Iberia's Crisis analysis

University of OklahomaCrisis CommunicationOwen KulemekaJMC 4413

Crisis Analysis

Pablo Mondragón Fernández

“People trust an organization that seems to have their best interest in mind. Thus, crisis experts have indirectly argued the

importance of credibility during crisis management”

Ulmer, Sellnow, Seeger. (2010).

Table of Contents1. Background of the Organization and the Crisis

1. 1. Introduction

1. 2. Analysis of the crisis

a) Reputation Threat

b) Causes of the Crisis

c) Timeline of the Crisis

2. Organizational Response to the Crisis

2. 1. Verbal Response

2. 2. Non-verbal Response

3. Media Response

4. Stakeholders Response

5. Recommendations

5. 1. Accounts

5. 2. Situational Crisis Communication Theory

5. 3. Final Recommendations for the Crisis Response

6. Reference List

Crisis Analysis

1. Crisis Analysis

1. 1. Introduction

- Number one Spanish airline company, ranked as the third one in Europe

- Founded on June 28, 1927- Revenue of $24.762 million

during the year 2012- Results of the research:

Inability to properly manage crisis -> need of outside help. Why?

- “One of the most financially troubled and ineficent airlenes in Europe”, Burghouwt (2007)

- Between: 1989 and 1995: “on the brink of bankruptcy”.

- European Commission allowed the Spanish government to rescue

1. 2. Analysis of the crisis

Crisis Analysis

Crisis Analysis

1. Background of the Organization and the Crisis1. 2. Analysis of the crisis

- The crisis: - Workers of the Spanish airline Iberia

protested for the layoff of 4,500 workers, in early 2013, following to loosing $1.20 billion in 2012

- Passengers began to suffer the effects of negative relations between employees and managers .

Crisis Analysis

1. 2. Analysis of the crisis1. Background of the Organization and the Crisis

Crisis Analysis


Crisis Analysis


Crisis Analysis


Crisis Analysis

2. Organizational Response to the Crisis

Crisis Analysis

3. Media Response

“Every crisis, carries with it some level of uncertainty” (Seeger, 2010).

Crisis Analysis

4. Stakeholders Response

The stakeholders' response is now, more than ever, public and shared at a higher speed.

Nuggets, "specific messages that crisis communicators want to convey to audiences", explains Alan Jay Zaremba (2009).

1.Facebook: on May 8, 2012 that they will keep the same flight schedule, despite the fact that there was a strike

• Wrong approach: diminishment posture, they informed saying, "the participation in previous strike journeys were minimal”.

• Only one hour later: "Almost a week ago you told me…”.

2. Twitter: hasthag of #saveiberia, though engagement with the community was very low.3. YouTube: Reputation is clearly damaged online as illustrates the 4,570 videos available about the strike.4. Newspaper comments: depending on the location of the readers. The Telegraph criticized the decision of Spanish workers to go on strike. ”The best paid in the industry"5. Spanish government took an active role: establish minimum service 6. The pilots and crews were mobilized to boycott the subsidiary 'low cost', Iberia Express March 25 2012

Crisis Analysis

Stakeholder’s Response in Social Media

5. Recommendations

Crisis Analysis

The controversy: forces the company to examine avoid the likelihood of the crisis to happen in the future.

it started in 2005, announced a wage freeze.

enerated a the rumor of the working conditions and merger with British Airways.

“Victims of their own actions" unintentionally:

The effects are still in progress:

Crisis Analysis

5. Recommendations 5. 1. Accounts

The lesson learned from the crisis:

-Decisions are not perceived in the same way by all stakeholders.-Leading to two different behavioral intentions -Affecting Perceived Organizational Reputation, and the Perceived Crisis responsibility of Iberia

Crisis Analysis

5. 1. Accounts

The Model of Situational Crisis Communication Theory Proposed by Coombs (2007)

5. Recommendations

Crisis Analysis

5. 1. Accounts

- This explains the problem of communication in the negotiation process.

- Because Iberia’s “behavior was called into question”, that is the definition of accounts according to Coombs (2012).

- Iberia had a protective attitude and not a proactive, however the threat was not external but internal.

5. Recommendations

Crisis Analysis


In order to analyze the reputational threat, Iberia has three factors:

1.

Type of crisis 2.

Crisis history &prior reputation crises 3

. Our recommendation

- Preventable cluster, a high level of responsibility by the company.

- "Produce greater reputational damage" (Coombs, 2012).

- This is the halo effect, which limits the extent of the impact of the new changes because of what Alan Jay Zaremba calls the "residual of past relationships" (2009).

- A small change in image of the brand and generates a negative buzz

- The organization can't hide the negative relationship with the public.

- Based on impression management, that is "on the notion that communication can be used to strategically shape the public reputation”

- Example: Bolstering Posture: connect with the Spanish public: Spanish flag, 9,000 interviews to include the views of consumers, through a webpage http://hoy.iberia.com/

5. Recommendations

Crisis Analysis


In order to analyze the reputational threat, Iberia has three factors:

1.

Type of crisis

➞2.

Crisis history &prior reputation crises

3.

Our recommendation

We can see a change in management

- Decisions are part of a response renewal strategy (rhetoric of renewal)

- ”Not on assigning or averting blame”

- Example: Iberia's CEO, in a letter to their employees, these changes are "much more than a logo change”

- Does it really work? The economic benefits will generate a revenue increase of between 6 and 8 percentage points.

5. Recommendations

for future crisis

However, here's theCrisis

ResponseStrategy recommended

Denial Posture: Denial 1 Rebuilding Posture: Compensation

1

Denial Posture: Scapegoating2 Bolstering Posture: Reminding2

Diminishment Posture: Justification3 Bolstering Posture: Integration3

- Iberia’s crisis managers started saying that the crisis did not exist

- Iberia started blaming the financial crisis, then the globalization, always groups outside the organization.

➞

➞

- By minimizing Iberia's responsibility.

- Discounts for future purchases of tickets to the passengers, food and a place to stay during the strikes.

- Connect with the Spanish public by making the brand “Spanish again”: Spanish flag and the first aircraft, 9,000 interviews to include the views of consumers in a site.

- Praise the role of all the stakeholders.

➞Crisis Analysis

Crisis Response Strategy Used by Iberia Crisis Response Strategy Recommended

Crisis Analysis


Management is starting to apply the Crisis Response Strategy Recommended:

- Part of a response renewal strategy (rhetoric of renewal)

- Its "focus is on rebuilding confidence”- Not on assigning or averting blame",- In the words of CEO of Iberia, Luis

Gallego, in a letter to the employees: "is much more than a logo change”

Crisis Communication Best Practices Based on SCCT

and Attribution Theory-Based Research by Walker

(2012)

5. Recommendations

6-8%6-8%➞

With the new response

renewal strategy

In revenueIn revenue

Crisis Response

Recommendations Finalfor the

Strategy

1.

Communication

2.

Corporate Social Responsibility

3.

White label social networks

4.

Direct access to managers: Hot line

5.

Brand: international corporate culture while Spanish cultural identity

6.

Message map: no information void

7.

Schedule: unique idea

8.

Dark web sites and social media

9.

Instructing information to passengersWarn before decision that can damage reputation

10Status of their flights, refund, hotels and restaurants

11

Working conditions: health care benefit, paid vacations, resting Periods for pilots

12

Advertising campaign

Thank you

Blackmur, D. (1993). Strikes: Causes, Conduct & Consequences. Federation Press.

Brown, G. (2010). Beyond the Crash: Overcoming the First Crisis of Globalization. Free Press.

Burghouwt, G. (2007). Airline Network Development in Europe and Its Implications for Airport Planning. Ashgate.

Coombs, W. T., & Holladay, S. J. (2012). The Handbook of Crisis Communication. Wiley.

Lin, Y. H., & University, M. S. (2007). Testing the Effects of Apology and Compassion Response in Product-harm Crises in Situational Crisis Communication Theory. Michigan State University.

Rodgers, P. E., & Rodgers, E. (2002). Encyclopedia of Contemporary Spanish Culture. Taylor & Francis.

Ulmer, Robert; Sellnow, Timothy. (2010; 2nd Edition). 2-24 Effective Crisis Communication: Moving from Crisis to Opportunity.

Walker, D. C. (2012). Mass Notification and Crisis Communications: Planning, Preparedness, and Systems. Taylor & Francis.

Zaremba, A. J. (2009). Crisis Communication: Theory and Practice. M. E. Sharpe Incorporated.

Radio Onda Cero. El SEPLA desconvoca la huelga de pilotos de Iberia. https://itunes.apple.com/us/ podcast/sepla-desconvoca-la-huelga/id441005128?i=111488031&mt=2

http://www.breakingtravelnews.com/news/article/iberia-announces-new-measures-to-reduce-costs- and-raise-productivity/

http://www.aljazeera.com/news/europe/2012/12/2012124192857939301.html

References List




http://www.reuters.com/article/2009/01/11/spain-iberia-barajas-idUSLB9219720090111

http://bigstory.ap.org/article/unions-spains-iberia-agree-end-strike

http://bigstory.ap.org/article/spains-iberia-workers-call-strikes-over-layoffs

http://grupo.iberia.es/portal/site/grupoiberia/menuitem.5a459edec4a85bc9485771fbf34e51ca/

http://grupo.iberia.es/portal/site/grupoiberia/menuitem.21ddc38cbdbcc14a485771fbf34e51ca/

http://grupo.iberia.es/portal/site/grupoiberia/menuitem.b96d0acbb3edc01a485771fbf34e51ca/

http://elpais.com/diario/2006/08/04/opinion/1154642401_850215.html

http://elpais.com/tag/c/e8aab36422f303577fe148e28efbb34c/27

http://www.reuters.com/article/2013/03/27/iberia-strikes-idUSL5N0CJ1IX20130327

http://www.reuters.com/article/2013/06/27/bankia-iag-idUSL5N0F324D20130627

http://www.reuters.com/article/2010/12/03/spain-airspace-iberia-idUSMDT00956220101203

http://www.telegraph.co.uk/travel/travelnews/9906728/Iberia-strikes-QandA.html

http://www.expansion.com/2013/02/13/empresas/transporte/1360784592.html

http://www.youtube.com/results?search_query=iberia+strike&oq=iberia+strike&gs_l=youtube. 3...603.16935.0.17511.26.22.1.0.0.1.1141.5730.4j2j4j3j1j1j0j2.17.0...0.0...1ac. 1.11.youtube.NWnE10yAIP0

http://www.iprofesional.com/notas/172149-En-medio-de-una-reestructuracin-financiera-Iberia- estren-su-nueva-imagen

http://www.nytimes.com/2013/02/19/business/global/strikers-disrupt-iberia-terminal.html?_r=5&







Business

Iberia's Crisis analysis