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Managing the Social Media Tsunami: Nestlé’s Reputational Crisis Management Battle versus Greenpeace Document Transcript

  • 1. Running Head: Managing the Social Media Tsunami: Nestlé’s Reputational Crisis Management Battle versus Greenpeace   Managing the Social Media Tsunami: Nestlé’s Reputational Crisis Management Battle versus Greenpeace Rodelio Concepcion California State University Fullerton
  • 2. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE I. 2   Introduction With the proliferation of Web 2.0, and recently the spread of social media, companies and organizations have seen how the online communication sphere can make or break a company’s reputation. Traditional crisis management and public relations practices have been put into test, and new ways of managing online stakeholders’ communications have been examined and created. Although traditinal media and communication’s best practices are likely to remain effective and useful in the social media sphere, some of these may need some adaptation or alteration. The growth of social media, such as Facebook, Twitter and Youtube, provides growth of another stakeholder relationship where marketers and communicators need to examine in order to tactically use effective ways of communicating with them. Otherwise, communications and actions can greatly affect a particular brand or company. Such has been the case of Nestlé against Greenpeace. Nestlé, being a large global company that manufactures and supplies food products, has always been involved in a number of issues and boycotts pertaining to product ingredients, environmental issues, economic impact and trade practices. In some of them, Greenpeace would be involved by routinely attacking Nestlé in the hopes that the said company would consider more ecologically and environmentally friendly practices. Such controversy involved Nestlé being accused by Greenpeace of using palm oil supplier Sinar Mars that caused continued deforestation in Indonesia, and that this accusation had been put on the online spectacle of Youtube and Facebook.
  • 3. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 3   Indeed, palm oil has been a huge issue in terms of sustainability for many years now that manufacturers have been dealing with despite the efforts of the Roundtable on Sustainable Palm Oil (RSPO) and improvements in responsible sourcing efforts made by a number of major food manufacturers and brands (Harrild, 2010). Greenpeace initiated a coordinated viral campaign and attack online questioning Nestlé’s irresponsible palm oil sourcing practices by targeting its KitKat brand. Nestlé’s steps in addressing the online campaign is a case that provides social media and online communication practitioners a basis on addressing stakeholder communications to manage a crisis and effectively communicate with the online audience, especially if activist groups back it up. II. Literature Review Reputation and crisis management have been defined and discussed in a number of literatures that help in providing explanation on how these two concepts are used in the field of marketing and communications. Reputation is often regarded as “a perceptual representation of a company’s past actions and future prospects that describe the firm’s appeal to all of its key constituents” (Fombrun, 1996, p. 165). The information that stakeholders get regarding the organization through the different interactions with the organization and the media, as well as through second hand information like word-of-mouth, weblogs or news develops reputation (Coombs & Holladay, 2007). In crisis situations, the damage of an organizations’ reputation is often positively related to the perceptions of responsibility for the crisis, or ‘crisis responsibility’ and specific
  • 4. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 4   characteristics of the crisis situation (Schultz, Utz & Göritz, 2011). In intentional crises situations, for example, the attribution of responsibility and therefore the danger of reputational threat is the highest (Coombs, 2004). Organizations in turn react on crises and reputational threats communicatively. Schultz, Utz and Göritz (2011; p. 21) further added that “analyses of such crisis responses argue that different crisis response strategies differentially affect a variety of important crisis communication outcomes including organizational reputation, but also anger, negative word-of-mouth and account acceptance”. Crisis communication research primarily tackles the interrelationships between crisis situations, communication strategies and crisis perceptions (Schultz, Utz & Göritz, 2011). In discussiong further what crisis communication is, Seeger, Sellnow, & Ulmer defined an organizational crisis as a “specific, unexpected and non-routine event or series of events that create high levels of uncertainty and threaten, or are perceived to threaten, an organization’s high priority goals” (as cited in Schultz, Utz & Göritz, 2011, p. 21). For Dowling, it disrupts the social order, affects the interaction of stakeholders with the organization, while for Patriotta, Gond, & Schultz, it tends to damage the organization’s reputation and legitimacy (as cited in Schultz, Utz & Göritz, 2011, p. 21). Byrd (2012) said that in order to build and maintain the trust of both internal and external publics, corporate communication practitioners should recognize that reputation management and relationship-building with shareholders and consumers are he first componenets that are needed to be given priority in
  • 5. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 5   order to be successful even in an unpleasant, hostile environment or situation. Byrd further added that maintaining the status of being on top and praised for corporate practices, behavior and social initiatives is not an immediate task for corporate communication practitioners, but that it is a constant, challenging operation of assessing the program, planning, executing and evaluating the program results. Crisis communication research often claims that the response strategies during a crisis should be less defensive and more accommodative, aside from providing further information regarding the crisis itself (Coombs & Schmidt, 2000; as cited in Schultz, Utz & Göritz, 2011). Schultz, Utz and Göritz (2011) also mentioned that it is assumed that a pronounced acceptance of thew responsibility of the crisis leads to more positive reactions from stakeholders and provides a favorable reputation to the organization. Furthermore, Jordan-Meier (2012) mentioned that communication is very vital during crisis situations. Furthermore, she argued, “how an organization communicates during a crisis can mean the difference between survival and failure. Appropriate and accurate communication is a must, particularly in our lightning-fast age, where information travels around the globe in minutes, if not seconds (p. 20).” Jordan-Meier (2012) continued to suggest a four-stage approach to deal with crisis in terms of the needed resources and required messages – breaking news (focusing on the details of the incident), the unfolding drama (immediate shift of focus to the victims – environment or people affected), the
  • 6. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 6   blame game (looking for who is responsible), and resolution and fallout (lesson learned). Crisis and reputation management take a different spin in terms of approaches with the proliferation of social media. Freberg (2012) says that “contemporary public relations practice, and crisis communications in particular, is being challenged by the emergence of social media. Although many of the best practices used in traditional media are likely to remain effective in the domain of social media, some may require adaptation (p. 416)”. Goolsby (2010) said that social media provides the means for creating new communities and for reenergizing old communities. These new communities formed by social media tend to be more aggressive, proactive, and free in voicing opinions, in the same way as old communities that has shifted their ground on social media. In terms of credibility of messages being seen on social media, Freberg (2012) further added that social media users tend to highly comply when messages originated from an organizational source than when it originated in a user-generated source. Hence, he concluded that “These results also sound a cautionary note to professionals developing crisis management plans. The possibility that unconfirmed information will carry the same weight as official, confirmed information leaves organizations quite vulnerable to rumor and misunderstanding (p. 421).” Aula (2010) suggests that a level of consideration should be applied by corporate executives as to the kinds of concrete reputation risks are produced by social media, what the consequences are when these risks materialize, how organizations should try to manage reputation risks emerging from social media,
  • 7. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 7   and whether organizations should have an ambient publicity strategy. She further added that “from the strategic management point of view, a major change will likely be the shift from a world of careful planning to one of continuous uncertainty and risks. Because of social media everything an organization does is profoundly public. Management of ambient publicity plays a central role in furthering a firm’s strategic goals as it builds relationships with stakeholders, represents their interests to produce a reputable company, and ultimately creates value for the firm by enhancing and maintaining a good reputation.” (p. 48). Byrd (2012) added that relationships are the most basic element that is taken cared of, nurtured and cultivated when different stakeholders participate in online communication. Byrd (2012, p. 247) further added that “With the internet came immense opportunity, and due to the explosion of social media, those tools pose not only opportunities, but also tangible risks to organizations. However, it is imperative that organizations that rely on consumers, donors or other types of public support, understand that the opportunities to engage constituents through social networks far exceed any risks.” However, not all instances appear to be a crisis, especially when it appears online. Coombs and Holladay (2012b) defines what they call as paracrisis that can “look like” a crisis and does require action from the organization. They added that a paracrisis does not immediately need to convene the crisis team and operate in a crisis mode, as the initial stage might just be a challenge. Challenge crises occur when stakeholders claim an organization is acting in an irresponsible or unethical manner (Lerbinger, 1997; as cited in Coombs and Holladay, 2012b). The
  • 8. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 8   challenge becomes a crisis when the “concern” becomes highly visible and attractive to a range of stakeholders. In the past, challenges began when stakeholders petitioned the organization and asked that their concerns be addressed. If the organization refused, the stakeholders would try to attract public attention by employing media advocacy (Ryan, 1991; as cited in Coombs and Holladay, 2012b). Coombs and Holladay (2012b) mentioned that it is necessary for organizations to be warned about using a social medium to address a paracrisis when the organization previously never has utilized that social medium, stimulate people to search for information about the paracrisis and the organization involved in the paracrisis in that social media, and use multiple, overlapping communication channels, including both social media and legacy media to provide stakeholders to experience the message more than once. Coombs, W. T., & Holladay, S. J. (2012a), in another study, argues that critical theory, buoyed by acceptance of its key concepts, its increasing access to presentation venues and journals sympathetic to once-marginalized, alternative perspectives, is poised to infiltrate the public relations orthodoxy. This possibility offers hope that once marginalized pluralistic approaches, especially critical public relations, may disrupt the colonization of the orthodoxy and infiltrate mainstream public relations. It is not a claim that organizations and activists have already reached an equal power; in fact, managers can still ignore allegations of activists or discredit their claims, and activists can continue using the power of advocacy. Coombs and Holladay’s (2012a) point is that “CSR and reputation provide potential leverage and make activists more salient to corporate managers.
  • 9. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 9   If activists can become more important to managers, activists become more significant to public relations researchers as well. There is pressing need for a greater understanding of activists, how they use public relations to gain power, and their effects on critical corporate assets such as reputations and CSR. The latent potential of activists to become more prominent actors in public relations legitimizes them as a focus for study” (p. 885). III. Research Questions This paper will examine the following research questions: 1. How important is transparency when addressing an issue via social media? 2. How should corporations such as Nestlé manage allegations, accusations and negative comments in social media? How did the approach to censor and regulate negative comments affect the company’s social media reputation and footprint? 3. How did Nestlé manage the company’s reputation vis-à-vis activist allegations from Greenpeach that are fueled further by social media? IV. Facts of the Case Prior to the social media campaign, Greenpeace had already been asking Nestlé to stop using a palm oil supplier that is known to consciously destroy Indonesian forests, however Nestlé kept silent on the request (Seibt, 2010). Thinking that it would give a more impact to catch Nestlé’s attention by using social media together with a more organized fashion of activities, Greenpeace's
  • 10. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 10   campaign against Nestlé was rolled out with a viral ad campaign, social media campaign and traditional on-the-ground activism targeting the company's AGM and offices in the UK and Europe. A video clip which shows an office worker biting into a KitKat containing an orangutan finger, which dripped blood onto a computer keyboard (Hickman, 2010) has been posted on video-sharing website YouTube on March 17, 2010 by Greenpeace UK. It also featured a disparaging version of the Kitkat logo with the word “Killer” on it. The 60-second clip ended with a play on Kit Kat's famous slogan: "Have a break? Give orangutans a break." The video clip can be accessed through http://www.youtube.com/watch?v=VaJjPRwExO8. Greenpeace claimed that Nestlé’s practices in sourcing its suppliers contribute to rainforest deforestation and used YouTube as a platform to shock viewers with a video that likens eating a Kit Kat to eating an orangutan. According to Ban (2010), Greenpeace criticized the company for sourcing palm oil from “companies that are thrashing Indonesian rainforests, threatening the lives of local people and pushing orangutans towards extinction.”. Aside from this, Greenpeace also created a provocative website, http://www.greenpeace.org/international/en/campaigns/climate-change/kitkat/. Nestlé’s attention was caught by the video, and asked Youtube to have the video removed due to copyright infringement, with the message, "This video is no longer available due to a copyright claim by Societe des Produits Nestlé S.A." Fueled by the momentum of the Greenpeace video, anti-Nestlé discussions move away from activist blogs and land on Nestlé’s facebook page. Nestlé then accused
  • 11. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 11   Greenpeace of inciting people and advocates to call, send e-mails and leave castigating comments on Nestlé's Facebook Page (Blanchard, 2010). The situation was worsened when a Nestlé representative managing its Facebook website threatened to delete any comments by users whose profile pictures used the modified and provocative version of the Nestlé logo, aiming to make it consistent with Nestlé’s censorship efforts across different online channels. This hostile approach provoked further harsh comments from Facebook users. The anti-Nestlé attack grew and moved wider as environmentally conscious and concerned Facebook users join the anti-Nestlé crowd. This then was further picked up by different blogs, online news websites and media organizations, which covered stories about the incident. The story was followed closely by specialist media, such as Greenbiz and Treehugger, as well as mainstream media such as the Guardian and newswires like Reuters (Harrild, 2010). Instead of trying to control further social media conversations, Nestlé’s social media team stepped back and adapted a different approach. They dealt with the short-term impact of the accusation by suspending its sourcing of palm oil from Sinar Mas. They then followed up with meetings with Greenpeace to open dialogues and provided them with details of its palm oil supply chains. To foster its long-term commitment of sustainability, Nestlé appointed Forest Trust, a credible non-profit organisation that helped the company when it came to liaising with Greenpeace as well as helping Nestlé to certify and audit the sustainability of its suppliers.
  • 12. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 12   In May 2010, Nestlé also joined the Roundtable for Sustainable Palm Oil, a partnership of companies and other parties aimed at eliminating unsustainable production. A year later Nestlé had also changed its marketing and communications strategy by hiring Pete Blackshaw for the new post of global head of digital and social media. Mr Blackshaw, a newcomer to Nestlé, was recruited to help provide a fresh perspective. V. Analysis Nestlé’s immediate response when Greenpeace posted the accusations geared away from discussing the issue at hand but tried to downplay it by claiming a different issue. While Nestlé has the right to protect its intellectual property as it see it applicable, censorship of criticisms by inciting copyright infringement as a disguise is seen as objectionable in the online and social media sphere. Nestlé’s action of removing comments further flamed the users of social media, as this was seen as a reflection of the curtailment of their freedom of expression. The incident also showed that Facebook as an open platform for discussions can go uncontrollable especially when provoked with threats of deleting comments. This provides a lesson to social media practitioners that the openness of the platform for Facebook users to post comments should never be threatened or compromised at all. Instead of trying to shut down the conversations on social media, a better solution in dealing with accusations is to be engaging with critics, listening to
  • 13. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 13   their concerns and addressing the issues. Nestlé learned about this the hard way by realizing how the act of shutting down social media backfires, especially when the activist giving accusations is an established organization such as Greenpeace whom a number of netizens and users of social media find credible in advancing causes related to sustainability. In this situation, Nestlé could have just let the postings and discussions get into social media, but make itself being highly involved in discussions by giving statements of what Nestlé is doing to address the accusations, or even investigate, and then give updates on the progress. Social media need immediate address from a company’s crisis team to let its users that the company is aware of the accusations and is conducting investigations. However, a bigger picture that Nestlé could show and focus much more attention is to show how to have a dialogue with Greenpeace not on social media, but perhaps on a sit-down conversation, and try to address and investigate the accusations. Before Greenpeace's campaign against Nestlé, some business leaders were already making clear statements about their standards and goals towards sustainable production of palm oil. When the crisis accusing Sina Mas of being unsustainable hit, some companies stepped up their efforts, disassociated themselves from Sinar Mas, and took a positive and engaging crisis management action. Nestlé could have been quick in doing the same, saying that they would disassociate themselves from Sinar Mas while an investigation is going on, and provide a clear message of commitment of its pro-sustainability stance.
  • 14. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 14   However, Nestlé was very quick in rectifying its mistakes. It shook up its social media and crisis communications team, and was able to give a cooperative stance as soon as the social media mistake occurred. Sales of Kitkat might not haveen majorly affected in the onset of the campaign, but the campaign proved how passive consent of people is greatly affected by the active minority whose opinions and accusations become very much prevalent and transparent in social media. For activist organizations, this only shows how their causes can gain more support from more people by mobilising them through the social media arena. VI. Conclusion The beginning of social media has left public relations and reputation management professional clueless as to what the rules of engagement would be in the aforementioned new platform. Most of the companies did not take the platform seriously that management of company’s social media presence were assigned to inexperienced staff. However, with a list of companies’ success and failed stories of engaging its stakeholders in social media, it only proves that social media presence for companies and brands is a serious matter that requires planning, training, preparation, focus and direction. With social media being present for quite sometime, and with a number of monumental and benchmarked cases of companies’ use and misuse of the platform, rules could have more or less been put into place as to how to deal with social media when a crisis, or a reputation accusation strikes.
  • 15. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 15   The rule of immediate attention and activation of crisis management team should be put into place as soon as crises affecting the company’s reputation attack. Companies should allow free flow of discussions and showcase an engaging and involved nature when dealing with comments in social media. But more important is for the company to highlight the steps that they take to be in touch with groups where the accusations come from, invite dialogues, and try to address every issue being thrown at them and investigate. Simply put, listening and talking are just the beginning of the plan. Action is still the best way to silence the detractors. Lastly, it does not hurt but rather it is for the gain of the company’s reputation admitting and showing responsibility on things that might eventually appear to be that of the company’s. The Nestlé and Greenpeace debacle only showed that crisis and reputation management in social media should still adapt some of the same best practices in traditional media. The incident involved the usual stakeholders that could have been present should the debacle is done in traditional media: advocates and activists, consumers, members of the media. However, the difference is that when a different paltform is used, there is a different approach in order to effectively utilize the said platform as far as corporate communication is concerened. Social media might have different rules of engagement, but the principles and practices should still be the same. Companies should immediately engage in social media before or as soon as crisis and reputation attacks occur, as interactions in the said platform are immediate and much more public nowadays.
  • 16. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 16   References: Journals, Books, Papers Aula, P. (2010). Social media, reputation risk and ambient publicity management. Strategy & Leadership, 38(6), 43-49. Byrd, S. (2012). Hi fans: Tell us your story! ; incorporating a stewardship-based social media strategy to maintain brand reputation during a crisis. Corporate Communications, 17(3), 241-254. Coombs, W. T., & Holladay, S. J. (2004). Reasoned action in crisis communication: An attribution theory-based approach to crisis management. In D. P. Millar, & R. L. Heath (Eds.), Responding to crisis: A rhetorical approach to crisis communication (pp. 95–115). Mahwah, NJ: Lawrence Erlbaum Associates. Coombs, W. T., & Holladay, S. J. (2007). The negative communication dynamic. Exploring the impact of stakeholder affect on behavioral intentions. Journal of Communication Management, 11(4), 300–312. Coombs, W. T., & Holladay, S. J. (2012a). Fringe public relations: How activism moves critical pr toward the mainstream. Public Relations Review, 38(5), 880-887. Coombs, W. T., & Holladay, J. S. (2012b). The paracrisis: The challenges created by publicly managing crisis prevention. Public Relations Review, 38(3), 408-415. Freberg, K. (2012). Intention to comply with crisis messages communicated via social media. Public Relations Review, 38(3), 416-421. doi:10.1016/j.pubrev.2012.01.008 Freberg, K., Saling, K., Vidoloff, K. G., & Eosco, G. (2013). Using value modeling to evaluate social media messages: The case of Hurricane Irene. Public Relations Review, 39(3), 185-192. doi:10.1016/j.pubrev.2013.02.010 Fombrun, C. (1996). Reputation: Realizing value from the corporate image. Boston, MA: Harvard Business School Press. Goolsby, R. (2010). Social media as crisis platform: The future of community maps/crisis maps. ACM Transactions on Intelligent Systems and Technology (TIST), 1(1), 111. Gutierrez, M., & Naidoo, K. (2013). ‘We shouldn’t have to do the job of journalists’. Index On Censorship, 42(1), 110-113. doi:10.1177/0306422013481705 Jordan-Meier, J. (2012). YOU CANNOT control A CRISIS; YOU CAN CONTROL YOUR response. Communication World, 29(6), 20-23. Schultz, F., Utz, S., & Göritz, A. (2011). Is the medium the message? Perceptions of and reactions to crisis communication via twitter, blogs and traditional media. Public Relations Review, 37(1), 20-27. doi:10.1016/j.pubrev.2010.12.001
  • 17. MANAGING THE SOCIAL MEDIA TSUNAMI: NESTLÉ’S REPUTATIONAL CRISIS MANAGEMENT BATTLE VERSUS GREENPEACE 17   Blog Articles J Ban. (2010, March 26). Sweaty Palms for Nestlé [Web log comment]. Retrieved from http://www.blog.cbdmarketing.com/2010/03/sweaty-palms-for-Nestlé/ O Blanchard. (2010, March 22). Greenpeace vs. Nestle: How to make sure your Facebook page doesn’t become a PR trojan horse – Part 1 [Web log comment]. Retrieved from http://thebrandbuilder.wordpress.com/2010/03/22/greenpeace-vsnestle-how-to-make-sure-your-facebook-page-doesnt-become-a-pr-trojan-horsepart-1/ Armstrong, P. (2010, March 20). Greenpeace, Nestlé in battle over Kit Kat viral. CNN. Retireved from http://edition.cnn.com/2010/WORLD/asiapcf/03/19/indonesia.rainforests.oranguta n.Nestlé/index.html Online News Articles Harrild, L. (2010, October 27). Lessons from the palm oil showdown. Guardian Sustainable Business. Retrieved from http://www.theguardian.com/sustainablebusiness/palm-oil-greenpeace-social-media Hickman, M. (2010, May 19). Online protest drives Nestlé to environmentally friendly palm oil. The Independent. Retrieved from http://www.independent.co.uk/environment/green-living/online-protest-drivesnestl-to-environmentally-friendly-palm-oil-1976443.html Seibt, S. (2010, April 2). How Greenpeace reduced Nestlé’s Kit Kat to virtual crumbs. France24. Retrieved from http://www.france24.com/en/20100402-environmentgreenpeace-nestle-kitkat-online-campaign-palm-oil-deforestation Van Grove, J. (2010, May 17). Nestlé Meets Greenpeace's Demands Following Social Media Backlash. Mashable. Retrieved from http://mashable.com/2010/05/17/Nestlé-social-media-fallout/ GreenpeaceUK. (2010, March 17). Have a break?. Youtube.Video retrieved from http://www.youtube.com/watch?v=VaJjPRwExO8