Skip main navigation

Stakeholder Responses to Crises and the Outcomes They Produce

Stakeholder Responses to Crises and the Outcomes They Produce
Once stakeholders have evaluated the impact of some trigger event specifically according to our model. Once they’ve considered the extent to which a person or organization is responsible, and the degree of hardship created by the situation stakeholders will draw some conclusions about an appropriate response and the response will manifest itself in two ways. Their assessment of the organizational brand and their future intentions for the conduct of business with that organization. We know that our stakeholders evaluation process will lead to an effective response of some sort. Effect is a term that’s used to describe some sort of emotion. Our stakeholders will have an emotional response of some sort as a result of the crisis.
As we’ve learned in this module, the incident can prime feelings of many different emotions, including anger, hostility, shame, frustration, guilt, and many more. And can be particularly intense when they follow an assessment that an injustice has occurred. When a crisis has been deemed by stakeholders as clearly our fault and the damage assessment is significant, stakeholder responses will likely be extreme. In our model moral outrage is used to describe the extent of negative emotions such as anger and resentment that stakeholders feel when they or others have been wrongfully harmed. Estimating stakeholders levels of outrage can help us predict their behaviors during a crisis.
Specifically when we can predict that stakeholders will project outward facing negative emotions, they’ll also feel the need to correct the wrong or engage in retaliatory behaviors. It is these behaviors that produce the outcomes described in our model. Clearly a primary objective for high stakes leaders is to reduce the impact of negative stakeholder sentiments. In our model, the two outcomes were most interested in are, the reputation damaged perceived by a given stakeholder and any future intentions that are not in the best interests of the firm.
We will not go into great detail on this course on the brand impact of a crisis nor will we pay nearly enough attention to the different ways stakeholders might perceive a company and its leadership after a crisis. Or the extent to which they’ll change the way they engage with the business itself. Suffice it to say these crises unless they’re managed very effectively will put pressure on the reputation or brand value perceived by stakeholders and will likely result in the future stakeholder behaviors that are not consistent with the best interests of the firm. How does this realization help us?
The point of understanding this entire model while it may feel as though we’ve taken a very research focused view of stakeholder reactions to crises, is to have at our disposal a model for predicting the likely stakeholder responses to certain crisis scenarios. If we’re in the middle of a crisis, we’re not going to have to predict our stakeholders might respond. I can assure you they’ll be letting you know what’s on their minds. Having a model and a mechanism for predicting a likely stakeholder responses is a very important step in our crisis preparedness and planning. This is true for two reasons. First during a crisis, you’re going to have limited time and resources to engage stakeholders as effectively as you would like.
A model like this will help you develop a predictive instrument for identifying priority stakeholders for particular types of crises. How, by spending time thinking through crises that your company is most likely to face and then using this model to predict which stakeholder groups are most likely to be impacted and therefore most likely to respond most actively. Second, a model such as this will help crisis leaders at your firm develop a general communication plan for certain types of crisis based on how different stakeholder groups are likely to react in each scenario. If both of these benefits sound a bit complex or if you’re wishing that you had a little more time to work through them, don’t fret.
We’ll be exploring exactly how to put this plan into use later in this course. As high-stakes leaders, we can benefit greatly from thinking through the ways our stakeholders are likely to react as a result of different crisis scenarios. Having a a sense of these likely reactions we’ll be able to prepare a stakeholder engagement plans that can address their concerns as they evaluate responsibility in the severity of damage of the event, effectively respond, and make choices about the extent to which we’re trustworthy and worth their partnership going forward.
This article is from the free online

High Stakes Leadership: Leading in Times of Crisis

Created by
FutureLearn - Learning For Life

Our purpose is to transform access to education.

We offer a diverse selection of courses from leading universities and cultural institutions from around the world. These are delivered one step at a time, and are accessible on mobile, tablet and desktop, so you can fit learning around your life.

We believe learning should be an enjoyable, social experience, so our courses offer the opportunity to discuss what you’re learning with others as you go, helping you make fresh discoveries and form new ideas.
You can unlock new opportunities with unlimited access to hundreds of online short courses for a year by subscribing to our Unlimited package. Build your knowledge with top universities and organisations.

Learn more about how FutureLearn is transforming access to education

  • 30% off Futurelearn Unlimited!