Stakeholder Theory Insights for Crisis Communication in MARK907

This essay critically analyzes the specific and relevant insights that stakeholder theory provides for crisis communication. It begins by defining stakeholder theory and crisis communication theory, highlighting their interconnectedness and influence on organizational management during crises. The analysis explores how stakeholders, including customers, employees, and the public, react to and are affected by crises, and how their roles shift in these situations. The essay emphasizes the importance of effective communication with stakeholders during crises, drawing on concepts like the Situational Crisis Communication Theory (SCCT) to guide strategic responses. It examines the emotional reactions of stakeholders (anger, sympathy, anxiety) and the need for corrective actions to prevent future crises. The essay argues that informing stakeholders and considering their interests are paramount for maintaining organizational reputation and long-term success. It also references the impact of external parties like the media, government and citizens, on stakeholder relationships. The conclusion reinforces the importance of stakeholder communication for successful crisis management and organizational resilience. The essay is supported by academic resources and real-world examples to illustrate the application of the theories.

Running head: CRISIS MANAGEMENT
CRISIS MANAGEMENT
Name of the Student
Name of the University
Author Note

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Topic: What are the specific and relevant insights that stakeholder theory provides for crisis
communication
Introduction
The stakeholders tend to form a crucial part of the organization and with respect to this, it
becomes relatively important for any firm to ensure that the communication with the different
stakeholders in a firm is always optimum and that the stakeholders are always informed about
the different happenings which take place in the firm (Andriof and Waddock 2017). This can be
considered to be crucial aspect because the stakeholders have a relevant stake in the firm and this
makes them an important constituent of the firm. The primary aim of the essay is to critically
analyse the specific as well as relevant insights which the stakeholder theory provides for the
crisis communication. In addition to this, the essay will also be considering relevant topics like
the meaning and definition of the crisis communication theory, the stakeholder’s theory and how
does the latter influence on the first. The essay will consider practical examples along with
theoretical frameworks as well.
Analysis
Stakeholder theory
According to Boin, Stern and Sundelius (2016), the stakeholder theory can be rightfully
defined as a theory of organizational management and business ethics which aims to address the
different moral as well as values in the management of an organization. The primary stakeholder
theory tends to define the specific stakeholders which exist in a company and then examine the
different conditions such as the corporate social responsibility, market economy as well as the
social contract theory. In line with this, Bundy et al. (2017), states that the stakeholder view takes

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into consideration that the different stakeholders always need to be the primary concern of the
firm before any other action of the firm. According to the stakeholder theory, any matter which
the firm engages in needs to consider the stakeholders of the firm first and this will then be
followed by the rest of the important components of the information line.
Crisis communication theory
The crisis communication can be rightfully defined as a theory in the field of the crisis
communication which tends to lay down the strategic responses which are required to be given
by a crisis manager in critical responses to the level of crisis responsibility which may exist in an
organization. The crisis manager will be required to evaluate the crisis type, the history of the
crisis and the prior relationship regulation which shall then go a long way in assisting the
different managers to ensure that they are successfully able to complete their goals and
communicate effectively (Andriof et al. 2017). Hence, this theory serves as a useful tool which
can be rightfully applied in an organizations overall crisis management scenario. The theory as
formed by Coombs tends to give the different managers a sense of guidance which will assist
them to communicate with their stakeholders in a timely manner. The Situational crisis
communication theory tends to lay down the manner in which the different facets of the crisis
scenario may have an ability to impact the overall working of the firm.
According to Christensen et al. (2016), the crisis communication can be rightfully stated
to be the sub speciality of the profession of public relations which are required to be designed
and to protect or defend a particular individual or a company so that the reputation remains
intact. A crisis can be stated to be some serious event which requires analysis in terms of the
attention from the management of an organization. According to Claeys, Cauberghe and Vyncke
(2010), the crisis management can become a serious issue in case where the unpredictable event

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may threaten the important expectancies which exist in the realm of a firm. In addition to this, it
becomes important to ensure that, the firm is able to communicate about the problems to the
right stakeholders. This will enable the firm to ensure that the stakeholder remains their correct
point of concern. Hence, in line of this, the following section will be discussing the relevant
insights that the stakeholder theory provides for the the crisis management.
Relevant insights that the stakeholder theory provides for the crisis communication
The stakeholders have a crucial role to play and their role changes considerably when the
organization is faced by a crisis (Cook 2015). The shift in the role of the stakeholders comes
from the fact whether they are the victims of the crisis or the potential victims of the crisis. In
case they are the mere observers of the crisis may not be required to take action in the same way.
The role of the stakeholders in relation to the crisis generally determines the overall response of
the management. In cases where the stakeholder is a customer then, in case of a product harm
crisis, the different customers are the direct victim of the crisis and may have a higher vested
interest. In other cases, in case the crisis is related to an industrial issue then, the customer may
not be a direct victim and will be a mere observer of the overall event. Hence, as agreed by
Foster and Jonker (2005), it is this role which tends to create different expectations and different
levels of involvement from the different stakeholders. However, it is to be noted that it is the role
of the stakeholders in supporting the different organizational members which is of utmost
importance. The primary stakeholder reaction in a crisis may be the emotional reaction of the
stakeholder.
The primary three emotions which a stakeholder generally displays in a firm can be stated
to be the emptions related to anger, sympathy and anxiety (Eriksson 2017). In a case where the
stakeholder is angry about any kind of a crisis then, the stakeholder may direct that anger directly

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towards the organization and in this scenario, the crisis then reflects maximum damage on a
particular organization. Additionally, as the anger motivates the different stakeholders to act
against the firm and the overall image of the organization might be destroyed in such a scenario.
In some cases, the stakeholders may also reflect sympathy for the organization during certain
types of crisis then in such a case, they might be very supportive of the firm. Lastly, anxiety in
the stakeholders generally remains because the product harm has been done and this risk can turn
out to be harmful for the stakeholders. Hence, as per the writings of Freeman et al. (2018), the
major key in these key crisis scenario can be to establish the effective corrective actions which
will prevent the repetition of the crisis and harm the other stakeholders.
The main reason why the stakeholder theory might have significant impact on the crisis
communication is because, it has to be understood that the stakeholder theory states that the
stakeholders form the most critical part of the organization and with respect to this, it is the duty
of the organization to undertake the different duties in the right manner and inform the
stakeholders in the first instance (Liu, Shankar and Yun 2017). The stakeholder theory has
clearly outlined that in any case, it is the duty of the firm to inform the different stakeholders in
case any crisis takes place and set a specific guideline stating that it is the duty of the firm to be
able to mitigate the crisis for the stakeholders and work in the best interests of the firm.
Moreover, the firm would also be require to take decisions which will be the best in the favor of
the different stakeholders.
Critical analysis
Therefore, as agreed by Moutinho and Vargas-Sanchez (2018), the relationship between
the stakeholder and the business tends to change in cases where the organization is faced by a
major problem. The relationship of the stakeholder is under pressure and so is the overall image

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of the organization. Moreover, as mentioned by Steurer (2006), the external parties like media,
government and the citizens influence the overall relationship of the firm with the stakeholders
and hence, according to the stakeholder theory, it thereby lies the duty of the firm to ensure that
the firm is able to achieve long term success and ensure that the stakeholders are protected in the
right manner. For this reason, it becomes comparatively important as per the stakeholder theory
for the firm to communicate effectively with the targeted audience and to ensure that, the
stakeholder relationship with the organization remains intact. Hence, in line of this, and in
agreement with van der Meer et al. (2014), it can be mentioned that, with the stakeholders needs
to be open and avoid all statements which shall antagonize the different stakeholders. If the
stakeholders are not communicated with effectively, then they might become liabilities for the
firm and, the organization might face certain consequences. On the other hand, the employees
can be understood to be critical aspects of the firm and serve as credible source of information
about a firm. Hence, it is crucial to inform the employees as well about the crisis which will help
them to communicate with the firm in a better manner. Hence, they need to be well leveraged so
as to ensure that the crisis can be dealt with properly.
Conclusion
Therefore, from the given analysis, it can be rightfully understand that the crisis
management is a scenario which may often take place at the organization, however, in line of
this, the firm would be required to understand that if they want to attain the success of their
workplace, then they would be required to ensure that they are successfully able to communicate
with the stakeholders. The stakeholder theory also recommends that the employees form a
critical part of the firm and in order to build the relationship with them, in case of a crisis, it lies

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the duty of the different management to communicate with them effectively and to take actions
in the best of their interests.

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