Copenhagen Business School 2015 - IB Unionibunion.dk/wp-content/uploads/2016/09/Corporate...Copenhagen Business School 2015 BSc International Business, 1st year Corporate Communication

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Copenhagen Business School 2015

BSc International Business, 1st year

Corporate Communication

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TABLE OF CONTENT

1 INTRODUCTION .............................................................................................................................. 1

2 THE CRISES EXPLAINED.............................................................................................................. 1

2.1 THE GREENPEACE VS. LEGO CRISIS ............................................................................................ 1

2.2 THE AI WEIWEI AND LEGO CRISIS .............................................................................................. 2

3. METHODOLOGY ............................................................................................................................ 3

3.1 SCOPE AND DELIMITATIONS ......................................................................................................... 3

4 THEORETICAL FUNDAMENT ..................................................................................................... 4

4.1 STAKEHOLDER THEORY ............................................................................................................... 4

4.1.1 Stakeholder salience model......................................................................................................... 4

4.1.2 Position-importance matrix ........................................................................................................ 5

4.1.3 Models of organization-stakeholder communication .............................................................. 5

4.2 CRISIS COMMUNICATION.............................................................................................................. 5

4.2.1 The development of an issue into a crisis ................................................................................. 6

4.2.2 Crisis type matrix ......................................................................................................................... 6

4.2.3 Crisis communication strategies ................................................................................................ 6

4.3 REPUTATION ................................................................................................................................. 7

4.3.1 Reputational capital..................................................................................................................... 7

4.3.2 Alignment between image, vision and culture.......................................................................... 7

4.4. SOCIAL MEDIA............................................................................................................................. 8

4.4.1 Opportunities and challenges ..................................................................................................... 8

5 ANALYSIS OF THE SHELL CRISIS ............................................................................................. 8

5.1 STAKEHOLDER RELATIONSHIPS FOR LEGO ................................................................................. 8

5.1.1 Greenpeace ................................................................................................................................... 9

5.1.2 Royal Dutch Shell....................................................................................................................... 10

5.1.3 Customers and the general public ........................................................................................... 10

5.2 SOCIAL MEDIA: WHAT ROLE DID IT PLAY? ................................................................................ 11




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5.3 CRISIS COMMUNICATION ............................................................................................................ 12

5.3.1 From issue to crisis .................................................................................................................... 12

5.3.2 Type of crisis ............................................................................................................................... 12

5.3.3 Crisis communication strategy ................................................................................................. 13

5.4 REPUTATION ............................................................................................................................... 15

5.4.1 LEGO’s reputation..................................................................................................................... 15

5.4.2 The vision-image gap................................................................................................................. 16

6 DISCUSSION ................................................................................................................................... 17

6.1 STRATEGY IN RELATION TO STAKEHOLDERS.............................................................................. 17

6.2 CONSISTENCY IN CRISIS COMMUNICATION STRATEGIES ............................................................ 18

6.3 IMPROVEMENTS .......................................................................................................................... 19

7 ANALYSIS OF THE AI WEIWEI CRISIS................................................................................... 19

7.1 STAKEHOLDER RELATIONSHIPS FOR LEGO IN THE AI WEIWEI CRISIS ...................................... 19

7.1.1 Customers/General public ........................................................................................................ 20

7.1.2 Ai Weiwei..................................................................................................................................... 20

7.1.3 The Chinese government ........................................................................................................... 21

7.2 WHAT ROLE DID SOCIAL MEDIA PLAY? ...................................................................................... 21

7.3 CRISIS COMMUNICATION ............................................................................................................ 22

7.3.1 Crisis communication ................................................................................................................ 22

7. DISCUSSION AND COMPARISON ............................................................................................ 23

7.1 DIFFERENCES AND SIMILARITIES BETWEEN THE TWO CRISES .................................................... 23

7.2 CAN LEGO LEARN FROM THE GREENPEACE CRISIS TO MINIMIZE REPUTATIONAL DAMAGE IN

THE CURRENT AI WEIWEI CRISIS? ............................................................................................... 24

8 CONCLUSION ................................................................................................................................. 26




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1 INTRODUCTION

Throughout the past 80 years, what started as a small carpenter’s workshop has evolved into a

powerful and beloved global toys manufacturer. The LEGO brick, launched in 1958, offers

children endless possibilities to make the buildings in their imagination reality. LEGO is an

abbreviation of the Danish words for ‘play well’, which seems like a very appropriate name for

this world-famous toy, and also happens to be the ideal of the company (Mortensen, 2012).

When an organisation usually associated with such positive values as bringing joy to children,

is suddenly associated with environmental damage and political discrimination, crises emerge.

This was proven when LEGO experienced a big crisis in 2014, caused by a Greenpeace

campaign against their collaboration with the oil company Shell. Currently, LEGO is facing

another crisis, caused by the company’s refusal to sell a bulk of LEGO bricks to Chinese artist

Ai Weiwei.

The degree to which companies are able to learn from crises like these is extremely important

in sustaining a good reputation and a sound business. The ability to develop the crisis

communication continuously when exposed to different crises is incredibly valuable. This

concept of learning from experience is interesting within corporate communication, and what

this paper seeks to investigate. More precisely, the paper will examine whether or not LEGO

are able to use the experience from the Shell crisis in the current Ai Weiwei crisis. In order to

analyse this, we will use the following problem statement:

To what extent was LEGO’s handling of the Shell crisis successful, and how, if possible, can

LEGO use this experience to adapt their handling of the current Ai Weiwei crisis.

2 THE CRISES EXPLAINED

2.1 THE GREENPEACE VS. LEGO CRISIS

The 1st of July 2014, Greenpeace published a press release announcing the launch of a major

global campaign targeting LEGO. The aim of the campaign was to stop LEGO’s collaboration

with oil giant Shell, which consisted of Shell-branded LEGO-sets being sold or given away at

Shell petrol stations (Greenpeace, 2014b). Since 2012, Greenpeace had been criticising the oil

giant for their plans of drilling in the Arctic, which they claimed were threatening the arctic

environment and its unique wildlife. Greenpeace considered the collaboration between LEGO




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and Shell to be an attempt from Shell to improve its image by shifting the public’s attention

away from the Arctic programme. The same day Greenpeace’s campaign was launched, LEGO released a statement saying they

intended to live up to their long-term contract with Shell and did not think highly of

Greenpeace’s campaign against LEGO (Exhibit 4.1). A week after the launch Greenpeace

published a video online, showing a LEGO-model of the Arctic being inundated with oil while

an altered version of the LEGO-movie theme song plays in the background. The video titled

“LEGO: Everything is NOT awesome” was one of the most important features of the campaign.

During the three-month campaign, a petition to stop LEGO’s collaboration with Shell was

signed by more than one million people (Greenpeace, 2014a), which finally led to LEGO

releasing a second statement on the 8th of October 2014. This second statement ended the crisis

with the message that though LEGO were still going to honour the long-term contract they had

entered with Shell, they would not renew it at its end (Exhibit 4.2). This promise made

Greenpeace consider the campaign successful and completed.

2.2 THE AI WEIWEI AND LEGO CRISIS

In September 2015, LEGO refused to sell a bulk of LEGO bricks to the Chinese artist Ai

Weiwei. Ai Weiwei wanted to use the LEGO bricks as part of a “political” artwork about

freedom of speech, aimed at the Chinese government’s policies and human-right violations.

The order was refused by LEGO, arguing that it is against their corporate policy to be affiliated

with political activities outside the LEGO licensing program (Tucker, 2015). The artist

criticized the refusal and called it “an act of censorship and discrimination” (Ibid). He argued

the refusal was related to the recently announced opening of a new Legoland in Shanghai. The

artist retaliated by posting pictures of a toilet bowl filled with Lego bricks on Instagram. Lego

spokesman Roar Rude Trangbæk confirmed that the order was rejected on “political grounds”

(Tucker, 2015). The artist had done a similar project last year for an exhibition at Alcatraz

prison in San Francisco, titled “Trace”, which used Legos to create mosaic portraits of 176

prisoners for conscience of political exiles (Qin, 2015). Ai Weiwei questioned LEGO in why

the company had sold bricks for the Alcatraz project but not for this project (Ibid). “Any

individual person can naturally purchase or get access to LEGO bricks in other ways to create

their LEGO projects if they desire to do so, but as a company, we choose to refrain from

engaging in these activities, through for example bulk purchase”, said Trangbæk (Qin, 2015).




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The general public is critical against LEGO and reacted by offering pieces of their own LEGO

collections to Ai Weiwei, who vows to accept bricks from around the world (Kennedy, 2015).

3. METHODOLOGY

This paper seeks to investigate LEGO’s handling of the Shell crisis and determine whether or

not LEGO can utilize this experience in handling the current Ai Weiwei crisis. In order to

achieve this, the two crises have been introduced in a brief overview. After this section, the

chosen theories and the reasoning behind these choices will be described. This will function as

the theoretical framework on which the rest of the paper is built. In succession of the theories

is an analysis of the Shell crisis along with a discussion of how well LEGO handled it and how

they could have handled it even more efficiently. Furthermore there will be a brief analysis of

the Ai Weiwei crisis to determine how it differs from the Shell crisis, after which it will be

discussed how, if possible, LEGO’s experiences from the Shell crisis can be used to adapt the

current handling of the Ai Weiwei crisis.

The analyses are based on qualitative primary and secondary sources and are carried out using

a desktop research method. The primary sources are various statements from actors in the crisis,

including LEGO, Greenpeace and Ai Weiwei. The secondary sources consist mainly of

newspaper articles.

When referring to theory, this paper will mainly focus on the book “Corporate Communication

– A Guide to Theory & Practice” by Joep Cornelissen.

3.1 SCOPE AND DELIMITATIONS

Due to the broad scope of this paper, there will be certain limitations and focus areas. First of

all, the theories are not used with equal emphasis. The main focus in the analysis of the Shell

crisis will be on stakeholder relationships and especially the crisis communication strategies,

while the reputational and social media theories have a peripheral role.

Furthermore the analysis of the Ai Weiwei crisis will be a brief difference-based analysis which

focus on what differs from the LEGO crisis. In this part the reputational theory will be excluded

due to the fact that the crisis is still ongoing, which makes the effects on the reputation more

speculative.

When dealing with stakeholder relationships, the analysis will focus on the most salient

stakeholders in regards to the crises.




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The reputational theory will not be focused on the general processes of creating a good

reputation, but on reputational capital and the potential damage to the reputation the crises can

cause.

The social media will not be analysed with models of its own, but it will be analysed what role

it played in the crises.

4 THEORETICAL FUNDAMENT

In this section, the theoretical fundament of the paper will be outlined. Models and figures

within stakeholder management, crisis communication, reputational management will briefly

be explained. Furthermore it will be described how these models and figures contribute to the

paper, and why they have been chosen compared to other available options.

4.1 STAKEHOLDER THEORY

Stakeholder management theory is located at the core of corporate communication. Independent

of the situation, a solid overview of which stakeholder groups a company is dealing with, as

well as how salient they are, is of major importance when determining the right way of

communicating. Stakeholder theory has developed from the neo-classical theory with its sole

focus on profits, to the socio-economic theory in which the company needs to take all groups

with an interest in its operations into consideration and engage in interdependent relationships

with these so-called stakeholder groups. A stakeholder is defined as “Any group or individual

who can affect or is affected by the achievement of the organization’s purpose and objectives”

(Cornelissen 2014, p.42-43). Especially the part about affecting the objectives of the company

is interesting when dealing with crises.

In this paper, stakeholder theory will be employed in order to determine LEGO’s significant

stakeholders and how they are positioned in relation to the crises. With this aim, several models

that will allow us to analyse stakeholders in relation to crisis communication have been chosen.

For the same reason, models that are better suited for the continuous development of strong

relations with stakeholders have been left out.

4.1.1 Stakeholder salience model

The stakeholder salience model has been selected to form the basis of the LEGO stakeholder

analysis. The function of it is to determine which stakeholders are of importance to the

organisation and thereby how much communicative effort is required. First, the stakeholder




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groups are analysed by assessing the power they have over the company, how legitimate their

claims are and how urgent it is to deal with them. Based on this assessment, the groups are

divided into different categories, of which especially the definitive stakeholders are of

paramount importance (Exhibit 1.1.).

4.1.2 Position-importance matrix

The position-importance matrix will be the connecting model between general stakeholder

salience analysis and crisis communication theory in the paper. The model is developed for use

in issue management (Exhibit 1.2). However, using it on a crisis might yield insight into how

the different stakeholder groups are positioned in relation to the crisis. Therefore this model is

being utilized instead of the power-interest matrix, which is often used in connection to the

stakeholder salience model when companies look at general stakeholder communication (Ibid,

p.50). The idea of the position-importance matrix is to categorize stakeholder groups depending

on how powerful they are, and on whether or not they oppose or support the company during

the crisis. (Ibid, p.184-185).

4.1.3 Models of organization-stakeholder communication

Stakeholder theory can, in addition to establishing an overview of the different stakeholder

groups, also suggest in what way the company should communicate with these groups. That is

what the model of organisation-stakeholder communication will be included for. The model

suggests that companies can, depending on the salience of stakeholder groups and the type of

communication, employ an informational, persuasive or dialogue strategy (Exhibit 1.3). This

model will, together with the crisis communication strategies which will be explained later, be

used to look at the way LEGO communicates with their stakeholders during the crisis.

4.2 CRISIS COMMUNICATION

Broadly speaking, a crisis is defined as “an event or issue that requires decisive and immediate

action from the organization” (Cornelissen 2014, p.201). It has always been essential for a

company to be aware of different ways to handle crises. However, as modern communication

now allows news to spread faster and more widely than ever, it has become increasingly

important for companies to be aware of different strategies for communicating with

stakeholders during a crisis. The purpose of crisis communication is to ensure stakeholders that

their interests are being cared for, and that the organization complies with all necessary




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standards (Ibid, p.200). This is done by taking actions to contain the crisis and limit negative

consequences for stakeholders (Ibid, p.201).

Since this paper is going to focus on the crisis communication after the crises emerged, it will

focus on how the crises developed, how they can be categorized, and how they were handled.

This means that other theories have been left out, such as those regarding the prevention and

contingency of crises, as it is LEGO’s handling of the crises and not how they possibly could

have avoided them, that will be analysed.

4.2.1 The development of an issue into a crisis

The problems faced by organisations in their crisis communication strategies have often

evolved in similar ways, going through the same process. Many of them starts out as “latent”

issues, that do not require immediate or decisive actions by the organization. Due to media

attention or stakeholders mobilizing themselves, the issue can turn “active” and then “intense”,

before finally with enough pressure on the organization it can be called a crisis (Exhibit 2.1).

We will use this model to analyse how Greenpeace caused the LEGO/Shell crisis to evolve

through the different phases, and which role social media played in accelerating the process.

4.2.2 Crisis type matrix

Different types of crises need different types of communication strategies. To be able to analyse

the communication strategies, it is necessary to identify which type of crisis the organization is

facing. A useful tool for this is the crisis type matrix (Exhibit 2.2). This matrix categorizes

crises in four different categories based on two dimensions (internal-external and intentional-

unintentional). This matrix will be used to categorize the crises faced by LEGO, in order to be

better equipped to discuss their choice of communication strategy.

4.2.3 Crisis communication strategies

When choosing a crisis communication strategy, companies need to assess the extent to which

they are seen as responsible for the crisis by their stakeholders (more than whether they actually

are). Depending on whether there is a perception of low or high level of responsibility, the

organizations can utilize different types of communication strategies (Exhibit 2.3). This theory

will therefore be used to categorize the communication of LEGO in the crises and discuss

why/why not the strategy was effective.




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4.3 REPUTATION

In today’s society it is increasingly important for companies to have a strong reputation, which

is closely connected to the identity of the company. Stakeholders nowadays don’t only focus

on the actual product, but also on the company behind it. This means that firms must focus on

creating a positive reputation, which in part requires alignment between corporate image, vision

and culture. This paper will focus on reputational capital and the vision-image-culture

alignment in relation to crises.

4.3.1 Reputational capital

According to Ingbredsen (2008) reputation is a tangible asset, because a good reputation

generates more demand. Furthermore a good reputation means a lot in regards to how a crisis

affects a company. Scholars talk about reputational capital, as a sort of buffer against negative

publicity (Cornelissen 2014, P 204). This idea will be used to discuss whether or not LEGO’s

reputational capital had an influence on the degree to which the Shell crisis harmed LEGO’s

reputation.

4.3.2 Alignment between image, vision and culture

When a crisis occurs, it is important for the firm to assess the damages on their reputation. There

is a thin line between the identity and the reputation of a company. The first can be said to

generate the second.

This paper focuses on the crisis communication, which is why the most efficient way to analyse

the potential harm on reputation caused by the crisis will be to look at the potential gaps between

the firm’s image, vision and culture. (Exhibit 3) The vision is how the company wants to be

seen by the public. Culture is the way internal stakeholders (e.g. employees) see and represent

the firm, while the image is how external stakeholders view the company (Cornelissen 2014

p.75). The model suggests that companies need to align these three dimensions in order to be

consistent. This is of paramount importance in relation to reputation. Therefore it is critical if

gaps emerge between the vision, image and culture, which is often the case during crises.

Most of the other models used for reputational analysis are describing the connection between

behaviour, symbolism and communication. These models do not focus on crises, which is why

they will not be used in this paper.




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4.4. SOCIAL MEDIA

Social media is a relatively new although influential player within corporate communication. It

has influenced the classic model of communication practitioners by introducing new sources of

communication distribution channels; such as Twitter, Facebook and Youtube. The new sources

of distribution have affected the way that crises emerge. These platforms offer information

about organizations and impact stakeholders and the general public's opinion regarding the

image and actions taken by organizations (Cornelissen 2014, p.257). Social media in this paper

will be used to contribute to the analysis of the emergence of crises. Primary social media

theories do not apply to this paper, although social media influences the previously mentioned

theories.

4.4.1 Opportunities and challenges

Social media has forced the process of stakeholder communication to evolve. This new reality

has influenced the process and speed of communication, which means that crises might emerge

much faster. One of the other effects social media has, is that it allows different stakeholders to

communicate with each other. This can be an opportunity for companies to create ambassadors,

but it can definitely also be a threat as these communication channels might cause crises. The

public can quickly pick up on whether the company has stayed true to the image they try to

project. The stakeholders can also quickly and efficiently organize themselves for action and

point out the lack of ‘authenticity’ (Cornelissen 2014, p.267- 268). Therefore this paper will

include social media’s impact as a peripheral theory, when analysing the crises.

5 ANALYSIS OF THE SHELL CRISIS

Following is an analysis of the Lego Shell crisis. It will be analysed who the important

stakeholder groups were, what kind of a crisis it was and how it was handled. Furthermore the

reputational damage will be assessed, and the role of social media will be discussed briefly.

5.1 STAKEHOLDER RELATIONSHIPS FOR LEGO

An international and broadly known company like LEGO ought to have a great number and

variety of stakeholders. However, as previously stated, this paper will only focus on the most

important ones.

The three most important stakeholders for LEGO in this crisis are Greenpeace, Shell, and the

customers as well as the general public, who will be discussed under the same title.




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Considering these stakeholders, there will be an analysis about where they might be placed on

the stakeholder salience model and the position-importance matrix. Lastly, it will be considered

how LEGO communicates with each named stakeholder.

5.1.1 Greenpeace

When looking at the salience model, the organization clearly possesses power. With the help of

social media, it is able to reach a great number of people, in this case the six million viewers of

their video. Furthermore it communicates its causes well, as shown by the petition that has been

signed by over a million people. (Starr, 2014)

It can also be argued that the organization has urgency, since their campaign is targeted directly

at LEGO and therefore requires immediate attention.

The third variable of the salience model is legitimacy, which is less clear in the case of NGOs.

According to the definition Slim (2002) uses, legitimacy for NGOs is based on moral and legal

sources, and it is actively generated by its members, supporters and admirers. Based on this

argument, it can be stated that Greenpeace has legitimacy with its 2.8 million supporters

worldwide and because the environment is shared between everyone, which might suggest that

people should be allowed to voice concerns about environmental issues. (Greenpeace, 2015)

Given that the organization possesses all three components of the salience model, it is by

definition a definitive stakeholder.

Greenpeace must also be looked at through the position-importance matrix. As stated before,

due to its huge supporter base and good communication strategy, it must be considered highly

important, since it is able to generate a great publicity. Given that Greenpeace directly criticized

LEGO in the campaign, the company must be placed on the opposing side in the position

dimension of the matrix. In conclusion, Greenpeace is an antagonistic stakeholder, which is an

opposer with great importance.

LEGO’s communication strategy toward Greenpeace will be further analysed in the following

sections. The communication is based on the statements by Mr. Knudstorp, the CEO of the

LEGO Group, where he repeatedly tried to persuade the public that the Greenpeace campaign

should not be directed at LEGO, but should deal directly with Shell. (Exhibit 4.1) This statement

suggests that the CEO does not wish to engage in negotiations or dialogue communication with

Greenpeace, since he does not think that the company should be involved in the campaign at

all. In this way it can be argued, that LEGO uses a persuasive strategy, but unlike the model




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suggests, it is in this case not a two-way, but rather a one-way communication strategy, as

LEGO does not get direct feedback.

5.1.2 Royal Dutch Shell LEGO and Shell have been partnering up ever since the 1960s, and their current branded deal

was signed in 2011. (BBC, 2014) The oil company is also closely connected to the crisis, since

Greenpeace is aiming to break up the contract mentioned above due to Shell’s plans of drilling

in the Arctic.

Looking at the stakeholder salience model, it can be concluded that Shell does not have urgency

in this situation, since the company does not require LEGO’s immediate actions. The company

does not really have power either, only to the extent that if LEGO broke up their deal, it could

start a lawsuit against LEGO. However, Shell has legitimacy, since it is in a contractual

relationship with LEGO. It can be concluded that Shell is not as significant to LEGO as

Greenpeace, and it is a discretionary stakeholder in the salience model.

Placing the company on the position-importance matrix, Shell is not extremely important for

LEGO in the given crisis. On the position side, naturally, Shell is on the same side as LEGO.

In this way, according to the model, Shell can be categorised as a low priority stakeholder.

The two companies are partners, so it is to be assumed that they have some kind of two-way

communication channel between them. However, in the case of this crisis, there is no evidence

of LEGO attempting to involve Shell by directly communicating with the oil firm.

5.1.3 Customers and the general public

Customers are most of the time defined as either dominant or definitive stakeholders, depending

on the urgency factor. (Cornelissen 2014, p.48) It can easily be argued that customers have

legitimacy, as they are by definition the target group of the firm, and they have power because

by buying the products they provide serious revenues for the company.

The general public can be defined as “potential customers”, therefore they are to be treated as

important stakeholders as well. To determine the urgency factor, it must be investigated how

the customers treat LEGO when the crisis arises. Even though there are many people urging

LEGO to stop its deal with Shell (proven by the one million supporters of the petition), it can

be argued that most customers were not affected by the crisis, as LEGO sales have been

increasing with a vast amount between 2013-14 as well. (The LEGO Group, 2014) All in all,




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the customers and the general public can be defined as definitive or dominant stakeholders

depending on whether they are considered urgent or not.

On the position-importance model, customers and public are divided into two groups. Naturally,

given the results of the salience model, their importance is definitely high, but there is a

difference between whether they support or oppose the Greenpeace campaign. In this way, the

customers and general public are either antagonistic or supporter stakeholders.

When looking at the communication channel LEGO uses during the crisis, it can be argued that

it is using the above mentioned irregular persuasive one-way communication strategy with the

public as well, through the two published statements.

5.2 SOCIAL MEDIA: WHAT ROLE DID IT PLAY?

When the Greenpeace campaign was launched, the NGO was ready to mobilise more than 5

million online Arctic supporters (Greenpeace, 2014b). One week after the launch, the “LEGO:

Everything is NOT awesome” video was published. The day after its release, this video had

already been shared more than 1 million times on social media, and throughout the campaign it

gained more than 5.5 million views (Hartley-Parkinson, 2014). Before publishing the video,

thousands of fans had already urged LEGO to stop its partnership with Shell on LEGO’s

Facebook and twitter pages (Greenpeace, 2014a).

In general, social media allows stakeholders to “share experiences, opinions and ideas about

organizations, and organize for action” (Cornelissen 2014, p.267). As this happens online, news

go viral and can spread to large audiences in a much faster and more uncontrollable way than

before social media. This means social media can have a great effect on the emergence of crises.

This was proven in this case, where Greenpeace’s presence on social media and ability to

mobilize supporters online meant LEGO was faced with a crisis that developed rapidly. Social

media has also changed stakeholder communication, as it allows stakeholders to communicate

with each other and the organization more freely and easily, proven in the pleads to stop the

Shell-collaboration posted from fans on LEGO’s social media sites. However, these sites also

allow the corporation to engage with its stakeholders more directly. Though to a much lesser

extent than Greenpeace, LEGO did also use social media as a tool since they posted quotes

from their press releases on twitter and Facebook, to ensure reaching the large audience that

was criticizing them.

Finally, there is no doubt that social media played a crucial role in the success of Greenpeace’s

campaign. Without social media, the campaign’s key element (the video) would not have




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reached such a wide audience, which would probably have resulted in less people signing the

petition to stop the collaboration.


In this section, the development from issue to crisis will be assessed, after which the type of

crisis will be determined. Finally, the crisis communication strategies will be analysed.

5.3.1 From issue to crisis

In order to properly analyse a crisis, it is important to look at its emergence.

An issue is defined as: “(a) a public concern about the organization’s decision and operations;

that may or may not also involve (b) a point of conflict in opinions and judgments regarding

those decisions and operations” (Cornelissen 2014, p.181). The essence of the critics against

LEGO was the fact that the company cooperated with Shell (Greenpeace UK, 2014). This issue

had not been brought up before, and one might therefore argue that it began with Greenpeace’s

campaign, simply skipping the latent state. Otherwise the issue might have been latent all those

years in which LEGO cooperated with Shell, and just emerged due to a change in the society’s

view of the issue along with Greenpeace’s campaign. It would also be possible to argue that the

issue originated when Shell started to focus on the arctic. No matter how long the issue had

been latent, it changed with Greenpeace’s campaign. From the beginning of the campaign, there

was a lot of pressure on LEGO (Greenpeace, 2014b), which suggests that it became active or

intense in the issue to crisis figure (Exhibit 2.1). From there on the issue escalated to a crisis on

the model with the “everything is NOT awesome” video being published the 8th of july. The

video gained significant attention on social media and was viewed 3 million times within the

first 3 days, before it was blocked on YouTube (Greenpeace, 2014c). This caused the public

pressure to mount, and a lot of people to sign the petition to stop LEGO’s cooperation with

Shell (Starr, 2014). Therefore one might argue that due to social media this issue originated and

escalated within a very short period of time.

5.3.2 Type of crisis

When a company has to develop a crisis communication strategy, it is of significant importance

to know what kind of crisis it is dealing with. Therefore, for this paper to be able to analyse and

discuss LEGO’s handling of the crisis, it must first determine the type of crisis using Timothy

Coombs’ crisis type matrix (Cornelissen, p.206). However, one must always remember that




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models are only a perception or categorization of the world. They do not define reality, and

must therefore always be used critically.

A crisis can be either externally or internally caused along the vertical axis of the matrix. In the

LEGO Shell crisis, it can be difficult to determine precisely. Given that the essence of the crisis

was the mutually agreed upon partnership between LEGO and Shell, one might falsely think

that the crisis originated internally. It is however difficult to argue that LEGO directly caused

the crisis, because they just engaged in a common corporate activity. Considering that

Greenpeace ignited the crisis with their campaign, it would seem to have been caused

externally. This also makes sense, as the internally caused crises can be either “Accidents” or

“Transgressions” (Ibid, p.206), both of which do not fit with this crisis.

On the other axis is the question of whether the crisis was caused intentionally or

unintentionally. This is where the matrix becomes sketchy in regards to the Shell crisis. Given

the definition of intentional, “that the crisis was committed deliberately by some actor” (Ibid,

p.206) this crisis would seem to have been intentional, as Greenpeace directly criticised LEGO.

This interpretation would place the crisis in the “Terrorism”(Ibid, p.206) quadrant, which seems

rather harsh. This sort of crisis in usually caused by “Product tampering, hostage taking,

sabotage and workplace violence”(Ibid, p.206), which is fundamentally different from

Greenpeace’s actions in this case. With that in mind, it is also possible to argue, although

perhaps somewhat naively, that Greenpeace was not intentionally causing the crisis, but just

tried to end the collaboration between LEGO and Shell. This would mean that the crisis itself

was not the intention, and that the crisis, being external and unintentional, would be categorized

as a “Faux pas”. This seems to suit our crisis better, as it involves an external actor, voicing a

concern about a specific topic in a company. This issue might then, as in our case, evolve into

a crisis due to mounting public pressure or the lack of response from the company (Ibid, p.206).

Therefore it is argued that this crisis is a Faux pas, despite the fact that it might more suitably

be categorized as an act of terrorism in the crisis type matrix. This obviously fits out crisis

better, and allows the use of this categorization in our further analysis.

5.3.3 Crisis communication strategy

In order to determine the utilized crisis communication strategies, the two statements issued by

LEGO are analysed, as they represent the only external communication from the company

besides from a small tweet. The analysis is carried out using the crisis communication table




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(Cornelissen 2014, p.208) and quotes from the statements. Generally companies employ one or

more of these strategies, depending on the degree of responsibility (Ibid, p.207).

Statement 1

The first statement was issued the day Greenpeace initiated the campaign against LEGO. When

looking at a faux pas, “The unintentional and external challenge (…) may lead to an attribution

of minimal organizational responsibility”(Cornelissen, p.205). This would lead to a use of low

responsibility crisis communication strategies, which seems to be corresponding with LEGO’s

first statement. The company employs several different complementary strategies, some more

significantly than others, but all within the low responsibility category.

The statement is characterized by the use of bolstering strategy, with which LEGO is trying to

put focus on the positive aspects of the company (Ibid, p.208). This strategy is used as the

wrapping of the statement, both in the beginning when Knudstrup the CEO refers to the

“positive impact” and “unique contribution” of the company and in the end when he promises

that LEGO will continue to bring “creative and inspiring LEGO play experiences to children

all over the world.” (Exhibit 4.1)

Besides from the bolstering strategy, Knudstrup does not focus a lot on LEGO. It would seem

that he uses the excuse strategy, which is “denying intentions or volition by scapegoating others

for the crisis.” (Cornelissen 2014, p.208). This is the case, when he emphasizes that “…this

matter must be handled between Shell and Greenpeace” and explains that LEGO “expect that

Shell lives up to their responsibilities wherever they operate…” This strategy is used in order

to distance LEGO from the crisis and argue that Shell, if any, is responsible.

To further lower LEGO’s responsibility, a strategy of victimization is employed: “We are

saddened when the LEGO brand is used as a tool in any dispute between organisations.”

(Exhibit 4.1). This sentence emphasizes the unfairness of the campaign as perceived by LEGO.

This means that Knudstrup uses several low responsibility crisis communication strategies,

which together deny that LEGO should be part of any crisis. Therefore the essence of the

statement is that LEGO is not going to bow to Greenpeace’s campaign; “I would like to clarify

that we intend to live up to the long term contract with Shell, which we entered into in

2011.”(Ibid). Considering this statement, it is clear that LEGO perceives the company as having

no responsibility in the Shell crisis.




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Statement 2 The second statement was issued about three months after, and ended the crisis. The statement

employs many of the same low responsibility strategies, but is fundamentally different, due to

the use of a high responsibility strategy. Generally the second statement is almost identical to

the first statement. Knudstrup is using the bolstering strategy to associate Lego with its positive

contribution. Furthermore the victimization strategy is present when Knudstrup argues that

LEGO should never have been involved in the issue between Shell and Greenpeace.

As explained earlier, when dealing with a faux pas, companies often employ low responsibility

strategies, as LEGO did in the first statement. However, “…when the perception of

organizational responsibility for a faux pas is high or strong, an organization will have to follow

an acceptance or accommodative strategy.” (Cornelissen, p.205). This seems to be consistent

with what LEGO does in the second statement. The most essential part of it is the use of the

accommodative strategy, rectification: “We want to clarify that as things currently stand we

will not renew the co-promotion contract with Shell when the present contract ends.”(Exhibit

4.2). This is the opposite of what the first statement stated, and it can be argued to illustrate “A

tactic of taking corrective action to prevent a recurrence of the crisis in the future.” (Cornelissen

2014, p.208). This is definitely a high responsibility strategy, because it involves at least an

implicit acceptance of guilt. In this case, however, LEGO uses the accompanying low

responsibility strategies to insist that they are not responsible. This means that the second

statement can be seen as LEGO giving in to the pressure, thus ending the crisis, although the

company definitely does not explicitly accept responsibility.

5.4 REPUTATION

It will be analysed whether or not the crisis affected the reputation by analyzing the possible

damage on the reputation, focusing on the vision-image gap in the VCI model, while comparing

this to the reputational capital of LEGO.

5.4.1 LEGO’s reputation

The LEGO Group has a great reputation in terms of size and recognition. In the Reputation

Institute’s annual reputation survey, LEGO was placed ninth in the 100 largest and most well-

know brands survey of 2014 (Trangbæk, 2014a). Because the LEGO Group brand is so big, so

is the consumer base. Some may argue that a company with such a high profile is more

vulnerable to a crisis, and the effects on reputation that follow. Others may argue that because




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the company is so big, there will be a buffer effect, where the LEGO Group’s reputation is not

greatly influenced by the crisis in the long run, as the consumer base is too wide and large to

be affected by Greenpeace’s campaign. Their great reputation has given the company large

reputational capital which in turn means that the crisis may not have impacted LEGO as harshly

as otherwise. The company has good relationships with partners and external brands with whom

they do collaborations with, to promote different brands or upcoming films with LEGO inspired

character toys and thereby increasing the consumer base even more; e.g. Star Wars, Disney,

Minecraft (LEGO,2015b). By looking at LEGO’s relationships and reputation today, one sees

the company has not been greatly influenced by the crisis in the long run. However this was not

necessarily the case in the short run.

5.4.2 The vision-image gap

During the crisis, there might have been a vision-image gap, as the outside world’s overall

impression of the company clashed with the way the company wants to be seen. LEGO is very

concerned with sustainability and being environmentally friendly. LEGO states that they

evaluate their business through an environmental impact assessment, seeing where they can

achieve the largest reduction in their Carbon dioxide emissions (LEGO, 2015a). LEGO also

wants to use responsible resources, and are in the search of finding sustainable alternatives to

their current oil-based raw materials and use sustainable packaging for all LEGO products; this

should be reached by 2030 (Ibid). LEGO’s vision also prioritizes a healthy planet for children

to inherit (Ibid). The image that Greenpeace created of LEGO in their campaign was that of a

company who was a part of the destruction of the environment, going against the vision of the

company. The campaign impacted the way LEGO was perceived by the general public, during

the time of the crisis. There might have been a vision-image gap where the company projected

an image of being environmentally conscious whilst Greenpeace displays a fundamentally

different image where LEGO as a company contributes to Shell’s destruction of the

environment. However, this gap was probably quickly closed after the crisis ended. This can be

seen, as LEGO’s reputation did not change significantly after the crisis (Reputation Institute,

2015). LEGO’s great reputational capital has played a part in ensuring that the reputation did

not suffer in the long run.. Furthermore, due to the enormous consumer base, a crisis focused

or appealing to a specific type of audience, might not influence the company’s reputation

significantly in the long-run.




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6 DISCUSSION

So how well did LEGO handle the Shell crisis? In order to assess this, the strategy will be

looked upon with a focus on stakeholders. Then the consistency of the strategies will be

discussed, after which proposed improvements will be presented.

6.1 STRATEGY IN RELATION TO STAKEHOLDERS

In general a company wants to preserve its stakeholder relationships during a crisis. Therefore

it is often important to consider how well a strategy incorporates the expectations of the

different stakeholder groups. From the analysis it is given that Greenpeace and the

public/consumers are the most important stakeholders in this crisis. LEGO uses a persuasive

one-way communication strategy, from the models of organization-stakeholder communication

(Cornelissen 2014, p.53), when dealing with these definitive stakeholders. This is an

asymmetrical strategy that “involves a situation where the interests of the organization are

emphasized at the expense of the interests of its stakeholders” (Ibid, p.52). This might not be

the most useful strategy during a crisis, where some of your important stakeholders have

interests that conflict with yours. It might easily be seen as very egocentric way of

communication, when LEGO refuses to have a two-way communication with Greenpeace or

the consumers. This resulted in Greenpeace criticising LEGO for trying to “bolt the doors”

(Tilley, 2014). Considering that the initial persuasive statement did not stop the crisis, perhaps

the persuasive strategy was not the best choice in this situation. A dialogue is always a

respectful way of communication, even in situations where the company disagrees with its

stakeholders.

The reason for the failure of the first statement in hindering an actual crisis might also be partly

because of different perceptions of responsibility. It is clear that LEGO definitely did not view

the company as responsible in any way, and therefore went with low responsibility strategies.

However, “… the perception of whether an organization is responsible or culpable matters as

much as whether the organization is factually responsible or culpable.” (Cornelissen 2014,

p.209) This means that when LEGO is trying to employ the right crisis communication strategy,

it is not enough that the company doesn’t view itself as responsible. It has to take into

consideration the perception of the important stakeholders. In this case it might suggest that as

Greenpeace and a measurable part of the consumers found LEGO to be responsible, perhaps a

low responsibility strategy was not the best choice. This might be related to the fact that LEGO




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issued the first statement immediately after Greenpeace launched the campaign. There might

simply not have been time to analyse stakeholder opinions.

In hindsight, it might be said that the low responsibility strategies of the first statement did not

contain the crisis. It did not end until LEGO actually used a high responsibility strategy in the

second statement. Perhaps LEGO realised that the stakeholder opinions were against them, and

that the crisis would not disappear by itself. Furthermore LEGO might have analysed the

growing gap between vision and image, and therefore used the “…accommodative strategies

(that) emphasize image repair, which is needed as image damage worsens.” (Cornelissen,

p.209). This successfully ended the crisis, even though it meant that LEGO had to give up future

cooperation with Shell. Furthermore it protected the reputation of the company which partly

due to the large reputational capital was quickly back on track.

Another important point was that LEGO used the excuse strategy to scapegoat the crisis towards

Shell. It seems like an odd strategy, considering that LEGO actually wanted to continue the co-

promotion relationship. One might argue that it is not the best way of sustaining a sound

stakeholder relationship with Shell. However, as the analysis shows, Shell is not the most salient

stakeholders for LEGO. Therefore LEGO might have put the interests of the Customers higher

than that of Shell.

6.2 CONSISTENCY IN CRISIS COMMUNICATION STRATEGIES

During a crisis, companies often focus on being consistent in their communication. LEGO

rightfully used the CEO to issue the statements, but its communication might not have been

completely coherent. As analysed, the first statement consisted of various low responsibility

crisis communication strategies. On the other hand, the second statement still utilized low

responsibility strategies, with the exception of the accommodative strategy. One might argue

that the move from low responsibility to high responsibility was inconsistent communication,

but perhaps necessary, given that the initial statement failed at containing the crisis. It does,

however, still givesend a picture of a company that changed its mind during the crisis. LEGO

is aware of this, and used the low responsible strategies in the second statement to lower the

implicit acceptance of responsibility that lies in the rectification strategy. One might say that

they did not admit guilt, but still gave in to the pressure of important stakeholder groups. This

was probably a good move, since it ended the crisis, and allowed the vision-image gap to be

filled.




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6.3 IMPROVEMENTS

LEGO successfully ended the crisis with the second statement, after informing that the company

would not renew the Shell contract. However, in the months prior to this statement LEGO

experienced a harsh crisis, with a lot of negative attention and a possible impact on the

reputation. The timeline might have been significantly different, if LEGO had successfully

communicated with the important stakeholder groups. Even though LEGO did not perceive the

company as responsible, they should still have engaged in a dialogue communication strategy

with the definitive stakeholders. This would have illustrated that LEGO takes its stakeholders

into consideration and wants to hear their opinion. The persuasion strategy with the succeeding

lack of communication might just have increased the crisis. Therefore, even if the company was

not responsible, it would have been better to actually have a two-way communication with the

most important stakeholders.

Furthermore LEGO should perhaps have analysed the perception of responsibility from the

stakeholders when deciding on a communication strategy, instead of just including their own

opinion. Due to the fast response, this might have been difficult with the first statement.

However, waiting three months for the crisis to escalate, before issuing another statement was

a mistake. Furthermore, when looking at the situation in hindsight, it might have been better to

go with a high responsibility strategy from the beginning, to cope with the stakeholder views

as well as avoid inconsistent strategies.

7 ANALYSIS OF THE AI WEIWEI CRISIS

In this section, the Ai Weiwei crisis is briefly analysed in order to determine how the crisis

differed from the Shell crisis. It is important to know the difference in order to suggest possible

improvements in the handling of the current crisis.

7.1 STAKEHOLDER RELATIONSHIPS FOR LEGO IN THE AI WEIWEI CRISIS

LEGO’s most important stakeholder relationships in this case have been identified to be those

with its customers/the general public, Ai Weiwei, and the Chinese government. These are the

stakeholders that will be analysed through the salience model and the position-importance

matrix in the following sections.




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7.1.1 Customers/General public Despite a few differences between them, the customers and the general public will be analysed

as one category. These stakeholders can be argued to have legitimacy, as they are the target

group of the company, and they have power because without them, LEGO would not produce

any revenue. They do not appear to have as much urgency in this case, as in the Shell crisis.

However, due to the fact that a lot of people criticize LEGOs decision they are still classified

as urgent. Both the customers and the general public can therefore be defined as

dominant/definitive stakeholders, depending on whether they criticise LEGO or not.

As they have both legitimacy, urgency and power, these stakeholders would be positioned under

“high importance” in the position-importance matrix. However, those opposing LEGO’s

decision not to sell the bricks to Ai Weiwei would be characterized as antagonistic stakeholders,

while those in favour of the decision are supporters. This means the customers/general public

play essentially the same role in this crisis as they did in the Shell-crisis.

7.1.2 Ai Weiwei

According to the salience model, Ai Weiwei definitely has urgency, as he is calling for

immediate action (Cornelissen 2014, p.47) due to LEGO’s refusal of selling him bricks for an

upcoming museum exhibition. He does not appear to have much power over LEGO as an

organization, as he does not have any efficient tools to change the decision of LEGO. However,

it is important to keep in mind that Ai Weiwei might be able to gain power through social media,

when he uses this as a tool to gather supporters and mobilise them for action. Whether Ai

Weiwei’s claims are considered to be legitimate depends on one’s assessment of LEGO’s

refusal to sell him the bricks. Some might argue that it is a legitimate claim as LEGO’s actions

are unfair and discriminative, while others claim Ai Weiwei lacks legitimacy as LEGO is

operating within legal framework and is entitled to its decision. This characterises Ai Weiwei

as either a demanding or a dependent stakeholder.

When placing Ai Weiwei in the position-importance matrix, it is undoubtable that he opposes

LEGO’s position on the issue. His level of importance can be argued, as he does not have much

power over the organisation, but he he has still been able to cause a crisis, which makes him

important. That is why Ai Weiwei can be characterised as an antagonistic stakeholder. One

might argue that Ai Weiwei plays a similar role to that of Greenpeace in the Shell crisis.




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7.1.3 The Chinese government The Chinese government is a very relevant stakeholder for LEGO in this case, as LEGO has

announced the opening of an amusement park and a factory in China. The government can

therefore be argued to have great power, as they are the decision-making body of the country

and can affect LEGO’s possibilities for operating in the country. They also have legitimacy, as

LEGO’s actions in China can be expected to affect the country. At the moment they might not

have great urgency, as they can be assumed to be pleased with LEGO’s refusal of Ai Weiwei’s

bulk order, but the issue is of great interest to them, which is why the Chinese government

would be identified as a dominant stakeholder.

Ai Weiwei is often referred to as a dissident artist, and he is not popular with the Chinese

government. Because of this, the Chinese government can be assumed to strongly support

LEGO’s decision to refuse to provide the artist with bricks to produce dissident works of

art. The Chinese government is therefore a “supporter” in accordance to the position-

importance matrix.

7.2 WHAT ROLE DID SOCIAL MEDIA PLAY?

As discussed before, with social media, people can access more information, and information

can get to more people faster. This pattern is recognizable in this case as well, since the crisis

emerged with an Instagram post. (Ryan, 2015)

Due to this phenomenon, when Ai Weiwei wanted to raise his voice he did not communicate

with LEGO, but instead made a public statement against the company. His Instagram post

became popular quickly, which is in line with the theory that social media makes crises emerge

and escalate faster.

The next social platform to play a role in the crisis is Twitter, where Ai Weiwei communicated

with his supporters. Many offered their own LEGO bricks to help the artist’s cause, using the

hashtag #legosforweiwei, and Ai Weiwei set up spots in big cities where people could donate

their offerings. These spots were also announced through Twitter. This is an example of how

stakeholders can now communicate directly with each other. (Ryan, 2015)

An asymmetry in the communication in this crisis is due to the fact that while Ai Weiwei builds

strongly on public opinion and uses social media to communicate his arguments, LEGO

secludes from stating their opinion on the same platforms. The company uses a somewhat




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conservative strategy, communicating through private emails and a public statement given by

LEGO’s spokesperson, instead of using more of the platforms the social media provides. Because of LEGO’s lack of presence on these platforms, Ai Weiwei’s supporters dominate

Twitter and other social media, and because of this, their side of the story reaches more and

more people, increasing the crisis further.


Looking at the contrast between the Greenpeace and Ai Weiwei conflict, one sees that they

correspond as to the external nature of the crises, with outside factors playing a dominant part

in the cause of the crises. The Ai Weiwei crisis could be defined as a faux pas, and it is perhaps

even more unintentional than the Shell crisis. Claims by the artist stating that the refusal is an

“act of censorship and discrimination” pulls social responsibility into play, trying to turn the

refusal into a “violation” of accepted, although unwritten social rules and expectations

(Cornelissen, 2014; p.206). The validity of Ai Weiwei’s claims on the toy company can be

reviewed by looking at the company’s reasoning behind their refusal.

7.3.1 Crisis communication

The National Gallery of Victoria in Melbourne’s curatorial team contacted Lego by email to

place a bulk order. Lego responded on the 12th of September 2015. “It is against our corporate

policy to indicate our approval of any unaffiliated activities outside the LEGO licensing

program”, said LEGO in the statement quoted by Ai Weiwei on his instagram (Ryan, 2015).

The statement continued with a list of some of the policies LEGO has. The following policy

became of interest for the artist and the public, “The motive(s) cannot contain any political,

religious, racist, obscene or defaming statements” (Tucker, 2015). In a statement LEGO said

the following: “We acknowledge, that Lego bricks today are used globally by millions of fans,

adults, children and artists as a creative medium to express their imagination and creativity in

many different ways, even projects that are not endorsed or supported by the Lego group.

However, as a company dedicated to delivering great creative play experiences to children, we

refrain – on a global level – from actively engaging in or endorsing the use of Lego bricks in

projects or contexts of a political agenda. This principle is not new.” (Kennedy, 2015). Ai

Weiwei questioned the company in why they allowed the artist to use LEGO bricks in the Trace

project which had conscience of political exiles (Qin, 2015). LEGO’s spokesman Roar

Trangbæk declined to detail why the company had sold bricks for the Alcatraz project, although

stating that where the company is made aware of its political context, the company declines




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support (Ibid). Thereby, LEGO has responded once to the order, and once to the crisis. The

response to the crisis could to some extent be defined as a non-existence crisis communication

strategy, more specifically the one of clarification; “an extension of the denial tactic with

attempts to explain why there is no crisis” (Cornelissen, 2014; p.208). The response aims to

clarify why LEGO’s disapproval of the bulk order is to be considered acceptable and respected

by listing the policies, whilst clarifying that they do not support projects where the company is

made aware of its political context. Also, it is important to note that their response was not

released for the general public, it was communicated directly to Ai Weiwei after the company

had been questioned via email. The use of the clarification strategy means that LEGO uses a

low responsibility strategy as in the first statement in the Shell crisis. As was the case in that

previous crisis, LEGO has probably chosen this strategy because they perceive themselves as

having a low responsibility.

7. DISCUSSION AND COMPARISON

The following section will look into the crisis communication strategies used by LEGO in the

past Greenpeace crisis and in the current Ai Weiwei crisis. It will then be discussed whether

LEGO can draw on past experiences when adapting their crisis communication in the current

crisis.

7.1 DIFFERENCES AND SIMILARITIES BETWEEN THE TWO CRISES

Before going into a discussion of the two crises, it is important to highlight that the crisis

communication strategies used in the two crises are not necessarily directly comparable, as the

crises are of different nature, and therefore might have called for different communication

strategies.

As mentioned, LEGO’s customers/the general public have played similar roles in the two crises,

with some opposing LEGO’s actions and others supporting them. Both Greenpeace and Ai

Weiwei have been identified as antagonistic stakeholders, meaning that they both require

attention in the two crises. However, Shell and the Chinese government are two very different

types of stakeholders, and this significant difference between the two crises is one that needs to

be paid attention to. While it was concluded that Shell did not have neither power nor urgency

in the previous crisis, and therefore did not demand a great deal of attention, the Chinese

government was identified to be a dominant stakeholder. This means that while LEGO could

get away with less communication with Shell, the Chinese government has great importance




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and demands serious attention, something LEGO needs to take into consideration when

planning their current crisis communication strategy. This is also why it was easier for LEGO

to end the Shell crisis, as they could decide not to renew the contract with Shell without too

great consequences. However, they cannot just give in to Ai Weiwei’s demands in order to end

the current crisis, as they need to maintain their relationship with the much more important

Chinese government.

The crises are similar in the sense that they were both identified as ‘faux pas’ crises, and one

could argue that in both cases, despite being faux pas, some stakeholders consider LEGO to

have responsibility for the crisis. However, the fact that Ai Weiwei and the customers/general

public who support him can be assumed to see LEGO as having a high level of responsibility

in the current crisis is something LEGO has not addressed yet. This could be because LEGO

prioritizes its relationship with the Chinese government before that with the other stakeholders.

At the same time, the crises are also fundamentally different as the Shell crisis was a planned

campaign organized by a global NGO while the Ai Weiwei crisis was caused by a single

unsatisfied LEGO customer, who by being a famous artist is managing to draw some attention

to the issue. This difference between the essence of the two crisis make them difficult to

compare.

7.2 CAN LEGO LEARN FROM THE GREENPEACE CRISIS TO MINIMIZE REPUTATIONAL

DAMAGE IN THE CURRENT AI WEIWEI CRISIS?

In the previous discussion, several areas of improvement were identified in LEGO’s crisis

communication strategy. One of the most important was that in the Greenpeace crisis, LEGO

made use of an irregular persuasive communication strategy, consisting of one-way

communication, where the stakeholders were only allowed to react to the statements, instead of

engaging in actual dialogue with the stakeholders. In general, to ensure the best possible

relationships with stakeholders, which is especially desirable during a crisis, a company should

make use of the dialogue strategy instead, ensuring a two-way, symmetrical communication

between the organisation and its stakeholders. In the current crisis, LEGO has basically only

declined Ai Weiwei’s order and then refused to comment much further on the situation, which

is characteristic of one-way communication. If instead, LEGO engaged in a dialogue with Ai

Weiwei, trying to explain further their refusal of his order despite having accepted his previous

order for the Alcatraz prison, Ai Weiwei might be more understanding. The same goes for the

public: as mentioned, social media is swarming with Ai Weiwei-supporters who accuse LEGO




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of being discriminating. If LEGO for instance issued a public statement or something similar,

the public might feel more informed and less inclined to oppose LEGO’s actions so strongly. Another mistake LEGO made in the Greenpeace/Shell crisis, was a failure to correctly estimate

the stakeholders’ perception of LEGO’s level of responsibility in the crisis. This led LEGO to

use an ineffective, low-responsibility strategy at first, before finally choosing a high-

responsibility crisis communication strategy, that proved successful in ending the crisis. In the

Ai Weiwei crisis, it can be argued that LEGO has been using a clarification strategy, explaining

why it is fair that they have declined Weiwei’s order. However, if the crisis escalates, and the

blame on LEGO increases, LEGO could learn from the Greenpeace crisis and consider whether

a high-responsibility strategy might be more effective. A remediation strategy, compensating

Ai Weiwei, or a rectification strategy, ensuring the so-called discrimination does not re-occur

might be suitable strategies for this. However, due to the importance of the Chinese

government, this might not actually be feasible. It would simply have too big commercial

consequences.

A last important aspect to take into consideration, is the swiftness of response. The occurrence

of social media has not only played a big role in changing how fast crises emerge, but also in

how fast organisations are expected to respond. In the world of modern communication, when

facing any claims or crises, an organisation is expected to respond quickly, in order to maintain

their reputation. However, it is of course also important to still consider the content of the

response, and not only the speed of its release. In the Greenpeace/Shell crisis, LEGO did “well”

in the sense that they issued the first press release only minutes after the crisis began. However,

this release might not have been well thought through, as it proved inefficient. Despite this

inefficiency it took LEGO three months to issue a second statement, which only allowed the

crisis to escalate. This is also related to the need for LEGO to engage in dialogue with its

stakeholders. LEGO should learn from the Greenpeace crisis, and respond more continuously

to the different claims, while still considering the responses and taking the developments of the

crisis into consideration. Even though the two crises are not directly comparable, perhaps

LEGO should abandon their current strategy of silence, and start responding to the accusations

while taking all stakeholders and their perceptions of the company into consideration. LEGO

should engage in dialogue with them and handle the crisis as effectively as possible. It would

however not be recommended that LEGO uses a high responsibility strategy and actually gave

in to Ai Weiwei, due to the immense importance of the Chinese government. It is important to

stress that it is not always necessary for a company to accept responsibility for a crisis, just to




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put an end to it. More often than not, satisfying some stakeholders in a crisis will mean

dissatisfying others (e.g. ending the contract with Shell pleased Greenpeace but probably

displeased Shell). LEGO should therefore not directly copy their approach from the

Shell/Greenpeace crisis and accept responsibility in this crisis. LEGO should instead focus on

engaging in dialogue with important stakeholders and keep their crisis communication

strategies consistent, as this is often the most effective and credible way of communicating.

8 CONCLUSION

This paper is an example of how companies might analyse their crisis communication and work

to improve their performance in the event of future crises.

The analysis of the Shell crisis shows that the most important stakeholders were the

customers/the public and Greenpeace. Social media played an important role in the emergence

of the Faux pas crisis, by allowing Greenpeace to reach a lot of people and to organize the

campaign with other stakeholders. LEGO used a one-way persuasive communication strategy

with the stakeholders, in the form of two statements issued by the CEO. The first statement

contained several low responsibility crisis communication strategies, such as the bolstering,

victimization and excuse strategies. This did not stop the crisis from developing until LEGO

issued another statement, that was very similar to the first. The significant difference was the

use of the rectification strategy, which successfully ended the crisis, and filled the potential gap

between the vision and image of the company.

LEGO could definitely have handled the crisis better. The company’s low responsibility

strategy was not aligned with the perception of the important stakeholders, which is important

for the communication to be successful. Furthermore LEGO did not engage in any sort of

dialogue, which is often the wise thing to do, when salient stakeholders have a different opinion

than the company. The consistency of the crisis communication was not optimal, with the

progression from low responsibility to high responsibility. This might however have been

necessary, as the crisis continued after the initial statement. Furthermore the inconsistency was

hidden with the use of low responsibility strategies along with the high responsibility strategy

of rectification in the second statement. LEGO definitely also waited too long to issue the

second statement.

The question was then if this experience could be utilized in the current Ai Weiwei crisis.




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The crises are not directly comparable. LEGO’s important stakeholders in this crisis are Ai

Weiwei, the customers/the public and the Chinese government. One might argue that Ai

Weiwei caused the crisis as Greenpeace did in the Shell crisis, and that the customers/the public

played the same role. The main difference is how the Chinese government is a significantly

more salient stakeholder than Shell was in the first crisis. Furthermore social media again had

a significant influence, by giving power to Ai Weiwei who could communicate to his followers

and cause the crisis for LEGO. The company responded with a low responsibility crisis

communication strategy of clarification.

It is difficult to say exactly how LEGO should handle the Ai Weiwei crisis. However, some

general improvements can be identified. LEGO should become better at engaging in dialogue

with their important stakeholder groups, even when the company does not perceive themselves

as responsible. This would show respect, and allow for a solution to be found. Therefore the

company should engage with Ai Weiwei and the public in order to contain the crisis. Moreover

LEGO should remember to be consistent in their crisis communication, although it might be

necessary to change as the initial strategy proves to be insufficient. LEGO ought to align their

strategy with the perception of the important stakeholders. This would in the Ai Weiwei crisis

mean that LEGO should go with a high responsibility strategy. However, due to the importance

of the Chinese government, this would not be advisable in this case.

As illustrated by this paper, a very important aspect within all kinds of business is that of

learning. The utilization of past experiences in current and future situations is of significant

importance for a company to improve over time. This is definitely relevant for companies that

are dealing with crises, something all companies have to from time to time.




Group AB

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APPENDIX

Exhibit 1.1: Stakeholder salience model

Source: Cornelissen (2014), p.48 Figure 3.3

Exhibit 1.2: Position-importance matrix


Exhibit 1.3: Organisation-stakeholder communication


Exhibit 2.1: Development of an issue into a crisis


Exhibit 2.2: Crisis type matrix


Exhibit 2.3: Crisis communication strategies

Source: Cornelissen (2014), p.208-209 Table 11.1

Exhibit 3: Alignment between image, vision and culture


Exhibit 4.1: Statement 1

Jørgen Vig Knudstorp, CEO of the LEGO Group, comments on the Greenpeace

campaign using the LEGO® brand to target Shell.

The LEGO Group operates in a responsible manner and continually strives to live up to the

motto of the company since 1932: “Only the best is good enough”.

We are determined to leave a positive impact on society and the planet that children will

inherit. Our unique contribution is through inspiring and developing children by delivering

creative play experiences all over the world.

A co-promotion contract like the one with Shell is one of many ways we are able to bring

LEGO® bricks into the hands of more children.

We welcome and are inspired by all relevant input we receive from fans, children, parents,

NGOs and other stakeholders. They have high expectations to the way we operate. So do we.

The Greenpeace campaign focuses on how Shell operates in a specific part of the world. We

firmly believe that this matter must be handled between Shell and Greenpeace. We are

saddened when the LEGO brand is used as a tool in any dispute between organisations.

We expect that Shell lives up to their responsibilities wherever they operate and take

appropriate action to any potential claims should this not be the case. I would like to clarify

that we intend to live up to the long term contract with Shell, which we entered into in 2011.

We will continue to live our motto of “only the best is good enough” and deliver creative and

inspiring LEGO play experiences to children all over the world.

Jørgen Vig Knudstorp, President and Chief Executive Officer of the LEGO Group.

Source: Trangbæk (2014b)

Exhibit 4.2: Statement 2

Jørgen Vig Knudstorp, CEO of the LEGO Group, comments on the Greenpeace

campaign using the LEGO® brand to target Shell.

Children are our major concern and the central focus of our company. We are determined to

leave a positive impact on society and the planet that children will inherit. Our unique

contribution is through inspiring and developing children by delivering creative play

experiences all over the world.

A co-promotion like the one with Shell is one of many ways we are able to bring LEGO

bricks into the hands of more children and deliver on our promise of creative play.

The Greenpeace campaign uses the LEGO brand to target Shell. As we have stated before, we

firmly believe Greenpeace ought to have a direct conversation with Shell.The LEGO brand,

and everyone who enjoys creative play, should never have become part of Greenpeace’s

dispute with Shell.

Our stakeholders have high expectations to the way we operate. So do we. We do not agree

with the tactics used by Greenpeace that may have created misunderstandings among our

stakeholders about the way we operate; and we want to ensure that our attention is not

diverted from our commitment to delivering creative and inspiring play experiences.

The long-term co-promotion contract we entered with Shell in 2011 delivers on the objective

of bringing LEGO bricks into the hands of many children, and we will honour it – as we

would with any contract we enter.

We continuously consider many different ways of how to deliver on our promise of bringing

creative play to more children. We want to clarify that as things currently stand we will not

renew the co-promotion contract with Shell when the present contract ends.

We do not want to be part of Greenpeace’s campaign and we will not comment any further on

the campaign. We will continue to deliver creative and inspiring LEGO play experiences to

children all over the world.

Jørgen Vig Knudstorp, President and Chief Executive Officer of the LEGO Group.

Source: Trangbæk (2014c)

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