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Beyond control: crisis strategies and stakeholder media in the Danone boycott of 2001

Author: Hunter, Mark ; Le Menestrel, Marc ; De Bettignies, Henri-ClaudeINSEAD Area: MarketingIn: Corporate Reputation Review, vol. 11, no. 4, December 2008 Language: EnglishDescription: p. 335-350.Type of document: INSEAD ArticleNote: Please ask us for this itemAbstract: Parallel streams of theory hold that intangible factors such as reputation may account for a major share of a firm's market valuation, and that a dialogic relationship with a firm's environment in general and direct stakeholders in particular is increasingly essential. A consumer boycott of unprecedented scope which confronted Danone SA in 2001 as the firm sought to rationalise its biscuit division suggests that under certain conditions these streams are convergent: A firm’s refusal to engage in dialogue with adversaries and stakeholders may negatively impact management’s reputation, and with it market valuation. The case further suggests that strategies of crisis communication aimed at control of opinion carry growing risks in terms of conflict and credibility loss with key stakeholders. A further finding is that news media may be of less importance to the outcome of a crisis and to corporate reputation than stakeholder-controlled media. We conclude that crisis communication strategies must give greater attention to establishing and maintaining dialogue with both direct stakeholders and with adversaries, whose ability to inflict damage may paradoxically be amplified by a firm’s attempts to establish control over public opinion.
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Parallel streams of theory hold that intangible factors such as reputation may account for a major share of a firm's market valuation, and that a dialogic relationship with a firm's environment in general and direct stakeholders in particular is increasingly essential. A consumer boycott of unprecedented scope which confronted Danone SA in 2001 as the firm sought to rationalise its biscuit division suggests that under certain conditions these streams are convergent: A firm’s refusal to engage in dialogue with adversaries and stakeholders may negatively impact management’s reputation, and with it market valuation. The case further suggests that strategies of crisis communication aimed at control of opinion carry growing risks in terms of conflict and credibility loss with key stakeholders. A further finding is that news media may be of less importance to the outcome of a crisis and to corporate reputation than stakeholder-controlled media. We conclude that crisis communication strategies must give greater attention to establishing and maintaining dialogue with both direct stakeholders and with adversaries, whose ability to inflict damage may paradoxically be amplified by a firm’s attempts to establish control over public opinion.

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