstances, or is there something more systematic going on? What can we learn about these outcomes by broadly considering the different internal and external elements at play?
Integrative crisis management research also has the opportunity to consider additional theoretical frames. For example, to our knowledge, crisis management research has yet to systematically explore the real-time discourse and information exchange that occurs between an organization and its stakeholders as they make sense of a crisis. A discursive lens (e.g., Phillips & Oswick, 2012), combined with advanced content analysis techniques (Duriau, Reger, & Pfarrer, 2007)—including quantitative narrative analysis (Franzosi, 2010) or statistical natural language processing (Manning & Schutze, 1999)—could shed light on these exchanges. For example, research on crisis response strategies has examined how stakeholders are influenced by organizational responses but has not robustly considered how stakeholders influence organizations’ response choices. Similarly, research has not robustly considered the influence of switching response strategies or organizational attempts to deliver multiple strategies to distinct audiences at different points in time (cf. Bundy & Pfarrer, 2015; Massey, 2001). Alternatively, research could look at social networks (Scott, 2012) and how existing organization–stakeholder relationships influence crisis interpretations and reactions (Desai, 2014; Zavyalova et al., 2012).
A number of related theoretical frames also remain largely untapped in the crisis and crisis management literature. For example, few scholars have considered the role of resource dependence in crisis situations. Resource and power differentials may constrain the way in which stakeholders or partners respond to a crisis. Research on strategic actions and processes may also inform research on crisis management. For example, a number of strategic management concepts are often framed using language that evokes a crisis (including corporate turnarounds, succession events, and mergers and acquisitions). How do the strategies used to manage such events differ from the strategies used to prepare for, manage, and learn from a crisis (cf. Connelly et al., 2016; Graffin et al., 2011)? Others might consider the role of dynamic capabilities in crisis situations (Teece, 2007), particularly given the literature’s focus on “organizational learning, adaptation, and performance” (Hodgkinson & Healey, 2011: 1501). For example, how do organizational decision-making processes, routines, and other “best practices” influence crisis management effectiveness?
Finally, we encourage more integrative research that considers the normative and ethical implications of crises and crisis management (cf. Sellnow & Seeger, 2013). Crises raise a number of issues related to responsibility, fairness, trust, and justice. Organizational research generally takes an instrumental approach to crisis management, focusing on efficiency and effectiveness as opposed to moral and normative obligations. Indeed, it seems only a handful of authors have built theory around normative obligations (cf. Koehn, 2013; Ulmer et al., 2011). Therefore, future research should consider both instrumental and normative perspectives to better understand crises and the crisis management process. The potential for conflict is clear, particularly when considering that efficiency concerns may diverge from moral and normative guidelines (cf. Bundy & Pfarrer, 2015). Future research can investigate how such conflicts occur and how managers work to resolve them while being sensitive to different stakeholders.
Multilevel Opportunities
Multilevel theorizing and related empirical studies also remain a fruitful area for future research on crises and crisis management. Like the silos that have arisen from a focus on either the internal or the external perspective, we also find fragmentation in terms of levels of analysis. Many scholars focus on individual, organizational, or environmental effects but not on how these effects may interact. This is despite the fact that research from both the internal and external perspectives generally position both crises and crisis management as collective phenomena (cf. Morgeson & Hoffmann, 1999; Morgeson, Mitchell, & Liu, 2015). As such, we encourage future research to consider the interactions among individuals, groups, organizations, and institutions that influence crises and crisis management. For example, future research could examine how employees and middle managers respond to upper management’s use of crisis response strategies. It is possible that an organization’s official response contradicts what individual employees perceive. Such inconsistencies between public response strategies and private knowledge may lead to employee withdrawal or counterproductive behaviors. In contrast, managers that respond with compassion may encourage more empathy and enthusiasm from internal stakeholders (cf. Goodstein, Butterfield, & Neale, 2016; Muller, Pfarrer, & Little, 2014). As mentioned above, this may also encourage better and more effective learning and perhaps improve an organization’s ability to organize for reliability.
Additionally, for many stakeholders, crises and crisis management may represent more of an individual-level experience. For example, how a procurement manager responds to a crisis might be more influential to his or her clients than how an organization responds in the media. In this case, an individual manager’s efforts to maintain relationships may directly influence an organization’s performance and reputation following a crisis. Similarly, an additional opportunity for multilevel theorizing is the influence of social media on the crisis management process (Utz et al., 2013). For instance, it would be interesting to consider how different communications—from the organization itself, from those within the organization, and from various stakeholders—interact to influence crisis perceptions (cf. Jacques et al., 2007).
A final multilevel opportunity is to consider the dynamic nature of crisis management within and across organizations, stakeholders, and levels of analysis. For example, researchers could employ latent growth modeling techniques (Duncan, Duncan, & Strycker, 2013) to examine temporal changes in how organizations and stakeholders respond to crises over time. Future work could use similar techniques to examine cross-level differences in crisis perceptions to isolate the influence of individual managers on crisis response strategies and organizations on field and industry-level outcomes.
Opportunities to Study Contingent Effects
In their review of the crisis and crisis management literature, Pearson and Clair noted, “The crisis management literature, although replete with speculation and prescription, has undergone scant empirical testing” (1998: 73). Unfortunately, this trend has largely continued. While we do see the presence of more rigorous inductive empirical work, we found only a limited amount of large-scale empirical tests of the many theoretical prescriptions found in the literature. This may simply be a function of the phenomena in question. For example, Pearson and Clair also noted that “organizational crises are, by definition, infrequent events. When they do occur, organizations are reluctant to open current or past ‘wounds’ to external examination and speculation” (1998: 74). Additionally, many of the factors related to crises and crisis management are difficult to empirically capture (e.g., reliable organizations and effective learning).
Despite the empirical difficulties, we note that many of the factors that are influential in the study of crises and crisis management have yet to be tested simultaneously in large-scale and longitudinal empirical settings (cf. Goodstein, Butterfield, Pfarrer, & Wicks, 2014). While recent research has endeavored to include more factors (e.g., Lamin & Zaheer, 2012; Zavyalova et al., 2012, 2016), the empirical examination of multiple factors remains elusive. We believe that this elusiveness makes such an examination an excellent opportunity for future scholars.
In particular, we suggest that a configurational approach offers an excellent opportunity for future research to empirically consider the influence of these multiple factors (cf. Fiss, 2007; Greckhamer, Misangyi, Elms, & Lacey, 2008). Rather than asking if a certain factor influences crisis outcomes—as in traditional approaches—a configurational approach asks how different factors combine to influence crisis outcomes. For example, future research could use qualitative comparative analysis (cf. Fiss, 2007; Greckhamer et al., 2008) to consider how the crisis type combines with an organization’s endowed reputation, crisis history, response strategy, and other elements to influence organizational outcomes. Another opportunity is to consider how multiple factors combine to influence the likelihood of a crisis occurring, given that many of the studies in this space focus on the influence of a single factor. For example, a culture of misconduct based on managerial aspirations may be mitigated by appropriate governance structures.
Using this same approach, future research could also consider the conditional interdependencies that may exist between crisis stages. For example, scholars could simultaneously examine the different factors that influence crisis learning, including the cause of the crisis, its magnitude, the influence of vicarious learning, and the roles of leaders and other organizational members. Alternatively, research has yet to empirically consider an organization’s crisis response strategies as dependent variables (for theoretical treatments see Bundy & Pfarrer, 2015; Joshi & McKendall, 2016). As of yet, we do not fully understand why managers choose to be more defensive or accommodative. We believe that a configurational approach offers an opportunity to consider the factors that influence this decision.
Finally, research may also be able to use a configurational approach to consider multilevel factors. For example, research has shown that individual managerial characteristics—such as hubris and narcissism—may encourage risk taking that can lead to a crisis (Chatterjee & Hambrick, 2007; Hiller & Hambrick, 2005), and other scholars have shown that narrow-minded or reactive managers increase the likelihood of crisis (Sheaffer & Mano-Negrin, 2003). Considering these individual factors simultaneously with different organizational factors on a range of crisis outcomes (including learning, reputation, and performance) may reveal important sets of conditions that are critical to the processes associated with crises and crisis management.
Conclusion
Despite its implications for organizations and stakeholders, research on crises and crisis management remains fragmented. We have integrated research from multiple perspectives to bring coherence to this literature, and we have developed a holistic framework to better understand the crisis process. We have offered a number of future research directions and a comprehensive research agenda for scholars interested in crises and crisis management.
Acknowledgments
We would like to thank Miles Zachary for comments on an earlier draft of the manuscript. We are also grateful to associate editor Karen Schnatterly and two anonymous reviewers for their invaluable feedback and guidance.
Footnote
1. As noted above, we recognize that the term “crisis management” broadly captures managers’ behaviors in all stages of a crisis. However, and consistent with its colloquial use, for the remainder of the paper we use the term to reference the actions taken in the immediate aftermath of a crisis.
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