Navigating Crises Easier With Halo

When it seems like each day brings a new crisis, understanding the nuances of navigating these situations successfully becomes increasingly important for individuals and organizations alike. UConn Department of Communication crisis communication researchers Tyler Page and Carolyn Lin were interested in studying how people's pre-existing attitudes toward an organization influenced how they perceived a crisis faced by that organization. Their findings are published in Public Relations Review.

An organization's image is an important component for success, and one strategy corporations rely on to preserve a positive public image is by practicing corporate social responsibility (CSR). CSR can come in many forms, for example programs or outreach to promote welfare for employees, customers, or communities.

"In a world where organizations are increasingly facing crises, whether they caused one or not, having a good reputation in advance can protect an organization," says Page.

Crises can sometimes be an opportunity for growth and relationship building. Lin and Page note a classic example of how the Johnson and Johnson pharmaceutical company handled the fallout from fatal cases of tampering in their product Tylenol in the 1980s. The company responded by inventing product recall and tamper-resistant packaging, but they also responded with clear and forthright communication with the public and policymakers, says Lin. The company's public relations strategy culminated in the company gaining a great deal of trust and a good reputation that has persisted for decades.

Halo and carryover effects

In crisis communication, Page explains there are many theories to explain the complex factors impacting how reputation can influence public perception. One theory is of a "carryover effect" that can be thought of like a bank holding an organization's reputational capital. In the event of a crisis, the theory posits that organizations withdraw the same amount of reputational capital, therefore an organization with more reputational capital to carry over will come out of the crisis in a better position compared to one with less banked capital.

Another theory is called the "halo effect," in which a favorable pre-crisis reputation is thought to change how people perceive a crisis faced by an organization.

"Instead of taking a big withdrawal, the reputational cost of a crisis goes down because we have a pre-existing attitude and an expectation of the organization," says Page.

To further interrogate the factors that influence crisis situations, Page developed a model that assesses attitudes toward an organization's actions connected with a crisis. The model distinguishes perceptions of crisis offensiveness from organizational virtuousness and shows how both influence the reputation and other outcomes of a crisis. In this study, Page and Lin conducted an experiment to simulate a crisis that tested whether the halo effect or the carryover effect explains crisis outcomes.

'Broad implications for society'

Lin says they designed the experiment around a fake corporation and crisis, but with elements from real-life to elicit a more familiar personal connection for participants. In this scenario, the fictional company was a pharmaceutical company. The researchers used Amazon's Mechanical Turk (mTurk) platform, where 406 participants learned about the company and encountered one of several pre-crisis CSR scenarios. The first scenario was a CSR success where the company distributed COVID vaccines to under-served communities. The second scenario was of a CSR failure documenting groundwater contamination surrounding a company facility. The third scenario included neither negative or positive outcomes. Participants then answered questions to assess their perceptions of the company before all participants were then exposed to the same crisis story, in this case, the sale of baby powder containing cancer-causing ingredients for decades.

Using the model, the researchers assessed how CSR impacted perceptions of the company in response to the crisis. They found that the halo effect was responsible for the perceived reduction in offensiveness of the crisis and this reduction was mediated by the perception of the company's virtuousness. They also did not see any carryover effect, says Lin, which was a surprise.

"This model allowed us to assess the difference between the halo and carryover effects for the first time," says Page. "I think that has some broad implications for society."

In addition to the innovative approach, Page says the structural equation modeling allowed them to determine the importance of the key variable of perceived virtuousness in reducing perceived offensiveness of the crisis, something they may not have seen using other methods.

This is key because our perceptions are very individual and influenced by our standpoints and experiences, says Page. Different groups may evaluate and perceive things very differently, and as we are all likely well aware, this makes communication tricky.

"Take a political crisis, if somebody from party X does something bad, people from that party might evaluate that crisis as less severe than people from the other party, and that makes it very hard for people to communicate with each other if they don't realize that they're seeing things differently," says Page.

Strategies, and how to execute them

Since they collected this data, Page says he is trying to understand how this work can help us think about the cognitive distortions we all have, and how this can help us interact with people in our lives who don't share the same biases and life experiences we have.

"If a politician or a business that you have a long relationship with experiences a crisis, your reaction will likely be different than a friend or family member who does not have the same relationship," says Page.

Lin says they were excited that they were able to validate the model, and the implications of the findings from this unique approach can be applied to broader crises. While previous crisis literature focused primarily on strategy and whether it worked or not, this approach emphasizes that there are variations on how to execute this strategy.

"What this model helps us to do is to begin to measure that, and to begin to test and see what's working and what's not, and see what's creating these effects. This model is an innovation for crisis scholarship," says Lin.

The findings also offer some solace when thinking about crises, especially where profits factor into the equation, says Page.

"I think one of the beautiful things about being a crisis scholar is that our research keeps saying that you need to do the right thing, and if you do the right thing, you will benefit financially. Unfortunately, not every aspect of life is like that, but we are an area where the financial incentives line up and encourage people to do the right thing."

Page says he is currently working with two UConn students to compare how crises based upon false or hyperbolic allegations can influence future crisis situations. Lin adds that this is an important and timely focus for turbulent times.

"Let's put it this way, there are so many crises since January, so there are a lot of things for us to study," says Lin. "Frankly, crisis communication management is a constant challenge for all private and public institutions."