Post on 27-Mar-2018
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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Crisis communication under transformative change:
The emergent context and roles
of primary and secondary organisations
A thesis submitted in accordance with the requirements for the degree of Doctor of
Philosophy at the Queensland University of Technology
by
Amisha Madhuri Annand Patel
BBus(Hons)
School of Advertising, Marketing and Public Relations, QUT Business School,
Queensland University of Technology
Australia
April
2011
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Key Words
Crisis communication, public relations, change, punctuated equilibrium theory,
pharmaceutical industry
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Abstract
In an era of complex challenges that draw sustained media attention and
entangle multiple organisational actors, this thesis addresses the gap between current
trends in society and business, and existing scholarship in public relations and crisis
communication. By responding to calls from crisis communication researchers to
develop theory (Coombs, 2006a), to examine the interdependencies of crises
(Seeger, Sellnow, & Ulmer, 1998), and to consider variation in crisis response
(Seeger, 2002), this thesis contributes to theory development in crisis
communication and public relations. Through transformative change, this thesis
extends existing scholarship built on a preservation or conservation logic where
public relations is used to maintain stability by incrementally responding to changes
in an organisation‘s environment (Cutlip, Center, & Broom, 2006; Everett, 2001;
Grunig, 2000; Spicer, 1997). Based on the opportunity to contribute to ongoing
theoretical development in the literature, the overall research problem guiding this
thesis asks:
How does transformative change during crisis influence corporate actors’
communication?
This thesis adopts punctuated equilibrium theory, which describes change as
alternating between long periods of stability and short periods of revolutionary or
transformative change (Gersick, 1991; Romanelli & Tushman, 1994; Siggelkow,
2002; Tushman, Newman, & Romanelli, 1986; Tushman & Romanelli, 1985). As a
theory for change, punctuated equilibrium provides an opportunity to examine public
relations and transformative change, building on scholarship that is based primarily
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on incremental change. Further, existing scholarship in public relations and crisis
communication focuses on the actions of single organisations in situational or short-
term crisis events. Punctuated equilibrium theory enables the study of multiple crises
and multiple organisational responses during transformative change. In doing so,
punctuated equilibrium theory provides a framework to explain both the context for
transformative change and actions or strategies enacted by organisations during
transformative change (Tushman, Newman, & Romanelli, 1986; Tushman &
Romanelli, 1985; Tushman, Virany, & Romanelli, 1986). The connections between
context and action inform the research questions that guide this thesis:
RQ1: What symbolic and substantive strategies persist and change as crises
develop from situational events to transformative and multiple linked events?
RQ2: What features of the crisis context influence changes in symbolic and
substantive strategies?
To shed light on these research questions, the thesis adopts a qualitative
approach guided by process theory and methods to explicate the events, sequences
and activities that were essential to change (Pettigrew, 1992; Van de Ven, 1992).
Specifically, the thesis draws on an alternative template strategy (Langley, 1999) that
provides several alternative interpretations of the same events (Allison, 1971;
Allison & Zelikow, 1999). Following Allison (1971) and Allison and Zelikow
(1999), this thesis uses three alternative templates of crisis or strategic response
typologies to construct three narratives using media articles and organisational
documents. The narratives are compared to identify and draw out different patterns
of crisis communication strategies that operate within different crisis contexts. The
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thesis is based on the crisis events that affected three organisations within the
pharmaceutical industry for four years. The primary organisation is Merck, as its
product recall crisis triggered transformative change affecting, in different ways, the
secondary organisations of Pfizer and Novartis. Three narratives are presented based
on the crisis or strategic response typologies of Coombs (2006b), Allen and Caillouet
(1994), and Oliver (1991).
The findings of this thesis reveal different stories about crisis communication
under transformative change. By zooming in to a micro perspective (Nicolini, 2009)
to focus on the crisis communication and actions of a single organisation and
zooming out to a macro perspective (Nicolini, 2009) to consider multiple
organisations, new insights about crisis communication, change and the relationships
among multiple organisations are revealed at context and action levels. At the
context level, each subsequent narrative demonstrates greater connections among
multiple corporate actors. By zooming out from Coombs‘ (2006b) focus on single
organisations to consider Allen and Caillouet‘s (1994) integration of the web of
corporate actors, the thesis demonstrates how corporate actors add accountability
pressures to the primary organisation. Next, by zooming further out to the macro
perspective by considering Oliver‘s (1991) strategic responses to institutional
processes, the thesis reveals a greater range of corporate actors that are caught up in
the process of transformative change and accounts for their varying levels of agency
over their environment.
By zooming in to a micro perspective and out to a macro perspective
(Nicolini, 2009) across alternative templates, the thesis sheds light on sequences,
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events, and actions of primary and secondary organisations. Although the primary
organisation remains the focus of sustained media attention across the four-year time
frame, the secondary organisations, even when one faced a similar starting situation
to the primary organisation, were buffered by the process of transformative change.
This understanding of crisis contexts in transforming environments builds on
existing knowledge in crisis communication.
At the action level, the thesis also reveals different interpretations from each
alternative template. Coombs‘ (2006b) narrative shows persistence in the primary
organisation‘s crisis or strategic responses over the four-year time frame of the
thesis. That is, the primary organisation consistently applies a diminish crisis
response. At times, the primary organisation drew on denial responses when
corporate actors questioned its legitimacy or actions. To close the crisis, the primary
organisation uses a rebuild crisis posture (Coombs, 2006). These finding are
replicated in Allen and Caillouet‘s (1994) narrative, noting this template‘s limitation
to communication messages only. Oliver‘s (1991) narrative is consistent with
Coombs‘ (2006b) but also demonstrated a shift from a strategic response that signals
conformity to the environment to one that signals more active resistance to the
environment over time. Specifically, the primary organisation‘s initial response
demonstrates conformity but these same messages were used some three years later
to set new expectations in the environment in order to shape criteria and build
acceptance for future organisational decisions. In summary, the findings demonstrate
the power of crisis or strategic responses when considered over time and in the
context of transformative change.
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The conclusions of this research contribute to scholarship in the public
relations and management literatures. Based on the significance of organisational
theory, the primary contribution of the theory relates to the role of
interorganisational linkages or legitimacy buffers that form during the punctuation of
equilibrium. The network of linkages among the corporate actors are significant also
to the crisis communication literature as they form part of the process model of crisis
communication under punctuated equilibrium. This model extends existing research
that focuses on crisis communication of single organisations to consider the
emergent context that incorporates secondary organisations as well as the localised
contests of legitimacy and buffers from regulatory authorities. The thesis also
provides an empirical base for punctuated equilibrium in public relations and crisis
communication, extending Murphy‘s (2000) introduction of the theory to the public
relations literature. In doing this, punctuated equilibrium theory reinvigorates
theoretical development in crisis communication by extending existing scholarship
around incrementalist approaches and demonstrating how public relations works in
the context of transformative change.
Further research in this area could consider using alternative templates to
study transformative change caused by a range of crisis types from natural disasters
to product tampering, and to add further insight into the dynamics between primary
and secondary organisations. This thesis contributes to practice by providing
guidelines for crisis response strategy selection and indicators related to the
emergent context for crises under transformative change that will help primary and
secondary organisations‘ responses to crises.
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Table of Contents
Key Words ................................................................................................................... 2
Abstract ........................................................................................................................ 3
Table of Contents ......................................................................................................... 8
List of Figures ............................................................................................................ 13
List of Tables.............................................................................................................. 14
Abbreviations ............................................................................................................. 16
Declaration of Originality .......................................................................................... 17
Dedication .................................................................................................................. 18
Acknowledgements .................................................................................................... 19
CHAPTER ONE ........................................................................................................ 20
Introduction ................................................................................................................ 20
1.1 Background to Research .................................................................................... 20
1.2 The Research Problem ....................................................................................... 24
1.3 Justification for the Research ............................................................................. 28
1.4 Research setting ................................................................................................. 32
1.5 Methodology ...................................................................................................... 33
1.6 Definitions of Key Terms ................................................................................... 36
1.7 Limitations and Scope of Research .................................................................... 39
1.8 Outline of Thesis ................................................................................................ 42
1.9 Conclusion.......................................................................................................... 43
CHAPTER TWO ....................................................................................................... 44
Literature Review ....................................................................................................... 44
2.1 Crisis Communication Research ........................................................................ 44
2.1.1 Rationales of Existing Crisis Communication Research .......................... 45
2.1.1.1 Defining Crisis and Crisis Communication ........................................ 46
2.1.1.2 Crisis Response Typologies using Qualitative Research .................... 48
2.1.1.3 Crisis Response Typologies using Quantitative Research .................. 54
2.1.2 Alternative Views: Crisis Communication Research and Change ............ 57
2.1.2.1 New Directions in Crisis Communication Research ........................... 61
2.1.3 Punctuated Equilibrium and Public Relations........................................... 63
2.2 Punctuated Equilibrium Theory ......................................................................... 70
2.2.1 Origins of Punctuated Equilibrium Theory ............................................... 70
2.2.2 Context: Macro Level of Punctuated Equilibrium Theory ....................... 73
2.2.3 Action: Micro Level of Punctuated Equilibrium Theory .......................... 77
2.2.4 Conclusions and Implications for Study ................................................... 82
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2.3 Synthesising Context and Action through Punctuated Equilibrium Theory ...... 83
2.3.1 Context in Punctuated Equilibrium and Crisis Communication ............... 85
2.3.1.1 Punctuated Equilibrium Theory and Context ...................................... 86
2.3.1.2 Crisis Communication and Context .................................................... 87
2.3.2 Action Level: Crisis Response Typologies during Equilibrium and
Punctuations ....................................................................................................... 90
2.3.2.1 Punctuated Equilibrium Theory and Organisational Actions ............. 90
2.3.2.2 Crisis Communication and Organisational Actions ............................ 91
2.3.2.3 Existing Crisis Response Typologies .................................................. 92
2.3.2.4 Integrating Change into Existing Crisis Response Typologies ........... 98
2.3.2.5 Summary of Context and Actions and Implications for Study ......... 103
2.3.3 Synthesising Punctuated Equilibrium Theory and Crisis Communication
.......................................................................................................................... 104
2.3.3.1 The Trigger for Punctuation .............................................................. 105
2.3.3.2 Punctuations: Focusing and Emergent Crisis Events ........................ 108
2.3.3.3 Ongoing Crisis Events ...................................................................... 113
2.3.3.4 Implications for Research ................................................................. 116
2.4 Research Questions .......................................................................................... 118
2.4.1 Guiding Research Questions ................................................................... 119
2.4.1.1 Communication Action ..................................................................... 120
2.4.1.2 Linking Context and Communication Action ................................... 121
2.4.1.3 Research Propositions ....................................................................... 122
2.5 Conclusion........................................................................................................ 123
CHAPTER THREE .................................................................................................. 124
Methodology ............................................................................................................ 124
3.1 Justification for Research Paradigm ................................................................. 124
3.2 Methodology .................................................................................................... 126
3.2.1 Qualitative Research ............................................................................... 127
3.2.2 Process Theory and Research.................................................................. 130
3.3 Research Procedures ........................................................................................ 135
3.3.1 Case Study Selection ............................................................................... 135
3.3.2 Sources of Evidence ................................................................................ 138
3.3.3 Media Reporting of Organisations .......................................................... 141
3.3.4 Organisational Documents ...................................................................... 143
3.3.5Additional documents .............................................................................. 144
3.3.6 Management of Data ............................................................................... 144
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3.4 Data Analysis ................................................................................................... 145
3.4.1 Time Ordered Displays ........................................................................... 146
3.4.2 Narrative Construction by Alternative Templates .................................. 152
3.4.2.1 The Role of Narratives in Process Research ..................................... 152
3.4.2.2 The Construction of Narratives in this Thesis................................... 154
3.4.3 Presentation of Patterns in Data .............................................................. 160
3.4.4 Comparisons of Alternative Templates ................................................... 163
3.5 Quality of Research .......................................................................................... 164
3.6 Limitations of the Research ............................................................................. 167
3.7 Ethical Consideration ....................................................................................... 169
3.8 Conclusion........................................................................................................ 170
CHAPTER FOUR .................................................................................................... 171
Results ...................................................................................................................... 171
4.1 Background of Merck, Pfizer and Novartis ..................................................... 172
4.1.1 Merck & Co ............................................................................................ 173
4.1.2 Pfizer Inc ................................................................................................. 173
4.1.3 Novartis ................................................................................................... 174
4.2 Description of Key Events ............................................................................... 175
4.2.1 Starting Points: Overview of Pharmaceutical Industry ........................... 176
4.3 Alternative Template 1: Restoring Reputations through Coombs‘ Theory ..... 178
4.3.1 Withdrawal of Vioxx............................................................................... 182
4.3.2 Merck‘s ongoing crisis ............................................................................ 188
4.3.2.1 Merck‘s Marketing Strategies ........................................................... 189
4.3.2.2 Merck‘s Internal Communication ..................................................... 190
4.3.2.3 Response of FDA .............................................................................. 194
4.3.2.4. Vioxx and Coombs ........................................................................... 195
4.3.3 Response to Senate Committee ............................................................... 195
4.3.4 Reaction to the Bextra Withdrawal ......................................................... 199
4.3.5 Merck‘s Defence against Litigation ........................................................ 201
4.3.5.1 Ernst Trial.......................................................................................... 202
4.3.5.2 Humeston Trial.................................................................................. 204
4.3.5.3 Other Trials ....................................................................................... 206
4.3.6 Defence against Research Findings ........................................................ 208
4.3.6.1 Merck‘s Defence against its Own Data ............................................. 208
4.3.6.2 Merck‘s Defence against New Data .................................................. 210
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4.3.7 Settlement of Litigation........................................................................... 213
4.3.8 Summary of Coombs‘ Template ............................................................. 216
4.4 Alternative Template 2: Restoring Legitimacy in Response to Accountability
Pressures ................................................................................................................. 219
4.4.1 Withdrawal of Vioxx............................................................................... 223
4.4.2 Responses to the Withdrawal of Vioxx ................................................... 228
4.4.2.1 Pfizer‘s Reactions.............................................................................. 229
4.4.2.2 Pressures on Merck ........................................................................... 231
4.4.2.3 Spotlight on Regulators ..................................................................... 233
4.4.2.4 Pfizer under Threat ............................................................................ 236
4.4.2.5 Discussion of Cox-2 Drug Safety ..................................................... 241
4.4.2.6 Withdrawal of Bextra ........................................................................ 245
4.4.2.7 FDA Actions Trigger Response from Web of Actors ....................... 246
4.4.3 Defence against Litigation ...................................................................... 248
4.4.3.1 Vioxx Trials with Strong Media Coverage ....................................... 248
4.4.4 Defence against New Data ...................................................................... 251
4.4.5 Changes to Legislation ............................................................................ 254
4.4.6 Settlement of Litigation........................................................................... 257
4.4.7 Summary of Allen and Caillouet‘s (1994) Template .............................. 258
4.5 Alternative Template 3: Building Legitimacy across Multiple Organisations
through Oliver‘s Framework .................................................................................. 261
4.5.1 Withdrawal of Vioxx............................................................................... 265
4.5.1.1 Pressure and Opportunities for Pfizer ............................................... 268
4.5.1.2 Pressure from Congress .................................................................... 271
4.5.1.3 FDA Acts .......................................................................................... 274
4.5.2 Influence of the FDA .............................................................................. 280
4.5.2.1 Influence of the FDA on Bextra ........................................................ 282
4.5.2.2 Changes to the FDA .......................................................................... 283
4.5.3 Changes to Medical Reporting ................................................................ 288
4.5.4 Litigation ................................................................................................. 292
4.5.4.1 Liability trials .................................................................................... 292
4.5.4.2 Legal settlement ................................................................................ 295
4.5.5 Summary of Oliver‘s Template ............................................................... 296
4.6 Summary and Analysis of Crisis Communication Responses ......................... 299
4.6.1 Visual Maps using Coombs‘ Narrative ................................................... 301
4.6.2 Visual Maps using Allen and Caillouet‘s Narrative ............................... 304
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4.6.3 Visual Maps using Oliver‘s Narrative..................................................... 307
4.7 Comparison of Alternative Templates ............................................................. 310
4.7.1 Three Different Stories of and Drivers for Crisis Communication ......... 312
4.7.2 Differences in Interpretation ................................................................... 314
4.8 Conclusion........................................................................................................ 321
CHAPTER FIVE ...................................................................................................... 323
Conclusions and implications .................................................................................. 323
5.1 Summary of Findings and Theoretical Implications ........................................ 325
5.2 Conclusions about Research Questions ........................................................... 326
5.2.1 Research Question One: Persistence of and Changes in Crisis
Communication and Action ............................................................................. 327
5.2.1.1 Symbolic Strategies Prepare for and Support Substantive Strategies
....................................................................................................................... 329
5.2.1.2 Symbolic Strategies Adapt to Local Sites of Contested Legitimacy 334
5.2.2 Research Question Two: Uncovering the Features of Crisis Context..... 340
5.2.2.1 Model of Insight Formation Creates an Emergent Context for Crisis
....................................................................................................................... 341
5.3 Conclusions about the Research Problem ........................................................ 346
5.4 Implications for Theory .................................................................................... 351
5.4.1 Implications for Public Relations based on a New Theory for Change .. 352
5.4.2 Implications for Public Relations based on Crisis Communication during
Punctuations of Equilibrium ............................................................................ 355
5.4.3 Implications for Public Relations based on the Emergent Context and
Competitor Dynamics ..................................................................................... 356
5.4.4 Implications for Organisational Theory based on the Role of
Interorganisational Linkages and Buffers ........................................................ 358
5.4.5 Implications for Organisational Theory based on Communication Actions
during Transformative Change ........................................................................ 359
5.5 Implications for Practice .................................................................................. 361
5.5.1 Crisis Communication Decision-Making for Primary and Secondary
Organisations ................................................................................................... 361
5.5.1.1 Guidelines for Strategy Selection ..................................................... 362
5.5.1.2 Indicators of a Shift from Crisis Event to Focusing Event ............... 366
5.5.2 Integration of Change in Crisis Management ......................................... 368
5.6 Limitations ....................................................................................................... 370
5.7 Implications for Further Research .................................................................... 372
5.8 Conclusion........................................................................................................ 378
REFERENCES ......................................................................................................... 379
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List of Figures
Figure 2.1 The Relationship between Context and Action Levels................................... 85
Figure 2.2 Crisis Evolution under Punctuated Equilibrium Theory ............................... 105
Figure 3.1 Illustration of Data Analysis Process .............................................................. 156
Figure 4.1 Coombs‘ Crisis Response Strategies .............................................................. 182
Figure 4.2 Allen and Caillouet‘s Message Strategies ...................................................... 223
Figure 4.3 Merck‘s Web of Actors .................................................................................. 228
Figure 4.4 Same Start but Different Sequence of Events for Vioxx and Celebrex ......... 240
Figure 4.5 Oliver‘s Strategies .......................................................................................... 265
Figure 4.6 Explaining Differences in Vioxx and Celebrex ............................................. 279
Figure 4.7 Visual Map of Merck‘s Strategies using Coombs‘ Template ......................... 302
Figure 4.8 Visual Map of Merck‘s Crisis Communication using Allen and
Caillouet‘s Template ....................................................................................................... 305
Figure 4.9 Visual Map of Merck and Pfizer using Oliver‘s Template............................. 308
Figure 4.10 Zooming in and out of Alternative Templates ............................................. 311
Figure 4.11 Drivers for Change across Alternative Templates ........................................ 314
Figure 5.1 Hierarchy of Crisis Communication Strategies .............................................. 332
Figure 5.2 Crises as Core and Peripheral Events for Multiple Organisations ................ 337
Figure 5.3 Regulatory Insights under Formation ............................................................. 343
Figure 5.4 Process Model or Crisis Communication under Punctuated Equilibrium ..... 348
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List of Tables
Table 2.1 Qualitative Crisis Communication Case Studies ............................................. 52
Table 2.2 Coombs‘ Crisis Response Typology ................................................................ 56
Table 2.3 Strategies for Convergent Change ................................................................... 78
Table 2.4 Strategies for Transformative Change ............................................................. 80
Table 2.5 Coombs‘ Crisis Response Typology ................................................................ 93
Table 2.6 Allen and Caillouet‘s Crisis Response Typology ............................................ 96
Table 2.7 Oliver‘s Typology of Strategic Responses to Institutional Processes.............. 100
Table 3.1 Top Product Recalls in the United States ........................................................ 137
Table 3.2 Number of Media Articles per Year ................................................................ 143
Table 3.3 Number of Media Releases per Year ............................................................... 144
Table 3.4 Sample of Events Coded .................................................................................. 148
Table 3.5 Sample of Context of Events ........................................................................... 150
Table 3.6 Theoretical Emphasis of Alternative Templates .............................................. 155
Table 3.7 Alternative Template Strategies ....................................................................... 157
Table 4.1 Timeline of Key Events ................................................................................... 175
Table 4.2 Coombs‘ Crisis Response Strategies ............................................................... 179
Table 4.3 Merck Statements during Vioxx Withdrawal .................................................. 184
Table 4.4 Reinforcement of ‗Unexpectedness‘ of Trial Results ...................................... 186
Table 4.5 Merck Bolsters Financial Confidence .............................................................. 187
Table 4.6 Merck‘s Actions over Vioxx ............................................................................ 192
Table 4.7 Internal Emails Explained ................................................................................ 193
Table 4.8 FDA Advisory Committee‘s Votes on COX-2 ................................................ 200
Table 4.9 Vioxx Product Liability Trials in Media Reporting Order .............................. 207
Table 4.10 Merck Responses to NEJM ............................................................................ 210
Table 4.11 Allen and Caillouet‘s Message Strategies ...................................................... 220
Table 4.12 Merck Statements during Vioxx Withdrawal ................................................ 224
Table 4.13 Ingratiation Strategies Used by Merck during Vioxx Withdrawal ................ 226
Table 4.14 Timeline of Events ......................................................................................... 229
Table 4.15 Merck‘s Factual Distortion Responses to Medical Researchers .................... 232
Table 4.16 Merck‘s Factual Distortion Messages ............................................................ 233
Table 4.17 Comparisons between Celebrex and Vioxx ................................................... 238
Table 4.18 Merck‘s Responses to New Data on Vioxx ................................................... 252
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Table 4.19 Oliver‘s Strategic Responses to Institutional Processes ................................ 263
Table 4.20 Strategies Used by Pfizer in Response to the Vioxx Withdrawal .................. 269
Table 4.21 Pfizer Responses ............................................................................................ 276
Table 4.22 Changes to FDA policy and decision-making ............................................... 285
Table 4.23 Vioxx Product Liability Trials in Media Reporting Order ............................ 294
Table 5.1 Conclusions and Contributions of Research Question One ............................. 328
Table 5.2 Conclusions and Contributions of Research Question Two ............................ 341
Table 5.3 Macro Strategies and Recommendations ......................................................... 364
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Abbreviations
APPROVe – Adenomatous Polyp Prevention on VIOXX
COX-1 – Cyclooxygenase-1 (older generation drug compared to Vioxx, Celebrex,
and Bextra)
COX-2 – Cyclooxygenase-2 (base for Vioxx, Celebrex, and Bextra)
FDA – Food and Drug Administration
HMO – Health Maintenance Organisation
NEJM – New England Journal of Medicine
PhRMA – Pharmaceutical Research and Manufacturers of America
VICTOR – Vicriviroc in Combination Treatment with an Optimized Antiretroviral
Therapy Regimen in HIV-Infected Treatment-Experienced Subjects
VIGOR – Vioxx Gastrointestinal Outcomes Research
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Declaration of Originality
The work contained in this thesis has not been previously submitted to meet
requirements for an award at this or any other higher education institution. To the
best of my knowledge and belief, the thesis contains no material previously
published or written by another person except where due reference is made.
Signed:
Date:
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Dedication
This thesis is dedicated to
my father Dr Anand Kumar Patel and my mother Dr Madhu Anand Patel
who have taught me the most about perseverance and love.
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Acknowledgements
The passion for learning and sharing is what drives the people who have supported
me throughout this study. Thank you for inspiring me every day.
Thank you to my supervisory team of Brett Martin, Lisa Bradley, Jim Everett,
Stephen Cox, and Glen Broom. Whether it‘s been via a hallway chat or a two-hour
meeting, by sharing how you think, you have taught me so much about learning and
wisdom. Thank you for being such wonderful mentors and ingraining the ‗so what?‘
question into my (almost—shoes excluded) everyday thinking. It is indeed a
privilege to learn from you.
To Jane Browning and Jennifer Bartlett, for providing me with such constructive
ways to move forward. From ―no more dramas‖ to ―these streets will make you feel
brand new‖: you have given me the soundtrack for the study and believed in me
every step of the way.
To Robina Xavier and Ian Lings for showing me that this was within my reach.
Thank you for being awesome teachers and researchers, always listening, and
picking up a whiteboard marker to help me map out ideas.
A special thanks to Dorothy Chapman for editing the thesis and to Caroline Hatcher
and Karen Becker for their insights during my final seminar and to the examiners—
you‘ve all given me the chance to strengthen the contributions of the study.
*Snaps* to the hallway monitors of Elizabeth Macpherson, Kim Johnston, Ingrid
Larkin, Bill Proud, Connie Bianchi, Gina Courtney, Katherine Harkin, Tanya Wolfe,
Amanda Beatson, Helen O‘Donnell, and Anne Lane. And to our always amazing
past and present professional staff Janelle Valentine, Sue Chapple, Robyn Sinfield,
Jenny Hall, Elyse Knowles, Maree Turner, Naomi Davidson, Tania Campbell,
Stephanie Parker and Terece Edgar who make administrative life a breeze.
Thank you to my buddies in industry and in fun: Tenile Bishop, Kiara Bowles,
Michelle Palmer, Monica McCabe, Melanie Mayne-Wilson and Kirsty McDonald.
Thanks for celebrating the milestones along the way.
And to the most fabulous friends I could ever wish for: Liz Gofton, Helen Browning,
Louisa Aherne, Duncan Smith, Matthew Hart, Sharyn McCormack, Tanya deKroo,
Kristin Carlos, Heather Harcourt, Linda Henry, Emma Lawlor, and Wendy
McKnight. Thanks for your encouragement, even when I sounded like a broken
record.
And the greatest thanks and love to my family – my husband Vimal, Mum, Dad, my
brother Alok, Aunty Dawn, Uncle Cameron, and Lucy the dog. Thanks for being the
best thinking caps, sounding boards, cooks, and pockets of love a girl could ever ask
for.
To my guiding lights who are always looking out for me: Mamaji, Chotai Dada, and
Gordon Jenkinson. I am blessed to have such an inspirational group of people in my
life.
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CHAPTER ONE
Introduction
1.1 Background to Research
Uncertainty, surprise, and disruption are common features in business and
society, yet most organisations and disciplines are engineered to embrace stability
and certainty (Ramo, 2009). At the same time, organisational crisis events such as
the BP oil disaster, the collapse of Lehman Brothers, Bear Stearns and Storm
Financial, and natural disasters remind organisations of the importance of crisis
management and communication. Today‘s complex problems and crises make
significant the role and value of public relations and crisis communication.
Crisis communication has developed from the public relations literature to
explain the way organisations communicate during crises (Seeger et al., 1998). The
rationale for existing crisis communication is based on a logic of preservation of
stability and restoration of reputation and legitimacy. In this way, crisis
communication is used to achieve outcomes of positive reputations and legitimacy
for organisations. As a result of this logic, existing research is based largely on
situational or short-term crisis events using cross-sectional design.
Early research used rhetoric and impression management to produce
typologies of crisis communication that continue to be used as the basis for applied
case studies of single organisations (Allen & Caillouet, 1994; Benoit, 2000; Benoit
& Brinson, 1994; Hearit, 1994, 2001; Hearit & Brown, 2004; Hearit & Courtright,
2003). These typologies were subsequently adapted by quantitative researchers to
produce decision-making frameworks that enable crisis managers to select the most
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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effective sequence of standardised crisis response strategies in order to influence
stakeholder perceptions of crises and preserve organisational reputation (Coombs,
1998, 2002, 2004a, 2006a, 2007b; Coombs & Holladay, 2002, 2004, 2006).
As a whole, existing research in crisis communication serves the strong
practical requirement of the discipline (Jaques, 2009; Seeger et al., 1998). Yet even
the practical usefulness of this research is limited to communication decisions that
are based on preserving stability or a gradual, moving equilibrium between single
organisations and their environments (Grunig, 2000). By focusing on situational
crisis events and single organisations, these approaches have largely overlooked
what Seeger et al. (2005) call a ―fundamental suspension or disruption of
organisational stability and status quo‖ (p. 80) across multiple organisations. There
have been no studies of crisis communication across multiple and linked crisis
events that affect multiple organisations, an area that offers new theoretical
opportunities for scholarship in crisis communication and public relations.
Today‘s complex problems necessitate crisis communication research under
complex conditions of uncertainty, surprise and transformative change that
fundamentally suspend or disrupt organisational stability (Seeger, Ulmer, Novak, &
Sellnow, 2005). In response, research requires new types of theoretical and practical
solutions, creating opportunities for extending crisis communication and public
relations research.
Public relations scholars provide some support for advancing the genre of
crisis communication beyond ―objective phenomena‖ and standardised decision-
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
22
based frameworks (Hearit & Courtright, 2003, p. 80). Crisis communication
researchers are calling for work that overcomes the existing perspective of crisis
where crisis response strategies are enacted to restore reputation or legitimacy. Such
approaches are held to be ill-equipped to deal with complex and unpredictable
change (Gilpin & Murphy, 2006; Gower, 2006). Theorists support the need for crisis
communication research under conditions of transformative change that disrupts a
return to stability as opposed to research that seeks to ensure the effectiveness of
crisis communication in restoring reputations and legitimacy. Researchers are calling
for studies that examine the interdependencies of crises (S. Kim, Avery, & Lariscy,
2009; Seeger et al., 1998), variation in crisis response strategies (S. Kim et al., 2009;
Seeger, 2002), and the deep structures behind public relations responses (Seeger,
Sellnow, & Ulmer, 2001).
Crisis communication researchers have suggested punctuated equilibrium,
chaos theory, and complexity theory (Gilpin & Murphy, 2006; Gower, 2006; Jaques,
2007; Murphy, 2000, 2007; Seeger, 2002; Seeger et al., 1998; Seeger et al., 2005) as
frameworks to move beyond the notions of controllability that feature in most crisis
work. Under these theories, a crisis is viewed as a change-inducing event that
fundamentally disrupts the status-quo, rendering largely ineffective the standardised
crisis response strategies designed to preserve the status-quo (Seeger et al., 2005).
Within these frameworks, crisis communication cannot be meaningfully reduced to a
set of standardised responses because an organisation‘s future is not able to be
predicted. Even though authors have suggested alternatives to extend crisis
communication research, there has been limited empirical work that explores crisis
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
23
communication under transformative change that fundamentally suspends
organisational stability (Seeger et al., 2005) and affects multiple organisations.
Punctuated equilibrium theory provides a framework to study crisis
communication when change is transformative and affects multiple organisations
over extended time frames. Punctuated equilibrium theory argues that evolution
occurs through patterns of long periods of stability that are punctuated by short
periods of revolutionary and transformative change (Romanelli & Tushman, 1994).
In this way, change occurs not through continual and incremental improvement but
in more radical ways. Since the 1990s, punctuated equilibrium has become an
established theory to account for change in organisations and industries (Gersick,
1991; Romanelli & Tushman, 1994; Siggelkow, 2002) and public policy
(Baumgartner & Jones, 1991; Birkland, 1998; Jones & Baumgartner, 2005; Jones,
Sulikn, & Larsen, 2003; Nohrstedt, 2008; Schrad, 2007; True, 1999). Punctuated
equilibrium theory offers a way to understand radical changes to patterns of
adaptation in organisational evolution, particularly in the effort to account for change
at the macro level and change within organisations.
The value of the punctuated equilibrium perspective in crisis communication
is supported by Murphy (2000) who defines crises as change-inducing events for
organisations and industries. Yet, there has been little empirical evidence to account
for crisis communication during times of transformative change. By offering a map
for transformative change, punctuated equilibrium theory allows crisis
communication theory to move beyond situational crisis events studied through
cross-sectional design to consider the transformative force of crisis events, indeed
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
24
that crises punctuate equilibrium, and have implications for crisis communication.
This thesis adopts punctuated equilibrium theory, as it is employed in organisational
theory, as a theoretical framework to explain change in crisis communication when
crisis events trigger transformative change across multiple organisations and
extended time frames. Such an approach will allow crisis communication to draw
implications for the treatment of change in public relations theory.
1.2 The Research Problem
This thesis employs punctuated equilibrium theory as a perspective through
which to study transformative change and its role in crisis communication.
Recognising the extensive research around crisis communication or response
strategies during situational crisis events and frameworks that support crisis as a
change-inducing event, punctuated equilibrium theory connects both the role of
crises as change-inducing events (Murphy, 2000) and the communication role that
occurs within this context. The role and type of crisis communication during
transformative change is empirically absent in crisis communication research.
Because there is little knowledge on this topic and opportunities to extend existing
scholarship around change, the central research problem guiding this thesis is:
How does transformative change during crisis influence corporate actors’
communication?
Punctuated equilibrium theory provides an essential perspective to explore
this problem. Within the context of the organisational sciences, the overall thesis of
punctuated equilibrium theory is that organisational evolution occurs through
patterns of long periods of stability that are punctuated by ―short bursts of
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
25
revolutionary change‖ (Romanelli & Tushman, 1994, p. 1141). Long periods of
organisational stability are framed by deep structures or sets of fundamental choices
that organisations use to structure behaviour and obtain resources from their
environments (Gersick, 1991). Deep structures mesh together organisations and their
environments. This interdependence can create organisational inertia, where an
organisation is resistant to all but incremental change (Tushman & Romanelli, 1985,
p. 177). When punctuations occur, they are triggered by significant change events
that draw attention to and set in place a sequence of events that question and
dismantle the deep structures behind organisational behaviour and communication
(Gersick, 1991; Romanelli & Tushman, 1994; Siggelkow, 2002; Tushman, Newman
et al., 1986).
Punctuations occur when internal or external change threatens organisational
alignment and access to resources (Gersick, 1991). Some of the external triggers for
punctuations are changes in the macro environment, organisational performance,
product-related events or crises (Gersick, 1991; Sabherwal, Hirschheim, & Goles,
2001; Siggelkow, 2002; Tushman, Newman et al., 1986; Tushman, Virany et al.,
1986). While these trigger events are unlikely to be the direct cause of transformative
change, they provide the kinetic energy for transformative change (Gersick, 1991).
The ideal-typical nature of punctuated equilibrium provides an objective
basis to guide thinking, making the theory easily transferable and translatable from
evolutionary studies to organisational and political science (Robinson, 2007) and as
a result, crisis communication. Through the treatment of punctuated equilibrium
theory in both the organisational and public policy literatures, the theory is able to
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
26
provide a clear indication of the phases of change and the structure, process and
conditions for transformative change. As a result, punctuated equilibrium theory
accounts for both the context for transformative change and the actions of
organisations during transformative change. The duality between context and action
is useful for ongoing research in punctuated equilibrium theory.
At a context level, punctuated equilibrium theory sees change as
transformative and sets guidelines for the conditions of equilibrium, the nature of the
punctuation, and the renewal of equilibrium (Gersick, 1991). Public policy literatures
provide detailed examination of the punctuation itself, drawing on media interest and
attention as critical requirements for transformative change (Baumgartner & Jones,
1991; Birkland, 1998; Jones & Baumgartner, 2005; Jones, True, & Baumgartner,
1997). In the public relations literature, Murphy (2000) describes this as a process
where crises may ―initiate a period of confusion in media coverage followed by the
emergence of a new reputation for the organisation that underwent the crisis‖ (p.
453). A punctuation creates the opportunity for questioning the deep structures that
preserve stability (Gersick, 1991). As a result of this uncertainty, new structures can
emerge to guide the next period of stability (Gersick, 1991).
At the action level, punctuated equilibrium theory accounts for changes in
organisational strategy to complement the context for transformative change.
Organisational actions refer to the substantive and symbolic strategies enacted by
organisations during long periods of stability and punctuations of equilibrium.
During long periods of stability, organisations signal compliance to deep structures
through legitimation, justification, and rationalisation (Gersick, 1991; McDonough,
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
27
2000; Tushman & Romanelli, 1985). Within this context, organisational
communication delivered by organisational leaders or spokespersons is largely
symbolic, signalling organisational compliance to the logics of the deep structures
that guide organisational behaviour (Tushman & Romanelli, 1985).
However, during punctuations, organisational leaders are required to enact
substantive as well as symbolic strategies (Tushman, Virany et al., 1986).
Substantive strategies may include the reformation of organisational missions and
values, negotiation of power and status, and the employment of new executives
(Tushman, Newman et al., 1986). Because change has the potential to create
uncertainty (Gersick, 1991), organisational leaders must complement substantive
decisions with symbolic strategies that inspire confidence and enthusiasm for new
organisational directions (Tushman, Newman et al., 1986).
This thesis integrates punctuated equilibrium theory with the literature of
crisis communication to explain organisational communication as crisis events
develop into change-inducing events. Punctuated equilibrium theory provides a
means of integrating both context and action, which are essential to change and crisis
communication. The research questions that guide this thesis are:
RQ1: What symbolic and substantive strategies persist and change as crises
develop from situational events to transformative and multiple linked events?
RQ2: What features of the crisis context influence changes in symbolic and
substantive strategies?
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
28
These research questions represent a way to resolve gaps in crisis
communication and extend punctuated equilibrium theory by describing and
explaining crisis communication and the crisis context faced by multiple
organisations during transformative change. These research questions require data at
both the context and action levels with an emphasis of analysis on the action level
through substantive and symbolic strategies. The thesis is a longitudinal study of a
situational crisis that becomes a crisis that induces transformative change and affects
multiple organisations and industry actors. The pharmaceutical industry, and in
particular a product recall is the starting point for discovery. This crisis event led to a
change-inducing crisis affecting three pharmaceutical companies and requiring
regulatory intervention by the Food and Drug Administration.
1.3 Justification for the Research
The applied focus of existing crisis communication research offers limited
opportunities for ongoing or new theory development. The majority of existing crisis
communication research is based on demonstrating the effectiveness of crisis
response strategies that seek to restore image, reputations, and legitimacy. There is
opportunity to move beyond existing theoretical frameworks in public relations and
crisis communication provided by theorists who treat public relations as a series of
incremental adjustments to environments in order to preserve a gradual, moving
equilibrium (see Broom, 2006; Cutlip, Center, & Broom, 2006; Grunig, 1992, 2001,
2006; Grunig, Grunig, & Dozier, 2006).
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
29
Existing perspectives on change in the public relations literature limit the
ability to account for transformative change and crisis events. In the public relations
literature, the first insights into change were offered by Cutlip and Center in 1952
when they developed the adjustment and adaptation model based on systems theory.
Through this model, public relations activities are used to make incremental changes
to ensure that an organisation aligns with its environment in order to maintain
equilibrium (Cutlip, Center, & Broom, 2006). From a theoretical perspective, this
view of public relations limits change to a preservation role (Sha, 2004), constraining
not only the theoretical scope but quality of practice for crisis communication to a
conservation role, despite holding the potential for transformation.
Crisis communication research, as it is currently practised, must build on the
framework of crisis events as situational events that can be resolved in order to
restore reputation and maintain equilibrium. To do this, crisis communication
researchers could view crisis events not only as manageable but as events that hold
the potential for transformative change. This will enable theoretical development in
the area of crisis communication and public relations.
Advancing the treatment of change in crisis communication offers advantages
to the public relations literature. Punctuated equilibrium theory provides a relevant
theoretical framework to achieve this goal. With Murphy‘s (2000) acknowledgement
in the crisis communication literature, punctuated equilibrium theory provides a way
to see the opportunities brought about by crises. This thesis provides an opportunity
to extend and continue work that treats punctuated equilibrium theory as a lens to
examine crisis communication research.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
30
Punctuated equilibrium theory draws together two streams of research in
crisis communication. It provides a space for work that has established typologies of
crisis response strategies (Allen & Caillouet, 1994; Benoit & Brinson, 1994; Hearit,
1995) developing into crisis decision-making models (Coombs, 1995). This work
revolves largely around the action level where the type of situational crisis affecting
a single organisation predicts the selection of an appropriate sequence of strategies
based on stakeholder perceptions of responsibility. These actions are motivated to
restore organisational reputations or legitimacy, considering the immediate context
for single organisations. At the context level, other crisis communication authors
have established frameworks to view crisis events as change inducing events that
have the potential to transform organisations and industries (Seeger, 1986, 2002;
Seeger et al., 1998; Seeger, Sellnow, & Ulmer, 2001; Seeger et al., 2005).
Punctuated equilibrium theory connects the role of crises as change-inducing
events and the role that communication plays within this space. This provides a way
to resolve the central research problem, thereby filling a gap in understanding of the
nature of crisis communication during transformative change. By focusing on the
context and action levels, punctuated equilibrium theory makes significant the role
and power of crisis communication based on the context within which it occurs.
Much of the crisis communication literature occurs with a focus on one
organisation in the short term. The qualitative case study tradition in crisis
communication selects a crisis event, diagnoses the crisis type, and accounts for the
focal organisation‘s actions or crisis response strategies during the crisis. The
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
31
sampling focus on the immediate crisis responses of single organisations has
perpetuated this incrementalist perspective of change in crisis communication
research. However, crises and public relations have longer-term impacts that reach
beyond the crisis event and focal organisation. Studying crisis events and post-crisis
communication for a significant period of time beyond the crisis event will shed light
not only on the actions of focal organisations but other organisations and institutions
that are affected when situational crisis events become change-inducing events. The
longitudinal focus is supported by methodological perspectives inherent in
punctuated equilibrium theory.
The research also has the potential to contribute back to punctuated
equilibrium theory. Although punctuated equilibrium theory accounts for
organisational communication during periods of stability and transformative change,
empirical studies of punctuated equilibrium theory in organisational theory report on
substantive strategies such as executive succession, changes to organisational
structures and products. The focus on crisis communication in this thesis enables an
opportunity to build knowledge and understanding around the role of symbolic
strategies during punctuations of equilibrium.
Overall, this research uses punctuated equilibrium theory as a theoretical
framework to explain changes in crisis communication and the crisis context across
multiple organisations and extended time frames. The thesis aims to: 1) explore the
adequacy of existing typologies of crisis communication under conditions of
transformative change, and 2) explore the ways multiple organisations communicate
within this context.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
32
1.4 Research setting
This thesis is set in the pharmaceutical industry in the United States and
examines the actions and communications of three companies: Merck & Co (known
as Merck), Pfizer, and Novartis. The trigger event for change in this industry was a
voluntary product recall crisis initiated by Merck in relation to Vioxx, a COX-2 pain
relief medication that was one of the organisation‘s top selling pain relief drugs from
2002 to its withdrawal in 2004. Vioxx was recalled by Merck on 30 September 2004
after clinical trials showed it caused heart attacks and strokes, and in some cases,
these were fatal. The crisis event was covered extensively by the mass media in the
United States, drawing attention to Merck‘s decision-making, stock valuations and,
at a broader level, drug safety issues. It was listed as one of Newsweek‘s top product
recall crisis events ("Prominent product recalls in recent history," 2010, February
13).
Based on its significant role in triggering transformative change, Merck was
the primary organisation studied in this thesis. The secondary organisations are
Pfizer and Novartis, which also produced COX-2 drugs. Of these two secondary
organisations, Pfizer was more significantly affected than Novartis as Pfizer faced a
product recall event for one of its drugs, Bextra. Based on media coverage, the thesis
focuses mostly on Merck and Pfizer. The time frame for study is from August 2004
to December 2008. The beginning time allows some exploration of the industry
before the crisis event and the end time signals the finalisation of litigation for Merck
and Pfizer.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
33
1.5 Methodology
To explore changes in crisis communication and the crisis context, when
crisis events trigger transformative change across multiple organisations over
extended time frames, this thesis employs a qualitative research approach that is
guided by process theory and methods. A qualitative approach enables the
identification of changes in the crisis communication of multiple organisations as a
situational crisis develops to punctuate equilibrium. The time frame of the thesis is
four years and it captures the actions of three organisations within a context of
transformative change that is triggered by a product recall. The use of a longitudinal
and qualitative approach is consistent with punctuated equilibrium studies where
authors have developed organisational histories in order to map changes to strategy
and structure over time (Romanelli & Tushman, 1994). This approach builds on
existing crisis communication studies by extending the time frame of study and the
number of organisations under investigation.
Because this thesis is concerned with employing the perspective of
punctuated equilibrium to explore implications of transformative change on crisis
communication, process theory offers a way to study how and why change unfolds
in organisations over time by weaving context and action (Langley, 2007; Pettigrew,
1992; Van de Ven & Poole, 2005). Following process theory, this thesis integrates
alternative templates and narratives to guide the sensemaking of process data and
theory (Allison, 1971; Allison & Zelikow, 1999; Langley, 1999). The thesis
comprises of three narratives, each based on an alternative template of crisis
communication or strategic responses to institutional pressures such as crises. The
templates are based on the work of Coombs (2006b) who developed a typology of
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
34
crisis response strategies using quantitative methods, Allen and Caillouet (1994) who
developed a typology of impression management strategies that organisations can
use in response to crisis events, and Oliver (1991) who developed a typology of
strategic responses to institutional pressures and thus offers a way to consider
organisational agency over its environment. Each narrative connects action and
context to give meaning to the crisis responses of corporate actors.
Consistent with qualitative approaches in punctuated equilibrium and crisis
communication, data were collected from 1,071 print media articles, 91 news
releases or company statements, and 15 annual reports from three organisations from
August 2004 to December 2008 inclusive. The media articles or releases provided
the bulk of the data with annual reports used as a secondary source of evidence to
add further understanding or verification of data analysed in media resources. The
mass media are a recognised source of evaluating the legitimacy of organisational
actions (Trullen & Stevenson, 2006) with newspaper stories being linked to strong
stakeholder recall of information (Deephouse & Carter, 2005). The newspapers
selected for this thesis are The New York Times, Washington Post, and The Wall
Street Journal. These sources were purposively selected based on their high
circulation and their content influence on other media outlets.
Data were analysed in three stages. In the first stage, all incidents and events
were identified during an initial reading of media articles and organisational
documents. These events provided a framework for the construction of each
narrative. In this second stage of analysis, narratives were constructed to tell detailed
stories from raw data of crisis and strategic responses offered through each
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
35
alternative template. Following Allison (1971), each template provided a unique
theoretical lens through which to construct narratives and explain changes in crisis
communication. In the third and final stage of analysis, patterns of crisis response
strategies were matched to an ideal-type sequence based on the work of Siggelkow
(2002) who applied changes in organisational evolution to five sequence maps for
change: patching, thickening, coasting, misfits, and trimming. This analysis allows
for the examination of the primary and secondary crisis response strategies enacted
by organisations, and enhances the evidence built through each narrative.
The need for three alternative templates was evident when the findings from
each narrative were compared. Although the timeline of events was consistent across
alternative templates, each narrative emphasised different factors and required re-
interpretations of the same events. The comparative analysis involved the zooming in
and out (Nicolini, 2009) of the alternative templates, that is zooming in to take a
micro view of looking at the crisis from the perspective of Merck through Coombs‘
(2006b) framework, and moving up to Allen and Caillouet‘s (1994) framework that
considered how other organisational actors added pressure to Merck‘s responses, and
finally zooming out to a macro perspective through Oliver‘s (1991) framework that
allowed for the consideration of how Merck, Pfizer and Novartis operated. In doing
this, the thesis identified the importance of using the three theories in order to
understand and explain crisis communication during transformative change. The next
section of this chapter sets out the key definitions that guide the thesis.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
36
1.6 Definitions of Key Terms
To ensure consistency in interpretation, the definitions for key terms used
throughout the thesis are presented here.
Corporate or organisational actors
Corporate or organisational actors refer to the multiple organisations that are
involved in the crisis events either in a direct or indirect capacity.
Complex crisis event
A complex crisis event is defined as a crisis that is not able to be resolved by
the corporate actors or organisations in the short-term. Unlike situational crisis
events, complex crisis events are likely to involve multiple corporate actors or
organisations and contain a series of linked crisis events. Complex crisis events are
likely to become focusing events for transformative change.
Crisis context
Crisis context refers to the environmental conditions within which crisis
responses or symbolic or substantive strategies are enacted. The crisis context
provides time-specific information that refers to the conditions under which
corporate actions occur. The context provides a framework to give meaning to
actions. In this thesis, crisis context considers both the organisation-centric context
of existing research and emergent context during transformative change.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
37
Crisis response strategies
Crisis response strategies is a generic term used to represent the range of
typologies for crisis responses provided by crisis communication researchers. These
strategies represent the action level of punctuated equilibrium theory.
Equilibrium
Equilibrium refers to the long period of stability for organisations (Gersick,
1991; Romanelli & Tushman, 1994). During equilibrium or gradual moving
equilibrium (Grunig, 2000), an organisation or industry maintains rules and
structures. Within the context of this thesis, equilibrium is signalled by the lack of
media attention to an organisation or industry.
Focusing event
A focusing event draws organisational, industry and policy sector attention to
an issue and creates a need for change (Birkland, 1998; Jones & Baumgartner, 2005;
Wood, 2006). Focusing events reduce rapidly the legitimacy of existing structures,
arrangements, and organisational practices. Focusing events produce a foundation
for new ideas by heightening public attention to critical issues (Givel, 2006). In this
study, a focusing event is depicted when the situational crisis event of a product
recall gains sustained media and industry attention.
Punctuated equilibrium theory
In this thesis, punctuated equilibrium theory is used to provide a framework
for long periods of stability marked by short periods of transformative or radical
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
38
change (Gersick, 1991; Romanelli & Tushman, 1994). Punctuated equilibrium
theory provides a map for change processes that form the basis of this thesis.
Punctuation
Drawing on punctuated equilibrium theory in organisational and public
policy research, a punctuation is frame-breaking or transformative change that
occurs in response to or in anticipation of ―industry discontinuities‖ (Tushman,
Newman et al., 1986, p. 36). A punctuation alters the bases of competition and
legitimacy for organisations (Tushman, Newman et al., 1986), obliterates the
boundaries between industries and alters performance outcomes (Meyer et al. as
cited in Haveman et al, 2001). In this thesis, a punctuation is evidenced by sustained
media attention to an organisation or event (Murphy, 2000).
Substantive strategy
Substantive strategy refers to actions that relate to real change in
organisational goals, structures or processes in order to meet performance
expectations, conform to values and norms, or attempt to change institutional
procedures (Ashforth & Gibbs, 1990). These strategies also represent the action level
of punctuated equilibrium theory. Some crisis response strategies such as corrective
actions like a product recall are considered substantive strategies.
Symbolic strategy
Symbolic strategy refers to those actions that focus on communicating the
appearance of organisations to the environment (Ashforth & Gibbs, 1990). Symbolic
actions are part of the myth making ceremonies used by organisations to legitimate
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
39
themselves (Brown, 1994). These strategies also represent the action level of
punctuated equilibrium theory. Some crisis response strategies that are
communication-based such as denials or apologies are considered symbolic
strategies.
Situational crisis event
A situational crisis event is categorised based on a crisis type that is resolved
in the short-term. In crisis management and communication literatures, there are a
range of crisis events from natural disasters to product tampering, technical
accidents, human accidents and organisational misdeeds (Coombs, 2004; Coombs &
Holladay, 2002). In this thesis, the situational crisis event refers to Merck‘s product
withdrawal.
Transformative change
Transformative change is linked to the punctuation of equilibrium and refers
to the process of change that disrupts equilibrium and after which a new equilibrium
emerges. This process provides an indication of the context for the crisis
communication and action strategies enacted by corporate actors. In this thesis,
transformative change is evidenced by the withdrawal of Vioxx, signalling a change
in market conditions, and resulting in regulatory changes in the pharmaceutical
industry.
1.7 Limitations and Scope of Research
Several limitations to this research are acknowledged. Firstly, resources
constrained the nature of the investigation, data collection, and analysis. Ideally, and
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
40
like the work of Meyer and colleagues (see A.D. Meyer, Brooks, & Goes, 1990),
being serendipitously placed within an organisation as it was undergoing crisis
would have been a preferred way to study change in crisis communication. However,
one of the pragmatic considerations in this area of research is that punctuations of
equilibrium are most easily identified in hindsight. Therefore, while it may have
been possible to participate in an organisation undergoing crisis, a task that could
occur within a short time frame, knowing whether the crisis would transform it
would be difficult to predict and have significant pragmatic limitations for the
researcher. Further, access to key organisational decision-makers including the Chief
Executive Officer, General Counsel, and Chief Research Officer may also be limited
during times of crisis.
Although consistent with existing research in the public relations and
management literatures, one of the limitations of data sources such as print media
articles and organisational documents is validity or the major difficulties of
achieving member-checking. For example, the use of these secondary sources
precludes access to organisational leaders to confirm approaches to crisis handling
methodology or the organisational knowledge of an impending punctuation of
equilibrium. Primary research could have been conducted following the completion
of the alternative narratives in 2010. However, this would have occurred more than
five years after the initial crisis event. The limitations of both archival and informant
measures are not new to the literature. Several authors identify concern over
divergence between informant and archival measures of the environment (Boyd,
Dess, & Rasheed, 1993; Doty, Bhattacharya, Wheatley, & Sutcliffe, 2006; Neuman,
2006; Ventresca & Mohr, 2002), suggesting studies avoid this situation by choosing
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
41
only one type of measure (Doty, et al., 2006). One of the causes for divergence is
perceptual bias of informant measures (Boyd, Dess, & Rasheed, 1993; Doty et al.,
2006; Ventresca & Mohr, 2002).
A related challenge is found in the research and writing process where media
framing of stories and strong writing or individual bias can hide causal theories or
leave some elements implicit (Neuman, 2006). In part, these limitations were treated
by using and comparing both media articles and organisational documents and
alternative templates and actively scrutinising the data against multiple sources and
interpretations, and seeking out the differences in interpretation across these
templates. By producing three narratives to explain crisis communication during
change events and subjecting findings to competing yet inherently consistent claims
and interpretations, the thesis has sought to build strong arguments to support the
emerging theory as did Kvale (as cited in Hesse-Biber and Leavy, 2006).
Further limitations relate to the sampling decisions behind this thesis. These
decisions limit the thesis to transformative change triggered by crisis events for
which the primary organisation was responsible, and a focus on three large
organisations within one industry and during one punctuation of equilibrium. In part,
this limitation is explained by the significance of the data required to investigate
punctuated equilibrium. That is, these conditions were selected precisely because of
the multiple linked crisis events affecting multiple organisations because this thesis
was concerned principally with crisis communication during transformative change.
In doing so, the generalisability of the thesis may be limited to crises, crisis
communication, and transformative change under similar conditions. Process
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
42
research often navigates the challenge of context and generalisation (Sminia, 2009),
yet by linking the findings to the crisis communication literature, this thesis and its
conceptual model can also be applied to other industry contexts and crisis events.
The thesis has been motivated by Van de Ven and Poole‘s (2005) recommendation
for versatile process explanations that can be adapted to fit different cases at
different times.
1.8 Outline of Thesis
The thesis is presented across five chapters. This chapter introduced the
research problem and established the theoretical and practical justification for the
focus on crisis communication among multiple organisations during transformative
change. Chapter Two presents a review of the literatures of crisis communication
and punctuated equilibrium theory in order to present the research questions that
drive this thesis. In light of these research questions, Chapter Three establishes the
philosophy of the methodology and outlines the research process behind this thesis
by describing the techniques to collect, analyse, and interpret data. Chapter Four
presents the findings of the thesis and includes three narratives that offer alternative
descriptions and explanations for the transformative crisis. Following the narratives
developed using Coombs (2006b), Allen and Caillouet (1994), and Oliver (1991),
the chapter illustrates these strategies through a series of visual maps. To conclude
Chapter Four, the narratives and visual maps are used to compare alternative
templates and summarise differences in interpretation. Chapter Five concludes the
thesis and is comprised of a conceptual model to explain crisis communication and
the crisis context during transformative change and provide an overview of the
contributions of this thesis to theory and practice.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
43
1.9 Conclusion
This chapter has presented an overview of the research problem area and set
out the research questions that emerge from the problem. Following from the
justification of the research, Chapter Two will explicate the key literature relating to
crisis communication and punctuated equilibrium.
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44
CHAPTER TWO
Literature Review
The literature review provided in this chapter forms the basis for the
theoretical framework and research questions that guide the methodological choices
for this thesis. The chapter presents a discussion and critique of the literature in three
sections. In section 2.1, existing crisis communication research is reviewed in order
to identify the theoretical challenges and opportunities for research that extends
crisis communication during times of transformative change. Next, section 2.2
provides a framework to address the theoretical challenges of existing research by
defining and establishing the relevance of punctuated equilibrium theory. Section 2.3
draws upon sections 2.1 and 2.2 to outline a theoretical framework for crisis
communication during transformative change. Finally, section 2.4 identifies the
research questions that emerge from these literatures.
2.1 Crisis Communication Research
In this section, I review the case for employing punctuated equilibrium theory
as a framework for change in crisis communication research and public relations
theory. This argument is developed over three sections. Firstly, I consider the
rationales behind existing crisis communication research that dominates the public
relations literature. I argue that existing research has provided a rich set of typologies
of crisis response strategies and decision-making models that aim to resolve
effectively or repair organisational image, legitimacy and reputation for single
organisations. I argue that existing research limits ongoing theoretical development
and the practical usefulness of crisis communication research to short-term and
outcomes-driven research.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
45
Secondly, I establish an area of crisis communication research that provides
an alternative platform for viewing crises (and as a result crisis communication) as
events that induce transformative change. I argue that this stream of research
provides support for the introduction and integration of punctuated equilibrium
theory into crisis communication research. I draw together gaps and opportunities in
the existing crisis communication programs to establish the rationale for research in
the context of transformative change. Finally, I examine the use of organisational
theories of change in public relations and crisis communication research and use
these arguments to integrate punctuated equilibrium theory to these literatures.
2.1.1 Rationales of Existing Crisis Communication Research
Scholarship in crisis communication has developed through qualitative and
quantitative programs of research and multiple theoretical frameworks. The iconic
assumption for theory and practice in existing crisis communication research is that
crisis events can be ―influenced, contained and controlled in structured, predictable,
and rational ways‖ (Seeger et al., 1998, p. 248). This claim is verified by the types of
crises and organisations studied under this domain and the use of cross-sectional
research design. In all focal cases, organisations survived the crisis and in some
cases have flourished. In this way, the research and typologies assume that crises are
within an organisation‘s sphere of influence. As a result, the rationale for existing
research is to resolve effectively crises and restore organisational outcomes such as
image, legitimacy, or reputation. Theoretically, this work limits the view of crisis
communication to situational and controllable events, failing to account for or
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
46
explain crises that affect multiple organisations in ways that preclude the restoration
of the status quo.
After defining crisis and crisis communication, the qualitative and
quantitative programs of research will be reviewed to identify challenges to ongoing
theoretical development.
2.1.1.1 Defining Crisis and Crisis Communication
A crisis is most commonly defined in the literature as a single damaging
event or series of events that affect an organisation and its environment (Pearson &
Clair, 1998; Turner, 1976). According to Coombs (2007), a crisis is the ―perception
of an unpredictable event that threatens important expectancies of stakeholders and
can seriously impact an organisation‘s performance and generate negative outcomes‖
(p. 2-3). Some of these outcomes include physical and financial damage as well as a
loss of organisational reputation, legitimacy or viability depending on the
perceptions of critical stakeholders (Pearson & Clair, 1998). There are many types of
crises from unpredictable and uncontrollable natural disasters to industrial crises that
are preventable, controllable or unexpected (Coombs, 2007b; Fearn-Banks, 2002;
Mitroff, 2004; Shrivastava, Mitroff, Miller, & Miglani, 1988).
This thesis focuses on organisational or industrial crises and as such
prioritises crisis management over disaster management, defined as the distinctive
process involving government agencies as related to national or community disasters
(Jaques, 2007). The type of crisis affects the definition for crisis and also the
management of the crisis event. For example, industrial crises and natural disasters
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
47
affect different types of organisations and at different times (Shrivastava, Mitroff,
Miller, & Miglani, 1988). Unlike natural disasters, industrial crises have a prolonged
impact on organisations and societies and cannot be dealt with at the level of the
single organisation. An annual report on crisis events identified that the majority of
crises each year are industrial crisis events as opposed to natural disasters (Institute
for Crisis Management, 2009). Despite the position of Shrivastava et al. (1988) and
the high occurrence of industrial crises, existing crisis communication research
defines crises as those events that affect single organisations in relatively short-term
time frames.
Crisis communication is enacted by organisations to manage and resolve
crisis events. Crisis communication is an established area of scholarship and practice
in public relations and an essential part of crisis management (Craig, Olaniran,
Scholl, & Williams, 2006; Seeger et al., 1998). Crisis communication involves the
communication and relationship management approaches that organisational
members enact to prevent, manage and resolve crisis events (Pearson & Clair, 1998;
Penrose, 2000). As a result, crisis communication can be divided into two types: 1)
communication that provides information about how stakeholders should respond to
the physical and psychological effects of the crisis, and 2) post-crisis reputation
management that aims to restore faith in the organisation and its business operations
(Coombs, 2007b, 2009). The post-crisis communication phase focuses on the use of
communication to close the crisis (Coombs, 2009) and restore organisational
outcomes including image, reputation, and legitimacy. Organisational image is
defined as ―the way an organisation presents itself to its publics‖ (Bromley, 2000, p.
241). Organisational reputation is defined as the aggregation of a single
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
48
stakeholder‘s perceptions of the extent to which an organisation‘s actions align with
the expectations of multiple stakeholders (Wartick, 2002). Legitimacy is defined as
stakeholder perceptions that an organisation is desirable, proper and appropriate
(Suchman, 1995), enjoys support (Waeraas, 2007), and has a right to continue
operations (Massey, 2004).
Post-crisis communication is the focus of the majority of crisis
communication research. Given its important link to organisational outcomes, this
thesis shares this emphasis on the post-crisis communication strategies of
organisations. The next two sections outline the crisis response typologies or range
of crisis response frameworks that have been developed and refined in the existing
literature.
2.1.1.2 Crisis Response Typologies using Qualitative Research
The qualitative tradition in existing crisis communication research is based
on a series of studies of naturally occurring messages used by organisations in crisis
situations. In this tradition, authors have used rhetoric and corporate apologia
(Hearit, 1995), corporate impression management (Allen & Caillouet, 1994), and
discourse and image restoration theory (Benoit, 1997) to study mainly short-term
crisis events. Based on these perspectives, authors developed typologies of crisis
responses to restore legitimacy (Allen & Caillouet, 1994; Hearit, 1995) and image
(Benoit, 1997).
Qualitative crisis communication researchers studied crises that were
naturally occurring in business and society including natural disasters, product
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49
tampering, and organisational misconduct. The case study approach adopted by these
researchers enabled the translation of rich organisational messages during crises into
typologies of crisis response strategies, for example Benoit‘s (1991) image
restoration strategies, and Hearit‘s (1994) corporate apologia.
Although limited to two studies within the discipline, Allen and Caillouet
established a significant theoretical perspective on crisis communication (Allen &
Caillouet, 1994; Caillouet & Allen, 1996). The authors used impression management
to study organisational messages to improve and regain legitimacy (Allen &
Caillouet, 1994). Impression management is defined as organisational actions that
aim to influence stakeholder perceptions of an organisation (Elsbach, Sutton, &
Principe, 1998). Allen and Caillouet (1994) developed a typology of naturally
occurring message strategies that are based on the use of communication to shape
stakeholder attitudes about organisational legitimacy (Allen & Caillouet, 1994).
Allen and Caillouet (1994) also gave attention to the link between strategies and
institutionalisation. The value of these authors‘ research is the theoretical links
drawn between impression management and institutional theory, a perspective that
emphasises how organisations operate within an institutional environment governed
by logics and myths that influence, constrain, and sustain organisational behaviour
(Scott, 2001; Suddaby & Greenwood, 2005), around a legitimacy crisis. Through
these connections, Allen and Caillouet (1994) defined communication as a shaping
mechanism that organisations could draw on during crisis events. The strength of
this idea remains largely undeveloped within crisis communication research.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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Continuing the legitimacy framework, Hearit (1994, 1995) has contributed to
the field, limiting his research to those organisations charged with wrongdoing. The
theoretical rationale behind Hearit‘s work is corporate apologia, adapted from
individual apologia, where organisations issue apologia or defences to counter
charges of wrongdoing (Hearit, 1994, 1995; Hobbs, 1995; Ice, 1991). Because of the
focus on organisations charged with wrongdoing, for Hearit (1995), a crisis is a
―generally predictable series of events‖ (Hearit & Courtright, 2003, p. 83).
Organisations respond to threats by seeking to ―exert terminological influence in
order to symbolically ‗resolve‘ the crisis by argumentatively altering perceptions in a
manner favourable to organisational interests‖ (Hearit & Courtright, 2003, p. 83).
The contribution of Hearit‘s work to the field lies initially in his definition of
corporate apologia as distinct to individual apologia. This initial contribution was
later succeeded by a claim that the communicative agendas of crises and crisis
players rendered objectified decision-making strategies put forward by others in the
field as irrelevant. In essence, Hearit and Courtright (2003) argued that the outcomes
of crises were not always able to be predicted, and this limits an organisation‘s
ability to prepare for crisis communication.
Still ongoing in the literature, Benoit‘s crisis communication research also led
to the development of a typology of image restoration strategies that organisations
could use to repair or restore images under attack (Benoit, 1997). Benoit‘s (1997)
strategies draw on discourse theory and provide public relations practitioners with
the means to ―deploy texts‖ in discursive struggles (Motion & Leitch, 1996, p. 298).
The resultant image restoration strategies integrate self-defence strategies (Ware &
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51
Linkugel, 1973) and undergo constant refinement (see Brinson & Benoit, 1996). The
theory of image restoration discourse brings together the notions of responsibility
and perceived offensiveness of the act to identify five categories of messages or
strategies that enabled organisations to redress allegations or suspicions of
wrongdoing (Benoit, 1997). This theory is based on the use of communication to
explain organisational behaviour during crises and has been applied in subsequent
organisational and political studies (Benoit, 1995, 1997, 2000, 2004, 2006; Benoit
&Brinson, 1994; Benoit & Dorries, 1996; Benoit & Pang, 2008; Blaney, Benoit, &
Brazeal, 2002; Brinson & Benoit, 1996, 1999).
In addition to these research articles, crisis communication text books suggest
other crisis communication options including a narrative approach (Heath, 2004;
Heath & Palenchar, 2009). Although most of Heath‘s work is located within issues
and risk management, Heath (2004) defines a crisis as a break in a routine business
narrative, requiring the organisation to construct a narrative to account for the crisis
and its resolution. A crisis narrative provides organisations with the opportunity to
draw on rhetorical strategies to tell the truth, respond to stakeholders, and resolve the
event by exerting control over the circumstances and events (Heath, 2004; Heath &
Palenchar, 2009). In this thesis, Heath‘s work is integrated into the practical
implications and further research.
The journal publications of Allen and Caillouet, Hearit, and Benoit are
summarised in Table 2.1. The table identifies the theoretical rationale for the work
and outlines the key areas of research, the typology of crisis response strategies and a
list of key organisations and events studied. The list of case studies is limited to
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
52
those selected for study by the authors whose decisions were guided by theoretical
frameworks and used to create typologies.
Table 2.1
Qualitative Crisis Communication Case Studies
Research
approach
Conceptual focus Typology of crisis
responses
Case organisations, crisis types
and time frames
Impression
management
(Allen &
Caillouet)
Restore
organisational
legitimacy;
recognise that
organisational
communication is
constrained by
institutional
environment
Excuses,
justifications,
ingratiation,
intimidation,
apology,
denouncements,
factual distortion
Refuse/reuse facility, legitimacy
crisis, 1 year
Refuse/reuse facility, identity
crisis, N/A (time not identified by
researchers)
Corporate
apologia
(Hearit)
As discourse
restore social
claims to
legitimacy; defend
organisational
actions; distance
organisation from
wrongdoing;
provide counter-
apologia
Persuasive accounts;
statement of regret;
disassociation
through
opinion/knowledge,
individual/group, or
act/essence
strategies; counter
apologia; direct
challenge
Audi, accidental/consumer-based
product failure, 8 years
GM, rumours, 4 months
Intel, accidental/product failure, 3
months
Merrill Lynch, intentional/tainted
advice on equities, 4 months
Johnson Controls,
intentional/safety of foetus, N/A
(time not identified by
researchers)
Image
restoration
(Benoit)
Restore
organisational
image; redress
allegations or
suspicions of
wrongdoing;
explain
organisational
behaviour
Denial, evasion of
responsibility,
reduction of
offensiveness,
corrective action,
mortification
AT&T, product failure, one
month
Texaco, allegations of racism, one
month
Firestone, product recall, 11
months
Sears, fraud, approx. 7 months
Dow Corning, product recall, 9
months
Source: Allen and Caillouet, 1994; Benoit, 1997; Hearit, 1994
As illustrated in Table 2.1, most of the crises studied in the qualitative
tradition were industrial crises that were within the control of organisations or
individuals. The majority of crisis types related to product recalls or failures. In some
cases, the theoretical rationale limited the selection of crisis types to that of
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
53
organisational wrongdoing (see Hearit, 1994,1995) The time frame of these crisis
studies averages just over one year with the majority of crises occurring over a
shorter duration and only one study drawing on eight years of data.
Over time, research has shifted from the generation and refinement of crisis
response typologies to the evaluation of the effectiveness of these typologies. A
detailed review of the case studies produced by these authors provides insight into
what was determined as effective crisis communication. For example, Benoit and
colleagues have continuously sought to evaluate the appropriateness of an
organisation‘s use of image restoration strategies and undertake research that tracks
communication over a series of phases in the crisis cycle (Benoit, 1995, 1997, 2000,
2004, 2006; Benoit & Brinson, 1994; Benoit & Dorries, 1996; Benoit & Pang, 2008;
Blaney, Benoit, & Brazeal, 2002; Brinson & Benoit, 1996, 1999).
The case studies also demonstrated that an organisation‘s crisis response
strategies changed over time based on organisational evaluations of effectiveness
(Benoit & Brinson, 1994; Blaney, Benoit, & Brazeal, 2002; Brinson & Benoit, 1999;
Hearit & Courtright, 2003). For example, in the Texaco case study of racism, the
organisation‘s crisis communication and actions evolved gradually over time as the
organisation acknowledged the problem, investigated the crisis, expressed empathy
to employees, and settled litigation (Brinson & Benoit, 1999). Other case studies
suggest that changes to crisis communication strategies occurred as organisational
decision-makers learnt more information about the role of employees during crisis
(Benoit & Brinson, 1994). Overall, the case studies suggest that effective crisis
communication should be immediate (Blaney, Benoit, & Brazeal, 2002) and the
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
54
starting crisis response should acknowledge the organisation‘s responsibility and
how past mistakes have led to the current crisis event (Benoit, 1995; Brinson &
Benoit, 1996; Hearit & Courtright, 2003).
Although the selection of crisis events illustrated in Table 2.1 were adequate
to develop and refine crisis response typologies, their ongoing role reveals two
limitations. Firstly, the crisis response typologies and judgements of effectiveness
are based on an evaluation of practitioner actions (Seeger et al., 1998). Although this
is useful to develop typologies, it has the potential to limit ongoing theory
development. Secondly, the short time frame of study of these crisis events limits our
understanding of the role of crisis communication and change to that which occurs in
the immediate to short-term, that is through situational crisis events. However, Allen
and Caillouet (1994) and Hearit (2003) argue that the theoretical relevance for crisis
communication is its ability to reflect, create, or shape meaning, construction and
resolution of crisis events. The theoretical consideration given to legitimacy holds
much promise for research with longer time frames and ongoing theoretical
development in this field. Despite the significance of these typologies, some claim
that resultant research has focused on what organisations have done and should do
better in certain crisis situations (Seeger, Sellnow, & Ulmer, 2001) rather than on the
theoretical contribution of the respective rationales to crisis communication research.
2.1.1.3 Crisis Response Typologies using Quantitative Research
The work of Coombs and colleagues arguably leads crisis communication
research in the public relations literature. Coombs and colleagues adapted the
typologies of Allen and Caillouet (1994) and Benoit (1995) to develop a decision-
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
55
making model for crisis managers known as situational crisis communication theory.
Situational crisis communication theory was developed using a quantitative
methodology, and overcomes some of the generalisability concerns of qualitative
case study research. Although qualitative studies sought to study the effectiveness of
crisis typologies in naturally occurring crisis events, situational crisis communication
theory offers crisis managers decision-making tools (Coombs, 2009) to guide
organisational communication during a range of crisis events. Coombs and Holladay
(2002) identified the most appropriate mix of the crisis response strategies to restore
reputation based on the organisation‘s situational and historical factors.
Crisis response strategies are enacted by organisations to shape attributions of
crisis, to change stakeholder perceptions of the focal organisation, and to reduce the
negative effects of crisis (Coombs, 1995, 2007c). Each crisis response is built around
perceived acceptance of responsibility for a crisis. Coombs‘ crisis response strategies
undergo constant refinement over time, and range from defensive to accommodative
and sit within three primary postures of deny, diminish, and rebuild. In addition,
supplementary bolster responses can be used to supplement these primary postures,
as illustrated in Table 2.2.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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Table 2.2
Coombs’ Crisis Response Typology
Posture Crisis response strategy definition
Deny Attack on the accuser
Denial
Scapegoat
Diminish Excuse
Justification
Rebuild Compensation
Apology
Bolster
(supporting
strategies)
Reminder
Ingratiation
Victimisation
Source: Coombs, 2006b, 2007c
Through a series of experiments, research in situational crisis communication
theory established that crisis response strategies should be selected according to
situational factors, organisational crisis histories, perceived reputational threat, crisis
type, and attribution or blame assumed by stakeholders (Coombs, 1998, 2004a;
Coombs & Holladay, 2002). An assessment of these factors would lead crisis
managers to an appropriate crisis response posture: deny, diminish, rebuild. Where
necessary, organisations can also draw on bolster strategies. Situational crisis
communication theory argues that, if one posture of responses does not improve
reputational outcomes, then crisis managers should move to the next posture in order
to resolve the crisis. In this way, organisational responses can start at the deny level
and move up to the diminish level and so on. The aim is to close the crisis (Coombs,
2009). In some cases, crises remain lingering concerns for organisations, leaving
stakeholders to continue questioning the organisation‘s reputation. For example,
litigation and legislation contribute to ongoing reputational concerns for
organisations, leaving victims to seek closure only when the organisation is punished
for its actions (Coombs, 2009).
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In creating situational crisis communication theory, Coombs (1998)
translated the rich qualitative tradition of typologies of crisis responses into
quantitative studies that examine the effectiveness of typologies on organisational
reputation (Coombs, 1998, 2004b; Coombs & Holladay, 1996). This move reduced
the focus on the theoretical rationales of legitimacy and image restoration that were
identified in qualitative crisis communication research with reputational outcomes.
At the same time, situational crisis communication theory retains a focus on crisis
response strategies that occur to single organisations within immediate to short-term
time frames and in response to situational crisis events. As a result, the practical
utility of situational crisis communication theory is significant. In essence, through
his evaluation of crisis response typologies and integration of historical and
organisational context, Coombs has developed a strong model to support the
decision-making of crisis communication managers. In his own words, this line of
research is described as providing ―prescriptive guidelines‖ that are based on the
crisis situation as the drivers of post-crisis communication (Coombs, 2009, p. 249).
2.1.2 Alternative Views: Crisis Communication Research and Change
One of the ways to extend theory and scholarship in crisis communication is
to refine that understanding by exploring the approaches taken by other crisis
communication researchers who define crises in different ways (Sellnow & Seeger,
2001). Alternative views in the literature use punctuated equilibrium, chaos and
complexity theories (see Section 2.1.3 for definitions) to achieve this task (Gilpin &
Murphy, 2006; Murphy, 1996, 2000, 2007; Seeger, 2002; Seeger et al., 1998). Under
these perspectives, a crisis is viewed as having the potential for radical change by
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disrupting the status quo (Seeger et al., 2005; Sellnow & Seeger, 2001). That is,
crises hold the potential to display emergent properties that may go beyond an
organisation‘s management (Smith, 2006) and result in the permanent redefinition of
an organisation (Murphy, 1996).
Compared to the work of Benoit and Coombs, this alternative perspective
argues that the public relations function is unlikely to be able to influence an
organisation‘s future because the process is complex and may not be known or
knowable (Murphy, 2000, 2007; Seeger et al., 2005; Sellnow & Seeger, 2001). In
taking this view, punctuated equilibrium theory, chaos and complexity theories
present process-based research as an alternative to crisis communication research
(Gilpin & Murphy, 2006; Jaques, 2007). This argument is developed over two
sections that show how chaos and complexity theorists question the value of crisis
management yet at the same time reinforce the value of long-term research.
Where crisis communication research that is outcomes-based seeks to
manage a crisis by restoring organisational legitimacy, image and reputation to the
status quo, chaos and complexity theories see crisis decision-making models as less
relevant. This claim is based on two assumptions. Firstly, crises have the potential to
challenge and shift the deep structures or contexts that guide organisational
relationships, making organisational outcomes unknowable (Seeger et al., 2001).
Under these conditions, existing or historic crisis decision-making models are likely
to be inadequate (Sellnow & Seeger, 2001). For example, in the study by Sellnow
and Seeger (2001) of a community‘s response to flooding, historic success with
flood containment was a barrier to adaptation. Alternative and ultimately more
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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effective methods to flood containment were only made possible when the
inadequacies of historic methods were demonstrated in this case in dramatic and
costly ways (Sellnow & Seeger, 2001). Secondly, crisis events shift over time also
affecting the ability to predict outcomes (Gilpin & Murphy, 2006). Formalised
planning using crisis decision-making models may not take into account the range of
factors that can aggravate or cause shifts in crises (Gilpin & Murphy, 2006).
Rather than using typologies of crisis responses, chaos theorists argue for
organisations to set a new agenda for organisational relationships through a
discourse of renewal that is communicated immediately after a crisis and becomes
part of ongoing planning (Ulmer, Seeger, & Sellnow, 2007; Ulmer, Sellnow, &
Seeger, 2007). A discourse of renewal is values-based and focuses on how an
organisation can rebuild after a crisis (Seeger et al., 2005). Renewal discourse is not
strategic but provisional in nature, offering a natural and immediate response to
crisis (Ulmer, Seeger et al., 2007). Renewal discourse has been used to show how
communication following a crisis shapes change by defining organisational activities
in terms of future goals (Seeger et al., 2005). For example, Seeger et al. (2005)
suggests that an organisation‘s ability to:
...survive, rebuild and even renew themselves will depend on the ability to learn
from these events, create a new sense of normal and constitute compelling and
meaningful discourses that promote cooperation, support and renewal. This
discourse of renewal creates an opportunity after a crisis to fundamentally reorder
the organisation down to its core purpose. Crises, in these cases, create not only
severe devastation but a unique opportunity for systemic change and fundamental
reinvention (Seeger et al., 2005, p. 92).
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Renewal is viewed by Coombs (2009) as an extension of accommodation
strategies that positions the future as the central communicating force. Given this
perspective and the characteristics of the discourse, renewal works only in certain
types of crises (Ulmer, Seeger et al., 2007). Renewal discourse is considered most
effective in crises that are based on natural disasters rather than on crises that are
within the control of organisations (Ulmer, Seeger et al., 2007). Natural disasters and
industrial crises follow different paths with the worst effects of the latter continuing
for some time after the event itself (Shrivastava et al., 1988). In this way, industrial
crises require crisis communication and actions that exceed the renewal framework.
Industrial crises have a prolonged impact on organisations (Shrivastava et al.,
1988). As a result, an organisation‘s crisis communication choices become essential
not only to restoring reputations in the short-term but also to ongoing organisational
legitimacy. Legitimacy is a complex but essential requirement for organisations that
need to maintain support from their environments (Seeger et al., 1998).
Organisations that offer crisis communication strategies that are insufficient to
environmental expectations guarantee their place on the public agenda until
stakeholders are satisfied with their actions (Seeger et al., 1998). As a result, to
survive, organisations must be willing to change, often in dramatic ways, their crisis
communication approaches (Seeger et al., 2001).
The role of time plays an essential role in extending scholarship in crisis
communication. According to Seeger (2002), extending time frames and broadening
the scale of investigation has the potential to reveal ―a more comprehensive role‖ for
public relations (p. 336). The extended time frame also suits the view of crisis and
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61
crisis communication as part of an ongoing process of organisational and industry
renewal as opposed to a stand-alone, one-time strategic response (Sellnow & Seeger,
2001). In taking this view, the crisis communication literature supports the
investigation of crises that are complex, non-linear, unpredictable, and hold the
potential for transformative change.
2.1.2.1 New Directions in Crisis Communication Research
The discussion presented suggests the crisis communication literature has
developed in several ways. Qualitative work around typologies (Allen & Caillouet,
1994; Benoit, 1997; Hearit, 2001) has been translated into crisis decision-making
models that incorporate organisational context of crisis and relationship history as
well as the nature of the crisis event in order to provide a sequence of tailored crisis
responses designed to repair and restore organisational reputation (Coombs, 2006b).
Essentially, this line of research studies crisis as an event that affects an
organisation‘s immediate future and as a result, requires the organisation to respond
in ways that satisfy stakeholder needs. This view is based on the logic where an
action (crisis response) produces an intended effect (restoration of crisis and
restoration of image or reputation). This position is clearly established within the
crisis communication literature with ongoing work evaluating the different
conditions that affect these situational or stand-alone crises (Sellnow & Seeger,
2001) and related crisis responses. While research continues (Jin, 2010; McDonald,
Sparks, & Glendon, 2010), authors have previously recognised the need for ongoing
theory development (Coombs, 2006; Hearit & Courtright, 2003).
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At the same time, the literature has incorporated alternative
conceptualisations: a crisis holds the potential for transformative change or
fundamental disruptions in organisations and industries (Gilpin & Murphy, 2006;
Gilpin & Murphy, 2008; Murphy, 1996, 2000; Seeger et al., 2005). Under this
perspective, standard actions (crisis responses) are seen as ill-equipped to deal with
complex change that occurs both within and in addition to the organisational context
(Gilpin & Murphy, 2006). At an early stage in a crisis, an organisation may have the
ability to influence events and environmental responses to events (Murphy, 1996).
However, once the crisis moves beyond a certain point of escalation, an organisation
may lose its capacity to influence communication and reactions (Murphy, 1996).
Indeed, modern and complex crises often move outside of the organisational domain
(Boin & 't Hart, 2003; Shrivastava et al., 1988). Although researchers who follow
this perspective put forward renewal discourse as a communication response, its
value is limited to disaster-based crisis events (Ulmer, Seeger et al., 2007).
In summarising the discussion so far, it is clear that the crisis communication
theorists support the need for extending theory development in crisis communication
within two domains of crisis: as a manageable event and as a complex and
unpredictable event. While there is a strong understanding of what crisis
communication looks like under the first domain (see S. Kim et al., 2009), there is
limited research about communication under transformative conditions. Across both
domains, researchers are calling for studies that treat theory (Coombs, 2006),
examine the interdependencies of crises (Seeger et al., 1998), the variation in crisis
response (Seeger, 2002), and the deep structures behind public relations responses
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63
(Seeger et al., 2001), and adopt methodological diversity (Avery, Lariscy, Kim, &
Hocke, 2010).
To advance and reinvigorate the field, a new rationale for crisis
communication research is required. To date, existing research does not provide
empirical evidence to understand the role of communication beyond short-term crisis
responses provided by single organisations. As a result, beyond renewal discourse
that is limited to natural disasters or crisis events outside of an organisation‘s
control, there is little evidence to describe or explain crisis communication when
change is transformative, complex, and affects multiple organisations. To advance
the field, an organising theory is required to account for a range of levels of context
and action as factors of crisis communication. To date, these factors have rarely been
treated in the crisis communication and public relations literatures. One perspective
that considers these factors is based on the investigation of change in organisations,
and is punctuated equilibrium theory.
2.1.3 Punctuated Equilibrium and Public Relations
In this discussion, I argue that punctuated equilibrium theory offers a new
rationale for crisis communication when change is transformative rather than only
gradual or incremental. The selection of punctuated equilibrium theory is based on
an extensive review of organisational change theories. While it is beyond the scope
of this thesis to provide an extensive literature review on organisational change
theories, this section will provide a brief overview of the theories that were
considered for study. These theories, identified from public relations and
management literatures include systems theory, complexity and chaos theories, and
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
64
punctuated equilibrium theory. The following paragraphs present a definition of the
theories, their approach to change, leading to a discussion that supports the selection
of punctuated equilibrium theory.
Systems theory has long dominated international text books as a primary
organising theory for public relations (Cutlip, Center, & Broom, 2006; Grunig, 1992;
Mehta & Xavier, 2009, Pieczka, 2006, Spicer, 1997). A system is defined as a ―set of
interacting units that endures through time within an established boundary by
responding and adjusting to change pressures from the environment to achieve and
maintain goal stages‖ (Cutlip, Center, & Broom, 2006, p. 176). While there are
multiple systems approaches, a common element is the concept of equilibrium or
balance (Pieczka, 2006) where organisations seek fit with their environments. As a
result, the crucial and focal task for public relations is to monitor the organisation-
environment relationship (Everett, 2001) with alignment and consensus as central
outcomes to effective public relations (Spicer, 1997). Through systems theory,
public relations researchers have drawn on the notion of a ―moving equilibrium‖
(Grunig, 2000; Spicer, 1997) and as a result see change as being constant,
incremental, and necessary to maintain stability (Broom, 2006; Grunig, 1992, 2006).
Because of its focus on incremental change and the primacy of the
organisation, systems theory was not selected for this thesis. A systems view of crisis
communication would offer limited ability to extend existing crisis communication
research. As noted in the literature, systems theory has led research to focus
primarily on the organisation‘s actions and influence over the environment at the
expense of contextual factors such as the power and influence of an organisation‘s
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
65
environment (Curtin & Gaither, 2005). A consequence of this focus is that systems
theory fails in scope to consider and analyse the deep structures that guide
organisational behaviour and organisational change (Creedon as cited in Spicer,
1997). It is precisely these deep structures that are of interest in this thesis as they are
essentially linked to change and the actions of multiple organisations. Advancement
of the concept of change beyond incremental approaches is required for the crisis
communication literature and public relations discipline.
As identified in section 2.1.2, the crisis communication literature introduced
chaos and complexity theories and punctuated equilibrium theory as perspectives
that provide new ways to understand and explain crises that are complex and affect
multiple organisations simultaneously. These theories are analytically significant
because they provide an alternative to the incremental change approach that
dominates the existing crisis communication literature and is seen in systems
approaches.
Complexity theory is defined as the study of ―how the interaction of elements
in a system produces surprising, emergent behaviour that can be understood through
formal models even if those models cannot necessarily predict how a given system
will evolve‖ (Anderson, Meyer, Eisenhardt, Carley, & Pettigrew, 1999, p. 233).
Under complexity theory, organisations operate at the edge of chaos as part of
systems that may never achieve stability or equilibrium (Dooley & Van de Ven,
1999. Complexity theory encourages systems to absorb complexity and the
investigate possibilities for change through complex organisational relationships
with potential adaptations to new levels of complexity (Murphy, 2007). In crisis
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66
communication, complexity theory has renewed interest around change (Gilpin &
Murphy, 2006; Murphy, 2000, 2007). Although it remains largely conceptual,
complexity theory sees crisis management as obsolete, instead encouraging expert
and skilful improvisation (Gilpin & Murphy, 2006). In organisational studies on
innovation, complexity theory sees change as a continuous force (Brown &
Eisenhardt, 1997).
Chaos theory sees a system as a series of complex and non-linear interactions
that when the unexpected happens lead to re-emergence of a higher order through
natural processes of self-organisation (Seeger, 2002). When a system‘s direction,
character, or structure is fundamentally disrupted and departs from the previous path,
the system is undergoing bifurcation (Seeger, 2002). Chaos in the form of a
bifurcation may be necessary precursor to high level system order. Order re-emerges
out of chaos by self-organisation. Self-organisation is seen as a quasi-evolutionary
adaptive force, leading systems to higher levels of complexity and order following
the collapse or bifurcation of a lower order system (Seeger, 2002). Some believe that
the onset of bifurcations can be predicted (Murphy, 1996). In crisis communication,
chaos theory overcomes some of the linear approaches (Jaques, 2007), but has
mostly been used to study organisational communication following natural disasters
or crisis events that were outside of the organisation‘s control.
Despite offering a new perspective on stability and linearity in crisis
communication, complexity and chaos theories were not selected for this study for
several reasons. First, as considered in the crisis communication literature, the
theories emphasise the characteristics and unpredictable nature of the crisis context
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
67
over crisis actions. For example, complexity theory suggests that crisis management
is less about crisis response strategies and more about managerial skill and resilience
(Gilpin & Murphy, 2006). Despite providing instructions for complex crisis contexts,
a process approach sees both context and action as inseparable elements. Second, as
demonstrated in crisis research that follows chaos theory, the types of crises studied
are linked mainly to natural disasters such as floods or catastrophic crises that are
outside organisational control including terrorist attacks. The scope of this thesis is
to examine industrial or organisational crises. Third, the theories of complexity and
chaos are part of the existing crisis communication literature. By studying a new
approach to change such as punctuated equilibrium theory, the thesis has the
opportunity to contribute new understanding to crisis communication and public
relations.
Organisations, change, the crisis context, and an organisation‘s crisis
responses can be translated as central components to the theory of punctuated
equilibrium as treated within the organisational sciences. Punctuated equilibrium
theory offers a bridge between crisis communication research that aims to preserve
equilibrium or stability through incremental adjustments (crisis responses) that
restore reputations, legitimacy, and image, and research that views crisis as a trigger
for challenging equilibrium and leading to transformative change.
In the organisational sciences, punctuated equilibrium theory has become an
established theory to describe change in organisations and industries. It offers a way
to understand radical changes to patterns of incremental adjustments in
organisational evolution in order to account for change at the macro level and change
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
68
within organisations (Gersick, 1991; Romanelli & Tushman, 1994; Tushman &
Romanelli, 1985; Tushman, Virany et al., 1986).
Punctuated equilibrium theory was introduced into the public relations
literature as a way to consider complexity, uncertainty and non-linear change during
crises (Murphy, 2000). Murphy (2000) argued that for public relations, a punctuation
of equilibrium was signalled by a crisis event. Using the Intel chip and NASA crises,
Murphy (2000) argued that crisis events initiated a ―period of confusion in media
coverage‖ that was followed by the emergence of new bases for reputation and
image (p. 453). The process and outcomes of re-emergence are unpredictable and
managers may be unable to forecast media response and reputational impact that are
central to re-emergence (Murphy, 2000).
Since Murphy‘s article in 2000, there has been limited integration of
punctuated equilibrium theory in the public relations literature. However, in a
general sense, punctuated equilibrium theory is positioned alongside chaos and
complexity theories as a way to overcome the notion of controllability that is a
feature of most crisis communication research (Gilpin & Murphy, 2006; Jaques,
2007, 2009; Seeger, 2002). Given the extension of research beyond existing views of
crisis communication is supported within the literature (Bechler, 2004; Gilpin &
Murphy, 2006), there is significant opportunity for punctuated equilibrium theory to
reinvigorate the theoretical development in crisis communication. This thesis
provides an opportunity to extend and continue work that draws together punctuated
equilibrium theory as a lens to examine the process of crisis communication.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
69
The use of punctuated equilibrium theory in crisis communication research
also holds significance for public relations. Punctuated equilibrium theory offers a
broader conceptualisation of change to that which has become historically embedded
in public relations theory and practice. Punctuated equilibrium theory has the
potential to widen the concept of change beyond its existing treatment as incremental
change and adjustment. From this broad application as a new theoretical context for
considering change in public relations, punctuated equilibrium theory holds specific
relevance to the area of crisis communication.
In this thesis, I employ punctuated equilibrium theory as a framework to
describe and explain change in crisis communication as crisis events trigger
transformative change affecting multiple organisations and actors across extended
time frames. At the context level, punctuated equilibrium theory provides a
framework to structure the analysis of the process of transformative change initiated
by crisis events (Gersick, 1991). At the action level, punctuated equilibrium theory
provides an indication of the organisational strategies that are used under stable and
turbulent times (Tushman, Newman et al., 1986; Tushman & Romanelli, 1985;
Tushman, Virany et al., 1986), offering a connection between punctuated
equilibrium and crisis communication. Punctuated equilibrium theory accommodates
multiple organisations, multiple crises, and extended time frames. These factors are
essential to the ongoing theory development in crisis communication research. In the
following section 2.2, punctuated equilibrium theory and its role in defining context
and action is investigated in greater depth.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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2.2 Punctuated Equilibrium Theory
In this section, I examine the literature related to punctuated equilibrium
theory. The literature review is built in four stages. First, I establish the origins of
punctuated equilibrium theory in evolutionary biology and draw links between this
conceptualisation and the treatment of punctuated equilibrium theory in
organisational sciences. Second, drawing on the treatment of punctuated equilibrium
within the organisational literature, I describe the context level of punctuated
equilibrium theory that considers the deep structures that ensure long periods of
stability as well as the triggers for transformative change. Third, and also within the
organisational sciences, I establish the action level of punctuated equilibrium theory
by describing the symbolic and substantive strategies that organisations can enact
under conditions of stability and transformative change. Finally, I set out the
alignment between punctuated equilibrium theory and crisis communication as a way
of establishing the theoretical basis for this thesis.
2.2.1 Origins of Punctuated Equilibrium Theory
Punctuated equilibrium theory originated in evolutionary biology as an
alternative explanation to Darwin‘s theory of evolution. Gould and Eldredge, both
palaeontologists, critically examined accepted theories of evolution as gradualism
(Ruse, 1989) against near-complete fossil records. The result of their analysis was
punctuated equilibrium theory. In this work, they argued that change occurs not in a
gradual manner but in rapid bursts of transformation (see Gould, 2002; Gould &
Eldredge, 1993; Ruse, 1989, 2000). Although the punctuated equilibrium theory was
the source of much controversy in its initial presentation to evolutionary biology, it
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
71
has developed to become an accepted part of the discipline‘s theory base (Ruse,
1989, 2000).
Following a similar path to evolutionary and ecological theory in biology,
punctuated equilibrium theory was translated as a perspective in the organisational
and political sciences as a means to understand change. The ideal-typical nature of
punctuated equilibrium, seen in its empirical identification and treatment of time,
change and stability, provides an objective basis to guide thinking (McIntosh, 1977)
and encourage transferability of key concepts from evolutionary studies to
organisational studies. In the remainder of this thesis, I specifically continue to refer
to punctuated equilibrium theory in reference to its treatment and role within the
organisational sciences.
Since the late 1980s, punctuated equilibrium has become an established
theory for change or transformation in organisations and industries (Gersick, 1991;
Romanelli & Tushman, 1994; Tushman, Newman et al., 1986; Tushman
&Romanelli, 1985; Tushman, Virany et al., 1986). In the organisational sciences, the
overall thesis of punctuated equilibrium theory is that organisational change occurs
through patterns of long periods of stability that are punctuated by ―short bursts of
revolutionary change‖ (Romanelli & Tushman, 1994, p. 1141). Punctuated
equilibrium theory considers periods of both stability and transformative change and
the internal and external forces that historically shape change and impact
organisational decision-making (Tushman & Romanelli, 1985). This thesis is
elaborated explicitly in the following excerpt:
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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Organisations evolve through convergent periods punctuated by reorientations
which demark and set bearings for the next convergent period. Convergent periods
refer to relatively long time spans of incremental change and adaptation. Convergent
periods may or may not be associated with effective performance. Reorientations are
relatively short periods of discontinuous change where strategy, power, structure and
controls are fundamentally transformed toward a new co-alignment (Tushman &
Romanelli, 1985, p. 171).
Punctuated equilibrium has emerged as a way to reconcile or bridge
(Haveman, Russo, & Meyer, 2001) opposite views of existing change theories. As a
general theory, punctuated equilibrium integrates key elements from ecological
models that emphasise change across populations (Hannan & Freeman, 1989),
adaptation theories that emphasise incremental change as organisations adjust to
dynamic environments, and transformational models that focus on metamorphic
change (Tushman & Romanelli, 1985).
Punctuated equilibrium theory offers a way to understand radical changes to
adaptation patterns in organisational evolution, accounting for change at the macro
level of the environment which houses the deep structures that guide organisational
behaviour that operates at the micro level through an organisation‘s substantive and
symbolic actions (Tushman & Romanelli, 1985). Punctuated equilibrium theory
connects the context for transformative change and actions of organisations during
transformative change. The context and action levels of punctuated equilibrium
theory will be explored as they provide an important way to connect crisis
communication and action to transformative change.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
73
2.2.2 Context: Macro Level of Punctuated Equilibrium Theory
At the context level, punctuated equilibrium theory describes deep structure
as the key component of the long periods of stability and short bursts of
transformative change. Taking a long-term view, punctuated equilibrium theory
provides information about the deep structures behind stability and equilibrium, the
punctuations that dismantle existing deep structures, and the renewal of equilibrium
(Gersick, 1991). These phases will be examined in order to provide a context for
organisational actions that form part of the micro level of punctuated equilibrium
theory.
Punctuated equilibrium theory provides a theoretical explanation of
equilibrium as the conditions or deep structures of organisational systems (Gersick,
1991). A deep structure is ―the set of fundamental ‗choices‘ a system has made of the
basic parts into which its units will be organised and the basic activity patterns that
will maintain its existence‖ (Gersick, 1991, p. 14). In essence, deep structures form
the basis of organisational practice and persist for long periods of time before and
after punctuations.
Deep structure shapes and manages participation (McDonough, 2000) based
on rules or logics that determine how an organisation or system obtains resources
from its environment (Gersick, 1991). The deep structure is seen or made real
through legitimation, explanation and rationalisation (McDonough, 2000; Tushman
& Romanelli, 1985). During equilibrium periods, organisations signal compliance to
the logics of the deep structure that guides the system (Tushman & Romanelli,
1985). At the same time, organisations manage environmental shifts through
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convergent change or incremental adjustments that occur in line with existing deep
structure (Gersick, 1991; Tushman, Newman et al., 1986).
Organisations that successfully manage convergence or incremental
adjustments are likely to develop internal forces for stability known as organisational
inertia (Tushman, Newman et al., 1986). Organisational inertia, the resistance to
change, grows over time in response to deep structures that reinforce existing
practices (Tushman & Romanelli, 1985). When deep structure is coupled with
―structural and socially-anchored inertia‖ an organisation develops a resistance to all
but incremental or convergent change (Tushman & Romanelli, 1985, p. 190). Thus,
organisational inertia acts to maintain a system‘s equilibrium (Gersick, 1991). While
deep structure and organisational inertia preserve equilibrium and therefore stability,
they may also impact negatively on organisational performance. Organisations that
remain the same despite new competitive conditions or new criteria for performance
may find that their inertia leads to decreased performance (Tushman & Romanelli,
1985).
Despite the reluctance of organisations to undergo transformational change
(Sabherwal, Hirschheim, & Goles, 2001), the ―mutual interdependence‖ among the
parts of systems open them up to internal and external sources of disruption that
threaten a system‘s ability to obtain resources (Gersick, 1991, p. 21). Triggers for
transformative change include product lifecycles or class evolution (Tushman &
Romanelli, 1985; Tushman, Virany et al., 1986), market forces (D'Aunno, Succi, &
Alexander, 2000; Kraatz & Zajac, 1996), the organisation‘s internal environment
(Gersick, 1991; Tushman & Romanelli, 1985; Tushman, Virany et al., 1986), and
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
75
sustained low performance (Sabherwal et al., 2001). While these forces are unlikely
to be the direct cause of transformative change, they can certainly provide the kinetic
energy for transformative change (Gersick, 1991, p. 22). As a result, these forces and
the momentum behind them draw attention from multiple players and create a need
for solutions that often go beyond existing deep structures and institutional
arrangements (Gersick, 1991; Hoffman & Ocasio, 2001; John, 2003).
Establishing the boundaries between equilibrium and punctuations can be
difficult (Poole & Van de Ven, 1989). Although a crisis event that disrupts existing
arrangements is a clear boundary, other problems can develop gradually (Poole &
Van de Ven, 1989). According to Van de Ven and Poole (1988), the punctuation
process itself remains an area whose description is underdeveloped in organisational
sciences.
The triggers or focusing events represent the nucleus that is required before
transformative change can take over the system (Gersick, 1991). The events that
trigger change can be ―inconsequential‖ at first (A.D. Meyer et al., 1990). Change is
triggered when focusing events both bring attention to key issues and create a
mandate for change by reducing the legitimacy or acceptance of support of existing
structures or arrangements (Jones & Baumgartner, 2005). The nature of change
depends on the dimensions of conflict. Four dimensions singularly and collectively
shape conflict and influence the level of change: scope of conflict, visibility,
intensity, and direction (Heck, 2004). Transformative change and reorientations
occur when conflict produces ―radical disruptions‖ to convergent patterns of
organisational behaviour (Tushman & Romanelli, 1985, p. 197). In doing so, deep
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structures are dismantled and the system is temporarily disorganised before
subsystems recreate deep structures bound by new logics and rules (Gersick, 1991).
Punctuated periods can relocate or obliterate boundaries between industries,
change rules of competition and alter performance outcomes (Meyer et al. as cited in
Haveman et al., 2001). Such environmental changes force organisations to accept
and respond to transformative change through organisational reorientations.
Organisational transformation is synonymous with revolutionary change that occurs
swiftly and affects all parts of the organisation and potentially its environment
(Greenwood & Hinings, 1996; McNulty & Ferlie, 2004). A punctuation is a frame-
breaking change that occurs in response to or in anticipation of ―industry
discontinuities‖ (Tushman, Newman et al., 1986, p. 36).
Transformative change occurs when social, legal, political and technological
conditions shift, public opinion changes or activism increases (Givel, 2006;
Tushman, Newman et al., 1986). Change in these areas alters the bases of
competition and legitimacy for organisations (Tushman, Newman et al., 1986),
obliterates the boundaries between industries and alters performance outcomes
(Meyer et al. as cited in Haveman et al, 2001). Change occurs not out of the
instability produced by the conflict between environmental shifts and organisational
practices (Givel, 2006) but through public attention to crisis events (Givel, 2006) and
competing ideas that undermine and reduce the legitimacy of existing ideas
(McDonough, 2000). Radical change bypasses an ―organisation‘s resources and
capabilities because adaptations are not consistent with or complementary to existing
infrastructure, knowledge, markets or processes‖ (Street & Gallupe, 2009, p. 723).
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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The outcome of punctuated equilibrium is a new equilibrium period that is
guided by a renewed deep structure (Gersick, 1991; McDonough, 2000; Siggelkow,
2002). Although this new period may not steer the system towards improvement
(Gersick, 1991), it represents a unique point of difference in an organisation and
system‘s development.
In summary, the contextual level of punctuated equilibrium theory holds deep
structure as the key to either long periods of stability or short periods of
transformative change. When companies are stable, deep structure not only
establishes the rules behind organisational practice but generates organisational
inertia. Under transformative change, deep structures come under question, opening
up opportunities for change and the development of new deep structures to guide the
next period of equilibrium. This contextual framework for change is significant to
understanding transformative change at the action level, which is reviewed next in
section 2.2.3.
2.2.3 Action: Micro Level of Punctuated Equilibrium Theory
The context-level discussion of punctuated equilibrium theory provides a
framework to explain organisational actions during periods of equilibrium and
periods of punctuation. Organisational actions refer to the substantive and symbolic
strategies enacted by organisations. The type of action, in this case substantive or
symbolic strategy, depends upon the organisation‘s position in the change cycle.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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During periods of stability, organisational actions are designed to be
consistent with the rules and logics of the deep structures that govern organisational
systems (Gersick, 1991; Siggelkow, 2002). Under stability, organisational actions
are designed to reinforce deep structures (Gersick, 1991; McDonough, 2000;
Tushman & Romanelli, 1985). Two types of incremental or convergent change are
considered to be used during periods of stability in order to achieve fit among
strategy, structure, people and processes: fine-tuning and incremental adjustments
(Tushman, Newman et al., 1986). Fine-tuning allows an organisation to maximise
and defend its mission. Incremental adjustments are those that occur in response to
minor shifts in the environment. These incremental adjustments are largely the
responsibility of middle managers (Tushman, Newman et al., 1986) and occur
outside of the public domain. They are designed to adapt the organisation to its
environment without transforming the organisation (Tushman, Newman et al., 1986).
See Table 2.3 for details of strategies for convergent change.
Table 2.3
Strategies for Convergent Change
Macro strategy Strategies for convergent change
Fine-tuning
strategies Refining policies, methods and procedures
Creating specialised units and linking mechanisms to permit
increased volume and increased attention to unit quality and cost
Developing personnel especially suited to the present strategy –
through improved selection and training, and tailoring reward
systems to match strategic thrusts
Fostering individual and group commitments to the company
mission and to the excellence of one‘s own department
Promoting confidence in the accepted norms, beliefs, and myths
Clarifying established roles, power, status, dependencies, and
allocation mechanism.
Incremental
adjustment
strategies
Expanding in sales territory
Shifting emphasis among products in product line
Improving processing technology in production
Source: Tushman, Newman et al., 1986, p. 34
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During periods of stability, these substantive strategies are complemented by
symbolic strategies. Symbolic strategies aim to re-emphasise missions and values
and are delivered by organisational leaders such as the chief executive officer or
general counsel (Tushman, Newman et al., 1986). Organisational leaders use
symbolic strategies to signal compliance with existing deep structures (Tushman &
Romanelli, 1985) in order to legitimise, justify and rationalise organisational actions
(Gersick, 1991; McDonough, 2000; Tushman & Romanelli, 1985). Specifically,
organisational leaders are responsible for managing ―symbols, settings, and values to
further support, justify and make more meaningful the firm‘s strategic orientation‖
(Tushman & Romanelli, 1985, p. 196).
In comparison to periods of equilibrium or stability, punctuation periods
bring about significant changes in organisational strategy, power, structures and
control systems (Tushman, Newman et al., 1986; Tushman & Romanelli, 1985).
According to McNulty and Ferlie (2004), a transformation occurs as sharp and
simultaneous shifts in strategy, power, structure, and control. The process of
reorientation leads organisations to shift existing structures, systems and values into
the organisation‘s past or history to make way for the organisation‘s future
(Tushman & Romanelli, 1985). At the same time as the organisation makes room for
change, it must simultaneously bypass its own inertia and also prepare for potential
liabilities of newness or the survival risk organisations face at their time of creation
and during points of significant change (Amburgey, Kelly, & Barnett, 1993; Singh,
Tucker, & House, 1986).
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During punctuations and reorientations, organisational leaders enact major
substantive as well as symbolic decisions (Tushman & Romanelli, 1985). Some of
the decisions involved in frame-breaking change include the reformation of
organisational missions and values, the re-negotiation of power and status and the
employment of new executives (Tushman, Newman et al., 1986). These activities
often occur simultaneously. As a result, they have the potential to create high levels
of uncertainty among system members (Gersick, 1991; Tushman & Romanelli,
1985). The range of transformative change strategies is outlined in Table 2.4.
Table 2.4
Strategies for Transformative Change
Categories for
change
Strategies for change
Strategy Introduction of new lines
Abandonment of new lines
Entrance to new market
Abandonment of market
Structure Reorganisation of firm, change to core structural
form
Changes in titles of senior executives
Power distribution Dramatic resources shift
High turnover of executives
New additions to team reflected in a shift in
functional orientation
Changes in ratio of expenditures
CEO change Internal promotion
Externally sourcing
Source: Romanelli & Tushman, 1994; Tushman, Newman et al., 1986, p. 37-38
Research also supports the need for swift responses. Organisations are likely
to adopt new practices even when there is a temporary inconsistency with existing
policy (Alexander & D'Aunno, 1990). In doing so, the organisation not only
demonstrates its acceptance of and commitment to change but its actions may also
contribute to the new equilibrium (A.D. Meyer et al., 1990). Meyer et al. (1990)
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81
argue that managers who operate during transformative change take on the role of
entrepreneurs ―reinventing both their organisations and their environments‖ (p. 108).
In addition to the strategies outlined in Table 2.6, organisational leaders can
manage uncertainty by drawing on symbolic strategies to inspire confidence and
enthusiasm for new direction (Tushman, Newman et al., 1986). In punctuated
equilibrium theory, less is known about symbolic strategies than substantive
strategies during transformative change or punctuations of equilibrium. In a study of
regulatory punctuations, symbolic actions were found to be the first response and
occurred immediately after punctuations while substantive actions took time to
formulate and implement (Haveman et al., 2001).
By providing an alternative view to change and considering context and
actions, punctuated equilibrium theory offers the opportunity to extend existing crisis
communication research. Yet, the theory is not without its critics. Although
punctuated equilibrium theory contains both incremental and transformative or
revolutionary change, some authors have offered a third type that they believe better
captures and explains organisational change. In their study of innovation in the
computing industry, Brown and Eisenhardt (1997) drew on grounded theory to put
forward continuous change as a type of change that sits in between incremental and
transformative change. Continuous change sees change as frequent, relentless and
endemic to the organisation (Brown & Eisenhardt, 1997). Researchers also argue
that a punctuation of equilibrium may not emerge from a single punctuation but
involve multiple part change (Sastry, 1997). Further, from a practical perspective,
Sastry (1997) argued that organisations may fail after transformative change. These
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perspectives have been considered in the selection of punctuated equilibrium theory
as the organising theory for this thesis.
In summary, this section has provided an overview of punctuated equilibrium
theory and its treatment in organisational sciences. The discussion of the context and
action levels associated with punctuated equilibrium theory provides insight into the
processes of transformative change. During times of stability and turbulence, the
structural context for change depicted through deep structures influences the patterns
of actions seen as substantive and symbolic strategies. These patterns indicate the
level of change with organisational systems. The implications of this process for
change in relation to crisis communication and public relations are summarised in
the next section.
2.2.4 Conclusions and Implications for Study
In section 2.2, I argued that the scholarship of crisis communication limits
ongoing theoretical development and practical utility of the research to outcomes-
driven work. Existing research provides crisis response typologies and guidelines for
crisis communication decision-making for single organisations that are involved in
short-term or situational crisis events. Under this framework, crisis communication
is used to restore organisational reputation, image or legitimacy and return the
organisation to the status quo. Yet this existing scholarship presents a challenge to
ongoing theoretical development for crises that involve multiple organisations and
occur within the context of transformative change. At the same time, some authors in
the public relations literature provide support for viewing crises, and as a result,
crisis communication, as triggers for transformative change. In doing so, these
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authors provide opportunities for theoretical development and empirical studies to
fill the gap in crisis communication and public relations scholarship.
In considering the theoretical challenges of existing research and the
theoretical opportunities in the literature, there is the opportunity to investigate crisis
communication during transformative change. In section 2.2, I introduced punctuated
equilibrium theory as a guiding framework to the investigation of crisis
communication and change. With some support in the public relations literature
(Murphy, 2000), punctuated equilibrium theory provides a way to consider the
context of crises and the actions of organisations, seen as crisis communication
responses, under conditions of equilibrium and punctuations of equilibrium.
Punctuated equilibrium theory specifically identifies the ideal mix between
substantive and symbolic strategies during these conditions. In doing so, punctuated
equilibrium theory provides a platform to link crisis response strategies found in
crisis communication and public relations practice with punctuated equilibrium
theory. Based on these indications from the literature, I develop a framework to
guide this thesis in section 2.3.
2.3 Synthesising Context and Action through Punctuated Equilibrium Theory
In section 2.1.1, existing crisis communication research was discussed in
terms of its contribution to resolving situational or short-term crisis events that
affected single organisations. The role of crisis communication was to restore
organisational image, reputation, or legitimacy. This literature review has established
that the role of crisis communication during times when crisis events moved beyond
situational events and affected multiple organisations in potentially transformative
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ways is empirically absent. In section 2.2, punctuated equilibrium theory with its
acceptance within the public relations literature, provides a framework that supports
the role of crisis events as triggers for transformative change and the role of crisis
management and communication during this process.
Based on the review of these literatures, it is noted that punctuated
equilibrium theory provides a framework through which to structure and study
transformative change and its role in crisis communication. This section sets out to
draw together crisis communication and punctuated equilibrium theory in order to
establish essential components of a process model that supports this integration.
Based on the extensive research around crisis communication during
situational crisis events as well as the support for crisis events as potential triggers
for transformative change, punctuated equilibrium theory provides a bridge to
connect both the context of transformative change and the organisational actions that
occur within this context. The contextual processes of punctuated equilibrium and
crisis are intertwined with the action level of organisations and crisis
communication. In this way, context influences action, and action influences context
(see Figure 2.1).
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Figure 2.1 The relationship between context and action levels of punctuated
equilibrium theory and crisis communication, demonstrating how both action and
context influence each other.
This chapter section provides information about the elements of the processes
for change and in doing so, establishes the platform for the development of a
conceptual model (see Chapter 5) that connects both the context and action levels of
transformative change and crisis communication. This chapter section is set out in
three stages. Firstly, in section 2.3.1, the context levels of punctuated equilibrium
and crisis communication research will be synthesised to establish the context for
change and crisis. Secondly, in section 2.3.2, the action levels of punctuated
equilibrium and crisis communication will be explored to bring together existing
crisis response typologies with strategies for change. Finally, section 2.3.3
synthesises punctuated equilibrium theory and crisis communication.
2.3.1 Context in Punctuated Equilibrium and Crisis Communication
This section reports on the contextual processes of punctuated equilibrium
theory and crisis communication and management. The literature reviews of crisis
communication and punctuated equilibrium theory identify a number of elements
related to context. It is important to study context because according to Pettigrew
(1992), context and action are interwoven into history. As a result, in order to
Context of punctuated equilibrium
process and crisis communication
Actions of punctuated equilibrium
process and crisis communication
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explain actions, one must understand context (Pettigrew, 1992). Studies of change
should be aware of the ―enabling and constraining influences‖ of contexts on actions
(Pettigrew, 1992). To define context, this thesis draws on the foundational work of
Pettigrew (1992) and establishes context as the environment within which the
organisation is located. From a change perspective, shifts at the contextual level of
organisational systems affect change at the action level of organisations.
2.3.1.1 Punctuated Equilibrium Theory and Context
Within the perspective of punctuated equilibrium theory, contextual change is
seen through the phases of alternating periods of long stability and periods of short-
term transformative change. These periods are influenced by organisational systems
and triggers for change that come from either internal or external factors. Punctuated
equilibrium theory can be described as a ―path of development‖ (Siggelkow, 2002, p.
154) or model of insight formation (Gersick, 1991). In this way, punctuated
equilibrium theory focuses on the processes of change and demonstrates how change
occurs over time.
As a process model, punctuated equilibrium theory‘s context for change
includes the trigger for punctuation, which may involve a crisis event or another
internal or external factor, the punctuation period, where the trigger event gains
attention and leads to the emergence of multiple and linked crisis events, and the
new equilibrium period, where the system achieves new standards and deep
structures. At the same time, the emphasis of punctuated equilibrium theory is on the
processes of insight formation as there is no one pre-determined path for change and
no ability to predict the future (Gersick, 1991). Each organisation or system‘s change
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processes are individualised. At this level, little is known empirically about how
organisations respond to punctuations in their environments (Haveman et al., 2001).
One way to study this is through the communication practices of organisations
during punctuations.
2.3.1.2 Crisis Communication and Context
Under existing crisis communication research, the crisis context has been
treated largely at an organisational level that includes the perceptions of crisis
stakeholders and actors, and a consideration of an organisation‘s crisis history and
level of responsibility for the crisis event. These contextual factors influence
guidelines for crisis communication (Allen & Caillouet, 1994; Benoit, 1997, 2000,
2004; Coombs, 1998, 2004a, 2006b, 2007a, 2007c, 2009). When a situational crisis
event occurs, Coombs (2004, 2006) argues that an organisation‘s responses or
actions are influenced by stakeholders‘ perceptions of an organisation‘s
responsibility for the crisis event. It is this organisation-centric context that is used to
influence crisis management and crisis communication with the aim for the
prevention of the crisis event (Fearn-Banks, 2002; Fink, 1986; Hale, Dulek, & Hale,
2005).
Crises involve multiple stakeholders who are critical to an organisation‘s
crisis management. Crisis plans will consider employees, shareholders, media,
customers, governments, and local communities in their planning with the type of
crisis determining the prioritisation of stakeholders (Coombs, 2007b; Fearn-Banks,
2002; Marra, 2004). Stakeholders become involved in crises in many ways and at all
stages of the crisis. Stakeholders can cause crises, communicate about crisis events,
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and mitigate the effects of crises (Shrivastava et al., 1988). Stakeholders can be
directly affected by a crisis event such as a product recall; they can make decisions
that affect the focal organisation or government, and in some cases can demand to
become involved in the post-crisis management process (Allen & Caillouet, 1994;
Sen & Egelhoff, 1991). In these instances, organisations should find ways of
including stakeholders even at the expense of efficiency (Sen & Egelhoff, 1991).
As a crisis unfolds, stakeholder perceptions about the crisis and the
organisations or governments involved define the meaning of the crisis itself. That
is, although an organisation may seek to define a crisis event as a product recall or
workplace violence, stakeholders integrate their own meanings of the crisis. As a
result, a crisis is a socially constructed term that gains meaning from the
participation of multiple actors including the focal organisation or government,
media and other stakeholders (Hearit & Courtright, 2003). This involvement has the
potential to extend the time frame of crisis and increase the complexity of the crisis
context.
Depending on the type of crisis, stakeholders can communicate about it in
different ways. Stakeholders can be cooperative and collaborative or encourage
conflict and disunity (Seeger, 2002). Allen and Caillouet (1994) see an organisation
as being part of a ―web of complex relationships‖ (p. 44) where stakeholders‘ actions
can add pressures on the focal organisation. Their study of a reuse-recycle facility
that faced repeated challenges for its environmental record investigated how the
messages of other organisations or agencies involved in the crisis influenced the
communication of the reuse-recycle facility (Allen & Caillouet, 1994). By examining
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the target of the focal organisation‘s messages, Allen and Caillouet (1994) observed
that the majority of messages were directed to the media, government, and regulatory
bodies.
The existing literature suggests that stakeholder actions will influence the
focal organisation‘s communication choices during and after the crisis event (Seeger,
2002). In some cases, organisations will adapt their messages to suit each
stakeholder or audience (Allen & Caillouet, 1994). Each party seeks to frame the
crisis in ways that are favourable to their interests and over time the meaning of the
crisis shifts based on the role of stakeholders (Hearit & Courtright, 2003).
Existing crisis communication research recognises the role and influence of
stakeholders on an organisation‘s crisis management, yet its consideration is limited
to an organisation-centric context, that is the influence on the focal organisation.
However, research in the organisational literature suggests that industrial crises
extend beyond organisational phenomena and have fundamental trans-organisational
causes that mean their resolution cannot be achieved at the organisational level alone
(Shrivastava et al., 1988). Indeed, ―organisations do not operate in a social vacuum‖
(Brouillette & Quarantelli, 1969, p. 44). As a result, it is important to consider the
linkages between organisations (Miner, Amburgey, & Stearns, 1990). Punctuated
equilibrium theory provides a broader consideration of the context for change than
what is seen in the existing crisis communication and public relations literatures and
in doing so offers a way to extend scholarship.
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2.3.2 Action Level: Crisis Response Typologies during Equilibrium and
Punctuations
This section reports on the action levels of punctuated equilibrium theory and
crisis communication. The literature reviews of crisis communication and punctuated
equilibrium theory identify a number of elements related to the substantive and
symbolic actions that can be enacted by organisations. Action and context are
intricately connected parts of process models for change and crisis communication in
this thesis.
2.3.2.1 Punctuated Equilibrium Theory and Organisational Actions
Under punctuated equilibrium theory, organisational actions refer to
substantive and symbolic strategies. These strategies are enacted in different ways
depending on whether the organisation is operating under equilibrium or
punctuations of equilibrium (Siggelkow, 2002). Section 2.2.3 provides an account of
the actions of punctuated equilibrium theory and describes the incremental or fine-
tuning strategies that are enacted during the long periods of equilibrium as well as
the multiple strategies that are enacted during punctuations of equilibrium.
As established in section 2.2.3, organisational studies using punctuated
equilibrium theory have focused predominantly on the substantive strategies enacted
during punctuations of equilibrium. Although there is some sense of the role of
symbolic strategies, there is limited empirical evidence around this. As a result, by
studying crisis communication as symbolic strategies undertaken by organisations
during punctuations of equilibrium, this thesis responds to an opportunity in the
literature.
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2.3.2.2 Crisis Communication and Organisational Actions
Within crisis communication, the actions of organisations that undergo and
resolve crisis events that occur during long periods of stability are clearly established
through the crisis response typologies presented in the public relations literature.
However, the role and type of crisis communication during transformative change is
empirically absent in crisis communication research. Following the principles of
punctuated equilibrium theory, these properties are essential to describe and
understand specifically because they have the potential to reinforce, punctuate, and
reset equilibrium and thus influence crisis communication.
Organisations can prevent and manage crises by drawing on symbolic and
substantive strategies ('t Hart, 1993). As identified earlier in this chapter, the crisis
communication literature offers several typologies of crisis communication to
understand how organisations respond during crisis events. These typologies have
largely been applied to studies of single organisations experiencing situational or
short-term crisis events. Although the rationale for these typologies is grounded in
stability and the restoration of reputation and legitimacy, they provide useful starting
points to define crisis response strategies and map changes in these strategies over
time.
Sections 2.3.2.3 and 2.3.2.4 of this chapter are presented in two stages.
Firstly, the crisis response typologies of Coombs (2006b) and Allen and Caillouet
(1994) will be reviewed and justified. Secondly, because these typologies are
grounded in short-term or situational crisis events and do not consider transformative
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change, Oliver‘s (1991) strategic response typology will be presented to provide a
way to graft existing crisis response typologies to a typology that considers change.
Oliver‘s (1991) typology is introduced because existing scholars posit that standard
crisis communication typologies may not be adequate under transformative change
(Seeger et al., 2005). As a result, this thesis must integrate existing crisis
communication typologies with typologies that consider change.
2.3.2.3 Existing Crisis Response Typologies
Linked to the action level of punctuated equilibrium theory, the two
typologies selected from the crisis communication literature were developed by
Coombs (2006b) and Allen and Caillouet (1994). Sections 2.1.1 and 2.1.2 provide a
detailed overview of the range of existing crisis response typologies. Based on this
review, the typologies developed by Coombs (2006b) and Allen and Caillouet
(1994) were selected based on the following criteria: 1) clear framework of
organisational actions and communication choices, and 2) different analytical
considerations for crisis context. These criteria relate directly to process theory and
research and align with punctuated equilibrium theory.
Coombs‘ (2006b) typology was selected because it was created based on the
typologies of Benoit and Allen and Caillouet (1994) to offer a range of crisis
response strategies from deny to diminish to repair. Coombs‘ (2006b) crisis response
strategies build on these authors‘ typologies by integrating both symbolic and
substantive strategies such as compassion and corrective action that aim to treat the
cause of the crisis. In comparison, Allen and Caillouet‘s (1994) typology considers
only the symbolic or communication responses of organisations in crisis. Coombs‘
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(2006, 2007c) crisis response strategies can be used to answer and resolve concerns
about an organisation‘s responsibility for a crisis event. The strategies range from
accommodative to defensive and sit within three primary postures in addition to the
supplementary bolster strategy, as illustrated in Table 2.5.
Table 2.5
Coombs’ Crisis Response Typology
Posture Crisis response strategy definition
Deny Attack the accuser
Crisis manager confronts the person or group claiming something is wrong with
the organisation
Denial
Crisis manager asserts there is no crisis
Scapegoat
Crisis manager blames some person or group outside of organisation for the
crisis
Diminish Excuse
Crisis manager minimises organisational responsibility by denying intent to do
harm and/or claiming inability to control the events that triggered the crisis.
Justification
Crisis manager minimises the perceived damage caused by the crisis
Rebuild Compensation
Crisis manager offers money or other gifts to victims.
Apology
Crisis manager indicates the organisation takes full responsibility for the crisis
and asks stakeholders for forgiveness
Bolster Reminder
Crisis manager tells stakeholders about the past good works of the organisation
Ingratiation
Crisis manager praises stakeholders and/or reminds them of past good works by
the organisation
Victimisation
Crisis managers remind stakeholders that the organisation is a victim of the
crisis too.
Source: Coombs, 2006b, 2007c
Crisis response strategies shape attributions of crisis, change perceptions of
the focal organisation, and reduce negative effects of crisis (Coombs, 1995, 2007c).
Coombs‘ (2006b) typology considers the crisis context through the lenses of
organisational responsibility for the crisis, the crisis type, and the organisation‘s
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reputational and crisis history. For example, each response is built around perceived
acceptance of responsibility for a crisis. As crisis response strategies become more
accommodative, they show greater concern for victims, and stakeholders perceive
the organisation is taking greater responsibility for the crisis (Coombs & Holladay,
2004). The deny posture represents the defensive end of the continuum and the
rebuild posture represents the accommodative end of the continuum. Bolster
strategies can be used at any point in the crisis.
Allen and Caillouet‘s (1994) typology was also selected for this thesis. The
authors used impression management as a basis for developing a typology of
strategies and institutional theory as a way to explain how these strategies could
potentially shape and restore organisational legitimacy (Allen & Caillouet, 1994). To
build the link between impression management and institutional theory, Allen and
Caillouet (1994) developed a typology of message strategies and also examined the
target of each strategy. In this way, the study could understand both the complexity
of communication and institutional constraints on organisational messages. By
integrating institutional theory, Allen and Caillouet (1994) examined messages as
occurring within the context of a ―complex web of relationships‖ among a focal
corporate actor and other agents (Allen & Caillouet, 1994). In devising this typology,
the authors paid attention to how strategies related to institutionalisation within an
organisational field (Allen & Caillouet, 1994). That is, how an organisation
communicated its conformity and gained audience approval in order to enhance its
legitimacy (Allen & Caillouet, 1994). In doing so, Allen and Caillouet‘s (1994)
typology provides an insight into the crisis context that is analytically different to
Coombs‘ (2006b) typology.
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The resultant typology includes those strategies that admit fault and
communicate through excuses, justifications or apology; those that aim to convince
stakeholders of legitimacy through ingratiation; and those that aim to intimidate,
denounce or claim factual distortion (Allen & Caillouet, 1994). The strategies are
illustrated in Table 2.6.
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Table 2.6
Allen and Caillouet’s Crisis Response Typology
Strategy Definition
Excuse An organisation attempts to negate responsibility for an event
Denial of intention
consequences were unforeseeable
organisation was unaware of action and decision effects
effects were accidental or result of mistake
Denial of volition
event could not be controlled or be expected to be controlled
Denial of agency
organisation did not make a decision or perform a particular behaviour
or performed a similar response but did not produce the act in question
Justification Organisation accepts responsibility for the effect but does not accept
responsibility for the negative actions associated with it
Denial of injury
organisation admits an event occurred but asserts it was permissible
since no one was hurt or the act‘s consequences were trifling.
Denial of victim
the action was permissible since the victim deserved the injury
Condemnation of condemner
organisation admits act but asserts act was irrelevant because others
commit these and worse acts
Negative events misinterpreted
Ingratiation The organisation attempts to gain audience approval
Self-enhancing communication
organisation attempts to persuade target of organisation‘s positive
qualities, traits, motives, and/or intentions
Role model
organisation suggests that it serves as an exemplar
Social responsibility
organisation accepts social responsibility
Other-enhancing communication
Organisation seeks approval by praise, approbation, and flattery
toward the target
Organisation seeks opinion conformity
Organisation expresses similarity of beliefs, values, and attitudes
directly associated with liking
Intimidation Organisation conveys an organisational identity of danger and potency.
Often used in conjunction with threats
Apology Organisation admits the organisation‘s guilt and requests punishment.
Denouncement Statements indicate a particular external person or group is at fault.
Factual
distortion
Statements offered in regard to an event are taken out of context or untrue.
Source: Allen & Caillouet, 1994
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The strategies identified in Table 2.6 detail the range of messages that
organisational actors can communicate to restore or reinforce legitimacy. Allen and
Caillouet‘s (1994) typology is limited to messages only whereas Coombs‘
framework considered both communication and action. Unlike Coombs‘ (2006b)
situational crisis communication theory, Allen and Caillouet‘s (1994) typology does
not offer a set of prescriptive guidelines for strategy use. Allen and Caillouet‘s
(1994) work was more formative, leading to the development of a typology of
message strategies connected by a web of relationships among actors. One of the
ways that Allen and Caillouet‘s (1994) strategies achieve legitimacy is by
demonstrating conformity. Organisations demonstrate conformity to show that their
practices are consistent with industry norms. This is one way to restore stability or
the status quo.
Despite the ongoing use of Allen and Caillouet‘s (1994) work in Coombs‘
research, there are some elements lost in interpretation. By focusing on crisis
response strategies, Coombs‘ work has often not considered Allen and Caillouet‘s
(1994) emphasis on the way corporate actors become entangled in defining and
resolving the crisis. This thesis returns to a focus on the notion of the ―web of
complex relationships‖ (Allen & Caillouet, 1994, p. 44). Allen and Caillouet (1994)
take into account that legitimacy pressures can come simultaneously from multiple
stakeholders who have been affected by the actions of one organisation. Following
this network logic, one organisation‘s crisis can also both draw pressure from and
increase pressure on multiple, linked organisations. As a result, Allen and Caillouet‘s
(1994) study of impression management strategies also provides another way to
study crisis communication: to examine how the messages of other organisations or
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agencies pressure the communication of the focal organisation in crisis. As a result
of these additional pressures, the focal organisation may have had a greater
requirement to communicate externally that its actions were legitimate (Allen &
Caillouet, 1994).
2.3.2.4 Integrating Change into Existing Crisis Response Typologies
Although the work of Coombs (2006b) and Allen and Caillouet (1994)
provide an understanding of how organisations communicate during situational or
short-term crisis events, their role under conditions of transformative change when
crisis events affect multiple organisations remains untested. In order to integrate
change, the management literature provides typologies that allow for the
incorporation of multiple players and the transformation of crisis events yet are
consistent with crisis response typologies.
Although it is beyond the scope of this thesis to provide an extensive review
of all documented typologies in the management literature, the two key typologies
considered were Oliver‘s (1991) strategic responses to institutional pressures and
Suchman‘s (1995) legitimation strategies. Both typologies were considered because
they: 1) shared the outcome of legitimacy with crisis response typologies, 2) adopted
a strategic focus on institutional elements, and 3) considered change by relating a
strategy alternative to conformity or manipulation of the environment. However,
Oliver‘s (1991) typology was ultimately selected for this thesis. Suchman‘s (1995)
legitimacy strategies examine the challenges of gaining, maintaining and repairing
legitimacy based on three types of legitimacy, pragmatic, moral, and cognitive.
Although Suchman‘s (1991) typology has been used to analyse the James Hardie
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crisis (Patel & Xavier, 2005), its focus on the challenges and types of legitimacy
limits its applicability to a study that focuses largely on regulative legitimacy. As a
result, Oliver‘s (1991) framework was selected.
Drawing on both resource dependence and institutional theories, Oliver
(1991) developed a typology of an organisation‘s strategic responses to institutional
pressures towards conformity. The typology aimed to contribute to understanding
how organisational behaviour can sit on a continuum of conformity to resistance in
response to institutional pressures and expectations. Like Allen and Caillouet (1994),
Oliver‘s (1991) typology is also linked to organisational legitimacy.
Oliver (1991) identifies five strategic responses to institutional pressures:
acquiesce, compromise, avoid, defy, and manipulate. These strategies sit on a
continuum ranging from passive conformity to active resistance (Oliver, 1991, p.
146). Conformity to existing definitions of legitimacy and taken-for-granted norms is
a common organisational response that achieves legitimacy and enhances survival
(Oliver, 1991; Rao, 1994; M. A. Zimmerman & Zeitz, 2002). Conformity is a
characteristic organisational response to uncertainty (Rao, Greve, & Davis, 2001)
and represents both an efficient use of resources and continued access to resources
(George, Chattopadhyay, Sitkin, & Barden, 2006). At the other end of the
continuum, organisations can alter existing definitions of legitimacy (Dowling &
Pfeffer, 1975) by introducing new criteria and measures to evaluate legitimacy and
performance (Oliver, 1991). Organisations can pursue non-conformance strategies in
order to gain control of their environment (George et al., 2006). The typology is
presented in Table 2.7.
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Table 2.7
Oliver’s Typology of Strategic Responses to Institutional Processes
Strategy Tactic Definition and example
Acquiesce Habit Follow invisible, taken-for-granted norms
Organisations reproduce roles such as teacher, student etc
Imitate Mimic institutional models
Organisations imitate successful behaviours of others
Comply Obey rules and accept norms
Organisations show compliance with institutional bodies to
enhance legitimacy and stability
Compromise Balance Balance the expectations of multiple constituents
Organisation seeks balance between stakeholders to achieve
parity among multiple interests
Pacify Placate and accommodate institutional elements
Organisations show partial conformity to institutional
expectations
Bargain Negotiate with institutional stakeholders
Organisation negotiates with government to reduce scope of
compliance with new policy
Avoid Conceal Disguise nonconformity
A ―window dressing‖ organisation will say it is doing things
to meet institutional norms; e.g. prepare for a site visit by
doing expected activities that are not part of the norm
Buffer Loosen institutional attachments
Organisations reduce opportunity for institutional
inspections by separating internal activities from external
investigation
Escape Change goals, activities, or domains
e.g. if government inspections on emission standards are
considered too tough, then organisation might change goals
so that it no longer emits or change territories
Defy Dismiss Ignore explicit norms or values
e.g. organisation ignores affirmative action policy because it
cannot see relevance or it will not get caught
Challenge Contest rules and requirements
e.g. schools are legitimate yet different forms of schools like
Montessori hold different definitions for effective education
Attack Assault the sources of institutional pressure
Organisation denounces institutional rules openly; e.g.
criticise mass media for misrepresenting public opinion
Manipulate Co-opt Import influential constituents
Organisation may recruit stakeholder onto organisational
board or to be opinion leader
Influence Shape values and criteria
Trade association aims to influence perceptions of its
industry and lobby government for change
Control Dominate institutional constituents and processes
Organisation dominates small advocacy group that‘s
opposed its products
Source: Oliver, 1991
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Following from Table 2.7, the acquiescence strategy is designed to show
conformance to institutional processes (Oliver, 1991). Under this strategy,
organisations can respond using a range of tactics termed habit, imitate, and comply.
Under the habit response, organisations will ―reproduce actions and practices‖ that
have become convention within the environment (Oliver, 1991, p. 152). Under the
imitate response, organisations will mimic the responses of successful and trusted
organisations (Oliver, 1991). Similarly, the comply response shows a ―conscious
obedience‖ and choice of an organisation to comply with institutional pressures
(Oliver, 1991, p. 152).
The compromise strategy operates within the spirit of conformance, yet offers
a degree of agency for organisations to select and promote their own interests. Under
this strategy, organisations can respond using a range of tactics titled balance, pacify
and bargain. Under the balance response, organisations can accommodate the
interests of a range of stakeholders and is particularly useful when stakeholders hold
conflicting positions (Oliver, 1991). A pacify response shows partial conformity to
institutional pressures from one or more stakeholders (Oliver, 1991). A bargain
response is a more active form of compromise where the organisation seeks some
concessions from stakeholders (Oliver, 1991).
The avoidance strategy is designed to ―circumvent‖ the basis for institutional
conformance (Oliver, 1991, p. 156) and is achieved by decoupling the activities that
cause conflict (Dowling & Pfeffer, 1975; J. W. Meyer & Rowan, 1977; Oliver,
1991). In this way, organisations shift focus on non-conforming actions by
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increasing focus on actions that have a strong base in legitimacy (Dowling & Pfeffer,
1975; J. W. Meyer & Rowan, 1977; Oliver, 1991). Under this strategy, organisations
can respond using a range of tactics titled conceal, buffer, and escape. The conceal
response sees organisations disguise non-conformance by communicating plans in
response to institutional pressures but with no intention of implementing them
(Oliver, 1991). Under the buffer response, organisations attempt to shield itself from
external scrutiny by decoupling or removing internal activities from external
inspection (Oliver, 1991). Under the escape response, organisations either exit the
domain or significantly change goals to avoid conformity (Oliver, 1991).
Unlike the other strategies, the defiance strategy represents an organisational
rejection of institutional pressures. Under this strategy, organisations can respond
using a range of tactics titled dismiss, challenge or attack. Under the dismiss
response, organisations ignore institutional rules, often when the basis or rationale
for these rules is unclear to the organisation (Oliver, 1991). The challenge response
represents a more ―active departure‖ from institutional rules where organisations
make a case for their non-conformity (Oliver, 1991, p. 156). Under the attack
response, organisations are aggressively defiant of institutional pressures (Oliver,
1991). In this way, organisations denounce institutional norms and those
stakeholders who hold them to these rules (Oliver, 1991).
The manipulation strategy occurs when organisations actively change
institutional pressures (Oliver, 1991). In this way, organisations take control of
institutional pressures to redefine norms (Oliver, 1991). Under this strategy,
organisations can respond using a range of tactics titled co-opt, influence or control.
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A co-opt response occurs when organisations persuade stakeholders to join an
organisation through its board or other decision-making body (Oliver, 1991). An
influence response is used when organisations seek to influence and change
perceptions around institutional practices and/or the standards by which legitimacy is
evaluated (Oliver, 1991). Under the control response, organisations establish power
over the stakeholders that are applying institutional pressure (Oliver, 1991).
2.3.2.5 Summary of Context and Actions and Implications for Study
In summary, this section has outlined the context and action levels of
punctuated equilibrium theory and existing crisis communication research.
Punctuated equilibrium theory provides an understanding of the context for periods
of equilibrium and punctuations for equilibrium. Further, punctuated equilibrium
theory maps the substantive strategies that are enacted by organisations during
punctuations. Less is known about the role of symbolic actions during punctuations
of equilibrium, presenting opportunities for this thesis.
In comparison, the crisis communication literature depicts organisational
factors such as crisis history, an organisation‘s level of responsibility for a crisis, and
stakeholders as the key contextual factors that influence crisis communication and
action. Two typologies of crisis response strategies were presented in line with this
approach. However, because existing research has focused largely on situational or
short-term crises, less is known about crisis contexts and communication under
transformative change. As a result, punctuated equilibrium theory provides a way to
extend the context level and the organisational literature provides typologies for
change to extend scholarship in crisis communication.
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2.3.3 Synthesising Punctuated Equilibrium Theory and Crisis
Communication
This thesis aims to extend existing research and scholarship by examining the
specifics of crisis communication within a punctuated equilibrium framework.
Existing research is outcomes-based where crisis communication typologies have
been developed in order to restore organisational reputations and legitimacy in the
most effective and efficient manner possible. Instead, following punctuated
equilibrium theory, this thesis aims to take a process-based approach to studying the
interplay between context and actions in crisis communication under transformative
change. In order to achieve this task, this chapter section establishes the key
components of context and action over time as a way of building the methodology
and conceptual model of the thesis (see Chapter 5).
This thesis deliberately focuses on the period of punctuation where
transformative change occurs. Guided by this emphasis, this section draws together
punctuated equilibrium theory and crisis communication by establishing a crisis
event as a trigger for a punctuation, the emergent crisis events, and the signals of
renewal of equilibrium. These stages are represented in Figure 2.2.
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Figure 2.2 The development of a crisis under punctuated equilibrium theory,
depicting how a situational crisis event becomes a focusing event that retains media
interest.
Through each of these stages, the thesis aligns punctuated equilibrium theory
and crisis communication, considering both context and action levels. The context
level is based on the conditions and phases required and associated with
transformative change. The action level is based on the symbolic and substantive
actions enacted by organisations that occur within this context. These stages are
mapped out in the remainder of this chapter section.
2.3.3.1 The Trigger for Punctuation
The first stage of the punctuated equilibrium process model of crisis
communication proposes a situational crisis event as a trigger for the punctuation of
equilibrium. A situational crisis event is a negative and unexpected event that
interrupts and potentially threatens the normal operating environment of
organisations (Coombs, 2007b; Fearn-Banks, 2002; Pearson & Clair, 1998). To
resolve this threat and manage uncertainty, organisations respond using crisis
management and communication techniques and strategies (Boin, 't Hart, Stern, &
Sudelius, 2006; Coombs, 2004a; Coombs & Holladay, 2006).
Situational crisis event
•Focal corporate actor draws on crisis response typologies
Focusing event
•Media act as selection mechanism
•Multiple corporate actors or institutions affected
Emergent crisis events
•Media continue to cover story
•Focal corporate actor draws on crisis response typologies
Signals of newequilibrium
•New standards of practice emerge and are tested by regulatory authorities and corporate actors
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Existing crisis communication literature within the public relations discipline
provides extensive insight into the ways organisations communicate in order to
resolve situational crisis events. The public relations literature puts forward an
escalating set of crisis communication responses that organisations can use to protect
their reputations. Coombs and Holladay (2004) identify three response postures
(deny, diminish, and repair) that organisations can use to select and adapt strategies
as crises shift in the short-term. These strategies account for the organisation‘s level
of responsibility for the crisis event and help facilitate organisational control of the
crisis. Within the context of a developing crisis, organisational communication can
move from a first-level denial posture to a diminish posture and so on if initial crisis
communication is not accepted by the environment in the short-term (Coombs &
Holladay, 2004).
Although the public relations literature provides a rich set of crisis response
strategies to guide communication during situational crisis events, existing research
is limited to conditions where organisations have the ability or potential to control or
influence the levels of complexity and uncertainty associated with the crisis event.
Essentially, under these conditions, the organisation hopes to be able to manage the
crisis and restore the status quo. However, as yet, existing crisis communication
literature provides no consideration of crisis communication that moves beyond the
repair posture option as noted in situational crisis communication theory (Coombs &
Holladay, 2004). Existing research in crisis communication provides limited insight
into the ways organisations communicate when crisis events move beyond the
control or influence of organisations to affect multiple organisations and interests.
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Despite enacting standard crisis response strategies, organisations may
experience sustained questioning attention or focus as a result of their situational
crisis event and selection of crisis response strategies. A crisis can disturb the status
quo by casting a spotlight on organisational vulnerabilities and draw sustained
attention to stakeholder relationships (Clair & Dufresne, 2007). In doing so, a crisis
can trigger strong emotional reactions from stakeholders (Clair & Dufresne, 2007),
which in turn attract sustained media and public interest. This attention is likely to
affect organisational legitimacy (Smith & Sipika, 1993; Suchman, 1995) and shift a
situational crisis event to a more complex event or crisis or a series of crisis events.
Complex crisis events are less likely to be as spatially confined as their
situational counterparts (Boin & 't Hart, 2003). Complex crisis events can entangle
with other deep problems to have a prolonged impact on organisations, sectors or
industries (Boin & 't Hart, 2003). In this way, complex crises have the potential to
limit the effectiveness of standardised crisis response strategies.
Another characteristic of complex crisis events is that it is often difficult to
identify in real time. Events that trigger transformative change may initially appear
as ―inconsequential‖ (A.D. Meyer et al., 1990, p. 108). As a result, Meyer et al.
(1990) caution that their sudden onset may force action before the organisation fully
understands the consequences of such decisions. Research shows that organisational
actions during transformative change have the potential to create or be judged by the
new standards for equilibrium that follow (A.D. Meyer et al., 1990). Meyer et al.
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(1990) describe managers as being responsible for reinventing both organisations
and environments during punctuations.
The potential inadequacy of standard crisis response strategies (Seeger et al.,
2005) and difficulties associated with recognising the subtle shift from a situational
crisis event to a force that moves beyond an organisation‘s ability to control or
influence may hinder an organisation‘s ongoing reputation and viability. These two
conditions also have the potential to lead to the emergence of new properties related
to the original crisis event that draw from historical elements of organisational
systems. It is at this point that a departure is made from the public relations and crisis
communication literatures to the punctuated equilibrium theory literature that
provides more insight into both the context and actions of crisis events.
2.3.3.2 Punctuations: Focusing and Emergent Crisis Events
When the conditions are right, a situational crisis event that affects a single
organisation can develop into a focusing event that involves multiple organisations,
actors, and interests that operate across extended time frames. Once a situational
crisis event becomes a focusing event, a punctuation of equilibrium is imminent. The
public relations literature on crisis is focused largely on situational crisis events.
Although it recognises the transformative role of crisis, there is little insight given
into the development of complex crises and the role of crisis communication under
these conditions. Drawing from punctuated equilibrium theory in the public policy
literature, this section defines a focusing event and outlines the environmental
conditions required for the shift from crisis event to focusing event.
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A focusing event grows out of an incident of failure. While this failure on its
own is unlikely to be the direct cause of transformative change, it provides the
source of ―energy for revolutionary change‖ (Gersick, 1991, p. 22). A focusing event
draws organisational, industry and policy sector attention to an issue and creates a
need for new solutions that often go beyond existing deep structures and institutional
arrangements (Birkland, 1998; Wood, 2006). Once the event or incident gains
attention, it also gains momentum and can become an unstoppable force of change
(John, 2003) that may affect institutional arrangements (Hoffman & Ocasio, 2001).
Focusing events can take many shapes and involve different types of industry
and organisational actors (Hoffman & Ocasio, 2001). When a focusing event relates
to a matter that is high in the public interest or has the potential to trigger activism, it
becomes a matter requiring the attention of multiple players. Some of the key
stakeholders involved in focusing events include interest groups and activists,
government and regulatory leaders, policy entrepreneurs, mass media, or the general
public (Birkland, 1998; Givel, 2006).
Focusing events not only bring attention to key issues but create a mandate
for transformative change by reducing the legitimacy or acceptance of support of
existing structures or arrangements. Such events are usually time restricted and
―curtail in-depth deliberation‖ (Schrad, 2007, p. 457). In this climate, issues that
were once dormant can be re-framed and/or new ideas can be presented (Jones &
Baumgartner, 2005). Focusing events produce a foundation for alternative interests
by heightening public attention to critical issues (Givel, 2006). Alternative interests
have the potential to loosen the grip of organisational inertia (Haveman et al., 2001).
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The attention drawn by focusing events raises the salience of the issue and shifts
focus away from the content dimensions that support existing stability (Jones &
Baumgartner, 2005). In essence, focusing events create the potential for support for
new ideas and new practices to manage organisational-environmental relationships
or policy (John, 2003; McDonough, 2000).
The transition from a crisis event to a focusing event requires two essential
factors. Firstly, a crisis event remains ongoing when crisis response strategies or
crisis management decisions fail to preserve the status quo. This failure is
compounded when an organisation also lacks the ability to learn from its original
crisis responses and seek alternative paths (Lin, Zhao, Ismail, & Carley, 2006;
Moynihan, 2008). The second required factor for the development of a crisis event to
a focusing event is public attention (Alink, Boin, & 't Hart, 2001; Clair & Dufresne,
2007; Comfort, Sungu, Johnson, & Dunn, 2001; Wood, 2006).
For a crisis event to become a focusing event, it must be visible and
significant enough to receive attention from a range of stakeholders including the
elite industry actors and the mass media (Alink et al., 2001; Clair & Dufresne, 2007).
In the organisational studies literature, Hoffman and Ocasio (2001) sought to
determine the factors that influenced industry level attention on events. Through a
case analysis, they found that industry attention was given to those issues, situations
and activities that represented potential problems or opportunities for the industry
(Hoffman & Ocasio, 2001, p. 415). An industry actor‘s communication and
interaction with other actors created a specific selection force for events that
operated above the objective facts relating to the event (Hoffman & Ocasio, 2001).
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As a result, the power of actors‘ communications and interactions and perceptions of
events were significant in determining which events received greater attention and
therefore held the greatest potential for change.
The role of stakeholders and their connections is critical in focusing events.
Focusing events bring together multiple stakeholders who focus attention on
―existing but dormant problems‖ (Birkland, 1998, p. 55) with a view to voicing
concerns and correcting any policy failures. A focusing event gives stakeholders a
legitimate channel to voice ―latent feelings of discontent, suspicion or outrage‖ about
policy or sector performance (Alink et al., 2001, p. 298). Some of the stakeholders
involved include interest groups, government and policymakers, and the mass media
(Birkland, 1998; Shrivastava et al., 1988) and advocacy coalitions (Hoffman &
Ocasio, 2001).
The stakeholders identified above are key actors in society. While each group
has its own web of relationships (Allen & Caillouet, 1994), the public interest can
serve as a collective force for issue mobilisation. When public interest is high or has
the potential to become high, a focusing event will mobilise stakeholders and groups
(Birkland, 1998). Drawing on policy researchers (Baumgartner & Jones, 1991,
1993), John (2003) argues that ―once an idea gets attention, it will expand rapidly
and once that happens, it becomes unstoppable‖ (p. 489). Once an event becomes a
focus point or gathers industry attention, it has the potential for significant change to
institutional arrangements (Hoffman & Ocasio, 2001).
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The mass media plays a pivotal role in communicating crisis events to the
general public (Alink et al., 2001; Shrivastava et al., 1988). The media pressure
organisations or governments for immediate explanations and also scrutinise the
ways that organisations account for crisis events (Seeger et al., 1998). The mass
media‘s reporting of crisis and focusing events has the potential to shape perceptions
of and responses to such events. While the mass media attempts to provide detailed
coverage using available and often restricted information, there is potential for it to
extend the crisis event by ―giving rise to myths, false alarms and heightened
perceptions of harm‖ (Shrivastava et al., 1988, p. 291).The mass media creates high
visibility, which is required to turn the crisis event into a focusing event that acts as a
mechanism for change. The mass media integrates crisis stakeholders with other
indirectly related stakeholders to create a foundation for change (Clair & Dufresne,
2007; Comfort et al., 2001).
Crisis and focusing events also provide a foundation for the expression and
amplification of strong emotional reactions to a system‘s performance (Alink et al.,
2001, p. 298). A crisis and focusing event can highlight the ―emotional‖ life of an
organisation and can arouse intense emotional responses such as stress, fear, anxiety,
and apprehension from stakeholders and the public (Alink et al., 2001; Clair &
Dufresne, 2007; Seeger et al., 2005). Such an emotional response from stakeholders
has the potential for their rejection of the system or structures that caused the crisis
event (Seeger et al., 2005). As a result, organisations have to be prepared to manage
the emotional aspects associated with a crisis (Alink et al., 2001; Clair & Dufresne,
2007).
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A crisis that is highly publicised and politicised has the potential to suspend
equilibrium and relax the structural restraints of institutions (Boin et al., 2006).
Instability presents opportunities to ―agents of change‖ who leverage off the
(temporary or not) decrease in acceptance of the status quo to put forward claims and
proposals that may previously be perceived as unacceptable (Alink et al., 2001, p.
302). A crisis ―unfreezes‖ ways of thinking and allows for ―a radical break in the
changes of historical legacies‖ (Boin et al., 2006, p. 126). In this way, a crisis brings
together industry and policy actors and opinion leaders ―to realise that that traditional
structures and processes are no longer effective or appropriate‖ (p. 289). Within this
context, new alternatives surface (Alink et al., 2001).
2.3.3.3 Ongoing Crisis Events
A further consequence of ongoing interest in crisis and focusing events is the
potential for additional crisis events that are related to the original trigger events
(Shrivastava et al., 1988). Additional crisis incidents have the potential to ―extend
and deepen the crisis for involved organisations‖ (Shrivastava et al., 1988, p. 293).
When additional events emerge from the original event and are related to the event
or its attributes, they are emergent and linked.
Multiple and linked crisis events are an important consideration of the
punctuated equilibrium framework for crisis communication and the crisis context.
They signal ongoing instability at the same time as new parameters for legitimacy or
equilibrium are being negotiated. Despite acting as a signal for ongoing instability,
there is limited information on linked crisis events. In simulations of punctuated
equilibrium theory, a single shift in the environment has been shown to generate a
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―multiple-step‖ organisational revolution (Sastry, 1997, p. 266). While traditional
punctuated equilibrium studies are associated with studies of single punctuations,
there is the possibility for the theory to generate multiple punctuations (Sastry,
1997).
The public relations literature provides little insight into ongoing crisis
events. To fill this gap, the organisational and disaster management literature provide
some insight into ongoing crisis events or crisis chains (Ren, 2000; Shrivastava et
al., 1988). Industrial crises comprise interdependent events that can occur in
geographically dispersed locations and at different times (Shrivastava et al., 1988).
Drawing on the Bhopal crisis, Shrivastava et al. (1988) show how a crisis event that
occurred in India affected the chemical industry around the world over time. Linked
crises are described as parallel chains of events that are causally linked but may be
loosely coupled because they are triggered by different actions and agents
(Shrivastava et al., 1988). That is, while the chain of events can be linked back to a
prior crisis event, they are difficult to anticipate and may only indirectly affect future
crisis events (Shrivastava et al., 1988).
Further insight comes from the disaster prevention and management area.
Ren (2000) defines operationally linked crisis events as a series of crises that affect
one organisation:
A basic definition for linkage between crises is that a second or even third crisis
occurs before the impact of the first crisis has been completely resolved. The impact
of the first crisis…could be divided into: damage to the total integrity of society,
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local damage and loss within the impact area of the crisis, alterations to the normal
operational state of society, and taxing of recovery resources (Ren, 2000, p. 14).
In his proposed model to linked crisis events, Ren (2000) draws attention to
temporal grouping. Although the literature supports the potential for linked crisis
events (Shrivastava et al., 1988), Ren (2000) extends this and argues that the
temporal grouping of linked crisis events creates the potential for the emergence of
unique linkage properties that sit beyond the sum of individual crisis events.
Through this view, Ren (2000) argues that the response to the first crisis event may
positively affect subsequent crisis events for an organisation if it can recover social
integrity or legitimacy. However, the first crisis event may create ongoing
vulnerabilities for an organisation‘s additional crisis events by weakening structures
or draining resources (Ren, 2000).
Linked crisis events present several challenges to crisis managers. Set in the
disaster management and prevention area, Ren (2000) argues that the first challenge
is to determine the ‗unique effects‘ that link crisis events together. Once identified,
the organisation can enact an adaptive response to adjust operations in order to
decouple the ‗unique effects‘ of the crisis events (Ren, 2000). Another challenge
relates to the crisis managers themselves. According to Ren (2000), crisis response
personnel must ―free themselves from single crisis centred attitudes that could hinder
their ability even to emotionally accept the full nature of a multiple crisis event‖ (p.
17).
Although set in disaster prevention and management with a focus on crisis
events that affect a single organisation, Ren‘s (2000) conceptual work presents a
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useful addition to a punctuated equilibrium framework for crisis communication.
Linked crisis events capture not only the link between the original crisis event and
the focusing event but connect the cause of concern for the original crisis event to
other organisations who share the source of concern.
The consideration of multiple linked crisis events signals a unique
contribution to crisis communication research in the public relations literature.
According to Bechler (2004), the majority of the public relations literature treats a
crisis as an isolated event with a single cause or trigger. Such assumptions do not to
consider the ―systemic nature of organisational life‖ that involves the organising of
multiple individuals and organisations (Bechler, 2004, p. 67). Punctuations of
equilibrium turn attention to these conditions as brought about by focusing events
into new standards for equilibrium. The punctuation concludes when change brings
about new deep structures or conditions for equilibrium.
2.3.3.4 Implications for Research
In summary, focusing events bring industry and public attention to issues,
which in turn encourage the questioning of the deep structures that provide
equilibrium. When questioning of current equilibrium standards begins to have a
negative effect on existing systems and structures, a punctuation of equilibrium will
occur. The punctuation signals transformative change that engages multiple
organisational and industry actors. In relation to a punctuated equilibrium framework
for crisis communication, punctuations produce shifts in equilibrium standards and
additional crisis events that are linked to the original crisis event or focusing event.
As depicted in Figure 2.3, crisis events develop into focusing events when they gain
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high visibility through industry, media and public attention. Focusing events involve
not only multiple actors and levels of decision-making (especially in comparison to
those stakeholders involved in situational crisis events) but also lead to emergent
properties and linked crisis events. While these contextual processes are considered
in the punctuated equilibrium process framework, the communication actions of
organisations are yet unknown.
The contextual level shows that the transformation of a crisis event to a
focusing event and potentially to multiple linked crisis events gives crisis
communication researchers a greater ability to understand crisis response strategies
and their meaning (or lack of) in accounting for or driving change. One approach to
consider might be a renewed emphasis on both crisis response strategies that link
organisational accounts to broader system concerns. This approach will allow for an
investigation of how crisis response strategies work to shift arrangements for the
subsequent linked crisis events in industry settings.
The public relations and crisis communication literatures provide limited
guidance about the communication actions that occur when a crisis event transforms
into a focusing event and draws attention from multiple organisations within an
industry. Standard crisis response strategies may not be adequate to address crises
that transform into additional crisis events and, as a result, set in motion the
processes for new standards of equilibrium. Addressing this gap in the literature is
the concern of the next section of this chapter.
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2.4 Research Questions
Within the discipline of public relations, the synthesis of existing crisis
communication research and punctuated equilibrium theory provides a way to extend
and refine ongoing research in crisis communication beyond its application in
preserving the status quo. This thesis aims to contribute to the discipline by bridging
the existing communication actions of organisations during situational crisis events
with the process of transformative change as specified within punctuated equilibrium
theory. Together, these perspectives lead to the development of the central research
question. Because there is little empirical knowledge on this topic, and much of the
crisis communication and public relations literature is grounded in the area of
incremental change, the central research problem guiding this thesis is:
How does transformative change during crisis influence corporate actors’
communication?
This thesis seeks to refine and extend existing theories and models of change
in crisis communication and public relations by considering the nature of crisis
communication during transformative change. Specifically, this discussion draws
from existing literature that suggests crisis communication is designed to repair or
restore organisational image, reputation, and legitimacy following situational crisis
events. Yet, at the same time, these situational crisis events have the potential to
trigger transformative change and bring about a series of emergent and linked
properties and events that are derived from the original crisis event. What is not clear
is how organisations communicate when crises shift from situational to more
complex and potentially multiple crisis events. The nature of communication actions
is arguably constrained or enabled by the contextual factors of change including the
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level of media interest and number of actors who become involved in the developing
crisis events.
The relationships among these fundamental components are parts of the
conceptual framework for describing crisis from the perspective of punctuated
equilibrium theory. A punctuated equilibrium process model of crisis must illustrate
how a crisis event that occurs to one organisation during a period of equilibrium
becomes a focusing event that literally draws attention from a much larger set of
organisational and industry actors than the initial crisis event. Although the focal
organisation may have some control over the initial escalation from crisis event to
focusing event, the nature of the crisis shifts in scale to engage multiple
organisations and actors and, consequently, create a larger emergent set of linked
crisis events. Under these terms, when equilibrium is punctuated, the organisation
loses its influence over the emergent properties the punctuation creates. During the
punctuation, organisational and industry actors debate and start to form solutions or
alternative conditions for equilibrium and legitimacy. These conditions then become
the basis for the deep structure of legitimacy that guides the next equilibrium period
for the system.
2.4.1 Guiding Research Questions
In order to explore the central research question, two guiding research
questions have been developed based on the integration of crisis communication and
punctuated equilibrium literatures at the levels of context and action.
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2.4.1.1 Communication Action
The existing literature in crisis communication provides a foundation from
which to draw the communication actions of organisations during situational crisis
events. There are multiple typologies of crisis response that act as decision-making
frameworks to guide a manager‘s choices depending on the type of crisis, the
organisation‘s level of responsibility for the crisis, and the organisation‘s history of
crisis (Benoit, 1997; Coombs, 1998, 2004a, 2007a, 2007c; Hearit & Courtright,
2003, 2004). While these typologies provide frameworks for understanding
organisational responses to situational and arguably controllable crisis events, little is
known about how these strategies change as crises become more complex.
Punctuated equilibrium theory usefully informs us that punctuations of
equilibrium bring about shifts in the balance between substantive and symbolic
decisions (Tushman & Romanelli, 1985). To manage the uncertainty brought about
by punctuations, punctuated equilibrium theory suggests that organisational leaders
draw on symbolic strategies to inspire confidence and enthusiasm for new direction
(Tushman, Newman et al., 1986) that are then followed by substantive actions
(Haveman et al., 2001). Despite an acceptance of change and the often-described
entrepreneur-style management of organisational responses during transformative
change (A.D. Meyer et al., 1990), we are left without empirical evidence to show
how an organisation‘s immediate and short-term responses to situational crisis
events shift as the crisis transforms to involve multiple organisations and interests.
To inform this gap in our understanding, the first research question derived from the
central research question is:
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RQ1: What symbolic and substantive strategies persist and change as crises
develop from situational events to transformative and multiple linked events?
In order to answer this question, I draw on the typologies of crisis response
from the crisis communication literature, and link this to the Oliver‘s (1991)
typology of strategic responses to institutional processes.
2.4.1.2 Linking Context and Communication Action
While it is imperative to identify the communication actions used during
punctuations, punctuated equilibrium theory suggests that these actions take meaning
from their context. In the crisis communication literature, Hearit (1995) argues that
during crises, organisations should not rely on standard communication but react to
or shape the ―communicative agenda of critics‖ (p. 3). In the context of situational
crisis events, various authors have shown how organisations have adapted crisis
responses on the basis of having their original strategies deemed ineffective based on
stakeholder responses (Benoit & Brinson, 1994; Brinson & Benoit, 1999; Hearit &
Courtright, 2003). However, once the crisis shifts beyond an organisation‘s control
or influence, the conditions that shape the selection of responses are less clear. This
leads to the second research question:
RQ2: What features of the crisis context influence changes in symbolic and
substantive strategies?
Answering this question requires a connection between the context and action
levels of crisis communication and punctuated equilibrium theory.
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2.4.1.3 Research Propositions
A set of propositions have emerged from the literature to guide the
development of the conceptual model of the thesis. The propositions are built around
the assumption that a situational crisis event is able to be managed or influenced and
ultimately resolved by an organisation. Under these conditions, organisations and
systems seek to preserve the status quo and make small adjustments in order to
maintain equilibrium within their environments. The following propositions emerge
as the system moves from situational crisis events towards complex crises that
trigger punctuations of equilibrium. Under these conditions, an organisation and the
practice of public relations may potentially lose its influence as meaning is led by the
nature of the transformative change and emergent properties within the system. As a
result, the following propositions can be derived from the literature:
A situational crisis event escalates to a focusing event when standard crisis
response strategies become inadequate, the number and intensity of organisational
and industry actors increases, and the visibility of the crisis is high in the mass
media.
Standard crisis response strategies are no longer effective when equilibrium
is punctuated.
Based on the problem of emergent properties, a crisis event has the potential
to directly or indirectly (through a focusing event) trigger additional crisis events that
affect multiple organisations within the industry.
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A crisis event that leads to changes in legitimacy/equilibrium achieves
stability when organisations and industry actors recreate conditions for legitimacy.
2.5 Conclusion
This chapter presents punctuated equilibrium theory as a framework through
which to build a conceptual process model (see Chapter 5) to extend and refine
existing crisis communication research. While existing crisis communication
research is oriented to the outcomes of organisational reputation, image or
legitimacy, this process model focuses on the crisis communication responses and
emergent crisis context in punctuated equilibrium theory.
The chapter is based on one central and two guiding research questions that
will be explored through the pharmaceutical industry in the United States. Three
organisations will be studied over a four year period in order to fully articulate the
shift from a situational crisis event to a complex crisis event that involved multiple
actors and interests and inspired additional and linked crisis events. The
methodology for these processes is outlined in Chapter Three.
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CHAPTER THREE
Methodology
In this chapter, I describe the framework that is required to address the
research questions of this thesis and consequently, extend and refine research in
crisis communication. To do this, I describe the research paradigm and then establish
the research process by defining the ways data were collected and analysed in
relation to the research questions.
The first section of this chapter describes the underlying rationale for the
methods employed in this thesis. The second section of the chapter then interpolates
this rationale into the qualitative approach and process method that are engaged to
answer the research question. Based on these perspectives, the research process is set
out by identifying the sample, data collection and data analysis approaches. The
chapter concludes by identifying the techniques to establish quality and rigour in the
research as well as the limitations, and ethical considerations that guide the thesis.
3.1 Justification for Research Paradigm
The research paradigm around which this thesis is organised is based on the
effort to align the foundational elements of ontology, epistemology, and
methodology (Guba & Lincoln, 2005). Following Van de Ven (2007) and Guba and
Lincoln (2008), the selection of the philosophy represents a choice that was based on
the researcher‘s motivations for reflective inquiry in the field of public relations and
supported strongly by the nature of the research problem. This thesis is based on a
critical realist paradigm which is aligned to the concepts of change and changing
entities as studied using process theory, an acceptance of existing approaches to
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crisis communication, and the possibilities for new knowledge and approaches in
crisis communication research and practice (see Van de Ven, 2007).
Critical realism takes the middle ground between positivism and relativism
(Moses & Knutsen, 2007; Van de Ven, 2007). Critical realism or scientific realism
emerged by blending the most attractive features of naturalist and constructivist
approaches (Moses & Knutsen, 2007). Critical realism provides a strong link to
studies of change (Van de Ven, 2007; Van de Ven & Poole, 2005). The resultant
approach is a process of change in organisations where change in crisis
communication strategies is observed through processes of events. These events are
based on punctuated equilibrium theory‘s patterns of long stability that are
punctuated by short periods of transformative change. The critical realism
perspective is supported by Van de Ven‘s (2007) principles that data are theory-
laden, that no form of inquiry can be value-free and impartial, that knowledge comes
from multiple perspectives, that robust knowledge is a product of theoretical and
methodological triangulation, and that models that better fit problems allow for an
evolutionary growth of knowledge (Van de Ven, 2007). The thesis assumes a critical
realist ontology that sees both the natural and social worlds as structured and
changing and a subjectivist epistemology that are translated into methodology using
process theory (Van de Ven, 2007). These perspectives are elaborated on in the
following paragraphs.
The ontological approach for this thesis is an objective one where reality
exists independent of our cognition (Moses & Knutsen, 2007; Van de Ven, 2007).
Yet, at the same time, critical realism also accepts the constructivist epistemology
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where there are multiple layers to reality and access to one meaning is complicated
(Chia, 1999; Guba & Lincoln, 2008; Moses & Knutsen, 2007). Embracing these dual
perspectives, the ontology for critical realism and this thesis follows Moses and
Knutsen (2007) who propose that the process of uncovering truth and meaning is
guided by scientific or naturalist approaches. That is, while there are scientific bases
for punctuated equilibrium theory and proven typologies for crisis response
strategies, there is more knowledge and meaning that need to be explored in relation
to crisis communication during transformative change. In this way, critical realism
offers the space to integrate both constructivist and scientific approaches (Moses &
Knutsen, 2007).
The epistemological approach for this thesis sees social life through a
subjectivist approach and interpretive lens. The interpretive approach lends itself to
an inductive approach to understanding and knowledge where meaning is achieved
through the link between context and action. In this way, the research approach
focuses more on identifying and understanding process than on causal explanations
(Cule & Robey, 2004; Lee, 1991). Based on the critical realist paradigm, the
remaining sections of this chapter set out the methodology that draws on qualitative
research design and process theory.
3.2 Methodology
The thesis aims to extend existing crisis communication research by
explicating the ways organisations communicate during transformative change. The
thesis adopts punctuated equilibrium theory as a lens to explore crisis
communication and actions within the context of transformative change. Qualitative
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research and process theory and research are particularly suitable to understanding
the context and actions related to crisis communication and punctuated equilibrium
theory. Their relevance to this thesis is established in the next two sections of this
report.
3.2.1 Qualitative Research
Qualitative research is suited to research problems that have not been
adequately studied in the literature (Berg, 2009). This thesis selects qualitative
research because there is a lack of prior research about the ways organisations
communicate when crises shift from situational to transformative crisis events.
Qualitative research provides the opportunity to both define and explain complex
strategies that organisations use to communicate during crisis events without having
to ―pre-specify‖ the variables involved or the relationships between them, a task that
is more common in quantitative research (Barr, 2004, p. 167). Even though there are
established typologies for crisis response strategies that are generally used by
organisations to resolve situational crisis events, qualitative research methods
provide an opportunity to discover new variables, linkages, and processes in strategy
research (Barr, 2004; Maxwell, 2005). In particular, qualitative research enables the
study of crisis communication and actions within the context of change which
contributes to the meaning of the data.
This feature of qualitative research is particularly important as it leads to
research findings that increase understanding and expand knowledge through rich
and thick descriptions of communication during transformative and complex crises
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(Berg, 2009). Qualitative research contributes to an understanding of context and
unanticipated factors or influences (Maxwell, 2005).
The use of a longitudinal and qualitative approach is also consistent with the
methodology of punctuated equilibrium studies. Research involving punctuated
equilibrium theory has traditionally been longitudinal in nature involving the content
analysis of business reports, regulatory submissions and the mass media in order to
identify changes in strategy and structure (Romanelli & Tushman, 1994; Tushman,
Virany et al., 1986). These authors have used qualitative research to develop
organisational histories to map changes to strategy, structure and power that were
translated into quantitative measures to examine organisational transformations and
the rate of change (Romanelli & Tushman, 1994).
Following existing punctuated equilibrium research, the first step is the
development of organisational histories (Gersick, 1988; Romanelli & Tushman,
1994; Virany, Tushman, & Romanelli, 1992). These histories provide a descriptive
account of organisations or groups that can be used as the basis for data analysis.
After developing histories, punctuated equilibrium theorists search for general
patterns by isolating main points from cases often using quantitative analysis
(Gersick, 1988). A major strength of qualitative research is its ability to uncover
processes in ways that quantitative research cannot (Maxwell, 2005). Consistent with
punctuated equilibrium theory, qualitative data capture evolutionary and
transformational dynamics (Patton, 2002).
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The use of qualitative research is also consistent with crisis response
strategies. Until the work of Coombs (1998), the majority of the crisis
communication research examined crisis response strategies using qualitative case
studies (Allen & Caillouet, 1994; Benoit, 1995, 2006; Benoit & Brinson, 1994;
Benoit & Dorries, 1996; Blaney et al., 2002; Brinson & Benoit, 1996, 1999; Hearit,
1994, 1995, 1996, 1997; Hearit & Brown, 2004; Hearit & Courtright, 2003, 2004).
These case studies provided efficient descriptions of the range of strategies available
to organisations and some understanding of the effectiveness of these strategies as
related to the particular elements of the case. Crisis communication research in the
qualitative case studies tradition allowed researchers to argue that appropriate crisis
response strategy varied from situation to situation (Benoit, 1995; Sen & Egelhoff,
1991). However, the majority of crisis communication studies focused on short-term
and situational crisis events.
Qualitative research is also a notable part of process theory (Langley, 1999,
2007; Van de Ven, 1992; Van de Ven & Poole, 1990; Webb & Pettigrew, 1999). A
major strength of qualitative research is its ability to identify the processes of
change. Critical to process theory, qualitative research provides an ability to access
and analyse data over extended time frames and the opportunity to consider and
account for context (Barr, 2004; Langley, 1999). The integration of context helps tell
more to the reader than quantitative measures of clearly defined relationships and
significance (Barr, 2004; Pettigrew, 1992). Qualitative data offer insight into the
―complex social processes that quantitative data cannot easily reveal‖ (Eisenhardt &
Graebner, 2007, p. 26).
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In summary, qualitative research provides a way to study crisis
communication and actions under transformative change. Qualitative research is
consistent with existing research in punctuated equilibrium theory and crisis
communication. Further, qualitative research enables the discovery of linkages
between crisis communication actions and the context of transformative change. This
is an essential requirement to the research problem.
3.2.2 Process Theory and Research
There are several ways to study change including process theory or variance
theory. This thesis adopts process theory as the way to study how and why change
unfolds in organisations over time (Cule & Robey, 2004; Langley, 2007; Pettigrew,
1992; Van de Ven & Poole, 2005). Studies under the process theory tradition bring
to light the events, sequences and activities that are essential components to change.
To explicate these events and activities, process theory takes an historical
developmental perspective that allows for the explication of context and action that
are interwoven during historical reporting (Pettigrew, 1992; Van de Ven, 1992).
Although variance theory offers a way to study change, it provides
explanations based on relationships among dependent and independent variables
(Mohr, 1982). Variance theories provide patterns of relationships, yet they provide
only a partial picture of the world that is without consideration of the role of time
and often within the assumption of an equilibrium state (Bromiley & Papenhausen,
2003; Langley, 2007; Meyer, Gaba, & Colwell, 2005). Process theory allows
researchers to uncover the processes of change and the ―temporal
interconnectedness‖ of these processes (Pettigrew, 1992, p. 9). In this way, process
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theory focuses not only on the fact that change has occurred but also on the
processes that have contributed to the change itself. Scholars of change provide some
heuristics for continuing research (Meyer et al., 2005, p. 456). These heuristics are
based on multi-level, contextual, processual and emergent principles (Meyer et al.,
2005) that are shared by process theorists.
There are three types of process theory (Van de Ven, 1992). Process theory
can be used to explain causal relationships, to examine change in variables over
time, or to present a sequence of events that demonstrate how things change over
time (Van de Ven, 1992). This thesis adopts the third approach, which provides the
ability to observe processes in action and describe and explain how crises develop
and crisis communication changes over time (Pettigrew, 1992). Further, this third
view of process theory takes an historical developmental perspective, a stance which
aligns with the nature of the research design and the data of this thesis.
This thesis is concerned with studying the process of punctuated equilibrium
as it applies to crisis communication. This task requires a methodology that identifies
and examines the processes of change that have occurred over time (Sminia, 2009;
Van de Ven, 1992). Process theory provides a framework to identify sequences of
events and activities that can improve understanding about how crisis
communication changes over time (Van de Ven, 1992). When process theory is
translated to research design, it sets imperatives for the incorporation of time ordered
data and longitudinal research design (Pettigrew, 1992). Longitudinal research that
orders events and sequences in chronologies is critical for research questions that are
―posed in the language of becoming rather than of being‖ (Pettigrew, 1992, p. 5).
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According to McNulty and Ferlie (2004), processual research case studies should
prioritise longitudinal factors over cross-sectional studies. Punctuated equilibrium is
part of the teleological and evolutionary family of processes (Van de Ven, 1992; Van
de Ven & Poole, 1995). The evolutionary family covers the long periods of stability
that are punctuated by teleological motors of change where organisational leaders
enact strategies to reorient organisations (Van de Ven & Poole, 1995).
Process-based research offers a way to advance existing research and
scholarship in crisis communication. Much of the existing literature is focused on
evaluating or reflecting on the effectiveness of crisis communication and actions in
relation to restoring reputations, legitimacy and the status-quo. Continuing with
outcomes-based research will limit ongoing theory development. In order to advance
crisis communication, researchers have called for methodological diversity in crisis
communication research (Avery et al., 2010). By using process theory, this thesis
responds to calls for diversity in methodology and offers a way to extend crisis
communication research.
Following Langley (1990) and Van de Ven and Poole (2005), the thesis
integrates two strategies to guide sensemaking of process data and theory. I develop
narratives that use alternative templates and chronology as central organising
devices. Narratives are developed to describe and explain a series or sequence of
events (Pentland, 1999). They comprise events, focal actors, a narrative voice, an
evaluative frame of reference (operationalised as an alternative template in this
thesis), and other indicators of content and context (Pentland, 1999). Although
sequences of events are an essential component to describing narratives, it is also
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important to identify generative mechanisms in order to explain processes (Pentland,
1999). Pentland (1999) argues that generative mechanisms are identified by paying
attention to all aspects of the narrative and the structures that enable and constrain it.
While narratives provide a way to organise the data, alternative templates
provide a way to ground process data (Langley, 1999). Alternative templates are
used to propose several alternative interpretations of the same events (Allison, 1971).
In his book on the Cuban Missile Crisis, Allison (1971) used a qualitative approach
to explain decision-making using three theoretical templates or lenses: rational actor
model, organisational behaviour model, and governmental politics model. In this
thesis, I use alternative templates of communication responses to crises (Allen &
Caillouet, 1994; Coombs, 2006b) and strategic responses to institutional pressures
(Oliver, 1991) to identify and draw out patterns of crisis communication strategies
under transformative change.
These three alternative templates are used to construct three narratives. Each
narrative connects context and action to give meaning to the display of patterns in
crisis and strategic responses. By linking bare events to time and context, narratives
also allow for meaningful interpretation (Van de Ven & Poole, 2005). For example,
Pettigrew (1992) argues that researchers should be aware of the enabling and
constraining influences of contexts on strategy process and content. Narrative
approaches meet this task but, in keeping consistent with historical processes, they
enable researchers to find typical patterns in complex and unpredictable stories
(Abbott, 1990a; Pettigrew, 1992).
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While events are essential components to process theory and the narrative
approach to data organisation, they also present challenges to researchers. According
to Langley (1999), an event may have temporal precision but can also exist at
different levels. For example, the following can all be classified as events: a good
year for profits, a takeover, or the communication of a decision. Based on a research
program around event history analysis, Abbott (1984) provides some useful advice
to define events as theoretical constructs as opposed to the indicators of events that
are used to compose narratives. Such a distinction is required in order to build theory
around the role of a focusing event that shifts situational crises into transformative
crises. More detail around the process of defining events is provided in the data
analysis section of this chapter.
Process theory and research design are recognised as being inherently
complex (Abbott, 1984, 1990b; Langley, 1999, 2007; Pettigrew, 1992). Qualitative,
longitudinal studies under this approach require the researcher to negotiate the
positions of complexity and simplicity brought up during the analysis of significant
amounts of data (Eisenhardt, 1989). A balance between data reduction leading to
parsimony and data amplification demonstrating richness is required. This challenge
is clearly recognised in both punctuated equilibrium and process theories. To meet
this challenge, this thesis draws on the findings and insights provided by researchers
who have travelled this terrain before (Langley, 1999, 2007; Romanelli & Tushman,
1994; Tushman, Newman et al., 1986; Tushman & Romanelli, 1985; Webb &
Pettigrew, 1999).
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3.3 Research Procedures
In this section, I outline the research procedures that guide the design of the
thesis. The section identifies the sample, data sources of media reports and
organisational documents that are used to provide evidence to support theory, the
management of these data using computer software, and the specific approaches to
data analysis.
3.3.1 Case Study Selection
Case studies can be used to provide description for, generate or test theory
(Eisenhardt, 1989; Eisenhardt & Graebner, 2007; Yin, 2003). This thesis adopts the
theoretical sampling technique in which cases are chosen for theoretical and not
statistical reasons (Eisenhardt, 1989; Miles & Huberman, 1994; Yin, 2003). The case
study is considered instrumental and is examined primarily to provide insight into
the crisis communication practices of organisations and ―redraw‖ a generalisation
(Stake, 2008, p. 123). These steps are important given the limited guidance from the
literature (Yin, 2003). Further, theoretical sampling allows the researcher to select
cases that both replicate theory (Eisenhardt, 1989), and provide polarity (Poole &
Van de Ven, 1989). A single case has been selected in light of recommendations
from the literature on qualitative research and the methodology of punctuated
equilibrium studies (Siggelkow, 2007).
Guided by this theoretical sampling, this thesis focuses on a single industry
case study that tracks three organisations. The three organisations were selected from
the same industry to allow for the comparison of organisations that are affected by
uniform change events (Fox-Wolfgramm, Boal, & Hunt, 1998). In punctuated
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equilibrium studies, the selection of cases is critical in order to rule out alternative
explanations for patterns in organisational transformation (Romanelli & Tushman,
1994). Single industry studies also eliminate the influences of different types of
regulatory agencies, norms, and publics (Deephouse & Carter, 2005). At the same
time, single industry studies have the potential to limit results to the focal industry
and organisations (Deephouse & Carter, 2005).
The organisations to be studied are Merck and Co, Pfizer Pharmaceuticals,
and Novartis as part of the pharmaceutical industry with a specific focus on human
health. All organisations produced pain reliever COX-2 inhibitors that were the
subject of negative media attention for a sustained period of time. Merck was the
primary organisation as it was the company that caused the situational crisis event
and triggered transformative change affecting, in different ways, the secondary
organisations of Pfizer and Novartis. Of these two secondary organisations, Pfizer
was more significantly affected than Novartis as Pfizer faced a product recall event.
Based on media coverage, the thesis focuses mostly on Merck and Pfizer. The
selection of this sample defines limits for generalisability of findings to
transformative crisis events, in line with the research questions.
The nature of the crisis event is also significant, positioning Merck as the
primary or focal organisation. The Vioxx withdrawal was listed as one of
Newsweek‘s top product recalls in the United States ("Prominent product recalls in
recent history," 2010, February 13). Table 3.1 positions the Vioxx withdrawal with
similar prominence to the 2010 Toyota accelerator pedal crisis and the 2007 Mattel
product recalls. The Merck recall was selected as the crisis trigger for this study
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based on its prominence in the mass media over a sustained period of time and also
because it triggered transformative change in the pharmaceutical industry.
Table 3.1
Top Product Recalls in the United States
Year Company Crisis description
1972 Volkswagen Recall of 3.7 million cars produced between 1949 and 1969
because of faulty windscreen wipers that hampered vision.
1978 Ford Pinto Withdrawal of Ford Pinto cars due to placement of petrol tank in
the car‘s rear causing cars to burst into flames when impacted
even at moderate speeds.
1982 Tylenol Recall of Tylenol after product tampering incident. Seven deaths.
1996 Ford Recall of 8.6 million cars and trucks after ignition switches
caught fire.
1998 General
Motors
Recall of one million cars after airbag deployment in non-crash
situations.
2000 Firestone Recall of Firestone tyres after treads separated from tyres
causing rollovers at high speeds. Two hundred deaths were
reported and thousands of injuries.
2004 Merck Vioxx recalled after causing strokes and cardiovascular risks in
patients.
2006 Dell Four million Dell lithium-ion batteries recalled after overheating
and catching fire.
2005,
2007
Guidant In 2005, 50,000 implantable defibrillators recalled due to
technical flaws causing two deaths. In 2007, 73,000 implantable
defibrillators recalled because of shorter than expected battery
life.
2007 Mattel Recall of nine million toys manufactured in China with lead
paint or magnets that children could swallow.
2007,
2009
Food scares Peanuts recalled by New Jersey operator and spinach recalled by
Californian distributor because of salmonella; New Jersey
distributor recalled ground beef because of E. Coli infection.
2009 Window
blinds
Fifty million Roman-style and roll-up window shades with loose
cords were recalled because infants‘ necks could become caught
on these, leading to strangulation. Eight deaths occurred before
the recall.
2009 to
2010
Toyota Four million cars recalled in 2009 due to flawed floor mats. In
2010, Toyota admitted mechanical problems were at fault,
recalling more cars.
Source: "Prominent product recalls in recent history," 2010, February 13
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Further, some support for this case study exists in the public relations
literature with one study comparing the product launches of Celebrex and Vioxx
(Anderson, 2001). Anderson‘s (2001) study used seven media releases and 45 news
articles across a one year time frame to show that while Merck and Pfizer may have
influenced coverage of COX-2 drugs, the content of media stories was also
influenced by a variety of non-organisational spokespeople.
Given the longitudinal focus of this thesis, data were collected over a four
year period. This time frame captures the situational crisis event in September 2004
through to December 2008, two months after the settlement of litigation for Merck
and Pfizer. The longitudinal time frame is required in order to extend existing
approaches to crisis communication research beyond short-term and situational crisis
events. Longitudinal data are consistent with studies in punctuated equilibrium
theory (Romanelli & Tushman, 1994).
3.3.2 Sources of Evidence
Consistent with process and punctuated equilibrium theory and crisis
communication research and the focus of this thesis on organisational actions,
evidence for this thesis is collected from two primary data sources: 1) content
analysis of media articles about the crisis related to three pharmaceutical companies
affected by the product recall and the Food and Drug Administration, and 2) content
analysis of organisational documents such as news releases and annual reports
related to the crisis and subsequent events. These sources were selected to meet the
core requirements of process data: the identification of events, activities, or choices
ordered by time (Langley, 1999). Further, they enable the focus on organisational
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actions and allow for the reconstruction of the process through archival analysis
(Van de Ven & Poole, 2005; Ventresca & Mohr, 2002). In addition to the primary
data sources of media articles and organisational documents, documents produced by
the FDA were accessed to verify the mass media‘s reporting of FDA actions. Other
secondary data sources available for research included patient and plaintiff
discussion forums. Although the researcher was aware of these forums, they were
rejected as data sources based on: 1) the thesis focus on organisational actions, 2)
ethical principles in relation to the type and nature of comments provided, and 3)
practical data management limitations.
Media coverage of the crisis and subsequent events and related organisational
documents are the major sources of data. These data sources are also consistent with
existing research in crisis communication and punctuated equilibrium theory. The
case study tradition in crisis communication has used media coverage and
organisational documents as the basis for the development and refinement of crisis
response typologies (Benoit & Brinson, 1994; Hearit, 1995). In punctuated
equilibrium theory research, authors have also used news archives and organisational
documents to provide insight into the processes of change (Haveman et al., 2001;
Romanelli & Tushman, 1994; Virany et al., 1992). Media coverage and historical
organisational documents are sources of data that are appropriate to the research
questions and theories that guide the thesis. Further support for the use of
organisational documents comes from authors who have constructed histories of
pharmaceutical organisations‘ decision-making over time (see Trullen & Stevenson,
2006).
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Building from this fit with guiding research questions and theories, media
coverage and organisational documents present other advantages for organisational
research. Documents are generally easily accessible, facilitating replication and
comparison (Boyd, Dess, & Rasheed, 1993; Neuman, 2003; Ventresca & Mohr,
2002). Another benefit of documents is that they provide an ability to describe the
constraining and enabling forces faced by all organisations within an industry. This
selection of media as a data source was driven by its ability to provide some
historical or retrospective information that was more objective than other sources
(Lamertz & Baum, 1998; Romanelli & Tushman, 1994). In this way, the data are
unobtrusive (Berg, 2009).
The challenge provided by the use of documents relates to the fact that the
data were often created with a different purpose or function than the research at hand
(Boyd et al., 1993; Stablein, 2006). As a result of historical data not coming ready-
made to fit the research purpose (Simonton, 2003), the researcher is responsible for
demonstrating how documents represent ―the empirical reality of interest‖ (Stablein,
2006, p. 361). Further, not all documents are equally valuable tools to reconstruct the
past (Tilly as cited in Neuman, 2003). While historical data are weak in internal
validity requiring researchers to draw causal inferences with care, they possess high
external validity with applicability beyond experimental research (Simonton, 2003).
Punctuated equilibrium researchers also found that in analysing media coverage, not
all companies were written about in equal terms, which resulted in some
organisations demonstrating less change on the basis of information available
(Romanelli & Tushman, 1994). The integration of organisational documents such as
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media releases and annual reports alleviates some of these concerns by accounting
for the organisation‘s treatment of the issues at hand.
3.3.3 Media Reporting of Organisations
The media are an integral part of business with organisations and
organisational leaders using the mass media as a way to communicate strategy
decisions (Daft, Bettenhausen, & Tyler, 1993). The role of the media during crises is
further justification of this data source. Organisations rely on the mass media as a
channel of information dissemination to stakeholders during organisational crises
(Massey, 2001) with subsequent media attention stimulating greater corporate
disclosure (Deegan, Rankin, & Tobin, 2002). Organisational stakeholders also use
daily newspapers as a source of evaluating the legitimacy of organisational actions
(J. Johnson & Holub, 2003; Lamertz & Baum, 1998; Trullen & Stevenson, 2006)
with newspaper stories showing stronger stakeholder recall of organisational
information (Deephouse & Carter, 2005). Further, the frames used in news media
reports tend to be the frames that most stakeholders experience and adopt in their
understanding of the crisis (Coombs, 2007c). In this thesis, print media has been
selected as the primary means of data collection based on its ability to provide time
and space to the reporting of serious issues.
The newspapers selected for this thesis are based in the United States of
America. Newspapers from the USA were selected because the focal organisations
are based in or listed on the New York Stock Exchange. Further, a Factiva search for
articles revealed a limited number of articles from Australian sources. Newspaper
articles are collected from the following three newspapers: The New York Times, The
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Washington Post, and The Wall Street Journal. Although some studies have been
developed based on analysing articles from one newspaper (Bansal & Clelland,
2004), this thesis has drawn on specific criteria from public opinion and media
research to inform its data selection. These newspapers were purposively selected
based on their high circulation (Ansolabehere, Snowberg, & Snyder, 2005; Imrich,
Mullin, & Linz, 1995; Romer, Jamieson, & Jamieson, 2006; van Driel &
Richardson, 1988), a high degree of content influence on other mass media outlets
(Ansolabehere et al., 2005; Imrich et al., 1995; Lewis & Rose, 2002; van Driel &
Richardson, 1988), and their identification in national indices (Havic, 1997).
Data were collected using the Factiva data base across a four year period
from 1 August 2004 to 11 December 2008 using the following free text words:
Pfizer, Merck, and Novartis. These represent the three pharmaceutical companies
that were directly involved in or affected by the situational and subsequent crisis
events. This broad Factiva search produced 6,408 media articles. Once the articles
were downloaded, a further manual check by the researcher was conducted to ensure
the articles met the criteria for the thesis, that is, they related to the situational and
subsequent crisis events. As a result of this manual review, the original sample was
refined down to 1,071 media articles. The criteria for removal were based on
duplicate stories and news summaries (―Business and Finance‖ in The Wall Street
Journal or ―Business Digest‖ in The New York Times), and the removal of stories
that contained personal references to employees of these organisations such as
wedding announcements, referred to these companies‘ operations outside of the
pharmaceutical industry (e.g. Novartis‘ agribusiness operations), provided general
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medical advice or public health news, or referred to events that were historical to the
time period of study.
Media articles were the dominant source of data because they provided, for
the most part, a daily chronology of incidents and events. Further, media articles
provided insight into the crisis communication and actions of three organisations and
other key actors involved in the situational and ongoing crisis. The yearly breakdown
of the articles for each year is illustrated in Table 3.2.
Table 3.2
Number of Media Articles per Year
Newspaper 2004
August to
December
2005 2006 2007 2008 Total
The New York
Times
106 135 76 41 27 384
The Washington
Post
49 42 15 9 6 121
The Wall Street
Journal
141 178 109 80 58 566
Total 296 355 200 130 91 1071
3.3.4 Organisational Documents
Organisational documents were also selected as sources of evidence for the
thesis. Annual reports and media releases were selected across the same time period
as the media reports, from August 2004 to December 2008. The number of media
releases or company statements is identified in Table 3.3. Annual reports or 10-K
reports for each of the three pharmaceutical organisations were collected. In total, 15
reports were collected for the time period. Organisational documents provide a
deeper insight into the messages and strategies of organisations that may be distorted
by media reporting. In this thesis, annual reports were used to understand
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organisations‘ summative annual communication about key events including product
recalls or litigation. In doing so, annual reports complemented the daily chronology
of media reports.
Table 3.3
Number of Media Releases per Year
Company 2004
August to
December
2005 2006 2007 2008 Total
Merck 2 4 36 19 11 72
Pfizer 7 7 0 0 3 17
Novartis 0 0 0 2 0 2
Total 9 11 36 21 14 91
3.3.5Additional documents
In addition to media reports and organisational documents produced by
Merck, Pfizer and Novartis, materials produced by the FDA were accessed in order
to verify and elucidate media reporting around complex events. These additional
resources were accessed from 2004 to 2007 and related to FDA updates on drug
evaluations, transcripts of press conferences, statements on FDA decisions related to
Celebrex, Vioxx, and other COX-2 drugs. Although these materials were accessed,
the focus of the thesis remained on the organisational actions of the three
pharmaceutical organisations.
3.3.6 Management of Data
Given the vast quantity of qualitative data from media and organisational
sources, I used computer assisted qualitative data analysis program NVivo8 (N8) and
manual coding to store, organise, and analyse the data. All data were retrieved from
either Factiva or organisational websites, converted to rich text files, and imported
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into N8. Once the data set was determined (see Sections 3.4.3 and 3.4.4), I used N8
to reduce the data into evidence. This was a significant interpretive task (Richards &
Morse, 2007) and I used a journal to make note of the evidence behind coding
decisions.
The first stage of data treatment involved the recording of the source of the
articles and annual reports. Each article was saved with a unique numeric code in
consecutive order of publication, and then also coded based on the publication
source of either The Wall Street Journal, The New York Times, or the Washington
Post. Each media release and annual report was coded based on its source
organisation, Merck, Pfizer or Novartis and the year of publication from 2004 to
2008 inclusive. These processes enabled the easy navigation of the media and annual
report data during additional content analysis and the construction of the narratives.
3.4 Data Analysis
The data analysis process aims to explore the data, reduce the data, and
interpret the data in order to produce a research story and generate theory (Hesse-
Biber & Leavy, 2006). The data analysis process follows Hesse-Biber and Leavy‘s
(2006) structure to both explore the data by reading and reflecting on the material
supported by memos, and to reduce the data through coding that allows for the
identification of patterns. These steps are essential in order to develop a punctuated
equilibrium process model of crisis communication.
Following Trullen and Stevenson (2006), this thesis seeks to represent the
complexity and richness of the cases and also to use a formal logic to identify
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patterns and allow for the analysis to be replicated and compared across contexts. To
this end, the data analysis processes alternate between the identification of data and
evidence to support the events and the alternative templates that provided the basis
for the construction of each narrative. Three distinct analytical steps are articulated
to achieve this result: 1) time-ordered displays, 2) narrative construction by
alternative templates, and 3) visual presentation of communication and strategic
responses to crises. Finally, to conclude, the process for comparing alternative
templates is set out.
3.4.1 Time Ordered Displays
Following Miles and Huberman (1994), critical incidents across each case
were established through an initial reading of mass media articles, and organisational
documents. These critical incidents, indicated by media reporting of organisational
decisions or actions, provided a framework from which to build the context required
for narrative construction. This first stage of analysis improved researcher familiarity
with the data (Eisenhardt, 1989), and was summarised through visual displays
(Langley, 1999; Miles & Huberman, 1994). Time ordered displays also assisted in
the identification of themes and patterns. Miles and Huberman (1994) argue that
displays help researchers see themes and patterns, as they cycle between these and
theory. These displays are also useful in developing rival hypotheses, an approach I
build on in the alternative templates section.
The time ordered display also assisted in the process of distinguishing an
incident from an event (Van de Ven & Poole, 1990). This step was required in order
to identify the conditions under which the situational crisis event shifted to become a
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focusing event (Abbott, 1984). Further, this step was important in the construction of
the narratives. Focusing events symbolise poor performance, are evocative, and
receive media attention (Alink et al., 2001; Wood, 2006). In this way, focusing
events have the potential to expose vulnerabilities in organisations, industries, and
policy sectors. In a similar way, Van de Ven and Poole (1990) define an incident as
an empirical observation but an event as an indirect observation or a ―conceptual
construct‖ that is used to explain a pattern of incidents (p. 319). That is, an event can
be indicated by several incidents (Abbott, 1984; Van de Ven & Poole, 1990). One of
the challenges with this approach is selecting reliable and valid indicators of each
event (Van de Ven & Poole, 1990).
Some support to alleviate this challenge is provided in the management and
public policy literatures around process and punctuated equilibrium theories. In Van
de Ven and Poole‘s (1990) process research, an event was established through
qualitative analysis when it was significant enough to effect changes in the core
concepts being studied. This retrospective identification of an event is also supported
in the public policy literature where punctuated equilibrium has been used to explain
dramatic changes in public policy (Baumgartner & Jones, 1991, 1993; Jones &
Baumgartner, 2005; Jones, Baumgartner, & True, 1998; Jones, Sulikn, & Larsen,
2003; Jones, True, & Baumgartner, 1997). With a focus on public records and media
reports in particular, Baumgartner and Jones (1993), looked at focusing events as
those collections of incidents that resulted in long-lasting change and structural
changes. In addition, four criteria can be used to identify focusing events: they must
occur suddenly, be relatively rare, be large in scale, and become known to
policymakers and the public simultaneously (Birkland, 1998). Because focusing
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events draw attention to a single issue (Wood, 2006), they can be retrospectively
identified by examining the shifts in organisational and industry contexts and
actions.
The process of refining and selecting critical events involved three phases.
First, a full reading of all media articles and annual reports occurred. During this
step, the key actions of the pharmaceutical companies as well as other key actors
including the Food and Drug Administration and medical researchers were noted.
Second, incident codes were created in N8 and media articles and annual reports
were mapped to each of these codes. Coding of media articles and organisational
documents to key incidents allows the drawing together of descriptive data (Richards
& Morse, 2007) and the later retrieval of data to link organisational actions to these
events. Table 3.4 provides a sample of the incident codes and also indicates the
number of articles that were coded to each incident code.
Table 3.4
Sample of Events Coded
Incident code Date start Date end No. of articles
Merck product recall 30 September 2004 7 February 2005 63
Pfizer‘s Bextra warning 5 October 2004 10 December 2005 14
Launch of Celebrex trial 18 October 2004 7 December 2004 8
Review of FDA actions 18 October 2004 13 November 2004 12
European review of Cox II 25 October 2004 1
Approval of Arcoxia 30 October 2004 1
Congressional inquiry 2 November 2004 26 December 2004 23
Third, because not all incidents received significant media attention (as
illustrated in Table 3.4), a further step was taken to reduce data to focus on the key
events. Following the existing literature, key events were identified from the full list
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of incidents. Key events were identified based on both the number of articles
associated with each incident as well as each event‘s link to the original and
subsequent crisis events. Although the number of articles demonstrated the media‘s
significance of each organisational event or action and the time frame of coverage
related to each event, it was also important to demonstrate the context within which
these events were occurring. Following Langley (1999) and Miles and Huberman
(1994), the incidents were plotted visually in order to identify key events and crisis
actors involved. Table 3.5 provides a sample of the context of these events over time.
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Table 3.5
Sample of Context of Events
Date FDA actions Merck actions Pfizer actions Novartis actions Industry actions Other actions
30 Sep to
4 Oct
Withdraws Vioxx Shows safety of
Celebrex
Experts praise
Merck‘s crisis
management
Expresses concern
for class effect
Expresses concern
for FDA‘s role
Merck share price falls
Legal challenges are
commenced
6 to 7
Oct
Releases study
showing Vioxx led to
27,000 heart attacks
Claim Topol‘s data
are flawed
Releases Topol
data on Vioxx
Vioxx patients switch to
other drugs
14 Oct Claims Arcoxia is
safer than Vioxx
Questions Merck‘s
Vioxx marketing
16 Oct Identifies that Bextra
may have risks
18 Oct Establishes new trial
for Celebrex
1 Nov (Lawyers) release internal
emails suggesting Merck‘s
knew of Vioxx‘s risks
10 to 26
Nov Denies
suppressing Vioxx
study and defends
decisions
Suggests 5 drugs
should be recalled
inc Bextra
Testifies, explains
Vioxx withdrawal
Expresses concern
over power and
responsibility of FDA
Congressional inquiries into
FDA handling of Vioxx are
held
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Table 3.5 provides a sample of the incidents plotted visually across time and
across the organisational actors involved in the crisis events. This table provided a
way to reduce data from 52 incidents to nine key events that became the basis of
narrative construction: Vioxx withdrawal, Congressional Inquiry, FDA hearing,
withdrawal of Bextra, litigation, FDA policy changes, medical research correction,
recall of Prexige, and legal settlement. These events are elaborated in Chapter Four.
The selection of text for coding the conditions relevant to the incidents and
events in the case study are based on media analysis techniques and draw on process
and punctuated equilibrium theories. The key themes relating to the incidents were
identified based on media coverage (Boyle & Hoeschen, 2001). The themes were
also identified in relation to the sources presented in the article (Burch & Harry,
2004; Sumpter & Braddock, 2002). Only sources that were easily identified in the
story were included in the data analysis. Following Sumpter and Braddock (2002),
collective anonymous sources such as voters, jurors, or government officials were
excluded. In this case, a quote was defined as any direct or indirect opinion attributed
to an identifiable spokesperson in any article (Burch & Harry, 2004). Direct and
indirect quotes from the three focal organisations, Merck, Pfizer and Novartis, and
the FDA were coded.
The time-related aspects of these incidents are also captured in coding. In
previous studies that have used media articles as data sets for studying legitimacy,
authors have found that while criticisms and reactions towards organisations surface
quickly in media reporting, organisational endorsement and support persist long after
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the criticisms have faded (Elsbach & Sutton, 1992). This requires the researcher to
keep track of what time frames bound the incidents.
3.4.2 Narrative Construction by Alternative Templates
Following the time-ordered display of data, a narrative strategy was adopted
to construct detailed stories of crisis communication and change using three
alternative theoretical frameworks (Langley, 1999). Following Allison (1971), this
thesis constructs three narratives based on the following alternative templates:
Coombs‘ (2006b) crisis response strategies, Allen and Caillouet‘s (1994) corporate
impression management strategies, and Oliver‘s (1991) strategic responses to
institutional processes. Each template provided a unique theoretical lens through
which to construct narratives and explain crisis communication during
transformative change. This section will provide a review of the role of narratives in
process research followed by a detailed approach to the construction of each
narrative.
3.4.2.1 The Role of Narratives in Process Research
Alternative templates propose several alternative interpretations of the same
events based on different but coherent theories (Allison, 1971; Allison & Zelikow,
1999; Langley, 1999). Through the integrated use of narrative and alternative
templates as sensemaking strategies, this thesis aims to produce a more complete and
richer understanding of the ways organisations communicate during transformative
change. Such use of multiple procedures in archival research helps reduce sources of
error (Berg, 2009) and is supported as a process approach (Sminia, 2009). At the
same time, these dual perspectives shift between inductive reasoning through
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narrative construction to deductive reasoning through alternative templates (Langley,
1999). These processes are managed through the levels of coding.
The key elements of a narrative are a starting point of affairs, an action or
event, and the subsequent state of affairs (Czarniawska, 1998). Narratives are more
than a list of events in chronological order (Van de Ven & Poole, 2005). While
temporal order is an important way to ensure coherence of the sequences of events,
the power of a narrative is determined by the story being told (Czarniawska, 1998).
The story is built through associations or connections that are reinforced through the
voice of the narrator with the temporal indicators used to assist interpretations of
actions and context (Chase, 2008; Czarniawska, 1998; Van de Ven & Poole, 2005).
Narratives make meaning by shaping past experiences (Chase, 2008). Following
Chase (2008), the narrator shapes the story, shows how the story is enabled and
constrained by social resources, and situates the story by producing it both in a
particular setting and for a particular audience and purpose. Narratives play an
important role in process theory. According to Van de Ven and Poole (2005), stories
in process theory should include a time sequence, focal actors, a narrative voice, a
frame of reference, and context.
The use of narratives is consistent with the first step of data analysis
undertaken by punctuated equilibrium researchers (Romanelli & Tushman, 1994;
Virany et al., 1992). Romanelli and Tushman (1994) used coding teams to develop
annual historical narratives of organisations based on media reports and
organisational documents. These annual historical narratives were used to analyse
changes in core elements in order to build a theory for punctuated equilibrium in
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organisational settings (Romanelli & Tushman, 1994). Case studies are also common
to the qualitative research in crisis communication studies.
3.4.2.2 The Construction of Narratives in this Thesis
In this thesis, the process of narrative construction involved two stages.
Firstly, the theoretical emphases of each alternative template needed to be explicated
in order to establish the process for content analysis as the second step. Secondly, the
narratives were written based on the integration of the first and second steps and
reviewed against their templates and the audit trail taken during stage two. Each one
of these stages will be detailed. In this thesis, each alternative template was coded
and each narrative was written individually and discretely.
The first stage of the narrative construction process required the explication
of the theoretical emphases of each alternative template. The literature review
established three key typologies to study crisis communication and change. These
typologies and the rationales behind them became the theoretical lens behind each
alternative template. To guide the content analysis stage, the theoretical lens for each
template needed to be explicated. This is illustrated in Table 3.6.
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Table 3.6
Theoretical Emphasis of Alternative Templates
Alternative
template
Summary Action level Context level Build
Coombs Crisis response
hierarchy
developed to
restore
organisational
reputations after
crisis.
Crisis
response
typology
Organisation‘s
crisis history,
stakeholders‘
perceptions of
crisis
Allen and
Caillouet
Crisis
communication
messages tailored
to organisational
stakeholders and
developed to
restore
organisational
legitimacy.
Crisis
response
typology
Pressures for
accountability
imposed by
organisational
actors
Builds on
Coombs‘ (2006b)
work by
considering an
organisation‘s
links to
stakeholders
Oliver Strategic responses
to institutional
pressures to gain,
maintain or rebuild
organisational
legitimacy.
Strategic
responses to
institutional
pressures
Level of agency
of organisation
over environment
Builds on
Coombs‘ (2006b)
and Allen and
Caillouet‘s (1994)
work by
integrating an
organisation‘s
agency over
environment.
Table 3.6 sets out the action and context level for each alternative template
and also identifies how each template builds on the next. Each narrative was
constructed around the same data and events but because each template had unique
points of emphasis, it offered unique perspectives on organisational crisis
communication and processes under transformative change. As a result, the
alternative template strategy studied change through the lens of reputation and
legitimacy as set out by the alternative theoretical templates.
The second stage involved the translation of media reports and organisational
documents into a narrative. This was a complex task because the original documents
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of media articles, media releases and annual reports were written to tell their own
story at a particular time and to a particular audience. That is, a media article was
constructed by a journalist to report on a particular event and with a particular type
of reader in mind, in some cases reflecting the role of the media and bias of both the
journalist and newspaper. According to Czarniawska (1998), one way to integrate
text written by someone else is to draw inspiration from the original source or
reference. This approach focuses on using the information to suit the thesis and
references the work rather than representing the author (Czarniawska, 1998).
In this thesis, the data to support the construction of the narrative by
alternative templates was drawn from the integration or association of context and
action. Overall, the coding strategy aimed to connect coding categories and the data
they contain to support the narrative analysis and construction (Maxwell, 2005). This
process is illustrated in Figure 3.1.
Figure 3.1 Illustration of Data Analysis Process based on a series of steps involving
the identification of key incidents and the content analysis of alternative templates.
Data analysis process
Incident (from time ordered display)
Incident 1
Incident 2
Template 1
Conditions relating to incident 1, 2, and
so on
Strategies
Template 2
Conditions relating to incident 1, 2, and
so on
Strategies
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The narrative construction involved writing a description of each event,
coding of the alternative templates, and writing each narrative. Firstly, and central to
all templates, was a short description of each event (as identified in Section 3.4.1).
Each event was described along with the organisational actors that were involved in
the event itself. For example, the Congressional Inquiry description included a
summary of the key organisational actors and individuals who provided evidence at
this inquiry and the media‘s reporting of this information.
Secondly, coding categories for strategies were based on existing typologies
and are set out in Table 3.7. The macro codes as identified in Table 3.7 were used as
the primary coding device with sub-categories used to verify coding decisions. For
example, under Coombs‘ (2006b) alternative template, a statement was coded as a
diminish posture with sub-categories of excuse and justification used to verify the
decision. The process is supported by memos that act to capture decision-making and
facilitate thinking and analytical insights (Maxwell, 2005).
Table 3.7
Alternative Template Strategies
Alternative template 1 Alternative template 2 Alternative template 3
Coombs‘ (2006b) crisis
response strategies
Allen and Caillouet‘s (1994)
corporate impression
management strategies
Oliver‘s (1991) strategic
responses
Denial
Diminish
Rebuild
Bolster
Excuses
Justifications
Ingratiation
Intimidation
Apology
Denouncements
Factual distortion
Acquiesce
Compromise
Avoid
Defy
Manipulate
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The selection of text for coding alternative template strategies was based on
the techniques adopted by researchers in crisis communication. Following Allen and
Caillouet‘s (1994) crisis communication research, this thesis analysed organisational
crisis response strategies through document analysis. In their study, the majority of
organisational statements were found in mass media reports. Specifically, the
strategies are interpreted from organisational statements that express ―a complete
thought interpretable as a strategic act‖ (Allen & Caillouet, 1994, p. 50). Thus, the
unit of analysis is limited to an organisational statement.
The context of the organisational crisis communication or legitimacy
strategies was also considered with memos made in relation to two areas: 1) ongoing
crisis events, and 2) the multiple actors involved in the core and additional crisis
events. These memos were essential to the construction of each narrative because
they connected events, organisational actions, and context (Maxwell, 2005).
The third stage involved the writing of the narrative. In this thesis, each
narrative used chronology as an organising device in order to make meaningful the
events and actions that occurred in relation to the crisis and crisis communication
(Van de Ven & Poole, 2005). The story is developed around three focal
pharmaceutical organisations and the Food and Drug Administration as a key
protagonist in the crisis and subsequent events. Although each narrative was based
on the same set of events, each narrative was written discretely. That is, the content
analysis relating to Coombs‘ (2006b) crisis content and communication was
undertaken and the narrative constructed was based on that before the content
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analysis relating to Allen and Caillouet‘s (1994) alternative template was
undertaken, and so on.
According to Van de Ven and Poole (2005), narratives are value-based
because they carry some evaluation of actions even without intending to do so. In
this thesis, the evaluative frames of reference related to change and the processes
underlying change. The narratives were stories that were constructed following the
media and organisational reporting of the crisis events. The narratives described,
evaluated, and explained crisis communication and actions within the context of
change, with each template offering different levels of support for change.
The memos taken during the second stage of narrative construction were used
to inform both the writing of the narrative and its review. At the end of each
narrative, I reflected on the connections among events, organisational actions and
context bound within the theoretical emphasis of each alternative template. That is,
for the narrative based on Coombs (2006b), I identified the areas where situational
crisis communication theory did not provide an account for connections seen within
the data. Specifically, Coombs‘ (2006b) situational crisis communication theory
focuses on organisation-centric context for crisis and as such does not offer an
explanation for the role or actions of competitor organisations. These reflections
were critical to review the construction of each narrative and as a basis for
comparative analysis.
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3.4.3 Presentation of Patterns in Data
Although it is important to describe processes by telling the story, it is
equally important to identify patterns of sequences or events (Pettigrew, 1992).
These patterns in sequences and events allow process theories to provide
explanations in relation to outcomes (Langley, 1999). The process of discovering
patterns adds an explanatory emphasis to qualitative data (Babbie, 2004). Further,
patterns allow qualitative researchers to move from describing historical events
towards providing a more general interpretation of the research findings (Neuman,
2006). In this thesis, frequencies and processes are the two methods chosen to look
for and examine patterns (Babbie, 2004).
The patterns in crisis response strategies are matched to the ideal type
sequence of a punctuation of equilibrium. Punctuated equilibrium theory provides a
clear and transferable map for change that documents the phases of change and the
process and conditions for transformative change. According to Neuman (2006),
ideal types are models of social processes that provide pure standards against which
data can be compared. The ideal-typical nature of punctuated equilibrium is seen in
its empirical identification and its treatment of time, change and stability provide an
objective basis to guide thinking (McIntosh, 1977).In this thesis, ideal types are used
to contrast contexts where the processes of change, as specified in punctuated
equilibrium theory, are used to draw out the specifics of each organisation and
emphasise the impact of the unique context (Neuman, 2006). In this thesis, the ideal-
type sequence for punctuated equilibrium theory is drawn from Siggelkow‘s (2002)
research.
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The patterns of changes in crisis response strategies are presented in line with
the pattern maps developed by Siggelkow‘s (2002) research of an organisation‘s
evolution towards fit. After creating a chronology of organisational developments,
Siggelkow (2002), created a series of maps to display the core elements and changes
to these core elements over time. To present this analysis, Siggelkow (2002) needed
to explore the processes of change, which are described as patching, thickening,
coasting, misfits and trimming. Patching occurs through a process of adopting a new
core element and the subsequent reinforcement of this core element. Data to support
patching is found when media reports referred to the adoption of new strategies or
structures that contain elements that were interdependent with other core elements of
the organisation (Siggelkow, 2002). Thickening occurs when existing core elements
are reinforced and elaborated or redeveloped (Siggelkow, 2002, p. 145). In this way,
there is a thickening of interactions around an existing and central core element.
Coasting occurs when a core element is not reinforced over a selected period of time
(Siggelkow, 2002). Misfits occur when new core elements misfit or do not align with
existing core elements (Siggelkow, 2002). For example, when new products appear
that have attributes that are inconsistent with existing systems, this is considered a
misfit. And finally, trimming occurs when organisations delete existing core
elements (Siggelkow, 2002). This thesis creates maps to display changes in crisis
communication and strategies over the four year time frame of the thesis.
The data analysis required to achieve this involved the identification of
strategy change. Following Romanelli and Tushman (1994), strategy change was
identified whenever organisations introduce or abandon crisis response strategies.
This step involved the quantitative display of strategy change. A recent article has
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proposed a way to operationalise the pace and scope of change in management
studies (Street & Gallupe, 2009). After analysing the literature on change, Street and
Gallupe (2009) put forward a method based on relative measures of change.
Following Greenwood and Hinings (1996), the authors created operational measures
for pace or the rate of change and scope or the level of change. That is, continuous
change is frequent and incremental whereas episodic change, where punctuated
equilibrium falls, is considered infrequent, noncumulative and dramatic (Street &
Gallupe, 2009).
The pace of change was measured by the length of time preceding the
previous change event. That is, ―if the temporal length of a prior continuous change
period is at least more than double the length of a subsequent episodic change period
then the change could be considered being episodic‖ (Street & Gallupe, 2009, p.
726). The scope of change is measured by identifying change processes and putting
into practice a means for measurement (Street & Gallupe, 2009, p. 726). According
to Street and Gallupe (2009), a change in one element is considered convergent and
change in two or more elements is considered radical. The authors identified some
limitations in applying this technique for measuring the scope and pace of change to
a study on changes in organisational identity because previous research had not
categorised it under any of the above change categories (Street & Gallupe, 2009).
In this thesis, I mapped the crisis communication and action strategies as
depicted by Coombs (2006b), Allen and Caillouet (1994), and Oliver (1991) across
time. This visual display of strategies enabled a sense of how strategies were used in
combination and how and when strategies were replaced.
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3.4.4 Comparisons of Alternative Templates
The final step in data analysis was to summarise the similarities and
differences in interpretation presented by each alternative template. Following
Eisenhardt (1989), this thesis aimed to search for cross-case or template patterns. In
doing so, this thesis adopts the process used by Allison and Zelikow (1999) in their
analysis of the Cuban missile crisis. This analytical step is achieved by zooming in
and out (Nicolini, 2009) of the alternative templates to take a micro perspective and
focus on single organisations and zooming out to take a macro perspective to study
multiple organisations. This enabled the examination of new insights into crisis
communication, change and the linkages between them. Because each template
offers a different perspective on the crisis, it was important to consider and aggregate
these views to create a complete understanding of crisis communication under
transformative change.
This was achieved by focusing on the differences across the alternative
templates, as established in Table 3.6. Coombs‘ (2006b) situational crisis
communication theory focuses on the organisational context as an influence on crisis
communication and action. In comparison, Allen and Caillouet (1994) consider how
an organisation‘s complex web of relationships influences crisis communication and
action. And Oliver‘s (1991) approach opens up the ability to examine how multiple
organisations respond to shared institutional pressures such as crisis events and
regulatory change.
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By zooming in to the micro level and zooming out to the macro level of the
alternative templates, two analytical components emerged to consider context and
action. The differences across the templates were considered in relation to the
persistence of crisis communication and the role of secondary organisations. The
components of persistence and the role of secondary organisations were essential to
process theory and enabled the development of a conceptual model for this thesis.
3.5 Quality of Research
The quality of the research approach is based on measures taken to strengthen
validity and the quality and reliability of inferences from the research findings.
Following Maxwell (2005), validity is not a product but a goal and that is secured
through evidence and not methods. In this thesis, validity is integrated into research
processes that translate data into evidence through the consideration of validity
threats. By considering the ways that the research interpretations might be wrong,
and providing alternative explanations for the data, the thesis can focus on the goal
of validity.
From a process theory perspective, the generalisation of the findings is often
a complex and difficult task (Van de Ven & Poole, 2005). Because the development
of process explanations and the identification of patterns in process data is a difficult
undertaking, studies in this tradition have tended to limit the number of cases for
study, which also limits the generalisability of the conclusions of process research
(Van de Ven & Poole, 2005). However, even with this natural limitation, one way to
contribute to validity goals is to evaluate the versatility of the explanation (Van de
Ven & Poole, 2005). A versatile process explanation has the ability to ―stretch or
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shrink to fit specific cases that may differ in their tempo and time span‖ (Van de Ven
& Poole, 2005, p. 1384). Because punctuated equilibrium theory is seen as a
versatile process that can fit to both natural and social sciences, its contribution to
the theory development of crisis communication has the potential to strengthen the
versatility of the theory and the generalisability of crisis communication strategies
across multiple situations, organisations, and industries.
A further contribution relates to the use of alternative templates strategy for
data analysis (see Jick, 1979). In this way, the data are scrutinised against multiple
interpretations. By producing multiple narratives to explain crisis communication
during change events, internal validity is strengthened (Yin, 2003). By following the
process of subjecting findings to competing yet inherently consistent claims and
interpretations, the thesis has the potential to build strong arguments to support the
emerging theory (Kvale as cited in Hesse-Biber & Leavy, 2006). By constantly
comparing data against multiple theories and iterating towards a theory that can more
closely fit the data, the thesis has greater potential to yield empirically valid theory
(Eisenhardt, 1989).
However, one of the expected challenges of an alternative template strategy
is that it does not always result in one central explanation for sequences, events, and
actions (Allison, 1971; Langley, 1999). If there are incompatible elements, it may be
difficult to combine the alternative templates into one explanation. Poole and Van de
Ven (1989) suggest some approaches to address paradox and tension in theories.
Theorists can use these tensions to identify which side of a tension anchors their
work and expand on this by drawing on and addressing the criticisms offered by
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other competing theories (Alvesson & Karreman, 2007; Poole & Van de Ven, 1989).
Conflicting literatures ―present an opportunity, allowing researchers to be more
creative and reflective to show deeper insight into both the emergent theory, (and)
conflicting literature‖ (Eisenhardt, 1989, p. 544). In this thesis, the areas of build
offered by each alternative template facilitate this process and also allow for the
identification of generative mechanisms (Pentland, 1999).
Reliability is defined as the demonstration ―that the operations of a study can
be repeated with the same results‖ (Yin, 2003, p. 34). In line with a clear
conceptualisation of constructs, case study protocol guides the collection and
extraction of data and a case study database is developed to ensure repeatability and
the achievement of similar outcomes. The reliability of content analysis must be
ensured by researchers (Babbie, 2004; Berg, 2004; Krippendorff, 1980). Reliability
problems can come out of ambiguity of word meanings, categories, and coding rules
but can be avoided through consistent decision-making (Weber, 2004). Following
Weber (2004), there are three types of reliability that can be integrated into content
analysis. Firstly, it is important to look at stability which occurs when more than one
instance of the same content is coded by the same coder. This is likely to occur in
relation to the coding of crisis response and legitimation strategies as they can be
equally relevant to each alternative template but produce different meanings and
interpretations. Secondly, reproducibility where the same results are produced by
multiple coders. And finally, accuracy where the classification of text corresponds to
a clear standard or norm (Weber, 2004).
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As a result of these reliability types, a set of coding instructions were
developed following the operational definitions. The efficacy of these definitions
was tested initially through a test-retest method. Efficacy was also tested with a
second researcher to strengthen the clarity of definitions and reliability. The
reliability score was tested using this formula specified by dividing the number of
agreements by the total number of agreements and disagreements (Miles &
Huberman, 1994). Reliability for this thesis was 88 percent.
3.6 Limitations of the Research
As established in Chapter One, several limitations to this research are
acknowledged. Firstly, resources constrained the nature of the investigation, data
collection, and analysis. Ideally, and like the work of Meyer and colleagues (see
A.D. Meyer, Brooks, & Goes, 1990), being serendipitously placed within an
organisation as it was undergoing crisis would have been a preferred way to study
change in crisis communication. However, one of the pragmatic considerations in
this area of research is that punctuations of equilibrium are most easily identified in
hindsight. Therefore, while it may have been possible to participate in an
organisation undergoing crisis, a task that could occur within a short time frame,
knowing whether the crisis would transform it would be difficult to predict and have
significant pragmatic limitations for the researcher. Further, access to key
organisational decision-makers including the Chief Executive Officer, General
Counsel, and Chief Research Officer may also be limited during times of crisis.
Although consistent with existing research in the public relations and
management literatures, one of the limitations of data sources such as print media
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articles and organisational documents is validity or the major difficulties of
achieving member-checking. For example, the use of these secondary sources
precludes access to organisational leaders to confirm approaches to crisis handling
methodology or the organisational knowledge of an impending punctuation of
equilibrium. Primary research could have been conducted following the completion
of the alternative narratives in 2010. However, this would have occurred more than
five years after the initial crisis event. The limitations of both archival and informant
measures are not new to the literature. Several authors identify concern over
divergence between informant and archival measures of the environment (Boyd,
Dess, & Rasheed, 1993; Doty, Bhattacharya, Wheatley, & Sutcliffe, 2006; Neuman,
2006; Ventresca & Mohr, 2002), suggesting studies avoid this situation by choosing
only one type of measure (Doty, et al., 2006). One of the causes for divergence is
perceptual bias of informant measures (Boyd, Dess, & Rasheed, 1993; Doty et al.,
2006; Ventresca & Mohr, 2002).
A related challenge is found in the research and writing process where media
framing of stories and strong writing or individual bias can hide causal theories or
leave some elements implicit (Neuman, 2006). In part, these limitations were treated
by using and comparing both media articles and organisational documents and
alternative templates and actively scrutinising the data against multiple sources and
interpretations, and seeking out the differences in interpretation across these
templates. By producing three narratives to explain crisis communication during
change events and subjecting findings to competing yet inherently consistent claims
and interpretations, the thesis has sought to build strong arguments to support the
emerging theory as did Kvale (as cited in Hesse-Biber and Leavy, 2006).
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Further limitations relate to the sampling decisions behind this thesis. These
decisions limit the thesis to transformative change triggered by crisis events for
which the primary organisation was responsible, and a focus on three large
organisations within one industry and during one punctuation of equilibrium. In part,
this limitation is explained by the significance of the data required to investigate
punctuated equilibrium. That is, these conditions were selected precisely because of
the multiple linked crisis events affecting multiple organisations because this thesis
was concerned principally with crisis communication during transformative change.
In doing so, the generalisability of the thesis may be limited to crises, crisis
communication, and transformative change under similar conditions. Process
research often navigates the challenge of context and generalisation (Sminia, 2009),
yet by linking the findings to the crisis communication literature, this thesis and its
conceptual model can also be applied to other industry contexts and crisis events.
The thesis has been motivated by Van de Ven and Poole‘s (2005) recommendation
for versatile process explanations that can be adapted to fit different cases at
different times.
3.7 Ethical Consideration
The research process follows the policy set out by Queensland University of
Technology (QUT). Under QUT‘s ethics policy, ethics approval is required only for
projects or studies involving humans. As a result of this policy and because this
research is based on media reports and organisational documents that are freely
available, there is no impact on human participants.
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3.8 Conclusion
To understand and explain changes in crisis communication, this thesis
employs a qualitative research and process theory. Three alternative templates that
offered different perspectives on crisis and organisational communication were used
to construct narratives that linked crisis communication to the context of
organisations and an industry undergoing transformative change. The next chapter
presents the three narratives and provides an analysis of key findings against the
research questions.
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CHAPTER FOUR
Results
''It's not as big as asbestos and it's not as big as tobacco but it's No. 3,''
said Richard G. Sullivan, a Mineola, N.Y., lawyer who represents
clients with lawsuits involving the three COX-2 drugs (Martinez,
2004, December 15).
This results chapter is comprised of three narratives that offer alternative
descriptions and explanations for crisis communication decisions of multiple
organisations across a four-year time frame. In section 4.1, I provide background
information about the three organisations in the case study followed by an overview
of the case study and punctuating event in section 4.2. These organisations and
events remain constant across all narratives. Next, I present three alternative
interpretations of the case study. Section 4.3 presents the narrative as influenced by
Coombs‘ (2006b) situational crisis communication theory. Section 4.4 presents the
narrative as influenced by Allen and Caillouet‘s (1994) work on organisational
messages during crisis. Section 4.5 presents the narrative as constructed using
Oliver‘s (1991) strategic responses to institutional processes that consider
organisational agency. The justification for this approach is built in Chapters Two
and Three.
In section 4.6, I use the narratives to illustrate crisis communication of the
organisations involved through a series of visual crisis communication maps. These
maps identify the changes in crisis communication over the time frame of this thesis.
Each map is analysed against Siggelkow‘s (2002) models for change, enabling a
response to the first research question about the persistence of and change in
corporate actors‘ symbolic and substantive strategies over time. In section 4.7, I
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follow Allison and Zelikow‘s (1999) framework to sum up the differences in
interpretation presented by each narrative. This analysis establishes the importance
of the crisis context and the significance of observing crisis communication through
multiple templates, thus answering the second research question that guides this
thesis.
4.1 Background of Merck, Pfizer and Novartis
There are three pharmaceutical organisations at the centre of this thesis:
Merck & Co, Pfizer Inc, and Novartis AG (known in this thesis as Merck, Pfizer, and
Novartis). These organisations were selected because they all produce medicines in
the COX-2 inhibitors class of drugs that is the focus of the crisis events. Further,
each organisation was involved in the ongoing crisis events in different ways. Merck
was the primary organisation as it was the company that caused the situational crisis
event by withdrawing Vioxx. In doing so, Merck focused attention on the safety of
the COX-2 class of drugs, which affected the secondary organisations of Pfizer and
Novartis, and their products Bextra and Celebrex, and Prexige. Of these two
secondary organisations, Pfizer was more significantly affected than Novartis as
Pfizer faced a product recall event. Based on media coverage, the thesis focuses
mostly on Merck and Pfizer. All companies are listed on the New York Stock
Exchange. Merck and Pfizer are based in the United States and Novartis is based in
Switzerland, listed also on the Swiss Exchange. A short description of each one of
these organisations is provided in the next section.
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4.1.1 Merck & Co
Merck & Co (Merck) is a global research-driven pharmaceutical company
that produces a range of medicines to improve human and animal health (Factiva,
2009). This thesis is limited to Merck‘s human health division that is comprised of a
pharmaceutical and vaccine and infectious diseases segments. The pharmaceutical
division is responsible for approximately 80 percent of Merck‘s revenues
(DataMonitor, 2009). Merck is considered to be one of the largest pharmaceutical
companies in the world (DataMonitor, 2009). In 2008, Merck employed 55,200
people. Some of Merck‘s key products include Gardasil, a vaccine to prevent
cervical cancer, Vytorin, an anti-cholesterol medication, and Fosamax, a bone
resorption medication. Merck produced and marketed Vioxx from 1999 until its
withdrawal in September 2004.
In this thesis, Merck is the primary organisation. The majority of
organisational messages in the following narratives are delivered by organisational
leaders including the chief executive officer (CEO), general counsel, or chief of
research. During the time frame of this thesis, Merck had two CEOs. Until May
2005, the CEO of Merck was Raymond Gilmartin. Mr Gilmartin was replaced by Mr
Richard Clark. For the majority of the study, Merck‘s general counsel was Mr
Kenneth Frazier who was replaced by Mr Bruce Kuhlik in 2008. Merck‘s chief
research officer is Dr Peter Kim.
4.1.2 Pfizer Inc
Pfizer Inc (Pfizer) is the largest pharmaceutical company in the world and it
operates in more than 150 countries (DataMonitor, 2009). Pfizer comprises of
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segments in pharmaceutical and animal health (Factiva, 2009). As of 2008, Pfizer
employed 81,800 people (DataMonitor, 2009). This thesis is concerned with the
pharmaceutical division that includes a range of drugs for pain, cardiovascular and
respiratory diseases and other disorders. Some of the drugs produced and marketed
by Pfizer include Lipitor, a cholesterol-lowering medication, Zoloft an anti-
depressant, and Viagra for the treatment of erectile dysfunction. Pfizer produces and
markets Celebrex. Pfizer stopped marketing Bextra after its regulatory recall in
February 2005, following Merck‘s withdrawal of Vioxx in September 2004.
In this thesis, Pfizer is a secondary organisation, entangled in the process of
transformative change and the focus of a second product recall for the COX-2 class
of drugs. The majority of organisational messages in the following narratives are
delivered by organisational leaders such as the Chief Executive Officer (CEO).
During the study, Pfizer had two CEOs. Until August 2006, the CEO of Pfizer was
Mr Hank McKinnell. Mr McKinnell was replaced by Mr Jeffrey Kindler.
4.1.3 Novartis
Novartis AG (Novartis) is a Switzerland-based operation that produces and
markets pharmaceutical medicines through a range of subsidiaries (Factiva, 2009).
Novartis has portfolios in medicines, preventive vaccines and diagnostic tools,
generic pharmaceuticals and consumer health products (Factiva, 2009). This thesis is
limited to the pharmaceuticals portfolio that includes treatments for cardiovascular
and respiratory diseases, oncology, neuroscience, and other disease areas. In 2008,
the pharmaceutical division employed 53,632 associates (DataMonitor, 2009).
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In this thesis, Novartis is a secondary organisation but receives significantly
less media coverage than Merck or Pfizer as its COX-2 Prexige was not approved for
sales or marketing in the US. The majority of organisational messages in the
following narratives are delivered by organisational leaders such as the chief
executive officer (CEO). Throughout the study, the Novartis CEO was Dr Daniel
Vasella.
4.2 Description of Key Events
Each narrative is constructed based on a series of events that affected the
pharmaceutical industry from 2004 to 2008. The events are described and analysed
in chronological order. These events show how a product withdrawal punctuated
equilibrium for Merck and the pharmaceutical industry, drawing sustained attention
from media, regulatory, legal and academic stakeholders until Merck closed the
crisis by settling claims filed by individuals acting alone or as part of class actions.
The timeline of events is set out in Table 4.1.
Table 4.1
Timeline of Key Events
Date Event
September 2004 Merck withdrew Vioxx from all markets
November 2004 Congress held inquiry
February 2005 FDA‘s advisory panel discussed COX-2 drugs
April 2005 Pfizer withdrew Bextra at FDA‘s request
July 2005 Litigation against Merck begins
Pharmaceutical industry sets new advertising guidelines
December 2005 New England Journal of Medicine retracts Vioxx article
January 2006 FDA issues new guidelines for drug development
February 2006 NEJM publishes correction to Vioxx article
June 2007 New regulations introduced by FDA
August 2007 Novartis recalls Prexige in Australia
November 2007 Merck announces plans to settle litigation for Vioxx
October 2008 Pfizer settles litigation for Bextra promotion
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4.2.1 Starting Points: Overview of Pharmaceutical Industry
In 2004, the pharmaceutical industry was recovering from a crisis. Anti-
depressants had been linked to increased suicides or suicidal tendencies in children.
The Food and Drug Administration (FDA) and the drug companies involved were
under fire from the media for not uncovering these effects earlier.
The pharmaceutical industry in USA is regulated by the FDA which is
overseen by Congress. In 1992, spurred by AIDS and a desperate desire for access to
new treatments, the FDA adopted a liberal approach to drug approvals. A
consequence of this move was less monitoring of approved drugs. The regulatory
move from 1992 would become the focus of much regulatory discussion from 2004
onwards—because of one decision about one drug.
In 2004, like almost any year before it, media and organisational reports in
the pharmaceutical industry were rich with discussions about disclosures for drug
trials, drug approvals, drug advertising campaigns for risky new products, and
conflicts of interest where so-called independent scientists held shares or interests in
pharmaceutical companies. This represented a more-or-less standard news cycle for
an industry that always had news and was always under regulatory and financial
spotlights. But a change like no other was on the way.
On 29 September 2004, Merck voluntarily withdrew one of its top-selling
medications. Vioxx was a pain relieving medication that was prescribed by doctors
all around the world. In the USA, more than 100 million prescriptions were written
for approximately two million patients who had taken the drug since its market
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introduction in 1999. Patients used Vioxx to relieve joint pain and arthritis among
other illnesses. In 2003, worldwide sales of Vioxx totalled US$2.5 billion.
Vioxx was one of several COX-2 medications on the market. Other popular
medications in this category were Celebrex and Bextra, both marketed by Pfizer, and
Prexige, which was marketed by Novartis. Prexige was yet to gain approval in the
US market but was softly marketed and available in Australian and European
markets in 2005 (Whelan, 2007, January 19). The COX-2 class of drugs was popular
among doctors and patients alike as it provided pain relief but without the
gastrointestinal side effects of previous generations of pain medications (COX-1).
Yet the high popularity of COX-2 drugs was to become one of its major downfalls.
The voluntary withdrawal of Vioxx punctuated equilibrium for Merck and
the pharmaceutical industry. Merck‘s actions to withdraw the product, and its
processes to preserve the product‘s status, shed light on an industry full of regulatory
holes. The withdrawal triggered a congressional inquiry, thousands of law suits, and
profound regulatory change. Alongside these changes, three pharmaceutical
companies also underwent changes in the way they communicated about the crisis
and subsequent events.
What follows in the next three narratives are different perspectives on a story
of crisis events, cover-ups, and renewal as the organisations and industry bodies pick
their way through a punctuated equilibrium and journey towards a new equilibrium.
These different perspectives or alternative templates are important because the
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synthesis of each narrative provides a more rounded contribution to crisis
communication research than could be achieved by any single alternative template.
4.3 Alternative Template 1: Restoring Reputations through Coombs’ Theory
This narrative of the Vioxx product withdrawal and subsequent crisis events
is constructed using Coombs‘ (2006b) situational crisis communication theory.
Situational crisis communication theory offers crisis managers ―prescriptive
guidelines‖ (Coombs, 2009, p. 249) for organisational communication during crisis
events. Coombs‘ (2006b) theory considers the situational and historical factors that
affect organisations in crisis and suggests appropriate crisis responses to restore
reputation. To achieve this, Coombs and colleagues developed a typology of crisis
response strategies or communication options that are available to organisations
undergoing crisis.
Crisis response strategies can be used to answer and resolve concerns about
an organisation‘s responsibility for a crisis event (Coombs, 2007c). The strategies
range from defensive to accommodative and sit within three primary postures of
denial, diminish, and rebuild. In addition, a supplementary bolster posture can be
used to support these primary strategies. The definitions for these strategies and
samples from the narrative are illustrated in Table 4.2.
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Table 4.2
Coombs’ Crisis Response Strategies
Posture Crisis response
strategy
Sample from narrative
Deny Seeks to prove no crisis exists or organisation is not responsible for has no
responsibility for crisis
Attempts to remove connection between the organisation and crisis
Attack the
accuser
Denial
Scapegoat
Merck said yesterday it was "vigilant in monitoring and
disclosing the cardiovascular safety of Vioxx" and that
the Lancet study wasn't based on new data nor was it as
comprehensive as the company's own analyses
(Hensley, Lublin, & Tesoriero, 2004, November 5).
A lawyer representing Merck said the internal e-mails
and marketing materials were "taken out of context"
and "do not accurately represent the conduct of Merck
and its employees" (Hensley, 2004, November 9).
Diminish Crisis is not as bad as people think; must have evidence to support
Reflects attribution theory; Crisis manager accepts a crisis occurred and that
his or her organisation is involved but tries to change the attributions
stakeholders make about a crisis in order to reduce reputational damage.
Excuse
Justification Merck acted responsibly: from researching Vioxx prior
to approval in clinical trials involving almost 10,000
patients to monitoring the medicine while it was on the
market to voluntarily withdrawing the medicine when it
did (Kaufman, 2005, August 20).
When Merck& Co. pulled its big-selling painkiller
Vioxx off the market in September, Chief Executive
Raymond Gilmartin said the company was "really
putting patient safety first." He said the study findings
prompting the withdrawal, which tied Vioxx to heart-
attack and stroke risk, were "unexpected" (Mathews &
Martinez, 2004, November 1).
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Posture Crisis response
strategy
Sample from narrative
Rebuild Change perceptions of the organisation by presenting new information
about the company
Compensation
Apology
This is a good and responsible agreement that will
allow the company to concentrate even more fully on
its mission of discovering, developing and delivering
novel medicines and vaccines (Merck, 2007b).
Bolster Minimal opportunity for reputational development; best used to supplement
primary strategies and adjusting information
Reminder
Ingratiation
Victimisation
We were financially strong before this and we‘ll be
financially strong after (Martinez, Mathews, Lublin, &
Winslow, 2004, October 1).
Throughout Merck‘s history, it has been our rigorous
adherence to scientific investigation, openness and
integrity that has enabled us to bring new medicines to
people who need them (Merck, 2005d).
Source: Coombs, 2006b, 2007c
Crisis response strategies shape attributions of crisis, change perceptions of
the focal organisation, and reduce negative effects of crisis (Coombs, 1995, 2007c).
Each response is built around perceived acceptance of responsibility for a crisis. As
crisis response strategies become more accommodative, they show greater concern
for victims, and stakeholders perceive the organisation is taking greater
responsibility for the crisis (Coombs & Holladay, 2004). The deny posture represents
the defensive end of the continuum and the rebuild posture represents the
accommodative end of the continuum.
Crisis managers can select crisis response strategies based on a combination
of factors including organisational crisis histories, perceived reputational threat,
crisis type, and attribution or blame assumed by stakeholders (Coombs, 1998, 2004a;
Coombs & Holladay, 2002). An assessment of these factors would lead crisis
managers to an appropriate crisis response posture: deny, diminish, rebuild.
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Application of the model suggests that, if one posture of responses does not improve
reputational outcomes, then crisis managers should move to the next posture in order
to resolve the crisis. In this way, organisational responses can start at the deny level
and move up to the diminish level and so on. This post-crisis communication phase
focuses on the use of communication to close the crisis (Coombs, 2009). In some
cases, crises remain lingering concerns for organisations, leaving stakeholders to
continue questioning the organisation‘s reputation.
This narrative provides an opportunity to examine organisational
communication during a series of crisis events, triggered by the voluntary
withdrawal of Vioxx by Merck. Traditionally, situational crisis communication
theory has focused on crisis response strategies that are used by a single organisation
to resolve the crisis situation or event (Coombs, 1998, 2004a, 2006b, 2007c).
Coombs‘ (2006b) crisis response strategies aim to restore reputation and stability
through communication. The narrative aims to demonstrate how Coombs‘ (2006b)
situational crisis communication theory explains the Merck crisis.
The first narrative is presented in chronological order of the key events that
triggered crisis communication. Merck‘s crisis response strategies started with a
diminish response posture and moved, eventually, to a rebuild posture. The sequence
of crisis response strategies is illustrated in Figure 4.1.
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Figure 4.1 Coombs‘ crisis response strategies depicted as diminish and denial
responses during the Vioxx withdrawal and litigation and shifting to the rebuild
posture during settlement.
4.3.1 Withdrawal of Vioxx
After spending five years communicating the benefits and advantages of
Vioxx and defending it against risks identified by the FDA and independent medical
researchers, on 30 September 2004, Merck took corrective action and initiated an
immediate, worldwide voluntary withdrawal of the drug. Up to its withdrawal,
Vioxx was a pain relief medication used by more than two million patients in the
USA alone. Merck‘s decision to voluntarily withdraw Vioxx represented an abrupt
change in strategy for Merck. By deciding to withdraw a medication from the
market, Merck lost millions in revenue and opened itself up to significant legal
liability. In return, Merck hoped this action would ensure its reputation remained
intact.
The Vioxx withdrawal was a corrective action that occurred in response to
new information from a clinical trial. The APPROVe clinical trial was established to
study the effects of Vioxx on pre-cancerous polyps with the intention of gaining
extended marketing approval. Although APPROVe was meant to provide Merck
with good news about Vioxx, it revealed a major risk in the drug. The APPROVe
•Diminish crisis posture
Vioxx withdrawal
•Diminish crisis posture
•Denial crisis posture
Vioxx litigation
•Rebuild crisis posture
Vioxx settlement
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trial found that compared to the placebo, patients who took Vioxx faced an increased
risk for confirmed cardiovascular events such as heart attack and stroke, beginning
after 18 months of treatment. Specifically, patients who took Vioxx were twice as
likely to have a heart attack or stroke as those on the placebo.
Under situational crisis communication theory, Merck‘s decision to withdraw
the drug represented a corrective action that was required to preserve the
organisation‘s reputation and status as a leading pharmaceutical firm (Coombs,
2006). By withdrawing the product, Merck assumed a level of responsibility for the
event. As a result of this assumed responsibility, the crisis communication
surrounding this withdrawal automatically started at the diminish posture. Under the
diminish posture, Merck demonstrated an acceptance of the crisis but also sought to
minimise any related reputational damage. According to Coombs (2006b), in order
to influence stakeholder attributions towards this kind of crisis event, organisations
must use evidence to support claims that minimise organisational responsibility or
damage during crisis events.
In withdrawing Vioxx, Merck explained it was motivated by ―the best
interest of science and patient safety‖ (Masters & Kaufman, 2004, October 18).
Merck used the messages identified in Table 4.3 to communicate the withdrawal of
Vioxx. These messages demonstrate how Merck prioritised crisis stakeholders
including patients, doctors, and investors.
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Table 4.3
Merck Statements during Vioxx Withdrawal
Date Statement Strategy type
30.09.04 ―We are taking this action because we believe it best serves the
interests of patients. Although we believe it would have been
possible to continue to market Vioxx with labelling that would
incorporate these new data, given the availability of alternative
therapies, and the questions raised by the data, we concluded
that a voluntary withdrawal is the responsible course to take‖
(Mr Raymond Gilmartin, CEO of Merck as cited in Merck,
2004b)
Diminish,
justification
30.09.04 ―Merck has always believed that prospective, randomized,
controlled clinical trials are the best way to evaluate the safety
of medicines. APPROVe is precisely this type of study – and it
has provided us with new data on the cardiovascular profile of
VIOXX. While the cause of these results is uncertain at this
time, they suggest an increased risk of confirmed cardiovascular
events beginning after 18 months of continuous therapy. While
we recognize that Vioxx benefited many patients, we believe
this action is appropriate.‖ (Dr Peter Kim, president of Merck
Research Laboratories as cited in Merck, 2004b)
Diminish,
justification
18.10.04 "It's not that we're unaware of the consequences, but it's a deep-
seated belief that if you do the right thing, rewards will follow‖
(Mr Raymond Gilmartin, CEO of Merck as cited in Masters &
Kaufman, 2004, October 18).
Diminish,
excuse
The messages in Table 4.3 demonstrate that Merck aimed to minimise the
damage of the crisis by explaining, initially, the action of product withdrawal in
terms of patient interest above all other positions. Further support for this
interpretation comes from Merck‘s annual report:
Merck conducts its business based on guiding principles of scientific excellence,
ethics and integrity, and, above all, putting patients first. These principles and values
have allowed Merck to play a leading role in discovering and developing medicines
and vaccines that preserve and improve human life. And they have shaped both the
manner in which we have responded to the challenges of the past year as well as our
ongoing efforts, on behalf of patients and shareholders alike, to position Merck for
future success and growth. The decision we announced on September 30, 2004 to
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voluntarily withdraw Vioxx from the market reflects the depth and sincerity of
Merck‘s commitment to patients (Merck, 2004a).
Merck explained the withdrawal as being consistent with organisational
values and strategy that put patients first. In this way, Merck anchored the Vioxx
withdrawal in the organisation‘s past as a means to preserve the status quo. Although
Merck introduced uncertainty into the market by deciding to withdraw a product
rather than pursuing other equally legitimate options, its communication suggested
that the company was seeking to correct an issue and return the business to normal
operations. Essentially, Merck wanted to minimise the effects of the crisis and also
to limit ongoing discussion about the withdrawal. By achieving this, Merck hoped to
minimise reputational risk.
One of the ways in which Merck attempted to close discussion and the crisis
was to reinforce the method by which the findings came to light. By communicating
that clinical drug trials were the best way to evaluate drug safety, Merck was
establishing a sole basis for legitimacy, and one that was within the organisation‘s
control. In doing so, the company arguably aimed to close out or override other
researchers‘ findings, derived from alternative methods such as observational
studies, about Vioxx‘s safety from its market introduction in 2000 to its withdrawal
in 2004. These historical studies, undertaken by the FDA or other medical
researchers, had the potential to return to the media agenda and, in doing so, prolong
the crisis and cause further damage on Merck‘s reputation.
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Another advantage of the move to establish the legitimacy of clinical trials
(over other methods) was that Merck could also claim that the APPROVe study
produced the first data about Vioxx‘s risks. To reinforce this message, the
organisation framed the APPROVe data as being ―unexpected‖ and that none of the
earlier Vioxx studies had demonstrated convincingly heart and stroke risk from the
drug (Mathews & Martinez, 2004, November 1). In accounting for the company‘s
past behaviours, Merck‘s CEO said, ―we were acting consistent with the data we
had‖ (Mathews & Martinez, 2004, November 1). This diminish, excuse strategy
became a consistent theme in Merck‘s responses as demonstrated in Table 4.4.
Table 4.4
Reinforcement of ‘Unexpectedness’ of Trial Results
Date Message Strategy
type
1.10.04 Janet Skidmore, a spokeswoman for Merck, said yesterday that
the latest study was the first clinical trial to show such results and
the company took immediate action upon receiving data (Meier,
2004, October 1).
Diminish,
excuse
18.10.04 "I was stunned," said Dr Kim who had expected positive results
[from the APPROVe trial] (Masters & Kaufman, 2004, October
18).
Diminish,
excuse
18.10.04 "The drug held up for three years. When you've been going this
long you don't expect this kind of phone call," Gilmartin
remembered in an interview soon after the drug was pulled
(Masters & Kaufman, 2004, October 18).
Diminish,
excuse
1.11.04 ―…we were acting consistent with the data we had‖ (Mathews &
Martinez, 2004, November 1).
Diminish,
excuse
14.11.04 ''We did our best to think of the most comprehensive study we
could have done. I'm sorry that I did not know four years ago
what I know now, but the data did not lead us there four years
ago'' (Berenson, Harris, Meier, & Pollack, 2004, November 14).
Diminish,
excuse
The strategies identified in Table 4.4 are diminish, excuse strategies. Merck
tried to minimise organisational responsibility for the crisis on the basis of timing.
That is, Merck had no intention of causing harm to its patients and could not have
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foreseen four years ago what it faced now. In continuing this diminish crisis response
pattern, Merck also sought to frame messages to justify its actions preceding the
crisis event. Merck‘s key message about its past actions of Vioxx became: "Merck
acted responsibly and appropriately as it developed and marketed Vioxx...When
questions arose about the safety of Vioxx, Merck took steps to investigate and
address these issues" (Mathews & Martinez, 2004, November 1).
One of the consequences of Merck‘s decision to withdraw Vioxx was the
financial impact. The financial market reacted strongly to the withdrawal with shares
dropping $12.07 or 26.8 percent and reducing market value by $26.8 billion to $73.2
billion. Merck‘s decline was the fourth-largest drop in an industrial stock listed on
the Dow since 1993. Merck sought to reinforce the withdrawal decision by using the
bolster crisis response. These bolstering strategies aimed to increase confidence by
drawing on Merck‘s past deeds as well as indicating the future opportunities for the
organisation. The strategies to bolster the reputation of a company are used to
supplement primary strategies of deny, diminish, or rebuild. Table 4.5 illustrates
these messages.
Table 4.5
Merck Bolsters Financial Confidence
Date Message Strategy type
1.10.04 "We were financially strong before this and we'll be financially
strong after," Mr. Gilmartin said. He also pointed to several drugs
for diseases such as diabetes and obesity that Merck is developing
(Martinez et al., 2004, October 1).
Bolstering
1.10.04 "The action we are taking is without question what is best for
patients. That is always what is paramount for Merck," Lewent
said (Masters, 2004, October 1).
Bolstering
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Interestingly, the messages within the bolster response strategies focus on
historical deeds as well as focusing forward. Merck was trying to restore its
reputation by drawing links between its past, present, and future.
At this point, Merck may have hoped that its crisis response strategies that
focused on a select group of crisis stakeholders would have provided enough
information to close the crisis and restore its reputation. However, the crisis context
was moving outside of Coombs‘ (2006b) organisation-centric focus. The media
continued to report the Vioxx withdrawal, publishing opinions that criticised
Merck‘s historical actions towards Vioxx and the role of regulatory bodies. In
addition to this media-fuelled discussion, competitor organisations with similar
drugs started to advertise their products as being safe alternatives to Vioxx.
Together, the actions of the media and competitors added fuel to Merck‘s product
withdrawal crisis, seeing doubts emerge about Merck‘s actions and attributions of
responsibility shift. These factors continued to affect Merck‘s reputation.
4.3.2 Merck’s ongoing crisis
Since its market introduction in 2000, Vioxx had been the subject of some
debate in medical and scientific circles. As a result of this history, Merck‘s decision
to withdraw Vioxx provided stakeholders including medical researchers with a
foundation for ongoing scrutiny of the practices of Merck and other companies in the
pharmaceutical industry. By withdrawing Vioxx, Merck may have committed itself
to a course of action and communication that it could not manage without the
support of the industry. The Vioxx withdrawal sparked interest in Merck‘s historical
actions about Vioxx and while the company tried to reduce ongoing discussion and
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close the book on Vioxx, the product withdrawal actually held Merck accountable to
greater misdeeds thus affecting its reputation beyond restorative means. In doing so,
this increased the complexity of the crisis context by increasing number of crisis
stakeholders to whom Merck was communicating.
Although Merck acted offensively by withdrawing Vioxx and had enough
evidence to support this withdrawal decision with crisis response strategies, it lacked
evidence to defend itself against the ongoing scrutiny. In effect, this lack of evidence
may have caused stakeholders to question the original communication messages
provided by Merck during the withdrawal of Vioxx.
What Merck viewed as an action to close the door on a drug and continue on
with its operations, others viewed as a decision that legitimised their beliefs that for
some time, Merck had acted in a socially irresponsible manner. What resulted was
ongoing discussion that was critical about Merck, its marketing strategies, its internal
communications, its conflict with academic and medical institutions and the FDA.
As well there was a new interest in the role of other pharmaceutical companies.
These discussions, which were reported extensively by the media, continued to fuel
the crisis beyond its situational start, and arguably turned perceived damage into real
damage for Merck‘s reputation.
4.3.2.1 Merck’s Marketing Strategies
Merck‘s historical actions about Vioxx play out as a battle between
marketing and science. There was no doubt that Vioxx was a successful drug for
Merck in terms of market share and sales. But questions emerged about whether
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marketing had triumphed over science and whether Merck had continued promoting
a product that it knew to be unsafe (Pollack, 2004, November 14).
Merck had a significant marketing budget for Vioxx. In 2003, the year before
the withdrawal of Vioxx, Merck purchased $78.9 million of media time for Vioxx
advertisements, spending just over $45 million in 2004. In addition, experts
estimated that Merck spent $500 million in 2003 to promote the drug to physicians
through advertisements in medical journals, free samples, and visits by sales
representatives to prescribing physicians. Although consistent with industry norms,
the practices mean something totally different when they are communicated during a
crisis event and when the organisation responsible for these actions is under scrutiny.
The message was simple: Merck spent twice as much on marketing and
administration than it did on research and development (Angell & Relman, 2004,
December 28).
Merck responded to these claims by reinforcing its earlier diminish crisis
response. Merck argued that the company had acted responsibly and appropriately in
developing and marketing Vioxx (Pollack, 2004, November 14). What Merck lacked
during this time was evidence to support these claims, and retain the support and
positive perceptions of its key crisis stakeholders. As it turned out, more evidence
was forthcoming to support the views of Merck‘s opponents.
4.3.2.2 Merck’s Internal Communication
One month after the Vioxx withdrawal, evidence surfaced to support claims
that Merck knew about the risks of Vioxx well before the APPROVe trial results
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were released in September 2004. Information about Merck‘s internal
communication emerged to build support for this alternative position and shift the
crisis from a situational product withdrawal to a complex crisis of legitimacy for
Merck.
Merck‘s internal documents emerged as part of the preparation for product
liability trials. These documents showed how Merck employees first viewed Vioxx.
A feature story in The Wall Street Journal detailed Merck‘s actions from 1997 to
2004. As illustrated in Table 4.6, Merck had doubts about Vioxx before its market
approval that were subsequently confirmed in future clinical trials. The Wall Street
Journal draws on the discrepancy between the VIGOR trial results in March 2000
and the related Merck press release. At around this time, Merck also went on the
offensive with university medical professors who argued that Merck was attempting
to ―suppress a discussion‖ about Vioxx data (Mathews & Martinez, 2004, November
1).
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Table 4.6
Merck’s Actions over Vioxx
Date Merck‘s actions
February 1997 Internal Merck e-mail warns that a proposed trial may show Vioxx
patients having more blood clots than those taking another medication
and ―kill [the] drug‖.
May 1999 FDA approves Vioxx for arthritis and other types of pain.
March 2000 Vigor trial results available inside Merck. They eventually show Vioxx
group has five times the rate of heart attacks as naproxen group.
March 9, 2000 Merck research chief says in internal e-mail that cardiovascular
problems "are clearly there" in Vigor trial and appear to be "mechanism
based."
April 2000 Merck press release says Vigor trial results are "consistent with" clot-
preventing effects of naproxen.
October 2000 Merck official threatens that a Stanford researcher will "flame out" if he
continues "anti-Vioxx" lectures.
September 2001 FDA sends Merck a warning letter, accusing it of misleading public
about Vioxx's cardiovascular safety.
April 2002 FDA approves a label change for Vioxx, showing data about potential
heart risk.
September 2004 Merck announces worldwide withdrawal of Vioxx.
Source: Mathews & Martinez, 2004, November 1
This article from The Wall Street Journal as detailed in Table 4.6 reinforced
the view that Vioxx was a contest of marketing and science. As these internal
documents were released to the market, Merck defended its past actions through a
diminish, justification response: ―We acted responsibly and appropriately as we
developed and marketed Vioxx. When questions arose about the safety of Vioxx,
Merck took steps to investigate and address these issues‖ (Berenson et al., 2004,
November 14). This crisis response strategy aimed to diminish the crisis by offering
justification for Merck‘s actions. This response was reinforced by Merck General
Counsel Kenneth Frazier who said, ―Merck wasn‘t dragging its feet. It‘s pretty hard
for me to imagine that you could have done this more quickly than we did‖.
In response to the allegations about Merck‘s actions towards medical
researchers, Merck provided the following defence: ―Merck is committed to open
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and vigorous scientific debate‖ and ―never has had a policy of retaliating against
scientists‖ but ―has a right to defend its medicines against false claims‖ (Mathews &
Martinez, 2004, November 1). A further review of Merck‘s internal documents saw
responses from Merck as illustrated in Table 4.7.
Table 4.7
Internal Emails Explained
Incidents Internal emails Response from Merck‘s Ms
Wainwright
May,1999 Just before Vioxx was approved by the
FDA in May 1999, Dr. Scolnick
apparently lost his cool with an FDA
statistician, according to an e-mail sent
by a person working on behalf of
Merck to a Merck staffer. "I had her
very close to buying the Merck
position when Ed S. came up and
nearly strangled her and her
supervisor…that hurt badly," the e-
mail said.
Ms. Wainwright said the e-mail in
which someone wrote that Dr.
Scolnick "nearly strangled" an FDA
staffer was "hyperbole." She said the
e-mail referred to an FDA advisory-
committee meeting where the "debate
was heated, but neither Dr. Scolnick
nor any other Merck employee
engaged in any inappropriate
behaviour."
May,
2000
A year later, only weeks before getting
the results of the Vigor trial, Dr.
Scolnick in an e-mail asked a Merck
statistician to allow him to see the
results before he was officially
supposed to get access. He sent her a
copy of a Wall Street report that spoke
glowingly about the prospects for
Celebrex, and noted that "we are being
pounded by stories like this." He wrote
that "this situation cannot simply
follow the ‗book‘ ways of my
knowing," asked to speak to her
confidentially and assured her that he
was the only one who listened to his
voice mail.
"This is just another example of
documents being presented out of
context to advance the interest of the
parties who have started Vioxx
litigation," said Joan Wainwright, a
Merck spokeswoman. She said Dr.
Scolnick's e-mail to the Merck
statistician asking to see the clinical
data on Vioxx showed his eagerness to
see the information and that the
statistician appropriately reminded Dr.
Scolnick of the dates the data would
be available to Merck employees.
Source: Martinez & Mathews, 2004, November 18
As illustrated in Table 4.7, Merck responded using a denial posture. Merck
provided an alternative explanation for the internal emails and comments and
claimed the media and litigators were taking Merck comments out of context. The
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market did not believe Merck‘s position. The release and news discussion about
these internal documents led to a further decrease in share value. Merck lost $3.03 or
9.7 percent of its share price to close at $28.28.
4.3.2.3 Response of FDA
A week after the Vioxx withdrawal, a study by a researcher of the FDA
indicated that more than 27,000 heart attacks or deaths could have been avoided if
patients used Celebrex, a drug produced by competitor organisation Pfizer, instead of
Vioxx. This study was based on a sample of patient records and part of a study
conducted by FDA researcher Dr David Graham with Kaiser Permanente, a
prominent health maintenance organisation (HMO). Although Merck challenged the
methods of this study and reiterated its earlier claims that clinical trials were the only
legitimate source of data, the focus shifted quickly from praising Merck‘s decision to
withdraw Vioxx for patient safety, to questioning the delay in withdrawing the
product. Merck‘s opponents wanted to know why Merck delayed the withdrawal of
Vioxx and why the FDA did not act sooner.
The media also questioned the role of the FDA in monitoring Vioxx post
market approval. The FDA said its actions towards Vioxx were appropriate based on
the data available (FDA, 2004c). But the FDA relied on clinical trial data supplied by
Merck. FDA studies were often limited by funding constraints and tended to be
based more on studies of patient records. Both Merck and the FDA were held
responsible for their roles in relation to Vioxx and drug monitoring, respectively.
Although much of the discussion about Merck related to the Vioxx withdrawal, this
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event triggered a public discussion and focused attention to the issue of drug
monitoring and safety.
4.3.2.4. Vioxx and Coombs
In summary, from Coombs‘ (2006b) situational crisis communication theory
perspective, this second stage of the crisis introduced doubts about Merck‘s actions,
affecting Merck‘s reputation and legitimacy. The events detailed how the crisis
context was growing in complexity as the number of stakeholders who were both
evaluating and questioning Merck‘s crisis responses also increased. Media reports
questioned whether Merck delayed the withdrawal of Vioxx in order to put profits
ahead of patients. The evidence presented extended the original situational product
withdrawal crisis and created ongoing concerns for Merck. Further, although this
second stage continued the use of the diminish posture of crisis response strategies,
the success of this strategy was predicated on the provision of evidence to support
communication claims. This second stage of the case study provided more evidence
against Merck‘s original case thus moving the crisis beyond a restorative solution
(Coombs, 2006b).
4.3.3 Response to Senate Committee
In October and November 2004, two congressional committees (the Senate
Finance Committee and the House of Representatives Committee on Government
Reform) were convened to investigate the FDA‘s handling of Vioxx. Senator
Grassley, who chaired the Senate Finance Committee, was particularly concerned by
the ―cozy‖ relationship between the FDA and drug companies (Masters & Kaufman,
2004, October 18). According to Senator Grassley, "it looks like the FDA saw a lot
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of red flags from the beginning. The agency must address what looks like systemic
problems when it comes to putting public health and safety first and public relations
second" (Mathews, 2004, November 10). The FDA is a significant regulatory
agency, looking after products that account for 25 cents of every consumer dollar
(Miller, 2004, November 26). Although the focus of these hearings was on the
FDA‘s actions, pharmaceutical companies were also requested to account for their
actions. This ensured that media coverage extended to the Vioxx withdrawal.
The senate committees were charged to investigate the historical actions of
the FDA in relation to Vioxx in two questions. First, if COX-2s, the category name
for drugs like Vioxx, represented no significant improvement over earlier drugs, is it
irresponsible to introduce them to the market given their cardiovascular risks?
Second, did Merck know about heart risks earlier than the APPROVe trial results
that led to the Vioxx withdrawal (Mathews, 2004, November 10).
On 18 November 2004, Merck CEO Raymond Gilmartin presented prepared
testimony to the Senate Committee on Finance. Gilmartin‘s commentary was
summarised by Merck in the following way:
The Food and Drug Administration approved Vioxx only after Merck had
extensively studied the medicine.
Merck continued to extensively study Vioxx after it was approved for
marketing to gain more clinical information about the medicine.
Merck has promptly disclosed the results of numerous Merck-sponsored
studies to the FDA, physicians, the scientific community and the media and
participated in a balanced, scientific discussion of its risks and benefits.
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Until data from the APPROVe clinical trial became available in September,
the combined data from randomized controlled clinical trials showed no difference
in confirmed cardiovascular event rates between Vioxx and placebo and Vioxx and
NSAIDs other than naproxen.
While epidemiological studies have an important role to play, given their
inherent limitations, when both epidemiological studies and randomized controlled
clinical studies are available, the randomized controlled clinical trials are the most
persuasive evidence.
As soon as the data from the APPROVe study became available, Merck
acted quickly to withdraw the medicine from the market (Merck, 2004c).
These messages represented diminish, excuse crisis response strategies. In
these statements, Merck‘s CEO reinforced that the organisation had acted
appropriately in relation to Vioxx, made decisions using the right type of data, and
followed the requirements of the FDA. The diminish, excuse posture showed that
Merck historically handled Vioxx well but the unexpectedness of the APPROVe trial
results forced Merck to the drug. By using this diminish posture, Merck remained
consistent with earlier statements made during the Vioxx product withdrawal stage.
Merck also reinforced the ethical basis for its decision-making by reminding the
Senate committee of its history:
Merck believed wholeheartedly in Vioxx. I believed wholeheartedly in Vioxx. In
fact, my wife was a user of Vioxx until the day we withdrew it from the
marketplace. In conclusion, Mr. Chairman, throughout Merck‘s history, it has been
our rigorous adherence to scientific investigation, openness and integrity that has
enabled us to bring new medicines to people who need them. I am proud that we
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followed that same rigorous scientific process at every step of the way with Vioxx
(Merck, 2004c).
This bolstering strategy reminded the committee of the great achievements of
Merck, seeking to supplement crisis response strategies at the diminish level. The
media response to the statements of Mr Gilmartin, Merck‘s CEO, was positive
though some believed the senators treated him more lightly than he should expect
from litigators. The senators and media alike recognised the strong reputation of
Merck, indicating the effectiveness of the strategy choice (Berenson, 2004,
November 19). Merck‘s messages also aimed to deflect some of the criticism it
received from the release of internal documents by plaintiffs‘ lawyers. In addition,
Merck specified that it had followed the procedures of the FDA in seeking approval
for and monitoring the drug.
At the same time as senators showed support for Merck, the senate committee
criticised the FDA for failing to realise that, three years earlier, Vioxx was dangerous
(Harris, 2004, November 21b). The investigation process also brought to light that
the tools and practices used by the FDA to regulate drugs were insufficient. For
example, in 2001, FDA officials were forced to negotiate with Merck for one year
before being able to add cardiovascular risks to the Vioxx product label (FDA,
2004c). Although the FDA can recall a product, it is reluctant to do so until the risks
have been proven. The congressional hearings signalled a shift in responsibility away
from Merck and towards the FDA.
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From the perspective of Coombs‘ (2006b) situational crisis communication
theory, this testimony may have provided an option for Merck to shift blame to the
FDA. Merck chose not to take this path and the media articles and organisational
documents do not provide insight into this choice. Further, it is not clear that there is
evidence beyond Merck‘s prepared testimony to support this claim. Merck exited the
senate committee hearings with its reputation preserved in government and
regulatory circles, after receiving some reassurance that it had acted appropriately
and that the fault lay with the FDA‘s processes and resources.
Although these hearings provided an opportunity for Merck to reinforce the
appropriateness of its actions towards Vioxx, they also served to continue to ensure
Merck and Vioxx were high on media, regulatory, and public agendas. Merck had
yet one other committee hearing to get through before it could hope to exit the public
sphere, restore its reputation, and get on with business.
4.3.4 Reaction to the Bextra Withdrawal
Under fire from government and the media, the FDA convened a joint
meeting of the Arthritis and Drug Safety and Risk Management Advisory
Committees to review the benefits and risks of COX-2 medications in mid February,
2005 (FDA, 2005). The committee provided recommendations to the FDA which
would make the final decision on the future of COX-2 drugs. The review was
extensive and focused on clinical trial data and the views of patients, doctors, and
advocacy groups. The committee interviewed representatives from a range of
pharmaceutical companies that produced COX-2 drugs including Merck and Pfizer.
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Merck issued a statement in relation to the meeting, explaining that while it
could have continued to market Vioxx with labelling changes, the voluntary
withdrawal was the responsible choice (Merck, 2005c). Merck also said that as new
information became available, the cardiovascular risks observed in Vioxx may not be
unique to the drug but seen across the class of drugs (Merck, 2005c). These
statements are consistent with Merck‘s diminish, justification responses.
On 18 February 2005, the committee voted on the risk and benefit profile of
Vioxx, Celebrex, and Bextra, among others. The panel concluded that all COX-2
drugs carry risks and that the drugs should be used at the ―lowest safest dose‖
(Harris, 2005, February 18). The votes for the drugs were divided into abstained
votes and votes for and against the individual drugs, as illustrated in Table 4.8. All
drugs were supported by the advisory committee though Celebrex had a greater
support margin than Bextra or Vioxx.
Table 4.8
FDA Advisory Committee’s Votes on COX-2
Product For Against Abstained
Vioxx 17 15 0
Celebrex 31 1 0
Bextra 17 13 2
Source: FDA, 2005; Harris, 2005, February 19
The panel also raised concerns about the lack of legal clout of the FDA in
monitoring drugs post market approval (Harris, 2005, February 18). The panel
recommended strict restrictions be imposed including a ban on direct-to-consumer
advertising, blackbox warnings, and written warnings to patients about the risk of
cardiovascular events (Kaufman, 2005, February 19). The panel‘s recommendations
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triggered share price increases in Merck which surged $3.76 or 13 percent to close at
$32.61 and Pfizer which gained $1.74, or 6.9 percent, to finish at $26.80 (Kaufman,
2005, February 19).
In response to the advisory committee‘s recommendations, the FDA ordered
that Pfizer withdraw Bextra from the market and all drugs include a boxed warning
about potential cardiovascular risk (FDA, 2005; Pfizer, 2005a). At the same time,
Merck remained non-committal about returning Vioxx to the market. The company
said it would discuss the situation with the FDA but had no immediate plans to
return Vioxx to the market. Interestingly, because Coombs‘ (2006b) situational crisis
communication theory focuses on the crisis communication of single organisations,
it is unclear how Coombs (2006b) would consider linked crisis events involving
multiple organisations and account for Pfizer‘s actions and Merck‘s reactions.
The FDA‘s decision demonstrated a change in FDA practices. Media reports
summarised the FDA‘s new position as being cautious, signalling the emergence of
new practices (Appelbaum, 2005, April 13). Even the director of the FDA‘s office of
new drugs agreed that this represented a change in the agency‘s culture (Appelbaum,
2005, April 13).
4.3.5 Merck’s Defence against Litigation
From late April 2005, Merck entered a new phase of the crisis that continued
to challenge its reputation and extend the situational crisis: Vioxx product liability
trials. Merck‘s legal strategy was to defend each case individually. Merck believed
the burden of proof lay on the plaintiff‘s side. To win cases, plaintiffs and their
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attorneys needed to prove that Vioxx caused heart attacks and strokes, both of which
Merck argued, were common in the general population (Martinez, 2005, July 18). A
second challenge for plaintiffs related to the period of drug consumption. Merck‘s
studies showed that Vioxx caused risks after 18 months of use.
These trials are significant to Merck and crisis communication because they
extended the crisis concern for Merck and thus challenged the organisation‘s ability
to close the crisis and restore reputation and legitimacy. As preparation for the legal
trials was underway, Merck launched an advertising campaign that aimed to restore
the organisation‘s reputation. Although the timing of this advertising was
deliberately selected to coincide with the Vioxx litigation, the level of media
reporting of the ensuing litigation may have limited the effectiveness of this
corporate advertising. The next sections of this chapter outline the key liability trials
faced by Merck.
4.3.5.1 Ernst Trial
The first case to be tried was filed by Carol Ernst whose husband Robert
Ernst died suddenly in his sleep in 2001. The clinical focus of the case was Ernst‘s
arrhythmia (irregular heart beat or abnormal heart rhythm). Merck claimed that
Vioxx had never been linked to arrhythmia, and it had properly disclosed risks to
doctors (Berenson, 2005, July 11), thus according to Merck, the plaintiff‘s case had
no basis. This trial ran from 15 July to 20 August 2005. The legal trials provided a
detailed investigation of Merck and Vioxx, thus keeping the crisis alive on both
public and legal agendas.
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The plaintiff‘s lawyer was Mark Lanier whose strategy was to frame Merck‘s
actions as prioritising profits over safety, using internal documents as evidence
(Martinez, 2005, June 24). Merck‘s strategy was to reinforce that its actions were
responsible and appropriate during the development and marketing of Vioxx. The
jury decided against Merck and awarded $253 million to the plaintiff (Stewart, 2005,
August 24). The result led media editorial to question Merck‘s legal strategy,
claiming Merck‘s defence that Vioxx was not linked to arrhythmia was now
vulnerable:
I sympathize with Merck's lawyers, but they should have seen it coming. The series
of internal Merck documents casting doubt on the safety of Vioxx put Merck in the
vulnerable position of appearing to have ignored, suppressed or even covered up
data. Even if Merck had acted in accord with the highest medical standards then
prevailing, the contest between a grieving widow and a pharmaceutical giant earning
billions while seeming to discount evidence of heart attacks was never going to be
one Merck could expect to win (Stewart, 2005, August 24).
The strong media interest in the case continued to draw attention to Merck
and reduce the company‘s ability to restore its reputation. This loss of faith in the
company was more immediately demonstrated by a drop in Merck‘s share price. In
reaction to the case, Merck‘s stock fell almost 8 percent to close at $28.06.
Legal professors and doctors also responded to this trial, thus contributing to
ongoing media attention. A professor of law at the University of Chicago interpreted
the Vioxx trial verdict as a way to ―shut down the entire quest for new medical
therapies‖ (Epstein, 2005, August 22). He saw the trial as the start of a massive
financial imposition on not only Merck but the pharmaceutical industry (Epstein,
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2005, August 22). In a letter to the editor, Dr Martin Thiel, a surgeon explained that
risks and benefits existed in all procedures. He said that ―a society [that] has come to
demand a complete absence of risk will cease to enjoy many of the blessings of
innovation and progress‖ (Thiel, 2005, September 2).
These comments demonstrate recognition of risk and its role in all
medications, and not Vioxx alone, suggesting that the perceived injustice of the large
settlement to the plaintiff may affect or harm future practices in the pharmaceutical
industry. Merck‘s crisis communication strategy throughout the trials remained
consistent with its strategy before the trials. Despite changes in the crisis context, the
company remained steadfast in strategies that aimed to diminish perceived damage
and responsibility for the original and subsequent crisis events.
4.3.5.2 Humeston Trial
The second Vioxx trial began on 15 September and concluded on 4
November 2005. The plaintiff, Frederick Humeston, was suing Merck alleging that a
heart attack he had on 18 September 2001 was caused by Vioxx, which he had been
taking regularly for the two months prior to the heart attack (Davies, 2005, August
23).
In this second trial, Merck took a different approach with internal documents.
In opening arguments, Merck attorney Diane Sullivan said the ―company shouldn't
be held responsible for ‗stupid‘ comments made by some individuals‖ (Davies, 2005,
September 17). In this trial, Merck also simplified its messages about the science
behind Vioxx (Tesoriero, 2005, October 7). Dr Alice Reicin testified that Merck
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followed appropriate processes in seeking approval for Vioxx (Tesoriero, 2005,
October 12). She also explained some of her previous emails that expressed concern
about the safety of Vioxx (Tesoriero, 2005, October 18). Merck also sought to
counter the testimony of the plaintiff‘s medical witnesses (Tesoriero, 2005, October
21). For example, Merck called on a cardiologist Dr John Gaziano from Harvard
Medical School who said that short-term use of Vioxx did not cause heart attacks
(Tesoriero, 2005, October 27). Merck‘s defence was built around the FDA‘s
approval of Vioxx (Davies & Tesoriero, 2005, October 24).
The jury began deliberations to decide against two charges: 1) failure to
warn, and 2) consumer fraud. In the first charge, jurors had to decide whether Merck
failed to provide adequate warnings to doctors and that Vioxx was a contributing
case to the plaintiff‘s heart attack. In the second charge of consumer fraud, the jury
was expected to vote on whether Merck had engaged in inappropriate marketing
practices that misrepresented Vioxx‘s risks (Tesoriero & Davies, 2005, November
2).
The jury decided Merck was not legally responsible for the heart attack and
that Merck had properly warned doctors of Vioxx‘s risks. In response, shares
climbed 3.8 percent to close at $29.48. The jurors said they read the emails
completely and felt many of the ―inflammatory lines were taken out of context‖
(Tesoriero & Davies, 2005, November 4). The jury also unanimously found that
Merck did not violate the New Jersey Consumer Fraud Act in marketing the drug to
prescribing physicians. Although Merck adapted its legal strategy by changing the
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way it explained internal documents, its crisis communication strategy again
remained consistent throughout this trial.
4.3.5.3 Other Trials
Although the first few trials drew strong media interest and produced many
articles, this reduced significantly over time. After Ernst and Humeston, Merck faced
several other Vioxx trials. These trials are summarised in Table 4.9. During these
subsequent trials, Merck‘s crisis communication remained mostly consistent. It
appears the media tired of the outcomes or of Merck‘s unchanged response to the
trials.
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Table 4.9
Vioxx Product Liability Trials in Media Reporting Order
Date Plaintiff and case details Outcome Number
of
articles
30.11.05
to
13.12.05
Federal trial for Richard Irvin, 53 years,
who died after taking Vioxx for 24 days;
Merck denied responsibility and said
heart disease was common in men like
Irvin
Mistrial. 16
10.01.06
to
31.01.06
Leonel Garza, 71 years, who died of a
heart attack after taking Vioxx for one
month; Merck said plaintiff had serious
cardiovascular problems and refutes
Vioxx use as Garza‘s physician denies
giving him a 30 day supply of Vioxx
Jury found for plaintiff,
awarding $7 million
compensation to
Garza‘s family. Merck
to appeal case.
10
07.03.06
to
12.04.06
Joint trial filed by Thomas Cona, 57 years
who had a heart attack caused by taking
Vioxx for 22 months. John McDarby, 71
years, who had a heart attack and broke
his hip; Merck claims both plaintiffs had
high cardiovascular risk and studied
Vioxx for seven years and complied with
FDA policy.
Jury found that Merck
failed to warn McDarby
and Cona but that
Vioxx was a factor only
in McDarby‘s case.
Jury ordered Merck to
pay McDarby $3
million and his wife
$1.5 million.
18
14.07.06 Doherty Merck failed to warn;
Vioxx did not cause
heart attack
2
31.08.06 Grossberg Jury found for Merck 1
18.08.06 Barnett Jury found for plaintiff,
awarding $51 million;
subsequently offered
$1.6 million or retrial
4
18.08.06 Humeston/Hermanns Jury found for
Humeston; Hermanns
case dismissed
5
14.11.06 Smith Jury found for Merck 3
16.11.06 Mason Jury found for Merck 3
14.12.06 Dedrick Jury found for Merck 1
16.12.06 Albright Jury found for Merck 1
19.01.07 Appell/Arrigale Mistrial 2
28.03.07 Schwaller Jury found for Merck 1
In summary, throughout all of the legal trials, Merck consistently
communicated four key points: 1) that it appropriately and responsibly developed
and marketed Vioxx, 2) that it would defend each case individually, 3) that there was
no reliable evidence to support the jury decision when it lost a case, and 4) that the
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jury‘s decision confirmed there is no evidence. Merck‘s communication strategy was
aligned with its legal strategy. During this time, there was minimal adjustment to
Merck‘s communication strategy. Instead, the organisation stuck very closely to its
key messages, changing them only when referring to a different plaintiff or legal
matter. Perhaps this communication strategy coupled with the media‘s fading interest
in reporting the trials served to remove the Vioxx crisis from the public interest.
Financial markets continued to be interested in trial outcomes, responding positively
when juries found in Merck‘s favour. The trials continued to keep Merck and Vioxx
in the media agenda, complicating and extending the original crisis and making it
even more difficult for Merck to restore its reputation.
4.3.6 Defence against Research Findings
Although Merck‘s communication choices remained consistent during legal
proceedings for Vioxx, it also faced some interesting challenges about its research
and publishing practices. This section of the chapter outlines some of the key
challenges faced by Merck and its responses.
4.3.6.1 Merck’s Defence against its Own Data
In early December 2005 and midway through the third trial (Irvin), editors of
the New England Journal of Medicine (NEJM) raised concerns about a research
article on Vioxx that was published by a range of authors including some of Merck‘s
employees. The NEJM editors claimed that Merck had withheld data about three
heart attacks from publication (Berenson, 2005, December 9). In response to these
claims, Merck issued a statement to emphasise that it promptly and appropriately
disclosed the results of VIGOR (Vioxx gastrointestinal outcomes research).
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According to Merck, the three heart attacks to which the NEJM editors referred,
were reported after the cut-off date of the article and were therefore not published in
the journal (Merck, 2005b). However, the additional information was presented to
the FDA, included in numerous press releases, and disclosed to physicians along
with the original NEJM article. Merck also said that the additional information did
not change the findings. In response to this allegation, Merck also wrote letters to
editors and published an open letter to the medical community:
Merck has always been committed to the highest standards of scientific integrity and
patient safety. Recent news articles have challenged whether Merck‘s actions with
regard to the VIOXX GI Outcomes Research (VIGOR) study have been consistent
with our standards. We want to assure you that our actions, when fully examined,
demonstrate our continued commitment to these standards. We would like to share
with you the facts on VIGOR...
...The recent news articles focus on two allegations...Neither allegation is
true.
...We hope this letter helps to address any questions you may have had. We
know that you and the scientific community expect Merck to adhere to the highest
scientific and ethical standards and we intend to continue to meet those expectations.
We value our relationship with you and look forward to our continuing collaboration
with you as we endeavour to introduce new medications that enrich patients‘ lives
(Merck, 2005a).
Merck researchers refused to submit the correction requested by the NEJM.
Merck‘s responses are outlined in Table 4.10.
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Table 4.10
Merck Responses to NEJM
Date Strategy Strategy type
09.12.05 Merck believes it is important to emphasise that the company promptly
and appropriately disclosed the results of the VIGOR study. Merck
correctly communicated about the benefits and possible risks of Vioxx
and extensively disclosed the VIGOR data to the scientific and
medical communities, and in the press (Merck, 2005b).
Diminish
justification
13.12.05 Mr Beck called the situation [NEJM] an ―enormous sideshow because
it did not affect the safety profile‖ of the drug…even if the additional
heart-attack information had been included in the New England
Journal article, the difference wouldn‘t have been scientifically
meaningful to prescribing physicians, he said (Tesoriero & Martinez,
2005, December 13).
Diminish,
excuse and
deny, attack
accuser
23.02.06 Our evaluation leads us to conclude that our original article followed
appropriate clinical trial principles. The original table never included
the three additional heart myocardial infarctions…and the data were
not deleted from the manuscript. There is no material difference in the
conclusions that arise from the addition of the events reported after the
pres-specified cut-off date. All of the authors stand by the original
article (Merck, 2006a).
Deny, attack
accuser
Merck‘s responses to the NEJM allegation integrated both denial and
diminish crisis response strategies. This represented one of the first times that Merck
used the deny posture. Denial strategies aim to remove any association between the
organisation and the event at hand. By denying the allegations of the NEJM, Merck
demonstrated that this was a distraction that took it away from ongoing concerns
with legal proceedings. Merck also reinforced its handling of Vioxx clinical trial data
as being appropriate and responsible.
4.3.6.2 Merck’s Defence against New Data
A series of studies published in May 2006, September 2006 and early July
2007 revealed new information about Vioxx, the nature of its risks and the timing of
these risk events. This new information challenged earlier assumptions about Vioxx.
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On 3 May 2006, a study published in the Canadian Medical Association
Journal showed that seniors who took Vioxx faced the highest risk of heart attack
during the first two weeks of Vioxx consumption (Cherney & Tesoriero, 2006, May
3). The study looked at cardiovascular problems among almost 10,000 patients over
65 years of age who took Vioxx and Celebrex. Merck countered this news with a
statement that reinforced its view that observational studies were ―less scientifically
rigorous‖ than clinical trials (Cherney & Tesoriero, 2006, May 3). Plaintiff lawyers
were interested in the short-term effects of Vioxx but Merck argued that these data
would not change its legal strategy (Cherney & Tesoriero, 2006, May 3).
A few days later, Merck released new data from the APPROVe study that
originally triggered the Vioxx withdrawal in 2004. This follow-up analysis showed
that patients who took Vioxx were 1.64 times as likely to have a heart attack or
stroke during a subsequent year as when they were not taking Vioxx (Winslow,
Tesoriero, & Carreyrou, 2006, May 12). Again, Merck communicated that new data
would not change its legal strategy (Winslow et al., 2006, May 12). The study also
showed some support that the risk of Vioxx began within four months of
consumption (Tesoriero & Winslow, 2006, May 18). This news differed dramatically
from the 18-month time frame Merck had previously maintained and used as the
basis of arguments in legal proceedings where plaintiffs had consumed Vioxx for
shorter time frames (Tesoriero & Winslow, 2006, May 18). Merck explained the new
time frame information based on a statistical error in reporting (Berenson, 2006, May
31).
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Merck said there was a seven percent chance that Vioxx had an equally high
risk of causing heart attacks both before and after the 18-month time frame. The
correction, according to Merck scientist Dr Kim ―doesn‘t change our conclusion; it
doesn‘t change the results‖ (Carreyrou, Winslow, & Tesoriero, 2006, May 31). Other
scientists argued that while this number might seem small, it is high enough to argue
that Merck‘s 18-month theory is unproven (Berenson, 2006, May 31). Merck‘s
lawyers remained confident in using the 18-month risk time frame in future trials
(Tesoriero, 2006, June 27).
In relation to Merck‘s revelation about its statistical error, the NEJM
published an unsigned correction to Merck‘s original study. The correction said key
results in the original publication were reached by a method different from what was
described in original article (Tesoriero, 2006, June 27). The correction said
references to 18-month time frames for safety should be deleted (Tesoriero, 2006,
June 27). Merck responded with an open letter and described how it informed NEJM
of the data analysis error (Merck, 2006e). (See section 4.3.6.1 for excerpts from open
letter to medical community.)
On 13 September 2006, two new studies about Vioxx were publicised
(Loftus, 2006, September 13). One study by researchers at Harvard Medical School,
published in the Journal of the American Medical Association, identified Vioxx with
kidney-related and arrhythmia risks (Loftus, 2006, September 13). Merck said that
the Harvard analysis addressed known renal risks associated with COX-2s and that
Vioxx‘s label included information about risks of oedema (swelling or accumulation
of fluid) and hypertension (high blood pressure) (Loftus, 2006, September 13).
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Merck specifically noted concerns with observational analysis rather than clinical
trials (Merck, 2006f).
In July 2007, results from VICTOR, a study designed to investigate the effect
of Vioxx on colon cancer, showed that patients had increased heart risks soon after
taking the drug (Tesoriero, 2007, July 3). VICTOR was a study undertaken by
researchers at Oxford University and the trial was stopped when Vioxx was
withdrawn in 2004. The study showed heart attacks occurred within a 12 month time
frame and almost immediately after taking Vioxx (Tesoriero, 2007, July 3). Merck‘s
initial response to these data explained them as being inconsistent with data found in
other placebo studies (Tesoriero, 2007, July 3). In a subsequent company statement,
Merck said the VICTOR study results were limited by a premature study termination
and a small number of events (Merck, 2006g).
Despite receiving, over a sustained period of time, results that contradicted
Merck‘s earlier positions on Vioxx, the company continued to defend its original
positions and stay constant with its legal strategy. Evidence against Vioxx was
mounting but Merck was not shifting its approach. Although Merck persisted with its
original strategies for some time, this sequence of research evidence against Vioxx
did trigger a change in legal strategy for Merck.
4.3.7 Settlement of Litigation
Four months after the VICTOR trial and three years after the Vioxx
withdrawal in September 2004, Merck agreed to settle the 27,000 lawsuits filed in
relation to the drug. The settlement value was $4.85 billion, considered one of the
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largest amounts in civil litigation (Berenson, 2007, November 9). By this time,
Merck had established a strong track record in litigation, which served to encourage
plaintiffs to agree to Merck‘s settlement.
The settlement was good news for investors as Merck‘s legal fees were more
than $600 million each year (Berenson, 2007, November 9). The settlement was
individualised with each plaintiff receiving different settlement payments depending
on their injuries and the length of time they took Vioxx. The decision was explained
by Merck‘s CEO and general counsel in the following way:
This is a good and responsible agreement that will allow the Company to
concentrate even more fully on its mission of discovering, developing and delivering
novel medicines and vaccines. The agreement is structured to provide a significant
degree of certainty toward resolving the majority of the outstanding VIOXX product
liability claims in the United States for a fixed amount.
This agreement is the product of our defense strategy in the United States
during the past three years and is consistent with our commitment to defend each
claim individually through rigorous scientific scrutiny...Specific causation has been
a very difficult issue. This is an opportunity to end a long and difficult litigation that
has stretched on for more than three years (Merck, 2007b).
In response to the settlement, Merck‘s shares rose 2.1 percent to close at
$55.90 (Talley, 2007, November 10). Merck‘s executive team went on to reinforce
the opinion that it had implemented the right legal strategy and minimised business
disruption. The settlement decision is explained as allowing the company to
concentrate more fully on its mission (Merck, 2007a, 2007b). Merck‘s Ken Frazier
said that he viewed the decision to settle the trials not as a change in strategy but as a
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responsible resolution to existing legal strategy (Merck, 2007b). However, from
Coombs‘ (2006b) point of view, this legal decision triggered an abrupt change in
crisis response strategy from a diminish to a rebuild posture.
As of 3 March 2008, more than 44,000 of the approximately 47,000
individuals who registered eligible injuries submitted materials for enrolment in
Merck settlement (Merck, 2008a). On 17 July 2008, Merck announced that
participation requirements for the settlement had been met (Merck, 2008b).
In addition to individual cases, Merck had come under investigation for its
sales and marketing practices of Vioxx (Tesoriero, 2008, February 1). Merck agreed
to pay $650 million to settle the lawsuits and probes into its sales and marketing
practices (Rubenstein & Johnson, 2008, February 8). According to Merck, the
settlements did not constitute an admission of liability or wrongdoing ("Merck to
settle U.S. claims for $671 million," 2008, February 8). Merck also paid $58 million
to settle claims filed by states across the US that it used deceptive advertising for
Vioxx (Kingsbury, 2008, May 21). Merck did not admit any wrongdoing under the
settlement, defending its marketing practices of Vioxx.
Merck‘s decision to settle lawsuits represented a way to draw to a close the
Vioxx crises. In communicating this action, Merck drew from the rebuild posture
that aims to change perceptions of the organisation by demonstrating full
responsibility for the crisis. When Merck offered to settle legal claims and sales and
marketing practices, it adopted a rebuild, compensation strategy.
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4.3.8 Summary of Coombs’ Template
According to Coombs‘ (2006b) situational crisis communication theory,
organisations should ascend crisis response postures, from deny to diminish to
rebuild, when the initial response fails to restore an organisation‘s reputation. After
starting with corrective action by withdrawing Vioxx, Merck took three years to
move from a diminish posture to a rebuild posture that eventually closed the door on
the Vioxx crisis and allowed Merck to focus its attention and communication on
other aspects of its business. Although Coombs (2006b) has demonstrated the
effectiveness of his crisis response strategies in relation to stakeholder perceptions of
reputation, his work is yet to consider how time and the complexity that comes with
it influences this process. This thesis provides some insight to address this gap.
Based on this template, it appears that neither a single response nor a
sustained response can restore organisational reputation or close a crisis that
represents a transformation and triggers regulatory change. Instead, organisations
may find themselves being tested by the same crisis incident over a sustained period
of time. Further, organisations may find that their past actions merge with current
debates, and influence perceptions of responsibility for events. For example, Merck‘s
historical actions towards Vioxx, seen in its internal emails and strong marketing of
the drug, were consistently used by lawyers to demonstrate that Merck knew about
the risks of Vioxx well before it withdrew the product.
This template also shows how other organisational actors can hijack the
organisation‘s framing of the crisis and complicate the crisis context. Litigation and
medical researchers provided both new interpretations and new data relating to
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Vioxx marketing and Vioxx‘s efficacy. In response, Merck denied these claims thus
demonstrating a backtrack in crisis response postures from diminish to denial.
Merck‘s move to the rebuild posture occurred in March 2008 when the
company decided to settle ongoing Vioxx liabilities. As such, Merck‘s decision was
based on operational and communication concerns. Merck fought trial after trial
from 2005 onwards, initially facing more losses than wins. Although Coombs (2007)
advocates for the ascension from deny to diminish to rebuild postures, perhaps one
limitation in the timing of this process is the role of operational or non-
communication concerns. Some crisis events can be restored through clear
communication but in cases where the organisation accepts responsibility,
communication alone will rarely secure a return to reputation or the status quo. In
Merck‘s case, internal and operational decisions around the product liability trials
suggest a delicate balance in decision-making. For example, although the ongoing
litigation ensured Merck remained a focus of media reports for a sustained period of
time, achieving a track record of success in litigation may have been critical to
achieving success with a settlement of cases.
In summary, the Vioxx withdrawal and narrative represented a four-year
period of significant instability for Merck. Even as time passed, Merck persevered
with a diminish response strategy. Perhaps the organisation was hoping that
repetition of this message would yield a close to the crisis and a return to the status
quo. Yet, at the same time as it was persisting with these messages, the
pharmaceutical industry was undergoing tremendous regulatory change and the
effects of the Vioxx withdrawal on Merck were inadvertently caught up with that
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process. One way of interpreting Merck‘s persistence is by considering that the
organisation was seeking to have stakeholders associate the Vioxx withdrawal with
the company‘s past, and not its future. From 2004 to 2008, Merck itself went through
transformative change in organisational strategy by cutting workforces, changing
research and development strategies, and changing leadership.
The Coombs‘ (2006b) template provided a micro view of the crisis
communication and actions of the Merck as the primary organisation responsible for
withdrawing a top-selling drug and triggering transformative change in the
pharmaceutical industry. Next, narrative two provides a more macro view to
examine the crisis communication and actions of Merck and other corporate actors
that were caught in the web of change.
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4.4 Alternative Template 2: Restoring Legitimacy in Response to Accountability
Pressures
This narrative of the Vioxx product withdrawal and subsequent crisis events
is constructed using Allen and Caillouet‘s (1994) typology of message strategies.
Allen and Caillouet (1994) developed this typology by examining ―naturally
occurring‖ message strategies used by an organisation undergoing a crisis that
threatened its legitimacy. The authors used impression management as a basis for
developing a typology of strategies as a way to explain how these strategies could
potentially shape organisational legitimacy (Allen & Caillouet, 1994).
Allen and Caillouet (1994) developed a typology of message strategies and
also examined the target of each strategy. In this way, the thesis could understand
both the complexity of communication and institutional constraints on organisational
messages. By integrating institutional theory, Allen and Caillouet (1994) examined
messages as occurring within the context of a ―complex web of relationships‖ among
a focal corporate actor and other agents (Allen & Caillouet, 1994). In devising this
typology, the authors paid attention to how strategies relate to institutionalisation
within an organisational field (Allen & Caillouet, 1994). That is, how an
organisation communicates its conformity and gains audience approval in order to
enhance its legitimacy (Allen & Caillouet, 1994).
The resultant typology includes a number of strategies: those that admit fault
and communicate through excuses, justifications or apology; those that aim to
convince stakeholders of legitimacy through ingratiation; and those that aim to
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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intimidate, denounce or claim factual distortion (Allen & Caillouet, 1994). The
strategies and samples from the narrative are illustrated in Table 4.11.
Table 4.11
Allen and Caillouet’s Message Strategies
Strategy Definition Samples from study
Excuse An organisation attempts to negate responsibility for an event
Denial of intention
Denial of volition
Denial of agency
"We are comfortable that Merck's disclosures were
appropriate," said Tony Plohoros, a Merck
spokesman. "We believe our communications
adequately reflected our best understanding of the
data" (Martinez, 2004, October 5).
Justification Organisation accepts responsibility for the effect but does not accept
responsibility for the negative actions associated with it
Denial of injury
Denial of victim
Condemnation of
condemner
Misinterpretation of
negative events
―We are taking this action because we believe it
best serves the interests of patients,‖ said Raymond
V. Gilmartin, chairman, president and chief
executive officer of Merck. ―Although we believe
it would have been possible to continue to market
VIOXX with labeling that would incorporate these
new data, given the availability of alternative
therapies, and the questions raised by the data, we
concluded that a voluntary withdrawal is the
responsible course to take‖ (Merck, 2004b)
Ingratiation The organisation attempts to gain audience approval
Self-enhancing
communication
Role modelling
Social responsibility
Other-enhancing
communication
Opinion conformity
''Merck's future is both secure and promising'' ("As
another Vioxx trial nears, Merck vows to keep
fighting," 2005, September 10).
Intimidation No statements found.
Apology No statements found.
Denouncement No statements found.
Factual
distortion
Ted Mayer said the internal e-mails and marketing
materials were "taken out of context" and "do not
accurately represent the conduct of Merck and its
employees." People with access to a selection of
internal documents that tend to reflect poorly on
Merck permitted The Wall Street Journal to review
them, but Merck did not provide other documents
to furnish context, citing ongoing litigation
(Mathews & Martinez, 2004, November 1).
Source: Allen & Caillouet, 1994
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The strategies identified in Table 4.11 detail the range of messages that
organisational actors can communicate to restore or reinforce legitimacy after crisis.
Allen and Caillouet‘s (1994) typology is limited to communication messages such as
communicating denial whereas Coombs‘ (2006b) framework considered both
communication and action such as communicating denial and undertaking corrective
action such as a product withdrawal. Unlike Coombs‘ (2006b) situational crisis
communication theory, Allen and Caillouet‘s (1994) typology does not offer a set of
prescriptive guidelines for strategy use. However, Allen and Caillouet‘s (1994)
alternative template offers an opportunity to explore the notion of the ―web of
complex relationships‖ (p. 44). Allen and Caillouet (1994) take into account that
legitimacy pressures can come simultaneously from multiple stakeholders who have
been affected by the actions of one organisation. Following this network logic, one
organisation‘s crisis can both draw pressure from and increase pressure on multiple,
linked organisations. As a result, Allen and Caillouet‘s (1994) study of impression
management strategies also provides a new way to study crisis communication: to
examine how the messages of other organisations or agencies pressure the
communication of the focal organisation in crisis.
This alternative template offers the opportunity to reinvigorate a perspective
that was emphasised less in conducting Coombs‘ (1998) research. That is, although
Coombs‘ (1998) adapted Allen and Caillouet‘s (1994) message strategies, his
resultant situational crisis communication theory largely focuses on a single
organisation‘s outward communication to stakeholders.
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This second narrative provides an opportunity to examine organisational
communication during a series of crisis events, triggered by the voluntary
withdrawal of Vioxx by Merck. It extends Allen and Caillouet‘s (1994) current work
that examines an organisation‘s message to other stakeholders, and goes beyond
Coombs‘ (2006b) situational crisis communication theory by focusing on the role
and communication of other organisations linked to the crisis. This narrative tells a
story about Merck‘s actions but also provides a space to look at how other linked
organisations either presented additional accountability pressures on Merck or were
forced by Merck‘s actions to face pressure on their own organisation‘s legitimacy.
The narrative is presented in chronological order of the key events that
triggered crisis communication. Drawing on Allen and Caillouet‘s (1994) model, it is
argued that Merck‘s message strategies were focused on a justification response that
remained constant throughout the duration of the thesis and was complemented by
ingratiation or factual distortion strategies. The sequence of crisis response
strategies is illustrated in Figure 4.2. There are some elements of this narrative that
are repeated from narrative one. All narratives share the same data set and sequence
of events but each narrative enables subtle emphases of different points.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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Figure 4.2 Allen and Caillouet‘s Message Strategies demonstrating a justification
and ingratiation response during the Vioxx withdrawal and shifting to justification
and excuse response during Vioxx litigation and settlement.
4.4.1 Withdrawal of Vioxx
Despite receiving regulatory counsel for an alternative strategy, on 30
September 2004, Merck broke new ground by initiating an immediate, worldwide
voluntary withdrawal of Vioxx, a pain relief medication used by more than two
million patients in the USA alone. The withdrawal occurred in response to new
information from a Merck-sponsored clinical trial. The APPROVe trial was
established to study the effects of Vioxx on pre-cancerous polyps with the intention
of gaining extended marketing approval and further legitimising the product. Instead,
the APPROVe trial found that, compared to the placebo, patients who took Vioxx
faced an increased relative risk for confirmed cardiovascular events such as heart
attack and stroke, beginning after 18 months of treatment (Merck, 2004b).
Although a number of drugs have been recalled or voluntarily withdrawn in
the pharmaceutical industry, Merck‘s voluntary withdrawal of Vioxx was at odds
with the FDA‘s advice to continue to market Vioxx but with a new drug label.
Although the FDA offered Merck the opportunity to continue to legitimately market
•Merck: Justification and Ingratiation
Vioxx withdrawal
•Merck: Justification and Excuse
Vioxx litigation
•Merck: Justification and Excuse
Vioxx settlement
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224
Vioxx, the company went against this advice because it deemed withdrawal a more
responsible course to take. In essence, Merck‘s decision to withdraw Vioxx did not
conform to industry practices and regulatory advice. As a result, Merck‘s crisis
communication strategies needed to build legitimacy for its decision and for the
company.
Merck communicated its decision to withdraw Vioxx using a justification
strategy (Allen & Caillouet, 1994). Following Allen and Caillouet (1994), a
justification strategy showed the organisation accepted responsibility but not for the
consequences associated with the withdrawal. Merck justified the withdrawal of
Vioxx by emphasising the unexpected trial results and reinforcing how the company
acted in a responsible and appropriate manner. Merck denied knowing anything
about the risks of Vioxx until the results of the APPROVe trial, which triggered the
product withdrawal in September 2004. Table 4.12 illustrates these messages.
Table 4.12
Merck Statements during Vioxx Withdrawal
Date Statement Strategy type
30.09.04 The company‘s decision, which is effective immediately, is
based on new, three-year data from a prospective, randomized,
placebo-controlled clinical trial, the APPROVe (Adenomatous
Polyp Prevention on VIOXX) trial (Merck, 2004b).
Justification
1.10.04 Janet Skidmore, a spokeswoman for Merck, said yesterday that
the latest study was the first clinical trial to show such results
and the company took immediate action upon receiving data
(Meier, 2004, October 1).
Justification
18.10.04 "We were acting totally consistent with the data we had,"
Gilmartin said. "We undertook right away to ask the right
questions." The company was trying to get at cardiovascular
risk, he said, by initiating three clinical trials that would together
give important new information on the issue. Many doctors and
patients liked Vioxx's track record on gastrointestinal problems,
a major source of worry for arthritis patients (Masters &
Kaufman, 2004, October 18).
Excuse
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Merck‘s surprise at the data was complemented by a message that reinforced
the ethics of the organisation. In a press release announcing the Vioxx withdrawal,
Merck‘s CEO explained the withdrawal in terms of responsibility:
Although we believe it would have been possible to continue to market VIOXX with
labelling that would incorporate these new data, given the availability of alternative
therapies, and the questions raised by the data, we concluded that a voluntary
withdrawal is the responsible course to take (Merck, 2004b).
By communicating messages about newness of the data and reinforcing its
ethics, Merck was building a rationale to justify and legitimise its decision to
withdraw Vioxx. The rationale showed conformity with Merck‘s ongoing ethical
responsibilities at the same time as it justified the non-conforming strategy of
withdrawing Vioxx. Interestingly, though, at the time of the Vioxx withdrawal, and
to this day, doctors, patients, and journalists question why Merck chose this decision
over other viable decision alternatives. Regardless of this speculation, Merck
committed to an action and its communication supported that decision.
Merck sought to gain approval for its decision to withdraw Vioxx by drawing
on ingratiation strategies. Merck used ingratiation strategies to demonstrate that the
decision to withdraw Vioxx was socially responsible and would have a limited effect
on the organisation‘s bottom line. Some of the ingratiation strategies used by Merck
during the Vioxx withdrawal period are illustrated in Table 4.13.
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Table 4.13
Ingratiation Strategies Used by Merck during Vioxx Withdrawal
Date Statement Strategy type
1.10.04 "The action we are taking is without question what is best for
patients. That is always what is paramount for Merck," Lewent
said (Masters, 2004, October 1).
Ingratiation
(socially
responsible)
6.11.04 "I think we still are the good drug company. We still have the
same ethics," Wainwright said. "Is [the negative publicity]
something I like to see every day? No, but it doesn't change the
fundamentals of the company" (Kaufman & Masters, 2004,
November 6).
Ingratiation
The majority of ingratiation strategies were designed to reassure financial
stakeholders of Merck‘s decision. The core message was that Merck had not changed
as a result of the Vioxx withdrawal. In this way, Merck was seeking to show
conformity to existing beliefs. Another way Merck demonstrated conformity was by
establishing that it followed FDA protocols with the development and marketing of
Vioxx.
A secondary justification strategy added support to Merck‘s decision to
withdraw Vioxx. Merck sought to build legitimacy around the means by which the
withdrawal decision was made. Merck established clinical trials as the sole
legitimate method for studying the benefits and risks of drugs. In its press release
communicating the Vioxx withdrawal, Merck said that it ―always believed that
prospective, randomized, controlled clinical trials are the best way to evaluate the
safety of medicines‖ (Merck, 2004b). By communicating that clinical drug trials are
the best way to evaluate drug safety, Merck both countered and defended its decision
against any studies of Vioxx that used methods other than clinical trials.
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By establishing this basis for legitimacy, Merck had a strategic
communication response to current, historical and future events. Approximately one
month before the Vioxx withdrawal, on 26 August 2004, a FDA investigation using
patient data supplied by Kaiser Permanente, one of the largest health maintenance
organisations (HMO) in the United States, was released to the media. The study
showed that higher doses of Vioxx appeared to triple patients‘ risk of a heart attack
or death (Mathews & Hensley, 2004, August 26). Merck disagreed with the
conclusions of this study, stating that clinical trials ―are more authoritative‖ and that
population studies have ―inherent limitations that contribute to inconsistent results‖
(Mathews & Hensley, 2004, August 26). Because Merck had established clinical
trials as a decision-making requirement, it had in effect, dealt with the further
publicity given to existing and future research that was based on anything other than
clinical trials.
Up to this point, Merck‘s messaging around the Vioxx withdrawal reinforced
its decision and focused forward to reassure stakeholders of its financial strength and
ethical standards. What was perhaps unforeseen by Merck and other players in the
industry was the power of this event and the reactions of the actors. The ―complex
web of relationships with other organisations‖ served to both affirm and challenge
Merck‘s decision to withdraw Vioxx (Allen & Caillouet, 1994, p. 44). The Vioxx
withdrawal sparked a congressional inquiry and a review by the FDA, and created
opportunities for competitors—all actions that added multiple and complex pressures
on Merck. These pressures sustained the crisis and forced the need for ongoing
communication within complex and shifting environments. The complexity was
driven by an environment that was shifting in unpredictable and profound ways. As a
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result, the conditions that linked corporate actors together in their web also shifted.
The next sections show how corporate actors that were once relied upon for support
themselves came under fire, offering uncertain protection. At the same time, other
organisational actors whose voices would rarely be heard in the public sphere gained
the opportunity to share their concerns via the mass media.
4.4.2 Responses to the Withdrawal of Vioxx
At the same time as Merck was trying to legitimise its decision to withdraw
Vioxx, it was inadvertently setting in motion a complex situation of rivalry and
opportunity forged by the group of corporate actors to which it is connected. The
Vioxx withdrawal provided actors such as medical researchers with the opportunity
to scrutinise the practices of Merck and its regulator, the FDA, and thus add
accountability pressures to challenge Merck‘s legitimacy. It also provided competitor
pharmaceutical organisations with the chance to enhance the legitimacy of their own
products. The web of actors is illustrated in Figure 4.3.
Figure 4.3 The Web of Actors, identifying the key groups or individuals whose
actions added pressure on Merck as it tried to resolve the crisis.
Merck
Patients
FDA
Congress
Researchers
Pfizer
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Following Allen and Caillouet (1994), the web is observed to be complex,
including multiple links between corporate actors. This section examines how the
Vioxx withdrawal triggered responses from three groups: 1) Pfizer, 2) medical
researchers, and 3) Congress and the FDA. Although this section is structured by
each actors‘ responses, the timeline of these events is presented in Table 4.14.
Table 4.14
Timeline of Events
Date Event
30.09.04 Pfizer defends safety of Celebrex
18.10.04 Congressional committee underway
9.11.04 Pfizer issues warning about Bextra‘s skin condition and cardiac
risk
18.11.04 Merck CEO testifies at congress
19.11.04 FDA researcher identifies Bextra as being at risk at congress
10.12.04 FDA approves new label for Bextra adding warning about heart
risk for patients after bypass surgery and strengthening risk of
skin reactions
17.12.04 Pfizer announces trial data on Celebrex; trial shut down
20.12.04 Pfizer stops advertising Celebrex and amends communication
with doctors
4.4.2.1 Pfizer’s Reactions
Merck‘s withdrawal of Vioxx provided an immediate opportunity for
competitors. Pfizer produces two products in the same class of drugs, Celebrex and
Bextra. Approximately 27 million people around the world have received
prescriptions for Celebrex since its market introduction in 1998. Bextra represented
$1.29 billion in sales in 2004 or 2.4 percent of Pfizer‘s revenue.
In response to the Vioxx withdrawal, Pfizer immediately issued a press
release to confirm the safety of Celebrex based on data from three large and long-
term clinical trials. Pfizer also suggested Celebrex as a treatment alternative to Vioxx
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and in doing so, reassured stakeholders of the availability of Celebrex supplies.
Pfizer expressed confidence in the ―long-term cardiovascular safety of Celebrex‖
(Pfizer, 2004b).
Pfizer‘s responses to the Vioxx withdrawal served to legitimise Celebrex, yet
at the same time increase pressure on Merck. In the same way that Merck used
clinical trials to justify its decision to withdraw Vioxx, Pfizer used clinical trials to
support the safety of Celebrex. Further, about three weeks after the Vioxx
withdrawal, Pfizer announced that it would start a new trial to test Celebrex for the
prevention of heart attacks (Hensley, 2004, October 18). This move cemented the
efficacy of Celebrex at the expense of Vioxx. It also put added pressure on Pfizer to
prove the safety of Celebrex.
Merck‘s actions also prompted Pfizer to provide, ahead of expected time
frames and procedures, medical guidance about Bextra. This advice noted that
Bextra caused a rare but serious skin reaction and an increase in cardiovascular
events in surgical settings (Bextra is not approved for use in this setting) (Pfizer,
2004c). Pfizer explained that it disclosed these risks to ―reinforce our commitment to
share information with physicians about our product‖ (Pfizer, 2004c). Pfizer also
explained that the Bextra news had no implications for Celebrex. As a result of these
disclosures, Pfizer presented itself as an organisation with appropriate disclosure and
one that conformed to stakeholder expectations.
For Pfizer, the Vioxx withdrawal provided a unique but potentially risky
platform from which to promote Celebrex and Bextra. The differences and
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similarities between the message strategies used by Merck and Pfizer during this
phase are interesting. Merck accepted responsibility for the withdrawal of Vioxx and
used a justification strategy whereas Pfizer bore no responsibility for the crisis but
sought to defend its own products. The messages within these strategies saw Pfizer
use a similar rationale to Merck but as a way of supporting the safety profile and
reputation of Celebrex.
The communication relationship between Merck and Pfizer cannot be
explained solely by examining their choice of message strategy. To better understand
this relationship, we need to look at what connects both of them to other concerns.
When Merck withdrew Vioxx, the industry focus moved to the COX-2 class of
drugs. In this way, despite Pfizer‘s public assurances of the safety of Celebrex and
disclosure of risks of Bextra, the concern for COX-2 drugs had moved beyond the
level of one organisation to become a whole-of-industry issue. This move would
soon bring some unanticipated consequences for Pfizer.
4.4.2.2 Pressures on Merck
In the months following the withdrawal of Vioxx, medical researchers and
plaintiff lawyers seized the opportunity to hold Merck accountable for its past
actions regarding Vioxx. The actions and the actors behind them presented an
alternative view to Merck‘s claim of appropriate and responsible behaviour. The
opponents claimed Merck had known for some time about the risks of Vioxx.
Research scientists including Dr Graham from the FDA and Dr Topol from
the Cleveland Clinic claimed that the effects of Vioxx were known to Merck before
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it withdrew its product (Kaufman & Masters, 2004, October 7). Both Graham and
Topol‘s studies, based on observational data, were published in the reputable New
England Journal of Medicine (NEJM). In response to these claims, Merck used a
factual distortion strategy to communicate that the claims put forward by these
medical researchers were untrue. These responses are illustrated in Table 4.15.
Merck‘s responses reinforce some of its earlier justification strategies about the
legitimacy of clinical trials over other methods.
Table 4.15
Merck’s Factual Distortion Responses to Medical Researchers
Date Statement Strategy type
7.10.04 A company spokesperson said Topol's estimate "goes beyond
the data" and inaccurately extrapolates results from one study to
the entire universe of Vioxx users (Kaufman & Masters, 2004,
October 7).
Factual
distortion
18.11.04 Joan Wainwright, the Merck spokeswoman, said that the
separate study, because it was based on patient records and not
on an actual clinical trial, was inconclusive and had no bearing
on the decision to withdraw Vioxx (Meier, 2004, November
18).
Factual
distortion
7.12.04 A Merck spokesman said, "Observational studies on the risk of
cardiovascular events with Vioxx have had inconsistent results,
and this study only adds to that literature (Hensley, 2004,
December 7).
Factual
distortion
Lawyers for plaintiffs filing cases against Merck presented internal emails
exchanged during the development and marketing of Vioxx. The Wall Street Journal
published an article detailing these emails that suggested Merck knew about the risks
of Vioxx before seeking FDA approval (Mathews & Martinez, 2004, November 1).
In response to these claims, Merck also used a factual distortion message strategy to
communicate that the statements offered by these actors were taken out of context
(Allen & Caillouet, 1994). Table 4.16 illustrates some of these messages.
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Table 4.16
Merck’s Factual Distortion Messages
Date Statement Strategy type
1.11.04 Ted Mayer, a lawyer representing Merck, said the internal e-
mails and marketing materials were "taken out of context" and
"do not accurately represent the conduct of Merck and its
employees‖ (Mathews & Martinez, 2004, November 1).
Factual
distortion
2.11.04 ''Past experience of other companies in such situations suggests
that documents will be deliberately presented out of context to
advance the interest of the parties who have started Vioxx
litigation,'' Mr. Plohoros said in an e-mail message ("Senate
investigators interview lawyer who has sued Merck," 2004,
November 2).
Factual
distortion
By considering the messages and actions of other actors, alternative theories
about Merck‘s decision to withdraw Vioxx were suggested. As the crisis continued
to move beyond Merck‘s communication control or influence, it became an industry-
wide concern that also drew attention from the FDA and Congress. The more the
crisis moved out of Merck‘s control or sphere of influence, the greater became the
resources required to preserve Merck‘s legitimacy.
4.4.2.3 Spotlight on Regulators
As the crisis shifted to focus on industry-wide concerns, the FDA‘s role in
monitoring Vioxx was also questioned. Congressional committees were convened to
investigate the FDA‘s handling of Vioxx. In late October 2004, and almost one
month after the Vioxx withdrawal, the Senate Finance Committee and the House of
Representatives Committee on Government reform were convened to investigate the
FDA‘s handling of Vioxx. The committees were given the task to investigate the
historical actions of the FDA in relation to approving Vioxx when other COX-2s
were available, and monitoring Vioxx after it was approved.
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The committees called on a number of stakeholders including the FDA, drug
company CEOs, plaintiff lawyers, and medical researchers. On 18 November 2004,
Merck CEO Raymond Gilmartin presented a prepared testimony to the Senate
Committee on Finance. Gilmartin‘s testimony provided an opportunity for Merck to
reinforce its decision to withdraw Vioxx and account for its historical actions
towards Vioxx. These messages were communicated using justification strategies to
explain the Vioxx withdrawal and excuse strategies to account for Merck‘s past
actions that were in compliance with FDA procedures. Gilmartin‘s statements were
supported by ingratiation strategies that explained the difficulty of the decision and
reinforced Merck‘s conduct and commitment to patient safety and scientific integrity
(Merck, 2004c). Senators recognised Merck‘s reputation and responded positively to
Gilmartin‘s testimony (Berenson, 2004, November 19).
The following day, Dr Graham, a safety officer at the FDA, described the
FDA as being ―incapable of stopping dangerous drugs from entering and staying on
the market‖ and criticised its handling of Vioxx as ―a profound regulatory failure‖
(Kaufman, 2004, November 19). Dr Graham testified that five drugs should either be
withdrawn or restricted because of their high risks. These drugs were Bextra, Crestor
(cholesterol), Meridia (weight-loss), Accutane (acne) and Serevent (asthma).
According to Dr Graham, Pfizer‘s Bextra carried similar risks to Merck‘s Vioxx
(Kaufman, 2004, November 19).
Dr Graham‘s statements were denied by both the FDA and Pfizer. The FDA‘s
deputy director disagreed with Dr Graham‘s statements (FDA, 2004b; Harris, 2004,
November 19). Pfizer denied any concerns with Bextra, saying the drug "has been
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found safe and effective when used as indicated" (Kaufman, 2004, November 19).
Based on these comments as well as the additional risks of Bextra as disclosed by
Pfizer, prescriptions for the drug dropped (Pollack, 2004, December 1). Media
reports also suggested that Bextra was the next Vioxx and wondered how the FDA
would handle the emerging situation (Harris, 2004, November 21a).
After receiving testimony, the senate committee criticised the FDA for failing
to realise three years ago, that Vioxx was dangerous (Harris, 2004, November 21a).
The investigation process also brought to light that the tools and practices used by
the FDA to regulate drugs were insufficient. For example, in 2001, FDA officials
were forced to negotiate with Merck for one year before being able to add
cardiovascular risks to the Vioxx product label. Although the FDA can recall a
product, it is reluctant to do so until the risks have been proven.
The congressional hearings cast an industry-wide spotlight on the practices of
pharmaceutical organisations and the deficiencies of the regulatory body, the FDA.
Merck and Vioxx were caught up in a complex web of relationships and
communication that caused them to remain in the public sphere. So complex was this
web that one of Merck‘s commercial rivals, Pfizer, would see its actions come under
scrutiny. In this way, the source of pressure on Merck was also pressured by the
system. The stress for all actors caught up in the complex web was about to get even
more intense. More data would emerge about the cardiovascular risks of other COX-
2 drugs and pain relief medication.
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4.4.2.4 Pfizer under Threat
In the midst of an increasing focus on COX-2 drugs, on 17 December 2004,
Pfizer suspended a clinical trial, known as the APC cancer trial, because Celebrex
was shown to double or triple the risk of heart attacks, strokes or cardiovascular
deaths, depending on the dose ("New doubts about Celebrex," 2004, December 18).
At the same time, the preliminary analysis of a second Pfizer study, known as the
PreSAP cancer trial, showed no increase in cardiovascular risks (Pfizer, 2004e). Both
data came from two long-term cancer trials. The APC cancer trial studied Celebrex
at doses of 400mg to 800mg. In the USA, Celebrex is approved for use from 100mg
to 200mg for osteoarthritis and 200mg to 400mg for rheumatoid arthritis. In response
to these trials, Pfizer said it was ―taking immediate steps to fully understand the
results and rapidly communicate new information to regulators, physicians and
patients around the world‖ (Pfizer, 2004e).
In light of the growing complications in the web of corporate actors, the
FDA‘s response to this news was swift. Dr Crawford, the FDA‘s acting
commissioner, said that he had ―great concerns‖ about Celebrex and recommended
doctors switch Celebrex patients to other drugs (Harris, Stolberg, & Berenson, 2004,
December 18). The FDA asked Pfizer to stop advertising Celebrex and to modify the
messages used by its sales representatives with prescribing physicians (FDA, 2004a;
Hensley, Winslow, & Mathews, 2004, December 20). Media editorial writers
questioned why Pfizer did not withdraw Celebrex especially when Merck withdrew
Vioxx based on similar information ("New doubts about Celebrex," 2004, December
18). All eyes were on the FDA and Pfizer. Pfizer was forced to defend both the
results of the clinical trial and its decision to keep Celebrex on the market.
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Pfizer justified its decision to retain Celebrex by referring to the efficacy of
drug and its potential for treating cancer (Hensley et al., 2004, December 20). At the
same time, it could not avoid comparison to Merck. In light of this comparison to
Merck, Pfizer‘s CEO offered this response:
Vioxx made us alert to this risk. We had early signals of cardiovascular risk with
Vioxx. We saw none of that in our data for Celebrex. This new information was
inconsistent with the great body of information we'd accumulated over 10 years.
And it was contradicted by a very large study analyzed by the same group of
specialists. But we still haven't received the data; It's somebody's summary of the
data. Only a handful of the people in the world have seen the full data (Hensley et
al., 2004, December 20).
Although Pfizer was hoping to excuse itself from the same situation faced by
Merck, the connection between Celebrex and Vioxx persisted. Media reports
included opinions from a range of stakeholders about the link between Celebrex and
Vioxx. Some of these opinions are illustrated in Table 4.17 where medical
researchers, prescribing doctors, and communication experts talk about the Merck
precedent and offer their views about how Pfizer should handle Celebrex.
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Table 4.17
Comparisons between Celebrex and Vioxx
Date Statement
20.12.04 For the NCI study, "it looked very much like the Vioxx story," Dr. Pfeffer
said. "In our perspective, we felt that the [risk] was very comparable to that
seen with Vioxx." The level of risk increased with dosage (Hensley et al.,
2004, December 20).
21.12.04 The decision to keep Celebrex on the market may backfire in the court of
public opinion. "If their strategy is to minimize legal ramifications by keeping
the product on the market, that's a short-term gain that will have long-term
repercussions," says Paul Argenti, a professor specializing in corporate
communications and reputation management at Dartmouth College's Tuck
School of Business, and who has done consulting work for drug companies
(but not for Pfizer or Merck).
"Consumers aren't looking at this as a scientific problem anymore because the
science is confusing at best," Mr. Argenti says. "They see these drug
companies are taking advantage of people with expensive advertising and then
trying to rationalize about things that are emotional -- like the sense of danger.
Pfizer will be lumped together with Merck. Consumers can't tell the difference
between Vioxx and Celebrex and Bextra. They're now seen as equally bad"
(Martinez & Hensley, 2004, December 21).
23.12.04 Dr. Derman, the president of a large physician group affiliated with
Northwestern Memorial Hospital in Chicago, says his reading of the studies
that prompted Merck to pull Vioxx off the market this autumn raised big
concerns about the safety of Celebrex and Bextra. All are in the COX-2 class.
"I was concerned enough about it being a class effect that I did not switch
Vioxx patients to Celebrex" or Bextra, he says.
"Then, lo and behold, the information comes out on Celebrex, and it's concern
enough to say I would not use that product," Dr. Derman says. "I would be
shocked if it's not off the market soon." (Burton & Helliker, 2004, December
23).
Amidst the Celebrex-Vioxx debate, the cardiovascular results of yet another
study were released by the National Institutes of Health (NIH). The NIH study was
investigating the effects of pain relief medication on Alzheimer‘s disease, and
showed that patients who took Bayer‘s Aleve (naproxen) risked a 50 percent greater
rate of heart problems than those on the placebo (Harris, 2004, December 21). In
addition, Celebrex patients in the same trial saw no increase in heart events (Harris,
2004, December 21). The results of this study seemed to correlate with the majority
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of research into Celebrex. In relation to this study, Pfizer‘s CEO issued the following
statement in a news release:
This is important new information that should be considered by doctors and patients
as they evaluate the various treatments for arthritis and pain.... Millions of people
simply can‘t get through their day without pain relief. That‘s why all the emerging
information about arthritis medicines—prescription and over-the-counter—must be
fully evaluated by the U.S. Food and Drug Administration and other regulatory
authorities.
Recently, preliminary information from three major long-term clinical trials
with Celebrex has become available. Because the early information from these trials
is inconsistent, physicians and patients are understandably confused. That‘s why the
full study results must be shared with the medical, scientific and regulatory experts
so that we have a more complete understanding of the risks and benefits of these
medicines (Pfizer, 2004d).
This message from Pfizer‘s CEO added weight to the important role of the
FDA in evaluating the range of medicines for treating pain, including Celebrex,
Bextra, and Vioxx. For their part, the FDA described the situation as being
―confusing‖ and recommended doctors and patients have conversations about each
drug‘s unique risks (Harris, 2004, December 21). Pfizer continued to reinforce the
role of the FDA and its planned hearing into COX-2 drugs (Burton, Mathews, &
Regaldo, 2004, December 24). In doing so, Pfizer shifted responsibility for decisions
about its drugs to the FDA and avoided having to engage in questions about why it
retained Celebrex on the market when Merck withdrew Vioxx.
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The Vioxx withdrawal triggered a sequence of events among its web of
actors. For the most part, the web of corporate actors added further accountability
pressures on Merck, leading to a complex environment for communication. Merck‘s
response to a negative clinical trial set a precedent for the pharmaceutical industry.
When Pfizer faced a similar situation, though it was months after the Vioxx
withdrawal, it faced the same starting position but took different steps to Merck. This
sequence of events is illustrated in Figure 4.4. Each sequence started with the results
of clinical trials, yet the process and outcomes quite different.
Figure 4.4 Process charts for Vioxx and Celebrex, demonstrating how both drugs
had the same starting position around clinical trial results but made different
decisions.
Connecting the events in the industry context holds some explanations for the
different sequences illustrated in Figure 4. First, Pfizer‘s sequence of events was
dependent on Merck‘s sequence of events. If Vioxx was not withdrawn then Pfizer
would not be forced to defend its decision to retain Celebrex on the market. Second,
given that Vioxx was withdrawn from the market, it triggered not only
transformative change within the COX-2 market but questioned the legitimacy of
regulatory practices. The Vioxx withdrawal triggered instability within the
pharmaceutical industry. The Vioxx withdrawal also triggered discussions about
Vioxx clinical trial
Vioxx withdrawal
Crisis
Celebrex clinical trial
Celebrex stays on market
FDA responsibility
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drug safety at consumer and regulatory levels. Obviously, these conversations
changed the dynamics of risk within the industry.
As a result of Merck‘s actions, Pfizer faced a more engaged web of corporate
actors that were focused on drug safety and monitoring issues. Pfizer‘s decisions and
sequence of events occurred within an unstable and uncertain industry. Merck
withdrew Vioxx knowing that there were other COX-2 medications on the market;
Pfizer was the producer of two of those alternative COX-2 medications. If Pfizer
decided to recall Celebrex, the consequences within the pharmaceutical industry
would be tremendous. Equally, Pfizer‘s decision to retain Celebrex did not receive
nearly as much media attention as Merck‘s decision to withdraw Vioxx (seven
articles related to the Celebrex data whereas 50 articles were published about the
Vioxx withdrawal). Unlike Merck, Pfizer could call on the legitimacy of the FDA to
protect or buffer its decision. However, Pfizer‘s actions towards Celebrex gave rise
to a greater need for an industry-wide decision about COX-2 drugs. The FDA‘s
hearing on this group of drugs was to be a significant public debate about the safety
of these drugs (FDA, 2005). The result of the hearing was to keep Merck in the
media and to lead to some dire consequences for Pfizer.
4.4.2.5 Discussion of Cox-2 Drug Safety
Within a context that was growing more complex over time, on 16 February
2005, the FDA convened a joint meeting of the Arthritis and Drug Safety and Risk
Management Advisory Committees to review the benefits and risks of COX-2
medications in mid February, 2005 (FDA, 2005). The committee provided
recommendations to the FDA, which would make the final decision about these
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medications. The review was extensive and focused on clinical trial data and the
views of patients, doctors, and advocacy groups. This committee was convened to
add certainty and some sense of stability to a complex product sector (FDA, 2005).
At the committee meetings, drug manufacturers put forward different theories
for the cause of cardiovascular risks in COX-2 inhibitors but often with little
consensus (Mathews, 2005, February 17). Merck issued a statement, delivered by Dr
Kim, explaining that, while it could have continued to market Vioxx with labelling
changes, the voluntary withdrawal was the responsible choice (Merck, 2005c).
Merck also said that new medical information reported that the cardiovascular risks
may not be unique to Vioxx but seen across the COX-2 class of drugs (Merck,
2005c). Although these statements are consistent with Merck‘s justification
responses throughout the crisis, the company also drew on findings from Pfizer‘s
clinical trials to suggest a class effect.
Media reports suggested that Pfizer was accused of hiding data about
Celebrex and Bextra (Harris, 2005, February 17). Immediately after the Vioxx
withdrawal, Pfizer had said there was no evidence linking Celebrex and Bextra to
heart events. Since that time, however, Pfizer had disclosed studies that
demonstrated heart problems (Harris, 2005, February 17). The panel also found
inconsistencies in Pfizer‘s presentations with one panel member claiming the
presentation was misleading and biased towards positioning the company in a
beneficial light (Harris, 2005, February 17).
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Pfizer maintained that the majority of studies showed that Celebrex and
Bextra were safe. However, when Pfizer representatives were asked if they would
recommend the drugs to a patient with high cardiovascular risk, a Pfizer scientist
declined to answer and an arthritis specialist from Stanford University who also
consults to Pfizer responded in the negative (Harris, 2005, February 17). This
exchange between Pfizer and the FDA advisory committee represented a marked
shift in the communication from Pfizer about Celebrex and Bextra. Pfizer was being
held accountable for its actions in a public environment, yet it offered little response
to the panel.
At the conclusion of the hearing, the chair of FDA advisory committee said
that COX-2 drugs raised ―extremely complex‖ issues with ―no black-and-white
answers‖ (Kaufman, 2005, February 19). The committee saw risks in Vioxx,
Celebrex, and Bextra (Harris, 2005, February 18). But some of those risks were
considered to be small or tolerable ("The experts‘ verdict on painkillers," 2005,
February 19). The panel was more comfortable with the safety of Celebrex than of
Vioxx and Bextra (Harris, 2005, February 19), and rejected Pfizer‘s insistence that
there was little evidence to show that Celebrex and Bextra caused heart problems
(Harris, 2005, February 19). The committee‘s concern about risk was shared by a
number of medical scientists, prescribing doctors, and patients.
On 18 February 2005, the committee voted on the risk and benefit profile of
Vioxx, Celebrex, and Bextra, among others. The panel concluded that Vioxx could
be returned to the market and Celebrex and Bextra should stay on the market as all
COX-2 drugs carried risks (Harris, 2005, February 18). In deciding this, the FDA
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advisory committee provided the basis for a regulatory endorsement of COX-2
drugs. The panel identified the concern was that the patients who were at risk of
developing ulcers were also at risk of developing heart attacks (Harris, 2005,
February 18). (Refer to Table 4.8 FDA Advisory Committee‘s Votes on COX-2in
narrative one for the results.)
The panel also raised concerns about the lack of legal clout of the FDA in
monitoring drugs post market approval (Harris, 2005, February 18). As a result, the
panel recommended strict restrictions be imposed including a ban on direct-to-
consumer advertising, blackbox warnings, and written warnings to patients about the
risk of cardiovascular events (Kaufman, 2005, February 19).
At about the same time as the panel‘s recommendations were made public
through the media, Merck and Pfizer‘s annual reports for 2004 were also released.
Merck‘s annual report indicated that since it withdrew Vioxx, new data on
alternative drugs had emerged to suggest that cardiovascular risks pertained to the
entire class of drugs (Merck, 2004a). These messages remained consistent with those
used during the Vioxx withdrawal stage but also offered an alternative justification
for the decision to withdraw the drug: class effect.
The ―class effect‖ argument is precisely what Pfizer was trying to avoid.
Pfizer‘s annual report describes Celebrex and Bextra as ―thoroughly tested
medicines‖ (Pfizer, 2004a). Pfizer also makes the point that decisions should be
made in real-world situations and not only in the context of clinical trial data:
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Clearly, decisions about medicines must be made in real-world situations. Placebos
don‘t control pain. All the medicines used to relieve pain carry both risks and
benefits. No medicine, not even aspirin, is entirely risk-free. To make sense of what
you see and hear, consult the expert—your doctor—who knows your unique medical
situation, and can advise you on all your treatment options (Pfizer, 2004a).
This message represents a subtle shift in the evidence that Pfizer has used to
defend Celebrex and Bextra. During the Vioxx withdrawal phase, Pfizer used
clinical trials to justify the safety of Celebrex and Bextra. But after receiving some
inconsistent findings for Celebrex, Pfizer had adapted its message. Novartis made no
comment about this situation in its 2004 Annual Report.
4.4.2.6 Withdrawal of Bextra
In response to the advisory committee‘s recommendations, the FDA ruled
that the COX-2 drugs carried a class effect of cardiovascular risk. The FDA ordered
that all drugs include a boxed warning about potential cardiovascular risk (Pfizer,
2005a) and that Pfizer withdraw Bextra from the market. Although Bextra‘s
cardiovascular risk could not be differentiated from other drugs, it carried an
additional risk of rare but serious skin reactions. This additional risk was the basis of
the FDA‘s request for Bextra‘s withdrawal (Pfizer, 2005a). European regulators also
requested the suspension of Bextra in their markets.
Although Pfizer ―respectfully disagreed‖ with the FDA‘s position on Bextra‘s
risk/benefit profile, it suspended sales of Bextra (FDA, 2005; Pfizer, 2005a). The
FDA‘s request for Bextra‘s withdrawal was unexpected and investors believed that
due to Pfizer's performance, its reputation would be hurt as much as its profits: ―the
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forced withdrawal of Bextra is another blot on its image at a moment when Pfizer is
already suffering from stagnant sales and slumping profits‖ (Berenson, 2005, April).
Pfizer‘s communication about the Bextra withdrawal and the media reporting of it
was substantially less than Merck‘s communication about Vioxx and resultant media
coverage. The different outcomes can be explained by the context of the decision—
regulatory auspices—and that Pfizer still had Celebrex on the market.
The FDA‘s request for Pfizer to withdraw Bextra demonstrated a change in
practice. Media reports summarised the FDA‘s new position as being cautious
(Appelbaum, 2005, April 13). Even the director of the FDA‘s office of new drugs
agreed this represented a change in the agency‘s culture where caution is now ―in‖
and patient‘s rights are ―out‖ (Appelbaum, 2005, April 13).
4.4.2.7 FDA Actions Trigger Response from Web of Actors
The FDA hearing on COX-2s and its conclusions about drug withdrawals,
advertising, and the disclosure of risk also affected the web of actors. At the same
time as Bextra was withdrawn from the market, Merck remained non-committal
about returning Vioxx to the market. For Novartis, though yet to gain regulatory
approval for its COX-2 drug Prexige, there was recognition of a more conservative
approach to drug regulation (Whalen & Greil, 2005, January 21). For Pfizer, changes
to the Celebrex label that includes warnings for cardiovascular and gastrointestinal
effects were finalised on 1 August 2005 at the same time as the drug was approved
for a new use in patients with ankylosing spondylitis, a debilitating form of arthritis
(Martinez, 2005, August 1).
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In light of the FDA changes, the editor of the NEJM called for even greater
disclosure from pharmaceutical companies about clinical trials (R. Zimmerman &
Tomsho, 2005, May 26). Companies like Pfizer and Merck had started to disclose
clinical trial results on an online registry operated by the National Institutes of
Health (www.clinicaltrials.gov), yet NEJM editor Dr Jeffrey Drazen said these
disclosures were insufficient (R. Zimmerman & Tomsho, 2005, May 26). A coalition
of medical editors said they would refuse to publish results of trials that do not
comply with international transparency standards ("Hiding the data on drug trials,"
2005, June 1).
The Vioxx and Bextra withdrawals also led public health officials to increase
pressure on the pharmaceutical industry to limit drug advertising (Davies, Steinberg,
& Goldfarb, 2005, July 5). Senate majority leader Bill Frist, a former heart surgeon,
argued that drug advertising fuelled drug spending and called for drug advertising to
begin two years after drug approval and with the FDA‘s consent (Davies et al., 2005,
July 5). In response to Congress, the Pharmaceutical Research and Manufacturers of
America (PhRMA) which represents drug companies across the USA, introduced a
set of voluntary guidelines for drug advertising. The guidelines recommended that
firms submit advertising to the FDA and that risk and safety information was clearly
communicated (Dooren, 2005, August 3). Pfizer identified itself as one of the first
companies to support PhRMA‘s principles on direct-to-consumer advertising (Pfizer,
2005c). The company announced that the fundamental changes will make Pfizer
advertisements more effective at communicating risk and benefits and reinforce the
doctor-patient relationship (Pfizer, 2005b).
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In summary, the Vioxx withdrawal triggered a sequence of events that served
to increase public scrutiny of the practices of pharmaceutical companies and their
regulatory bodies. The withdrawal became much more than a manageable, short-
term crisis event. Instead, a product recall crisis triggered change across the
pharmaceutical industry. As transformative regulatory change unfolded, taken-for-
granted industry norms and expectations shifted, constraining organisational
behaviour.
4.4.3 Defence against Litigation
Soon after the FDA started to show change in its actions towards COX-2
drugs, a new phase of the crisis began: product litigation. From late April 2005,
Vioxx and Merck were returned to the media spotlight. Merck‘s legal strategy was to
defend each case individually, believing that the burden of proof lay with the
plaintiff. This section examines the major and minor trials, according to media
coverage.
4.4.3.1 Vioxx Trials with Strong Media Coverage
Merck faced a number of product liability trials in quick succession. During
these trials, Merck denied legal liability for Vioxx and continued to reinforce the
messages it communicated to justify the withdrawal of Vioxx. (For a complete list of
trials, see Table 4.9.)
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Throughout the legal trials, Merck‘s messages remained consistent with its
strategies before the trials. Despite some changes in the environment, the company
continuously justified its decision to withdraw Vioxx and explained that it acted
appropriately during the development and marketing of Vioxx. Although Merck took
responsibility for the withdrawal, it did not take responsibility for the legal and other
consequences associated with Vioxx.
While these trials occurred in the courtroom, Merck continued to be trialled
in the court of public opinion by members of the web of actors. During the third
legal trial, filed by Irvin, Merck was forced to account for challenges from the New
England Journal of Medicine (NEJM) that called into question the credibility of one
of Merck‘s critical witnesses, Dr Alise Reicin. The editors of the NEJM raised
questions about the scientific integrity of a Vioxx article written by Dr Reicin. The
NEJM editors claimed that Merck had withheld data about three heart attacks from
publication. In response to these claims, Merck issued a statement to emphasise that
it promptly and appropriately disclosed the results of VIGOR (Vioxx gastrointestinal
outcomes research).
More critically, Merck said that the additional data would not change the
research findings. Merck also wrote letters to editors and published an open letter to
the medical community, drawing on ingratiation strategies that reminded readers of
Merck‘s ethical standards (Merck, 2005a). (See section 4.3.6.1 for excerpt of open
letter to medical community.) Merck denied any agency in relation to this matter and
Merck researchers refused to submit the correction requested by the NEJM. Merck‘s
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responses to the NEJM allegation integrated excuse and ingratiation strategies,
representing one of the first times that Merck used the excuse message.
Although media reporting soon returned to Vioxx product liability trials, the
FDA weighed into the litigation debate. On 14 January 2006, the FDA announced
plans for a policy change where federally approved medication labels have the
potential to pre-empt state law and help protect drug companies against litigation
("FDA issues new rules For drug labels," 2006, January 19). The policy is written
into a FDA drug labelling rule that is designed to make it easier for physicians and
patients to get clear information about drugs ("FDA issues new rules for drug
labels," 2006, January 19). The biggest change to the labels is a new summary, titled
‗Highlights‘ that will summarise key risks and benefits ("FDA issues new rules for
drug labels," 2006, January 19). With this new label, the FDA believes that people
who are injured by the drugs will not be able to sue drug companies successfully in
state courts (Kaufman, 2006, January 19). This proposed policy was later used by
Merck to file for the dismissal of a case. However, Merck‘s attempt was rejected
(McConnaughey, 2007, July 4).
In summary, the media reporting about the Vioxx product liability trials ran
from April 2005 to August 2007. While the first few trials drew strong media interest
and produced many articles, the number of articles reduced significantly over time.
Merck‘s communication remained consistent. Merck‘s messages emphasised that the
company acted appropriately and responsibly in the development and marketing of
Vioxx and when explaining the jury‘s decisions. Merck‘s legal strategy also
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remained consistent as the organisation consistently insisted that it would defend
each case individually.
4.4.4 Defence against New Data
As product liability trials continued, Merck and its historical claims about
Vioxx came under fire as study after study presented more evidence to support the
risks of the drug. Merck continued to face challenges brought about by research and
publishing practices. New research triggered increasing pressure from medical
editors who called for greater disclosure and accountability from the organisation.
This section will examine the communication of Merck and the increasing pressure
from its web of actors in response to new data about Vioxx.
A series of studies published in May 2006, September 2006 and early July
2007 revealed new information about Vioxx, the nature of its risks and the timing of
these risk events. This new information challenged earlier assumptions about Vioxx.
The new data and Merck‘s responses are summarised in Table 4.18.
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Table 4.18
Merck’s Responses to New Data on Vioxx
Date New Vioxx research Merck‘s response
03.05.06 Study in Canadian Medical
Association Journal showed seniors
who took Vioxx faced highest risk
of heart attack during first two
weeks of consumption (Cherney &
Tesoriero, 2006, May 3).
Merck countered this news with a
statement that reinforced its view that
observational studies were ―less
scientifically rigorous‖ than clinical trials.
Merck said these findings would not
change its legal strategy (Cherney &
Tesoriero, 2006, May 3).
12.05.06 Merck released new data from
APPROVe, the clinical research
trial that triggered the Vioxx
withdrawal in 2004. The follow-up
analysis showed that patients who
took Vioxx were 1.64 times more
likely to have a stroke or heart
attack than patients who were on
the placebo (Winslow et al., 2006,
May 12). The study also showed
some support for the effects of
Vioxx being seen within four
months of consumption (Tesoriero
& Winslow, 2006, May 18).
Merck said that new data would not
change its legal strategy (Winslow et al.,
2006, May 12). Merck explained the new
time frame information was based on a
statistical error in reporting (Berenson,
2006, May 31). Merck said there was a
seven percent chance that Vioxx had an
equally high risk of causing heart attacks
both before and after the 18 month time
frame. The correction, according to Merck
scientist Dr Kim ―doesn‘t change our
conclusion; it doesn‘t change the results‖
(Carreyrou et al., 2006, May 31).
13.09.06 A Vioxx study by researchers from
Harvard Medical School and
published in the Journal of the
American Medical Association
identified Vioxx with kidney-
related and arrhythmia risks
(Loftus, 2006, September 13).
Merck said Harvard analysis addressed the
known renal risks associated with COX-2s
and that Vioxx‘s label included
information about risks of oedema and
hypertension (Loftus, 2006, September
13). Merck specifically noted concerns
with observational analysis rather than
clinical trials (Merck, 2006f).
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Date New Vioxx research Merck‘s response
13.09.06 Research out of Australia has
shown that cardiovascular risks
such as arrhythmia began soon
after treatment (Loftus, 2006,
September 13). This study was
based on observational research.
Merck claims its findings are incompatible
with clinical trial data (Merck, 2006f).
03.07.07 Results from VICTOR, a study
designed to investigate the effect of
Vioxx on colon cancer, showed that
patients had increased heart risks
soon after taking the drug
(Tesoriero, 2007, July 3). VICTOR
was a study undertaken by
researchers at Oxford University
and the trial was stopped when
Vioxx was withdrawn in 2004. The
study showed heart attacks
occurred within a 12 month time
frame and almost immediately after
taking Vioxx (Tesoriero, 2007, July
3).
Merck‘s initial response to these data
explained them as being inconsistent with
data found in other placebo studies
(Tesoriero, 2007, July 3). In a subsequent
company statement, Merck said the
VICTOR study results were limited by a
premature study termination and a small
number of events (Merck, 2006g).
Across more than one year, new data was released continually on Vioxx,
including that received from Merck-sponsored trials like APPROVe and VICTOR.
The data presented new perspectives on Vioxx‘s risks, which differed from Merck‘s
original positions when it withdrew the drug. The main point of difference related to
the time frame of Vioxx risks. Merck sponsored clinical trials presented evidence of
short-term risks in Vioxx. This news differed dramatically from the 18-month time
frame Merck had previously maintained and used as the basis of arguments in legal
proceedings where plaintiffs had consumed Vioxx for shorter time frames (Tesoriero
& Winslow, 2006, May 18). In response to the new evidence, Merck accepted this
new information, and acknowledged it had made statistical errors in calculating this
finding but, at the same time, argued there was no difference in the conclusions that
could be drawn from the research. Merck‘s lawyers remained confident in using the
18-month risk time frame in future trials (Tesoriero, 2006, June 27).
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Not everyone agreed with Merck‘s analysis. Other scientists argued that
while the number (7 percent) might seem small, it was high enough to argue that
Merck‘s 18-month theory is unproven (Berenson, 2006, May 31). In relation to
Merck‘s revelation about the statistical errors it had made, the NEJM published an
unsigned correction to Merck‘s original study. The correction said that key results in
the original publication were reached by a different method than what was described
in original article (Tesoriero, 2006, June 27). The correction said references to 18-
month time frames for safety should be deleted (Tesoriero, 2006, June 27). Merck
responded with an open letter and described how it informed NEJM of the data
analysis error (Merck, 2006e).
The NEJM‘s actions added accountability pressures on Merck who continued
to frame new data on Vioxx in a way that supported Merck‘s original arguments
about the 18-month time frame and the value of clinical trials over other
methodologies. Merck remained defiant, persisting with its original crisis
communication strategies that sought to justify Merck‘s historical decisions around
Vioxx.
4.4.5 Changes to Legislation
In the three years after the Vioxx withdrawal, and while Merck was
defending itself against product liability lawsuits and new data on Vioxx, the FDA
was also under fire and in the midst of transformative change. The FDA responded
to independent reports, changed the way it responded to the environment, and
ultimately was subjected to legislative change brought about by Congress. Each one
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of these events is described here in order to show the significance of the regulatory
changes within the pharmaceutical industry.
The Vioxx withdrawal crisis opened up the opportunity for change in the
pharmaceutical industry. Soon after the recall, the FDA commissioned the Institute
of Medicine to evaluate drug safety. The findings of this report were presented on 23
September 2006 and described the FDA ―as rife with internal squabbles and hobbled
by underfinancing, poor management and outdated regulations‖ that together
affected its ―ability to ensure the safety of the nation‘s drug supply‖ (Harris, 2006,
September 23). As a result of its investigations, the Institute of Medicine proposed
the following recommendations to the FDA:
Newly approved drugs should display a black triangle on their labels for two
years to warn consumers that their safety is more uncertain than that of older drugs.
Drug advertisements should be restricted during this initial period.
The FDA should be given the authority to issue fines, injunctions and
withdrawals when drug makers fail—as they often do—to complete required safety
studies.
The FDA should thoroughly review the safety of drugs at least once every
five years.
The FDA commissioner should be appointed to a six-year term.
Drug makers should be required to post publicly the results of nearly all
human drug trials (Harris, 2006, September 23).
Some four months later, in early 2007, the FDA announced a number of
policy changes designed to ―ensure marketed drugs were as safe as advertised‖
(FDA, 2007a; Harris, 2007, January 31). These changes were motivated by the
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processes involved in the Vioxx and antidepressant crises in 2004, where the FDA
took years to acknowledge risks that were clear to medical researchers (Harris, 2007,
January 31). As a result of these experiences, the FDA introduced new processes
including a comprehensive assessment of drugs 18 months after market introduction,
the creation of an advisory panel to improve the way the FDA communicates risks,
and the tracking of real patients who consume drugs (FDA, 2007a; Harris, 2007,
January 31).
In September 2007, legislation was passed to expand the FDA‘s drug safety
role (Rubenstein, Tesoriero, & Mathews, 2007, September 21). The bill increased the
ability of the FDA to monitor drugs post approval and strengthened the ability of the
FDA to change drug labels, require safety studies, and limit distribution of drugs if
safety concerns arise (Rubenstein et al., 2007, September 21). These changes not
only meant new regulatory practices for the FDA but they have the potential to
protect drug companies from product liability litigation. That is a drug endorsed by
the FDA should avoid litigation.
In summary, the Vioxx withdrawal focused attention on the inadequacies of
the regulatory practices of the pharmaceutical industry, necessitating radical and new
solutions to the FDA‘s existing approach to drug safety. The visibility of the Vioxx
withdrawal transferred onto the FDA and the pharmaceutical industry. As a result,
drug safety became a highly publicised and politicised issue, drawing attention from
―agents of change‖ such as Senators Grassley and Kennedy to win support for new
practices (Alink et al., 2001; Boin et al., 2006). Although it may have taken three
years for regulatory change to come into effect, the newly legitimised changes to the
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FDA set in place long-lasting effects to the approval, marketing and monitoring of
drugs.
4.4.6 Settlement of Litigation
Within this climate of change, in November 2007, Merck decided to settle
27,000 Vioxx lawsuits. The settlement value was $4.85 billion, considered one of the
largest amounts in civil litigation (Berenson, 2007, November 9). By this time,
Merck had established a strong track record of success in litigation, encouraging
plaintiffs to join the settlement.
As well as attending to the needs of various stakeholders, the decision to
settle Vioxx liability removed uncertainty and closed the Vioxx crisis. Merck
communicated its decision to settle Vioxx cases using both justification and
ingratiation message strategies. The justification strategies continued to reinforce
Merck‘s responsible behaviour towards Vioxx, culminating in this settlement. Merck
also used this decision to justify its legal strategy, explaining that winning individual
cases set the precedent for the settlement. As a result, Merck viewed the decision to
settle cases as a continuation in legal strategy.
More significantly, though, Merck‘s justification messages shifted towards
the future. Merck‘s CEO and general counsel set up the company‘s return to its
mission to find and develop drugs. Merck‘s general counsel Bruce Kuhlik said in
regard to the settlement: ―We have done everything we can to close the doors‖ (C.
Johnson, 2007, November 10). Closing the trials also meant closing the extended
crisis that Merck started in 2004. To support the justification strategies, Merck also
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used ingratiation strategies. These messages served to remind stakeholders that the
agreement added some certainty to Merck‘s future and freed it up to concentrate on
fulfilling its mission (Merck, 2007b).
As of 3 March 2008, more than 44,000 of the approximately 47,000
individuals who registered eligible injuries submitted materials for enrolment in
Merck settlement (Merck, 2008a). On 17 July 2008, Merck announced that
participation requirements for the settlement had been met (Merck, 2008b). This
signalled closure to the many individual suits filed against Merck. In addition to
individual cases, Merck was also under investigation for its sales and marketing
practices of Vioxx (Tesoriero, 2008, February 1). Merck agreed to pay $650 million
to settle the lawsuits and probes into its sales and marketing practices (Rubenstein &
Johnson, 2008, February 8). According to Merck, the settlements did not constitute
an admission of liability or wrongdoing ("Merck to settle U.S. claims for $671
million," 2008, February 8). Merck also paid $58 million to settle claims filed by
states across the US that it used deceptive advertising for Vioxx (Kingsbury, 2008,
May 21). Merck did not admit any wrongdoing under the settlement, defending its
marketing practices of Vioxx (Kingsbury, 2008, May 21).
4.4.7 Summary of Allen and Caillouet’s (1994) Template
Allen and Caillouet‘s (1994) approach to crisis communication integrates
impression management as the basis for crisis response strategies as a way to explain
how these strategies can reinforce or shape an organisation‘s legitimacy. Through
this practice, Allen and Caillouet‘s (1994) framework for crisis communication
considers both the organisation in crisis and the complex web of relationships
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between this organisation and others caught up in the crisis. As a result of this
network of actors, the link between an organisation‘s decision and industry practices
or institutional norms becomes critical.
Following Allen and Caillouet (1994), this narrative explored the crisis
communication of Merck and the additional pressures imposed upon Merck by a
range of corporate actors including Pfizer and the FDA. The inclusion of the
complex web of relationships allowed this template to consider the crisis context
surrounding Merck‘s actions and communication. As a result, this narrative is told
not only from the perspective of Merck but also from that of the other actors
involved in the crisis. In so doing, the narrative shows how an organisational crisis
developed to an industry-wide event affecting multiple groups.
One of the interesting sequences of events uncovered by this narrative was
Merck and Pfizer‘s divergent responses to the same starting situation. Both Merck
and Pfizer received unexpected and inconsistent findings from a clinical trial into
Vioxx and Celebrex, respectively. Although Merck voluntarily withdrew Vioxx,
Pfizer retained Celebrex. One company accepted responsibility for the findings and
the other did not. We now know what happened to both organisations. However, this
narrative and its focus on a web of relationships force the consideration of the
relationships between primary and secondary organisations. In this case, Merck set
the precedent for product withdrawal that, in essence, became an expectation or
norm for that class of drugs. As a result, Pfizer was questioned by the media when it
did not withdraw Celebrex after a trial yielded negative results. Pfizer was the
secondary organisation caught up in the context of Merck‘s Vioxx withdrawal. At
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the same time, the shifting regulatory context inspired by Merck became a source of
pressure relief for Pfizer. Pfizer responded to media scrutiny by yielding to the FDA
and its upcoming hearing, thus demonstrating alignment with regulatory actions.
This example suggests the importance of conformity to an organisation‘s
institutional environment. At an organisational level, ingratiation strategies were
used to demonstrate alignment between an organisation‘s actions and the industry‘s
regulatory standards or ethical principles that constrained organisational action and
communication. Yet, the true values of Merck and Pfizer‘s response choices become
clear when they are considered over time. At the beginning of the thesis, Merck‘s
Vioxx withdrawal represented a non-conformity strategy for the industry but in
justifying its decision, Merck potentially re-set the clock on industry expectations for
organisations that receive negative trial results. Later in the thesis, when Pfizer chose
not to withdraw Celebrex, while it may have contravened newly-formed industry and
media expectations, it was also operating within a renewed industry and regulatory
context. While this industry and regulatory context was under review, it served to
offer some protection over Pfizer‘s decision. As a result, Allen and Caillouet‘s
(1994) focus on ingratiation strategies that are designed to show organisational
conformity to standards or norms take centre stage in analysing change over time.
Merck later discovered the value of drawing on the experiences of its web of
corporate actors. Although Pfizer had initially been a source of pressure on Merck by
promoting the safety profile of Celebrex in response to the Vioxx withdrawal,
Pfizer‘s subsequent actions were also of benefit to Merck. As more information
became available about Celebrex, Bextra, and other COX-2 drugs, these additional
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data offered the chance for Merck to claim ―class effect‖ rather than ―Vioxx effect‖.
Pfizer‘s results with Celebrex and Bextra provided additional information to allow
Merck to shift the perception about Vioxx from being a unique to a class effect
during the FDA advisory committee hearings. As such, this reduced the emphasis on
Merck and Vioxx.
Finally, Allen and Caillouet‘s (1994) template identified the complexity of
the communication environment for Merck and the other corporate actors that were
complicated in the ongoing crisis. A crisis event created this complexity but the
organisations‘ communication strategies served also to shape the complex context
for the pharmaceutical industry during the study.
4.5 Alternative Template 3: Building Legitimacy across Multiple Organisations
through Oliver’s Framework
This narrative of the Vioxx product withdrawal and subsequent crisis events
is constructed using Oliver‘s (1991) typology of an organisation‘s strategic
responses to institutional pressures towards conformity. Drawing on both resource
dependence and institutional theories, Oliver (1991) developed this typology to
contribute to the understanding of how organisational behaviour can sit on a
continuum of conformity to resistance in response to institutional processes and
expectations. Oliver‘s (1991) typology provides a changed perspective on Coombs
(2006b) and Allen and Caillouet‘s (1994) alternative templates. By considering an
organisation‘s agency over its environment, which includes other organisational
actors such as regulatory bodies and competitors, Oliver (1991) provides a way to
graft existing crisis communication typologies onto a framework of change and
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agency. In doing so, Oliver‘s (1991) work allows for the consideration of how
organisations use strategic responses to remain or become legitimate.
Oliver (1991) identifies five strategic responses to institutional processes:
acquiesce, compromise, avoid, defy, and manipulate. These strategies sit on a
continuum ranging from passive conformity to active resistance (Oliver, 1991, p.
146). Conformity to existing concepts of legitimacy and taken-for-granted norms is a
common organisational response that achieves legitimacy and enhances survival
(Oliver, 1991; Rao, 1994; M. A. Zimmerman & Zeitz, 2002). Conformity is a
characteristic organisational response to uncertainty (Rao et al., 2001) and represents
both an efficient use of resources and continued access to resources (George et al.,
2006). At the other end of the continuum, organisations can alter existing definitions
of legitimacy (Dowling & Pfeffer, 1975) by introducing new criteria and measures to
evaluate legitimacy and performance (Oliver, 1991). Organisations can pursue non-
conformance strategies in order to gain control of their environment (George et al.,
2006). The typology is presented in Table 4.19.
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Table 4.19
Oliver’s Strategic Responses to Institutional Processes
Strategies
and tactics
Example Examples from study
Acquiesce
Act through
habit
Imitate
Comply
Follow invisible,
taken-for-granted
norms
Mimic institutional
models
Obey rules and accept
norms
A Merck spokeswoman responded that clear
policies govern the company's sales and
marketing activities and that "those policies are
aimed at ensuring that our product
communications are fair and balanced and
consistent with FDA labeling" (Kaufman, 2005,
January 25).
Compromise
Balance
Pacify
Bargain
Balance the
expectations of
multiple constituents
Placate and
accommodate
institutional elements
Negotiate with
institutional
stakeholders
Pfizer respectfully disagrees with FDA‘s
position regarding the overall risk/benefit profile
of Bextra. However, in deference to the
agency‘s views, the company has agreed to
suspend sales of the medicine pending further
discussions with the FDA. Pfizer said it will
explore options with the agency under which the
company might be permitted to resume making
Bextra available to physicians and patients
(Pfizer, 2005a).
Avoid
Conceal
Buffer
Escape
Disguise
nonconformity
Loosen institutional
attachments
Change goals,
activities, or domains
No statements found.
Defy
Dismiss
Challenge
Attack
Ignore explicit norms
or values
Contest rules and
requirements
Assault the sources of
institutional pressure
In a statement yesterday, Merck called Topol's
commentary "flawed in many important
aspects." In particular, the company said Topol
had misrepresented Merck's efforts to get firm
information about heart and stroke risks linked
to Vioxx (Kaufman & Masters, 2004, October
7).
Manipulate
Co-opt
Influence
Control
Import influential
constituents
Shape values and
criteria
Dominate institutional
constituents and
processes
"There is no reliable scientific evidence that
shows Vioxx causes cardiac arrhythmias, which
an autopsy showed was the cause of Mr. Ernst's
death, along with coronary atherosclerosis"
(Jonathon Skidmore of Merck as cited in
Kaufman, 2005, August 20).
Source: Oliver, 1991
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Communication between an organisation and its environment is motivated by
a constant need to legitimise its actions (Girardelli, 2004). Metzler (2001a) suggests
that legitimacy is established, maintained, challenged and defended through such
dialogue. Organisational crises or controversies have provided a rich space for the
examination of legitimising accounts (Benoit & Brinson, 1994; Elsbach, 2001;
Elsbach & Sutton, 1992; Hearit, 1995). Organisations can manage controversies by
presenting justifications that refer to the institutional environment (Elsbach, 2001).
In this way, legitimacy is a strategic public relations process that involves the
justification of the organisation‘s existence to external audiences in order to create
and sustain a belief in its legitimacy (Waeraas, 2007).
This narrative is constructed based on the strategic responses of Merck,
Pfizer and Novartis to a range of institutional pressures. In some cases, the
organisation‘s actions themselves become the source of institutional pressure and in
other cases, their actions trigger additional institutional pressures. In this way, this
narrative sees the crisis as made up of a series of institutional pressures that affect
organisations in different ways, enabling a space to talk about the strategic roles of
multiple organisations in response to a range of institutional pressures. An
institutional pressure is defined as an event or force that acts to hold accountable
organisations to institutional norms (Oliver, 1991). Institutional pressures can come
from a range of organisational actors including the mass media, activist
organisations, and regulatory bodies. Institutional pressures provide an opportunity
for the joint negotiation of organisational legitimacy.
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Across the time frame of the thesis, four pressures have been selected: the
Vioxx withdrawal and congressional committees, the FDA‘s hearing on COX-2
drugs, the pressures of medical journal editors on medical research, and the product
liability trials for Vioxx, Celebrex and Bextra. These pressures were selected as the
key events that triggered strategic responses from the corporate actors involved and
are illustrated in Figure 4.5. The pressures are linked to each other but represent a
range of different sources and in turn trigger a range of strategic responses from
Merck and Pfizer.
Figure 4.5 Institutional pressures of the withdrawal of Vioxx, actions of the FDA,
responses of journal editors, and defence of litigation.
4.5.1 Withdrawal of Vioxx
September 2004 turned out to be a very unusual month for Merck. The
company received FDA approval to market Vioxx for juvenile arthritis and, a few
weeks later, new information about the risks of Vioxx, one of its best-selling drugs.
•Pfizer assures Celebrex and Bextra safety
•Congress committees into drug safety
Withdrawal of Vioxx
•COX-2 committee
•Bextra withdrawal
•New Celebrex label
•Changes to FDA
Actions of the FDA
•PhRMA proposes new guidelines
•Pfizer adopts guidelines
•Correction to Vioxx article
Response of Medical editors
• Individual trials
•Settlement
Defence of litigation
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The Merck-sponsored APPROVe clinical trial that was established originally to
provide evidence for extended marketing approval of Vioxx instead revealed
information about the drug‘s cardiovascular risks. APPROVE‘s medical researchers
found that, compared to the placebo, patients taking Vioxx faced an increased
relative risk in cardiovascular events such as heart attacks and strokes beginning
after 18 months of treatment. After receiving this news, Merck‘s internal scientists
reviewed and subsequently agreed with the conclusions of APPROVe‘s medical
researchers. The new research findings challenged the scientific legitimacy of Vioxx,
a position that Merck had defended in the media since the drug‘s introduction to the
market in 1999. Merck‘s head of research, Dr Kim communicated these results to
Merck‘s CEO and executive team (Masters & Kaufman, 2004, October 18).
It took the company six days to decide its path: an immediate, worldwide,
and voluntarily withdrawal of Vioxx. But before Merck communicated its decision
publicly and to all relevant stakeholders, Merck communicated these findings to the
FDA. Upon learning about the risk profile of Vioxx, the FDA indicated it would
continue to support the listing of Vioxx if Merck updated its product label to reflect
the new risk. Despite receiving this counsel, Merck remained steadfast in its decision
to withdraw Vioxx—even when this decision was inconsistent with industry
practice.
In communicating its decision to withdraw Vioxx, Merck wanted to be seen
as an ethical company that made decisions in the interests of patients and science
over profits. In doing so, Merck took a compromise approach and aimed to balance
the multiple and potentially conflicting interests of patients, doctors, the FDA, and
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Merck shareholders. Yet at the same time, Merck‘s media releases and statements
revealed that the company deemed it important to mention that the withdrawal
decision was one of several alternatives. This position is illustrated in the following
quote from a Merck media release:
We are taking this action because we believe it best serves the interests of patients....
Although we believe it would have been possible to continue to market VIOXX with
labelling that would incorporate these new data, given the availability of alternative
therapies, and the questions raised by the data, we concluded that a voluntary
withdrawal is the responsible course to take (Gilmartin, (Merck, 2004b).
This quote shows that Merck had choices that were more consistent with
institutional norms than product withdrawal. This rationale is used to support
Merck‘s standing as an ethical company that puts patient safety first.
Merck‘s strategy was consistently applied when it communicated the
implications of the Vioxx withdrawal to financial stakeholders. Both the CEO and
CFO said the decision to withdraw Vioxx was the most responsible option for the
company (Kaufman, 2004, October 1). Merck also sought to reassure financial
stakeholders by reinforcing existing beliefs or deep structures: "We were financially
strong before this and we'll be financially strong after," Mr. Gilmartin said. He also
pointed to several drugs for diseases such as diabetes and obesity that Merck is
developing‖ (Martinez et al., 2004, October 1). The core message was that Merck
had not changed as a result of the Vioxx withdrawal. In this way, Merck was seeking
to reinforce its conformance to legitimacy.
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The mass media coverage of the Vioxx withdrawal was intense. In the first
week after the announcement of the withdrawal, more than 50 news articles were
published in the three sampled newspapers alone with 23 stories on the day
following the withdrawal. As a result of mass media coverage, the Vioxx withdrawal
itself became an institutional pressure for regulators, governments, and competitors.
This move gave consistent public focus to Merck and Vioxx, suspending the
legitimacy of both the organisation and the product.
Media coverage provided actors such as medical researchers with the
opportunity to scrutinise the practices of Merck and its regulator, the FDA. At the
same time as Merck was trying to seek support and legitimacy for its decision to
withdraw Vioxx, a number of the company‘s opponents used this opportunity to
publicly criticise Merck‘s historical actions towards Vioxx and draw attention to the
regulatory failures of the FDA. Independent medical researchers argued that Merck
had known about the risks of Vioxx long before the APPROVe trial results in
September 2004 and that the FDA failed the public for not acting on Vioxx earlier
(Kaufman & Masters, 2004, October 7). It was within this context that the Vioxx
withdrawal became an institutional pressure for other organisations and agencies that
were caught up in Merck‘s complicated web.
4.5.1.1 Pressure and Opportunities for Pfizer
Merck‘s decision to withdraw Vioxx was a competitor‘s dream come true. In
the highly aggressive world of pharmaceutical marketing, the removal of a drug from
market provided immediate opportunities for the drugs remaining in the COX-2
category. The day after Merck withdrew Vioxx, Pfizer immediately seized on the
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marketing opportunity to promote Celebrex. Thus, Pfizer contributed to the growing
momentum of the Vioxx withdrawal as an institutional pressure.
On the same day as the Vioxx withdrawal, Pfizer issued a press release to
confirm the safety of Celebrex based on data from three large and long-term clinical
trials. Pfizer also suggested Celebrex as a treatment alternative to Vioxx. In doing so,
Pfizer adopted a compromise strategy, aiming to balance the debate about COX-2
and establish the importance of Pfizer products to patients, especially given the
removal of Vioxx from the market. In choosing the compromise strategy, which
represents the tactics of balance, pacify, and bargain, Pfizer reacted to Merck‘s
product withdrawal by actively demonstrating the efficacy of its products and
ongoing studies. In doing so, Pfizer moved beyond an acquiescence strategy that
shows passive compliance. At the same time as it sought to reassure its patients,
Pfizer also took the opportunity to establish the benefits of Celebrex and stress the
correctness of its practices as distinct from Merck‘s actions towards Vioxx. Some of
the messages used by Pfizer are illustrated in Table 4.20.
Table 4.20
Strategies Used by Pfizer in Response to the Vioxx Withdrawal
Date Statement Strategy type
4.10.04 "We're even more confident today because the studies have
consistently not demonstrated any increased cardiovascular risk
with Celebrex," said Joe Feczko, Pfizer's president for drug
development, on Friday. "We have not been asked to stop or
change any aspect of the studies related to cardiovascular risk"
(Hensley, 2004, October 4).
Compromise
7.10.04 "It's hard to comprehend how two drugs in the same class could
be so different," Gandelman said. "But they are each in a
subclass of their own, and those different chemical structures
translate into a different safety profile" (Kaufman & Masters,
2004, October 7).
Compromise
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Pfizer‘s responses to the Vioxx withdrawal served to legitimise Celebrex and
the quality of Pfizer‘s practices in the development and monitoring of its drugs.
Pfizer distanced itself from Merck‘s predicament by positioning Celebrex as being
free from the cardiovascular risks that were evident in Vioxx. Pfizer also seized the
opportunity to increase Celebrex advertising in the wake of the Vioxx withdrawal.
Merck‘s withdrawal of Vioxx had put COX-2s on the media agenda but
Pfizer was not about to let Merck‘s actions encroach its territory. To further cement
the legitimacy of Celebrex, four days after the Vioxx withdrawal, Pfizer announced a
large-scale clinical trial to investigate Celebrex‘s ability to prevent cardiovascular
events in patients with serious cardiovascular disease (Pfizer, 2004f).
In the wake of the Vioxx withdrawal, Pfizer focused its communication
efforts primarily on Celebrex but less information was forthcoming about the second
COX-2 drug in Pfizer‘s arsenal: Bextra. This lack of public communication about the
safety profile of Bextra was explained when Pfizer provided, ahead of its normal
schedule, medical guidance about Bextra. This advice noted that Bextra caused a rare
but serious skin reaction and an increase in cardiovascular events in surgical settings
(Bextra is not approved for use in this setting) (Pfizer, 2004c). Pfizer explained that
it disclosed these risks to ―reinforce our commitment to share information with
physicians about our product‖ (Pfizer, 2004c). Pfizer also explained that the Bextra
news had no implications for Celebrex, setting up the possibility for an avoidance
strategy to loosen the link between Bextra and Celebrex.
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Pfizer disclosed this information about Bextra ahead of schedule based on the
media, public, and regulatory responses to Merck‘s withdrawal of Vioxx. One of the
criticisms of Merck‘s behaviour was its delay in communicating the risks of Vioxx.
Medical researchers claimed that Merck had known about the risks of Vioxx well
before it withdrew the product in 2004. This criticism of Merck‘s behaviour coupled
by the institutional pressures brought on by the Vioxx withdrawal prompted Pfizer to
provide advice on Bextra ahead of schedule.
Pfizer‘s drugs had legitimacy before the Vioxx withdrawal. Pfizer‘s
communication after the withdrawal served to take advantage of the situation
presented by Merck and reinforce the existing perception of the legitimacy of its
products as well as its conformity to institutional processes of regulation.
4.5.1.2 Pressure from Congress
As the Vioxx withdrawal continued to be a focusing point for media
reporting, it drew responses from a range of corporate actors. Although the actions of
competitor organisations were immediate, media discussion soon started to integrate
questions about drug safety and the responsibilities of regulators. One of the major
forces behind this perspective was Congress through the Senate Finance Committee
and the House of Representatives Committee on Government Reform. Senators
announced that they were extremely concerned by the FDA‘s handling of the Vioxx
withdrawal, which was preceded by the FDA‘s failure to respond swiftly to the anti-
depressants crisis. In essence, Senators were starting to see a pattern in the FDA‘s
handling of drug safety and were concerned that they were facing the same problem
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with Vioxx as they had seen with anti-depressants. The FDA‘s actions around the
Vioxx withdrawal did not provide senators with much optimism.
When Merck first presented the APPROVe trial results to the FDA, the FDA
originally counselled Merck to retain Vioxx but introduce a stronger warning label
that cautioned doctors and consumers about the new risks of the drug. However,
once Merck insisted that it wanted to voluntarily withdraw the drug, the FDA
acquiesced to Merck‘s decision. A few days later when the Vioxx withdrawal
became public knowledge, the FDA publicly acknowledged and supported Merck‘s
decision and actions in withdrawing Vioxx. According to the FDA, Merck had acted
appropriately in the approval and monitoring of Vioxx. Yet, at the same time as
offering this perspective, the FDA admitted it had concerns with the COX-2 drug
category, resulting in the joint meeting of the Arthritis and Drug Safety and Risk
Management Advisory Committees (FDA, 2005). What we see during this short time
frame is a drug regulator, charged with protecting public health and ensuring drug
safety, willing to be led by the decisions of a pharmaceutical company charged with
the responsibilities of producing drugs to meet market needs and return profits.
Senators thought the FDA‘s relationship with drug companies was too ―cozy‖
(Masters & Kaufman, 2004, October 18). Within a month of the Vioxx withdrawal,
congressional committees were established to investigate the FDA‘s handling of
Vioxx. The committees were charged to investigate the historical actions of the FDA
in relation to approving Vioxx when other COX-2 drugs were available, and
monitoring Vioxx. As a result of this investigation, the Vioxx withdrawal became a
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source of institutional pressure on the FDA. The Vioxx withdrawal became a test
case for evaluating existing regulatory practices.
Although the focus of the committees was on the FDA‘s actions, it also
presented an opportunity for Merck to reinforce its decision as an ethical company
and restate its compromise strategy. Senators recognised Merck‘s reputation and
responded positively to Gilmartin‘s testimony (Berenson, 2004, November 19). In
doing so, the senators demonstrated acceptance of Merck‘s arguments and testimony,
offering an institutional buffer to other actors‘ criticisms of Merck.
Testimony from the FDA‘s Dr Graham accused the FDA of ―profound
regulatory failure‖ in its handling of Vioxx (Kaufman, 2004, November 19). Dr
Graham introduced doubt about the legitimacy of the FDA‘s support of Merck‘s
communication about Vioxx. For example, Merck had communicated that it had
appropriately developed and marketed Vioxx by following FDA protocols. Doubt in
the FDA‘s processes had the potential to reflect poorly on Merck.
Dr Graham also testified that five drugs should either be withdrawn or
restricted because of their high risks. One of these drugs was Bextra, which is one of
Pfizer‘s COX-2 drugs. According to Dr Graham, Pfizer‘s Bextra carried similar risks
to Merck‘s Vioxx (Kaufman, 2004, November 19). As a result of Bextra being
named in Dr Graham‘s list, Pfizer was forced to respond to that researcher‘s claims.
Pfizer denied any concerns with Bextra, saying the drug ―has been found safe and
effective when used as indicated‖ (Kaufman, 2004, November 19). Based on these
comments as well as the additional risks of Bextra as disclosed by Pfizer,
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prescriptions for the drug dropped (Pollack, 2004, December 1). Media reports
suggested that Bextra was the next Vioxx and wondered how the FDA would handle
this emerging situation (Harris, 2004, November 21a).
The senate committee criticised the FDA for failing to realise three years
before that Vioxx was dangerous (Harris, 2004, November 21a). The Congressional
investigation process brought to light that the tools and practices used by the FDA to
regulate drugs were grossly insufficient. For example, in 2001, FDA officials
negotiated for one year with Merck before cardiovascular risks were added to the
Vioxx product label. Although the FDA possesses regulatory power to recall drugs,
the FDA‘s historical practices show that the regulator is reluctant to recall a drug
until the risks have been proven (Kaufman & Masters, 2004, November 18). In
essence, the FDA‘s regulatory power is stronger for drug approvals than for drug
safety. This critical realisation set in motion the processes of transformative
regulatory change in the pharmaceutical industry.
In summary, the congressional hearings cast an industry-wide spotlight on the
deficiencies of the regulatory body (FDA) and the practices of pharmaceutical
organisations. Grounds for instability in institutional processes emerged. Merck and
Vioxx remained in the public spotlight and Pfizer and its actions towards Celebrex
and Bextra came under greater scrutiny.
4.5.1.3 FDA Acts
Four months after the Vioxx withdrawal and in the midst of an increasing
media focus on drug safety, on 17 December 2004, Pfizer suspended a clinical trial,
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known as the APC cancer trial. The clinical trial was halted because Celebrex was
shown to double or triple the risk of heart attacks, strokes or cardiovascular deaths,
depending on the dose ("New doubts about Celebrex," 2004, December 18). At the
same time, the preliminary analysis of a second Pfizer study, known as PreSAP
cancer trial, showed no increase in cardiovascular risks (Pfizer, 2004e). Both data
came from two long-term clinical trials designed to investigate the efficacy of
Celebrex on cancer. Pfizer explained the results of the APC trial, which yielded the
high-risk results for Celebrex, as being inconsistent with existing research on
Celebrex. To explain these trials, Pfizer offered a compromise strategy to placate
those concerned by the data and to accommodate institutional factors such as FDA
processes. Pfizer said it was ―taking immediate steps to fully understand the results
and rapidly communicate new information to regulators, physicians and patients
around the world‖ (Pfizer, 2004e).
The FDA‘s response to Pfizer‘s news was swift—especially in comparison to
its handling of the Vioxx withdrawal. Dr Crawford, the FDA‘s acting commissioner,
acknowledged he held ―great concerns‖ about Celebrex and recommended doctors
switch patients to other drugs (Harris et al., 2004, December 18). The FDA asked
Pfizer to stop advertising Celebrex and to modify the messages used by its sales
representatives when meeting with prescribing physicians (FDA, 2004a; Hensley et
al., 2004, December 20). This signalled the emergence of new practices at the FDA.
Despite these efforts towards regulatory protection, media editorial
questioned why Pfizer did not withdraw Celebrex especially when Merck withdrew
Vioxx based on similar findings ("New doubts about Celebrex," 2004, December
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18). All eyes were on the FDA and Pfizer. Pfizer was forced to defend both the
results of the clinical trial and its decision to keep Celebrex on the market. Table
4.21 identifies Pfizer‘s messages.
Table 4.21
Pfizer Responses
Date Statement Strategy type
18.12.04 Pfizer said that it had no plans to withdraw Celebrex and noted
that other studies of the drug had found no increased risk of
heart disease….The differing study results are ''confounding,''
said Dr. Joseph Feczko, president for development at Pfizer. He
added that regulators needed to analyze all studies of the drug
before making any decisions (Harris et al., 2004, December 18).
Compromise
19.12.04 ''We market all of our medicines consistent with regulation,''
said a spokeswoman for Pfizer. ''Doctors and patients are in the
best position to say which drugs are most appropriate for them''
(Meier, Kolata, Pollack, & Elliott, 2004, December 19).
Compromise
20.12.04 "For many patients, Celebrex is the best option or, in some
cases, the last option to live a normal life with the pain and
inflammation of arthritis," he said (Kaufman, 2004, December
20).
Compromise
20.12.04 "The most important thing is that we don't allow the confusion
and uncertainty to push us to a premature decision," said Mr.
McKinnell in an interview. "These are complicated medical and
scientific issues" (Hensley et al., 2004, December 20).
Compromise
21.12.04 A Pfizer spokeswoman said the new result [PreSAP cancer trial]
was "consistent with the data we've accumulated," and "it's
especially important" that the data from the earlier cancer trial
"be rigorously analyzed, so that they can be put into context"
(Mathews & Winslow, 2004, December 21).
Compromise
21.12.04 But Dr. Gail Cawkwell, who directs Pfizer's medical research on
Celebrex and Bextra, said many patients benefited from the
drugs. ''Celebrex still has some significant benefits over the
older medicines,'' she said. ''We've had a lot of support from
doctors saying they have patients who haven't responded to
anything else'' (Berenson, 2004, December 21).
Compromise
To support Celebrex and its decision to maintain the status quo, Pfizer drew
support from doctors and patients. Pfizer justified its decision to retain Celebrex
based on the efficacy of the drug and its potential for treating cancer (Hensley et al.,
2004, December 20). Through these strategies, Pfizer remained in control of its
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message and decision. However, the connection between Celebrex and Vioxx
persisted. Media reports included opinions from a range of stakeholders about the
link between Celebrex and Vioxx. (Refer to Table 4.17 Comparisons between
Celebrex and Vioxx in Narrative 2 for full details.)
Amidst the Celebrex-Vioxx debate, the cardiovascular results of yet another
study were released by the National Institutes of Health (NIH). The NIH study was
investigating the effects of pain relief medication on Alzheimer‘s disease, and this
study showed that patients who took Bayer‘s Aleve (naproxen) risked a 50 percent
greater rate of heart problems than those on the placebo (Harris, 2004, December
21). In addition, Celebrex patients in the same trial saw no increase in heart events
(Harris, 2004, December 21). The results of this study were similar to the majority of
research into Celebrex. In relation to this study, Pfizer‘s CEO issued the following
statement in a news release:
This is important new information that should be considered by doctors and patients
as they evaluate the various treatments for arthritis and pain.... Millions of people
simply can‘t get through their day without pain relief. That‘s why all the emerging
information about arthritis medicines—prescription and over-the-counter—must be
fully evaluated by the U.S. Food and Drug Administration and other regulatory
authorities.
Recently, preliminary information from three major long-term clinical trials
with Celebrex has become available. Because the early information from these trials
is inconsistent, physicians and patients are understandably confused. That‘s why the
full study results must be shared with the medical, scientific and regulatory experts
so that we have a more complete understanding of the risks and benefits of these
medicines (Pfizer, 2004d).
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This message reinforced the important role of doctor-patient consultations,
reinforcing Pfizer‘s earlier calls for support for the retention of Celebrex. The
message also invoked Pfizer‘s trump card: the FDA. Pfizer signalled the importance
of the FDA and its role in evaluating the safety of pain medications including
Celebrex, Bextra, and Vioxx. Pfizer continued to support the role of the FDA and its
planned hearing into COX-2 drugs (Burton et al., 2004, December 24). In doing so,
Pfizer shifted responsibility for decisions about its drugs to the FDA and avoided
having to engage in questions about why it retained Celebrex on the market when
Merck withdrew Vioxx. The buck stopped with the FDA, and not with Pfizer. For its
part, the FDA described the situation as being ―confusing‖ and recommended
doctors and patients have conversations about each drug‘s unique risks (Harris,
2004, December 21).
In summary, although Pfizer and Celebrex faced the same starting position of
a negative clinical trial result as Merck and Vioxx, the processes and outcomes were
quite different. Like Vioxx, a clinical trial designed to investigate the effects of
Celebrex on cancer, suggested that Celebrex could double or triple patients‘ risk for
cardiovascular events. Although both Merck and Pfizer suspended clinical trials,
Merck decided to withdraw Vioxx, arguably setting a precedent for industry practice.
Four months after the Vioxx withdrawal, Pfizer continued to market Celebrex.
Although Pfizer‘s decision was questioned in the media as illustrated in Table 26, it
received significantly less media attention than Merck‘s Vioxx withdrawal.
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Following Oliver‘s (1991) framework for strategic responses, one
explanation for the different outcomes can be seen in the industry context, as
illustrated in Figure 4.6. The Vioxx withdrawal triggered instability in the
pharmaceutical industry, de-legitimising existing regulatory practices. As a result,
the withdrawal triggered discussions about drug safety at both consumer and
regulatory levels. These conversations, as played out in the mass media, influenced
the dynamics of risk within the industry. The industry was in a holding pattern,
knowing that change was to come but not knowing the extent of the change in
regulatory practices.
Figure 4.6 The differences in Vioxx and Celebrex are explained by the institutional
buffer of the FDA.
Pfizer‘s decision occurred within this context of change and uncertainty. At
the same time, the FDA needed to take control of the situation. The actions of the
FDA, which resulted from the Vioxx withdrawal, provided a buffer for Pfizer‘s
decisions. The FDA responded swiftly to Pfizer‘s release of information about
Celebrex (FDA, 2004a). This response from the FDA was remarkably different to
how it handled the Vioxx withdrawal. Further, Pfizer acted in compliance with the
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FDA‘s advice, allowing the company to call on the support of the FDA as a way to
buffer its decision. Merck was unable to do this because it acted outside of
regulatory advice, and was, as a result, forced to establish legitimacy for its decision
to withdraw Vioxx.
Pfizer‘s actions towards Celebrex gave greater rise to the need for an
industry-wide decision about COX-2 drugs. The FDA‘s hearing on this group of
drugs was to be a significant public debate about the safety of these drugs. The
hearing was to keep Merck in the media and public agenda and lead to some
negative consequences for Pfizer.
4.5.2 Influence of the FDA
When Merck withdrew Vioxx, discussion about COX-2 drugs went public.
With such a strong emphasis on drug safety in the COX-2 category, discussions
about the efficacy of these drugs were no longer limited to closed negotiations
between pharmaceutical companies and the FDA. In response to the Vioxx
withdrawal, the FDA convened a joint meeting of the Arthritis and Drug Safety and
Risk Management Advisory Committees to review the benefits and risks of COX-2
medications in mid-February, 2005 (FDA, 2005). From 16 to 18 February 2005, the
panel heard theories from a range of industry representatives before providing advice
to the FDA. The FDA would make the final decision about these medications.
The FDA committee heard a range of theories about COX-2 drugs. Using a
prepared statement, Merck‘s Chief Research Officer Dr Kim drew on recent
Celebrex data to suggest that Vioxx was not a unique drug and that the effect may be
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present in the whole class of drugs. Merck said that the FDA‘s decision on COX-2
drugs would be taken into consideration. In this way, Merck opened the door ever-
so-slightly on Vioxx‘s return to the market with FDA support. Dr Kim also
reinforced that Merck‘s decision to withdraw Vioxx was the responsible choice
(Merck, 2005c).
In comparison, Pfizer maintained that the majority of studies showed that
Celebrex and Bextra were safe and argued against the presence of a class effect.
However, given recent research findings about Celebrex, not everything went
Pfizer‘s way. The FDA advisory panel accused Pfizer of not disclosing fully data
about Celebrex and Bextra (Harris, 2005, February 17) and also found
inconsistencies and bias in Pfizer‘s presentations (Harris, 2005, February 17).
Pfizer‘s responses, though minimal, showed a compromise strategy where the
company presented its theory about COX-2 drugs yet respected the regulatory
processes associated with the advisory panel. Following Oliver (1991), this choice
reflects a compromise strategy and the pacify tactic, where an organisation
accommodates institutional elements. Pfizer deferred to regulatory practice,
signalling acceptance to the processes and outcomes that may eventuate.
At the conclusion of the hearing, although the committee noted tolerable risks
in Vioxx, Celebrex, and Bextra (Harris, 2005, February 18), the panel recommended
that Vioxx be returned to the market and Celebrex and Bextra remain on the market.
The FDA advisory panel also raised concerns about the lack of power or influence of
the FDA in monitoring drugs post market approval (Harris, 2005, February 18).
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4.5.2.1 Influence of the FDA on Bextra
In response to the advisory committee‘s recommendations, the FDA ruled
that the COX-2 drugs carried a class effect of cardiovascular risk. The FDA ordered
that all drugs include a boxed warning about potential cardiovascular risk (FDA,
2005; Pfizer, 2005a) and that Pfizer withdraw Bextra from the market (FDA, 2005).
Although Bextra‘s cardiovascular risk could not be differentiated from other drugs, it
carried an additional risk of rare but serious skin reactions. This additional risk was
the basis of the FDA‘s request for Bextra‘s withdrawal (FDA, 2005; Pfizer, 2005a).
European regulators also requested the suspension of Bextra in their markets.
Although Pfizer ―respectfully disagreed‖ with the FDA‘s position on Bextra‘s
risk/benefit profile, it had no choice but to suspend sales of Bextra (Pfizer, 2005a).
This represented a compromise strategy where Pfizer gave in to the pressure but did
so under protest. That is, while Pfizer obeyed the FDA‘s request, its symbolic
communication showed much more than a passive acceptance of or conformity to the
FDA‘s decision. The FDA‘s decision also provides further support for the theory of
the Vioxx withdrawal acting as a pressure point. Though the FDA‘s decision came
some months after the Vioxx withdrawal cast attention on COX-2 drugs, the force of
it remained strong for some time. Novartis, though yet to gain approval to market its
COX-2 drug Prexige, noted the company would continue to work closely with the
FDA in the hope of soon gaining approval (Mathews & Hensley, 2004, April 8).
Although the FDA‘s request for Bextra‘s withdrawal was unexpected,
shareholders at least saw the regulatory-enforced withdrawal as having little long-
term effect on Pfizer‘s profits, which were already slumping (Berenson, 2005,
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April). If it were Celebrex that was being recalled, more stakeholders would have
reacted to the decision. Although Pfizer continued to communicate support for
Bextra, media reporting of the Bextra withdrawal was substantially less than when
Merck withdrew Vioxx. A regulatory-forced withdrawal would usually have higher
news values than a voluntary withdrawal. The first suggests the need for a strong
regulatory hand, and the latter shows a responsible organisation. In this case, the
difference in reporting outcomes can be explained by the industry context. Although
Merck explained its voluntarily withdrawal of Vioxx as being based on responsible
and ethical practice, that was not necessarily believed by the stakeholders and
corporate actors caught up in this case. Further, the FDA‘s decision to withdraw
Bextra provided some regulatory auspice over Pfizer, which still had Celebrex on the
market.
The FDA‘s request for Pfizer to withdraw Bextra demonstrated a change in
practice for the FDA. Media reports summarised the FDA‘s new position as being
cautious (Appelbaum, 2005, April 13). Even the director of the FDA‘s office of new
drugs agreed this represented a change in the agency‘s culture where caution is now
―in‖ and patient‘s rights are ―out‖ (Appelbaum, 2005, April 13).
4.5.2.2 Changes to the FDA
Through a series of events, the Vioxx withdrawal triggered changes in the
regulatory practices governing the pharmaceutical industry. First, the FDA acted
swiftly when Pfizer presented new information about the risks associated with
Celebrex. The FDA recommended doctors consider alternative drugs and suspended
the advertising and marketing of the drug (FDA, 2005). Second, the FDA took
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stronger and more decisive action, exceeding the recommendations of its specially-
convened advisory panel on COX-2 drugs. In the past, the FDA normally follows the
recommendations of the panels it convenes to investigate drugs. Third, and most
recently, the FDA called for the withdrawal of Bextra as it provided no unique
benefits when compared with drugs that were available on the market. In the past,
the FDA‘s jurisdiction was largely limited to drug approvals but this decision
showed an increasing emphasis on drug safety.
These changes to FDA policy represented a punctuation in regulatory
processes in the pharmaceutical industry. The changes to the FDA are illustrated in
Table 4.22. These changes occurred alongside Vioxx product liability trials.
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Table 4.22
Changes to FDA policy and decision-making
Date FDA change
14 January
2006
FDA changed the format of drug labels to make it easier for doctors and
patients to understand drug risks ("FDA issues new rules For drug labels,"
2006, January 19). As part of this policy, the FDA argued that federally
approved medication labels hold the potential to pre-empt state law and help
protect drug companies against litigation ("FDA issues new rules For drug
labels," 2006, January 19). With this new label, the FDA believes that people
who were injured by the drugs should not be allowed to sue drug companies
in state courts (Kaufman, 2006, January 19).
17 March
2006
FDA announced new guidelines for preliminary phases of drug development
to get better information about drugs from the beginning of the process
(Mathews & Winslow, 2006, January 12). The FDA announced an agreement
among eight major pharmaceutical companies that would allow them to share
test results early in drug development. The FDA hopes that this will produce
safer medicines and allow for the earlier detection of drug safety concerns
("Drug makers agree to share test data ", 2006, March 17).
23
September
2006
Results of FDA-commissioned drug safety report conducted by the Institute
of Medicine presented. The report described the FDA ―as rife with internal
squabbles and hobbled by underfinancing, poor management and outdated
regulations‖ that together affected its ―ability to ensure the safety of the
nation‘s drug supply‖ (Harris, 2006, September 23). The Institute of
Medicine recommended the FDA change labelling system and restrict
advertising for new drugs, have more power to monitor and censure
pharmaceutical companies, and review drugs every five years (Harris, 2006,
September 23).
31 January
2007
The FDA announced a number of policy changes designed to ―ensure
marketed drugs were as safe as advertised‖ (FDA, 2007a; Harris, 2007,
January 31). The FDA changes included a comprehensive assessment of
drugs 18 months after market introduction, the creation of an advisory panel
to improve the way the FDA communicates risks, and the tracking of real
patients who consume drugs (FDA, 2007a; Harris, 2007, January 31).
4 April 2007 FDA rejected Merck‘s application for Arcoxia, a drug similar to Vioxx,
based on safety risks and because it did not fill an unmet need in patients
(FDA, 2007b; Dooren, 2007, April 11).
21
September
2007
The Food and Drug Administration Amendment Act (FDAAA) was signed
into law, giving stronger provisions to the FDA for drug safety. The key
principles of the act included:
Power to require post-marketing studies, change drug labels, and
restrict distribution
Injection of $225 million over five years for drug safety
Elevation of drug-safety‘s organisational status
Modernisation of adverse event reporting system and access to large
government or private databases on drug reactions (W. B. Schultz,
2007).
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The FDA Amendment Act represented a profound change in regulatory
processes by emphasising the role and importance of drug safety. The previous
policy of the FDA was introduced in 1992 and designed to expedite the drug
approval process, in an era of the increased prominence of AIDS-related medication.
Although the FDA decreased the time taken to approve drugs, the consequence of
this outcome was the ability to monitor and take action against drug companies. The
actions of the FDA towards drug safety are clearly seen in its decision to encourage
strongly Pfizer‘s withdrawal of Bextra.
But not everyone was happy with or recognised the changes would take
immediate effect. Merck was one of the first pharmaceutical companies to get a real
sense of the new FDA. Arguably, Merck was continuing to operate within the
expectations and experiences of the old framework of the FDA. In April 2007,
Merck was notified by the FDA that its approval for a new COX-2 drug Arcoxia was
denied (FDA, 2007b). The media reported the FDA‘s decision to deny Arcoxia
market approval was based on the grounds that other drug alternatives were already
available on the market.
Media opinion pieces argued that the FDA‘s decision had the potential to
deny patients a much-needed range of drugs as the matching of drug to patient
requires more not less choice (Gottlieb, 2007, April 17). Other reports suggested the
FDA was operating beyond its role by evaluating not only the safety and
effectiveness of potential drugs but also whether the drug is better than what is
already available (Henderson & Hooper, 2007, May 17). In a letter to the editor, the
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FDA responded to these claims, arguing its decision was made based on the safety
risks of Arcoxia (Galson, 2007, May 26).
In August 2007, Novartis recalled its COX-2 drug, Prexige, from the
Australian market following requests from the Therapeutic Goods Administration
(the Australian drug regulator). Prexige had caused two deaths and liver transplants
in two patients (―Novartis pulls drug in Australia,‖ 2007, August 14). Although the
media coverage was minimal in the US, the recall in Australia meant Novartis CEO
Daniel Vasella did not expect Prexige to be approved for sale in the US (Greil, 2007,
September 13). As anticipated, the FDA rejected Novartis‘s Prexige application. In
November 2007, Prexige sales and marketing were suspended in the UK and
Germany following a review by the European regulatory group (Novartis, 2007b). In
its annual report, Novartis indicated that Merck‘s recall of Vioxx had led to an
increased regulatory focus on product safety and efficacy. This new focus made the
drug approvals process more challenging and more expensive for pharmaceutical
companies (Novartis, 2007a).
The new FDA approach was catching on. As illustrated above, chief
executive officers of Novartis and also of Wyeth identified stricter safety standards
at the FDA and the challenge of winning FDA approval for its drugs (Novartis,
2007a; Whalen & Mijuk, 2007, October 19). The FDA denied this perception,
arguing that there had been ―no systematic changes in how it evaluates new drug
applications‖ (Loftus, 2007, November 7). The response from Novartis represented
one of the very few times the organisation engaged in communication about changes
to the FDA.
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4.5.3 Changes to Medical Reporting
Returning to the time before changes to the FDA started to take effect, Merck
and other pharmaceutical companies were facing another kind of pressure. This time,
the pressure came from a coalition of medical editors. On 26 May 2005, led by the
New England Journal of Medicine‘s (NEJM) Dr Jeffrey Drazen, a coalition of
medical editors called for greater disclosure of clinical trials from drug companies
(R. Zimmerman & Tomsho, 2005, May 26). Companies like Pfizer, Merck and Eli
Lily had started to disclose clinical trial results on a government website, yet NEJM
editor Dr Jeffrey Drazen said the current level of disclosures was insufficient (R.
Zimmerman & Tomsho, 2005, May 26). The coalition of medical editors said they
would refuse to publish results of trials that do not comply with international
transparency standards ("Hiding the data on drug trials," 2005, June 1).
The context of changing environmental conditions and expectations enabled
the coalition of medical editors to make public its concerns. That is, while medical
editors had aired their concerns to the academic community, the media‘s agenda for
Vioxx provided an opportunity for medical editors to share their concerns in
mainstream media. The group of medical editors communicated in public settings
how pharmaceutical companies used journal articles as evidence to support the
efficacy of drugs during sales meetings with prescribing physicians. In doing so, this
added pressure on the pharmaceutical industry to disclose research and marketing
processes.
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Both Pfizer and Merck responded to the allegations of the coalition of
medical editors. Pfizer argued that it had complied with the ―spirit and letter‖ of the
government website and other industry commitments (LaMattina, 2005, June 15).
Merck responded in a similar tone (P. S. Kim, 2005, June 8). These responses
represented a defy strategy where the company openly argued against the claims of
the medical editors.
The NEJM continued to pressure Merck. In December 2005 and during a
Vioxx product liability trial, the NEJM raised concerns about the scientific integrity
of a Vioxx article written by a Merck researcher. (A full description of this event is
detailed in Section 4.3.6.1.) Merck rigorously defended its actions and wrote letters
to the editors of mass media publications, and published an open letter to the medical
community. In doing so, Merck reminded readers of Merck‘s ethical standards.
Merck researchers refused to submit the correction requested by the NEJM. Merck‘s
responses to the NEJM allegation again adopted a defy strategy.
In May 2006, Merck released new data from the APPROVe study that
triggered the Vioxx withdrawal in 2004. This follow-up analysis showed that
patients who took Vioxx were 1.64 times as likely to have a heart attack or stroke
during a subsequent year as when they were not taking Vioxx (Winslow et al., 2006,
May 12). The study also showed some support that the risk of Vioxx began within
four months of consumption (Tesoriero & Winslow, 2006, May 18). This news
differed dramatically from the 18-month time frame Merck had previously
maintained and used as the basis of arguments in legal proceedings where plaintiffs
had consumed Vioxx for shorter time frames (Tesoriero & Winslow, 2006, May 18).
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Merck explained that the new time frame information was based on a statistical error
in reporting (Berenson, 2006, May 31).
Merck responded using a compromise strategy. Although Merck corrected
the statistical error in the study, it argued that this process did not change the
findings of the study. Merck said there was a seven percent chance that Vioxx had an
equally high risk of causing heart attacks both before and after the 18-month time
frame. The correction, according to Merck scientist Dr Kim ―doesn‘t change our
conclusion; it doesn‘t change the results‖ (Carreyrou et al., 2006, May 31). Other
scientists argued that while this number might seem small, it was high enough to
argue that Merck‘s 18-month theory is unproven (Berenson, 2006, May 31). Merck‘s
lawyers remained confident in using the 18-month risk time frame in future trials
(Tesoriero, 2006, June 27).
On 27 June 2006, the NEJM published a correction to Merck‘s original study.
The unsigned correction said key results in the original publication were reached by
a different method than what was described in original article (Tesoriero, 2006, June
27). The correction said references to 18-month time frames for safety should be
deleted (Tesoriero, 2006, June 27). Merck responded with an open letter and
described how it informed NEJM of the data analysis error (Merck, 2006e).
In July 2007, results from VICTOR, a study designed to investigate the effect
of Vioxx on colon cancer, showed that patients had increased heart risks soon after
taking the drug (Tesoriero, 2007, July 3). VICTOR was a study undertaken by
researchers at Oxford University and the trial was stopped when Vioxx was
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withdrawn in 2004. The study showed heart attacks occurred within a 12 month time
frame and almost immediately after taking Vioxx (Tesoriero, 2007, July 3). Merck‘s
initial response to these data explained them as being inconsistent with data found in
other placebo studies (Tesoriero, 2007, July 3). In a subsequent company statement,
Merck said the VICTOR study results were limited by a premature study termination
and a small number of events (Merck, 2006g).
Merck was scrambling to sustain as legitimate and believable its claims that
Vioxx‘s risks were present only after 18 months of consistent use. This message was
the foundation of its legal trials. Further, although these negotiations were reported
in the mass media, they largely related to a specific stakeholder group: prescribing
physicians. Further, pharmaceutical companies use academic journal articles as
evidence to support the effectiveness of the drugs they are marketing to doctors. It
also seemed that the company was going full circle. Merck decided to withdraw
Vioxx based on the results of a clinical trial. Merck had argued the risks of Vioxx
were seen after 18 months of use, as confirmed by a clinical trial. Merck had set up
clinical trials as the only legitimate source of information about drug safety and
effectiveness. Yet, these clinical trials are only considered legitimate themselves
when their findings are peer reviewed and published in highly-regarded medical
journals. This relationship is critical not only to Vioxx but to every current and
future drug produced by Merck. Without the endorsement from medical editors,
Merck risked losing a necessary part of its legitimacy into the future.
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4.5.4 Litigation
From late April 2005, at around the same time as medical editors were
pressuring the pharmaceutical industry, product litigation for Vioxx started against
Merck. The legal system was a pressure for Merck that went on from early 2005 to
late 2007. The pressure point of litigation was championed by plaintiff lawyers who
added personality and flamboyance to the trials in an effort to gain the upper hand
for their clients. During the course of litigation, Merck‘s legal strategy was to defend
each case individually, believing that the burden of proof lay with the plaintiff and
Merck‘s data established that Vioxx needed to be consumed for 18 months before
effects were present. This chapter section discusses liability trials culminating in a
settlement agreement.
4.5.4.1 Liability trials
Merck used both the time frame and ‗burden of proof‘ as criteria for what
was deemed a defensible trial. This approach represents a manipulate strategy where
Merck sought actively to redefine expectations for a valid trial. In this way, Merck
was demonstrating power over the institutional pressure of the liability trials. Merck
also established that it was prepared to defend cases for a very long time (Berenson,
2005, July 11), demonstrating further conviction behind the manipulate strategy.
Merck faced a number of product liability trials in quick succession. During
these trials, Merck denied legal liability for Vioxx and continued to reinforce its
manipulate strategy by drawing links between plaintiff‗s death or injury and illnesses
amongst the general population (Berenson, 2005, July 13). These claims were
justified by drawing on scientific evidence (Kaufman, 2005, August 20). (See section
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4.5.4.1 for a Table of trials.) Media reporting about the Vioxx product liability trials
ran from April 2005 to August 2007. When Merck lost a trial, the company
continued to employ a manipulate strategy in order to set and reinforce its belief that
the plaintiff‘s case did not meet the standards of law or provide evidence to link
Vioxx with the cause of death (Kaufman, 2005, August 20). Merck‘s messaging
during these trials aimed to de-legitimise the plaintiff‘s cases. These statements,
represented in Table 4.23, also represent manipulate strategies.
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Table 4.23
Vioxx Product Liability Trials in Media Reporting Order
Date Plaintiff Messages
15.07.05
to
20.08.05
Robert Ernst ''We believe the plaintiff did not meet the standard set by Texas
law to prove Vioxx caused Mr. Ernst's death,'' Mr. Skidmore said
(Berenson, 2005, August 20).
Merck, based in Whitehouse Station, N.J., said it was
"disappointed" in the jury's decision and vowed to appeal. In a
statement Saturday, Kenneth C. Frazier, Merck's senior vice
president and general counsel, said the plaintiff's case was
"fundamentally flawed" and that the company has "strong points
to raise on appeal" (Tesoriero, Brat, McWilliams, & Martinez,
2005, August 22).
15.09.05
to
04.11.05
Frederick
Humeston
But Mr. Frazier, Merck's general counsel, said the company
believed that jurors needed to know the truth about Mr.
Humeston's history of work-related complaints and stress.
''It is never our goal to attack anybody on the witness stand or
anywhere else, but there is an awful lot at stake in these cases,''
Mr. Frazier said. ''We're entitled to cross-examine people''
(Berenson, 2005, November 4).
30.11.05
to
13.12.05
Richard
Irvin The jury's decision confirms that there is no medical or scientific
evidence showing short-term use of VIOXX increases the risk of
heart attack and contributed in any way to the unfortunate death
of Richard Irvin," said Philip Beck, of the law firm of Bartlit
Beck, Merck's lead trial lawyer in the case. "Mr. Irvin only took
VIOXX for less than a month. He suffered multiple long-standing
risk factors for a heart attack including partially clogged arteries.
Mr. Irvin would have suffered a heart attack when he did,
whether he was taking VIOXX or not"(Merck, 2006d).
10.01.06
to
31.01.06
Leonel
Garza There is simply no reliable scientific evidence that VIOXX
caused Leonel Garza Sr.'s heart attack," said Richard L.
Josephson of Baker Botts, LLP, lead attorney for Merck's defense
team in the case. "It is also clear that that Merck provided to the
U.S. Food and Drug Administration all required information
about VIOXX. There was no evidence that Merck acted with
gross neglect and under Texas law that means punitive damages
should not have been awarded" (Merck, 2006c).
07.03.06
to
12.04.06
Thomas
Cona and
John
McDarby
"The jury heard irrelevant and prejudicial information from the
plaintiffs' attorneys about Merck and an appeal will be our next
step," said Kenneth C. Frazier, senior vice president and general
counsel of Merck. "The evidence is that Merck acted ethically
and in a responsible manner - from researching VIOXX prior to
approval in clinical trials involving almost 10,000 patients - to
monitoring and studying the medicine while it was on the market
- to voluntarily withdrawing the medicine when we did" (Merck,
2006b).
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Throughout the Vioxx litigation, Merck continued to draw on manipulate
strategy to reinforce its success in proving its case for plaintiffs who took Vioxx for
both the short and long-term (Loftus & Tesoriero, 2006, July 14). Merck‘s messages
remained consistent with the company insisting that it had appropriately and
responsibly developed and marketed Vioxx and that plaintiffs provided no evidence
to link Vioxx directly to their medical conditions. Thus, Merck consistently applied a
manipulate strategy that aimed to set and reinforce criteria for what made a
defensible case. The manipulate strategy during these product liability trials set the
platform for Merck to settle all claims.
4.5.4.2 Legal settlement
On 9 November 2007, three years after the Vioxx withdrawal, Merck agreed
to settle the 27,000 lawsuits filed in relation to the drug. Merck‘s decision to settle
Vioxx cases represented a continuation of the manipulate strategy. This persistence
with the strategy is justified by a comment made by Merck‘s Ken Frazier, former
general counsel. Mr Frazier said the decision to settle was not a change in strategy
but a responsible resolution to existing strategy (Merck, 2007c). Through Oliver‘s
(1991) lens and retrospective analysis, Merck‘s legal strategy can be viewed as a
continuation of the manipulate strategy. The decision was explained by Merck‘s
CEO and general counsel in the following way:
This agreement is the product of our defense strategy in the United States during the
past three years and is consistent with our commitment to defend each claim
individually through rigorous scientific scrutiny...Specific causation has been a very
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difficult issue. This is an opportunity to end a long and difficult litigation that has
stretched on for more than three years (Merck, 2007b).
By considering these messages from Merck‘s executive team and the
manipulate strategy used throughout the Vioxx litigation, it is clear to see that all
along Merck was redefining expectations for a legitimate and valid legal trial. Merck
had been successful in establishing power over the pressure of litigation.
Litigation was the final pressure faced by Merck. Merck‘s strategic response
demonstrated active resistance against this type of pressure, especially when
compared to its responses to other pressures. Merck was facing Vioxx litigation well
before it withdrew Vioxx. Perhaps this knowledge helped Merck develop a legal
strategy that would lead to the mass settlement of claims.
4.5.5 Summary of Oliver’s Template
In this template, Merck started out as a company that withdrew a drug that
had high sales when clinical research confirmed its cardiovascular risks. By taking
this action, Merck was seen as a company that prioritised patients and sacrificed
profits. Although the contest between science, profits and ethics alone makes for an
interesting narrative, the withdrawal of Vioxx became a pressure on competitors and
the regulatory authority in the pharmaceutical industry. In this way, the purpose and
significance of an organisational action is determined by the outcomes of that action.
In Merck‘s case, the act of withdrawing a product became much more than an
organisational adjustment. The Vioxx withdrawal triggered sustained media interest
not only in the actions of Merck but in the safety of drugs and the effectiveness of
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the FDA in protecting consumers. Without the Vioxx withdrawal, there would have
been no impetus to investigate the COX-2 class of drugs or transform regulatory
practices. Vioxx started the conversation about risk and safety that would be played
out over the duration of the study.
As the Vioxx withdrawal became a pressure for regulatory reform, three
other pressures emerged for Merck and other companies. The second pressure was
changes to the FDA. At the next opportunity for regulatory response after the Vioxx
withdrawal, the FDA tested out new approaches. When Pfizer announced one of its
clinical trials showed high risks in patients taking Celebrex, the FDA responded
swiftly by calling for a ban on advertising and for doctors to consider alternative
treatments. Pharmaceutical companies‘ responses to the new FDA remained
grounded in their past experiences with the agency.
It took some time for Merck, Pfizer and other stakeholders to learn about the
new FDA and shift their expectations of its new approaches to regulation. For
example, Merck and others were concerned by the FDA‘s decision to not approve
Arcoxia, Merck‘s replacement COX-2. According to the FDA, Arcoxia was not
approved because other similar drugs were available on the market. Yet at the same
time as Merck and others were becoming aware of changes in FDA, other
pharmaceutical companies expected difficulties with drug approvals. For example,
Novartis communicated to the market that it did not expect the FDA to approve its
COX-2 drug, Prexige.
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The third pressure faced largely by Merck was from journal editors. A
coalition of medical journal editors called for new practices in academic research.
The coalition wanted greater disclosure of the clinical trials undertaken by
pharmaceutical companies, requiring this before agreeing to publish any related
articles. The NEJM was particularly strong in its attacks on Merck, choosing to
publicise concerns about the integrity of a Vioxx article in the middle of a Vioxx
liability trial. Although Merck defied the validity of the NEJM‘s claims, the journal
continued in its efforts to preserve the integrity of publications in the journal.
The final pressure for Merck saw the company move to a more active form of
resistance. During Vioxx litigation, Merck set and continued to employ a strategy for
a defensible trial, resulting in a mass settlement of 27,000 individual suits. The
Merck settlement was portrayed in the mass media as a victory for the organisation
given the overwhelming support from plaintiffs.
What each of these accounts of pressures shows is that each pressure resulted
in different strategic responses from Merck and other affected organisations.
Although each pressure came from a different source, each was linked to the others
in a path-dependent sequence initiated by the Vioxx withdrawal. That is, the Vioxx
withdrawal became a trigger for regulatory change, the focus for medical journal
editors, and one of the key bases for litigation. Further, the processes of a changing
regulatory system presented a new type of context for organisational decision-
making and actions as illustrated in the summary of the second institutional trigger.
Based on these sequences of pressure points, what becomes interesting is the way the
primary organisation of Merck was affected in comparison to secondary
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organisations including Pfizer. Oliver‘s (1991) framework allowed for the analysis
of the integration of the strategic responses of multiple organisations that were
affected by the same pressures. As a result, this narrative enables the direct
comparison of strategies used by Merck and Pfizer.
Merck and Pfizer produced COX-2 drugs but their experiences with each of
these drugs after the Vioxx withdrawal were remarkably different. Section 4.5.1.3 of
Oliver‘s (1991) template provides an overview of some of the different processes
and outcomes for Merck and Pfizer. Regulatory support and buffer was available to
Pfizer but not to Merck. When Merck withdrew Vioxx, it did so against the original
counsel of the FDA. As a result, Merck was primarily responsible to legitimise the
Vioxx withdrawal. In comparison, Pfizer‘s actions around Celebrex and Bextra
occurred within the shadow of the Vioxx withdrawal and a more responsive FDA.
As a result of the FDA‘s involvement, Pfizer was buffered from media speculation.
That being said, both Merck and Pfizer lost sales and profits when Vioxx and Bextra,
respectively were withdrawn from the market but Pfizer retained Celebrex. There
may be some similarities in the financial cost of the withdrawals but there were
strong differences in the media‘s treatment of the decisions of primary organisations
that affected the actions and practices of secondary organisations.
4.6 Summary and Analysis of Crisis Communication Responses
This thesis is interested in understanding the interplay between actions and
context in organisations that are involved in crises that transformed the
pharmaceutical industry. The narratives provided three different contexts within
which to understand the crisis communication and actions of organisations under the
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templates of Coombs (2006b), Allen and Caillouet (1994), and Oliver (1991). In
order to enable the analysis of the interplay between actions and context in section
4.7, this section provides a set of visual maps to display the crisis communication or
strategic responses of the organisations involved in the Vioxx withdrawal and
subsequent events.
The visual maps are set out following Siggelkow‘s (2002) research.
Siggelkow (2002) used pattern maps to illustrate organisational change, including
punctuated equilibrium, by identifying when an organisation adopted, rejected,
reinforced, and elaborated core elements over time. To present this analysis,
Siggelkow (2002) identified five processes of change: patching, thickening, coasting,
misfits (failing to fit), and trimming: Patching refers to the process of adopting a
new core element and the subsequent reinforcement; thickening refers to the process
of reinforcing and elaborating core element; coasting refers to the process of not
reinforcing an element over a selected period of time; misfits (failing to fit) refers to
a process where new core elements do not align with existing core elements; and
trimming refers to a process where organisations delete existing core elements
(Siggelkow, 2002).
Punctuated equilibrium theory is illustrated when most or all core elements
change (Siggelkow, 2002). In this thesis, the punctuation event is defined as the
withdrawal of Vioxx, which changed the market environment, triggering
transformative change in regulatory practices that affect the industry.
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The purpose of the visual maps is to depict the changes or persistence in
crisis communication (Allen & Caillouet, 1994; Coombs, 2006b) or strategic
responses (Oliver, 1991) across the study time frame. This illustration enables the
identification of interaction among the crisis communication or strategic response
strategies.
4.6.1 Visual Maps using Coombs’ Narrative
The Coombs‘ (2006b) template provides a rich set of crisis response
strategies that sit at the communication and action level for organisations. The
context for the Coombs‘ (2006b) narrative focuses on restoring the focal
organisation‘s reputation by examining the direct influence of the environment on
Merck‘s decisions. The visual map for Merck using Coombs‘ (2006b) template is
illustrated in Figure 4.7.
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1. Vioxx on market 2. Vioxx withdrawal from market 3. Diminish strategy posture used to explain Vioxx withdrawal 4. Rebuild strategy posture used to explain settlement of litigation 5. Deny strategy posture used intermittently throughout crisis
Pre-crisis Crisis Inquiries Litigation Settlement of litigation
4
3
3 3
1
2
1
4 4
5
5
5
Figure 4.7Visual map of Merck‘s strategies using Coombs‘ template, demonstrating a change in strategies over time.
Key
Elaboration of strategy
3 3
Introduction of strategy
Strategy continues
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The visual map illustrates two changes in strategies: 1) when Merck
withdrew Vioxx from the market signalled by the shift from strategy one to strategy
two, and 2) when Merck decided to settle litigation signalled by the shift from
strategy three (diminish) to strategy four (rebuild). Strategy five (deny) was used
intermittently throughout the crisis time frame.
The path of Merck‘s selection of crisis response strategies shows a strong
focus on the diminish category. Merck‘s strategy choices show a thickening
(Siggelkow, 2002) over time or the elaboration and reinforcement of the diminish
posture of crisis response from the start of the crisis up to the end of 2007. The
decision to settle the Vioxx litigation represented a patching strategy (Siggelkow,
2002) where the rebuild strategy took over from the diminish strategy. The rebuild
strategy occurred when Merck decided to settle cases. Merck also drew on the deny
response strategy from time to time. Only the primary crisis response postures were
considered in this diagram and as a result, the bolster responses were not integrated.
The visual mapping of the Coombs‘ (2006b) template shows persistence in
Merck‘s diminish crisis response strategy. The organisation continued to enact a
diminish strategy to reduce the significance of the crisis for a prolonged period of
time. This suggests that the organisation‘s communication choices were grounded in
inertia. Another factor that contributed to an extended diminish strategy was the
timing of Vioxx litigation. From Coombs‘ (2006b) perspective, Merck‘s persistence
with this strategy delayed the resolution of the crisis, and as a result the ability to
restore Merck‘s reputation. In essence, Merck‘s reputation was suspended for a
number of years as the organisation resisted environmental pressures and change. As
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well as the constant use of the diminish crisis response, Merck enacted a deny
response from time to time during the crisis, signalling a coasting process
(Siggelkow, 2002). Merck generally drew on denial-based crisis communication in
response to research findings about Vioxx or allegations of scientific misconduct
from journal editors. However, both deny and diminish crisis response strategies
were ineffective in closing the crisis as significant as the Vioxx withdrawal had
become. The action to settle cases was the trigger for the closure of the crisis for
Merck.
4.6.2 Visual Maps using Allen and Caillouet’s Narrative
The Allen and Caillouet (1994) template provides a typology upon which to
examine the communication and legitimation strategies used by organisations in
crisis. In this thesis, Allen and Caillouet‘s (1994) template has been used to
understand the crisis communication strategies used by Merck as it handled a crisis
event and faced accountability pressures and challenges from its complex web of
corporate actors. As such, the context for this template is the pharmaceutical industry
where several corporate actors including competitors and regulators become
intricately involved in the Vioxx withdrawal and add pressure on Merck as it seeks
to restore legitimacy. The visual map for Merck using Allen and Caillouet‘s (1994)
template is illustrated in Figure 4.8.
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1. Excuse strategy used to explain Vioxx withdrawal 2. Justification strategy used to explain Vioxx withdrawal 3. Ingratiation strategy used to build confidence in Merck 4. Factual distortion strategy used intermittently throughout crisis
Crisis Inquiries Litigation Settlement of litigation
15
1 1 1 1
2 2 2 2 2
3 3
4 4 4 4
Figure 4.8Visual map of Merck‘s strategies using Allen and Caillouet‘s template, demonstrating a change in strategies over time.
Key
Elaboration of strategy
3 3
Introduction of strategy
Strategy continues
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The visual map depicts the crisis communication adopted by Merck after the
Vioxx withdrawal. The visual mapping of Allen and Caillouet‘s (1994) template
shows dominance and persistence in the justification response. Merck also drew
heavily on excuse, ingratiation and factual distortion strategies during the four-year
study. It is also important to note that most strategies continued to be drawn on from
time to time. All strategies adopted patching or coasting processes over time
(Siggelkow, 2002). These observations are elaborated in the next few paragraphs.
Under Allen and Caillouet‘s (1994) template, Merck‘s crisis communication
focused most significantly on a justification strategy where the company accepted
responsibility for Vioxx but not for the consequences of the drug during its time on
the market. Throughout the case study, Merck‘s justification response developed
from explaining why the company withdrew Vioxx to explaining why the company
was rigorously defending itself during litigation. This visual map also shows that
Merck did not rely on one crisis response strategy but integrated other strategies
across the time frame of the thesis.
Although the justification response was the most consistent strategy used by
Merck, the company drew on excuse, ingratiation and factual distortion strategies to
build a stronger rationale and respond to the transforming environment. The
withdrawal of Vioxx triggered responses from a number of corporate actors
including Pfizer, the FDA, and independent medical researchers. These responses
added further pressure on Merck, requiring the organisation to engage an excuse
crisis response strategy to demonstrate that the company had appropriately
developed and marketed the drug prior to its withdrawal. From time to time, and
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largely in response to the claims of medical researchers, Merck also used a factual
distortion strategy to show that the allegations of scientific misconduct were untrue
or that internal emails were taken out of context.
For Merck, an organisation under a significant amount of pressure that
oscillated over time, it is interesting to note a drop in ingratiation strategies during
the course of Vioxx litigation. According to Allen and Caillouet (1994), ingratiation
strategies are used to remind stakeholders of previous good deeds of the organisation
and as a way of showing conformity with the institutional environment. Ingratiation
strategies were used most during the first year after the Vioxx withdrawal but were
less prevalent in the latter part of the thesis.
In summary, Merck used a justification strategy as the pillar of its
explanation of the Vioxx withdrawal but engaged other strategies in response to
accountability pressures added by its web of corporate actors.
4.6.3 Visual Maps using Oliver’s Narrative
The visual map for Oliver‘s (1991) strategic responses to pressures is
developed to display the strategic responses of both Merck and Pfizer. Oliver‘s (199)
alternative template provided a typology of strategic responses that could be applied
to multiple organisations. This thesis has analysed the strategic responses of both
Merck as the primary organisation in the crisis and Pfizer as a secondary
organisation. The context for this template relates to change and the level of
organisational agency over the environment. The visual map for Merck and Pfizer
using Oliver‘s (1991) template is illustrated in Figure 4.9.
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1. Compromise strategy adopted during Vioxx
withdrawal by Merck and Pfizer 2. Defiance strategy adopted by Merck and Pfizer 3. Manipulate strategy adopted by Merck during litigation
Figure 4.9 Visual map of Merck‘s strategies using Oliver‘s template, demonstrating a change in strategies over time.
Vioxx recall Research Litigation Settlement of litigation
Key
Elaboration of strategy
1 1
Introduction of strategy
Strategy of Merck
1
Strategy of Pfizer
1
2 2
1 1 1 1 1 1
1 1 1 1 1 1 1 1 1 1
2
3 3
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This visual map depicts the strategic responses of Merck and Pfizer over time
and also shows the differences in the responses of both organisations. In the initial
stages of the crisis, Merck drew on a range of strategic responses seeking initially to
legitimise the Vioxx withdrawal. However, once the legal trials began, Merck
enacted and patched (Siggelkow, 2002) a manipulate strategy to clearly establish the
basis of a legitimate trial. This strategy led to the settlement of litigation. In
comparison, Pfizer drew largely on a compromise strategy, which was patched
(Siggelkow, 2002) throughout the time frame of the thesis. Pfizer compromised
around a series of regulatory decisions including the suspension of Celebrex
advertising and the recall of Bextra. Although a compromise strategy may have
affected Pfizer‘s bottom line, this strategic response enabled Pfizer to be protected or
covered under the auspices of a regulatory framework. As such, this visual map
suggests that secondary organisations like Pfizer are potentially more likely to
display conformity to organisational environments.
Although the strategic responses of Novartis were studied as part of this
thesis, the number of these responses was limited because its COX-2 drug Prexige
did not have regulatory approval in the US. However, Novartis was a keen observer
of the interactions among Merck, Pfizer, and the FDA. As a result of these
interactions, and as demonstrated in its 2005 Annual Report, Novartis was acutely
aware of the changing regulatory conditions and cautious behaviour of the FDA in
approving drugs:
The withdrawal of the painkiller Vioxx by the US company that discovered and
marketed the drug along with withdrawals of other medicines in recent years—has
ignited a heated debate about drug safety.
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―There is no doubt that the news around Vioxx has led to more conservative
attitudes toward new therapies as well as existing medicines,‖ Dr Vasella says.
The voluntary withdrawal of Vioxx—a medicine in the category of
painkillers called COX-2 inhibitors—posed a strategic dilemma for Novartis which
has a COX-2 inhibitor of its own, Prexige, in registration in a number of markets....
...―We believe Prexige is an excellent alternative for the right patients—who
are at risk for GI bleeds and who are free of any cardiovascular risks.‖(Novartis,
2005).
Several years later, and after Prexige was recalled in Australia in August
2007, the FDA issued Novartis with a ―not approvable‖ notification in relation to
Prexige (Novartis, 2007a). In explaining this decision in their annual report, the
company noted the ―setbacks‖ faced in recent years in relation to both gaining
approval for and continuing to keep drugs on the market (Novartis, 2007a).
4.7 Comparison of Alternative Templates
The narratives presented in this chapter tell three different stories about crisis
communication. Each story is told through a different lens or template, allowing us
to zoom in to the micro level and zoom out to the macro level to understand the
crisis communication choices of primary and secondary organisations involved in
crisis events that transform industry practices. The process of zooming in (micro
perspective to focus on single organisations) and zooming out (macro perspective to
study multiple organisations) (Nicolini, 2009) to and from the alternative templates
reveals new insights about crisis communication, change, and the relationships
among multiple organisations. Figure 4.10 illustrates this approach.
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Figure 4.10 Zooming in and out of alternative templates, demonstrating the micro
focus of Coombs‘ template on organisational strategies and the macro focus of
Oliver‘s template on multiple organisations and institutional processes.
The templates not only describe the events and crisis communication
approaches of the primary and secondary organisations but draw out explanations
about why organisations communicated during sequences of events. Although the
timeline of events is consistent throughout, each alternative template, from Coombs
(2006b) to Allen and Caillouet (1994) to Oliver (1991), emphasises different factors
and required re-interpretations of the same events. In this section, I will elaborate on
the similarities and differences across each alternative template by zooming in and
out and identifying their bases for explaining key events. This process demonstrates
the importance of using three alternative templates to understand and explain how
multiple organisations communicate during crisis events that transform the
pharmaceutical industry.
Zooming out
Zooming in
•Template 3: Oliver
•Active engagement across organisations
•Primary and secondary organisations
•Template 2: Allen & Caillouet
•Web of actors pressure focal organisation
•Template 1: Coombs
•Focal organisation’s crisis communication
•Primary organisation only
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4.7.1 Three Different Stories of and Drivers for Crisis Communication
The templates in this chapter have given us the ability to view the Vioxx
withdrawal and ongoing crisis events through a powerful lens. The lens can be
adjusted to zoom in (Nicolini, 2009) on the detailed actions of Merck, zoom out
(Nicolini, 2009) to focus on both Merck and its surroundings, and zoom out to pick
up the interactions between Merck and the corporate actors caught up in the event.
Based on the positioning of this lens, different types of evidence come into the
picture frame to guide our explanations of the moving images before us. Each
template recognises certain information in order to both describe and explain what
happened over of the course of the thesis (Allison & Zelikow, 1999). In this section,
I elaborate on the bases of explanation for each template that become the causal
drivers for change in crisis communication.
The templates are driven by the frameworks and theories that sit behind each
template. Coombs‘ (2006b) template is based on situational crisis communication
theory. This theory guides the decision-making of organisations in crisis by
considering the situational and historical factors that affect organisations. Factors
such as the type of crisis, attributions of blame, and reputational threat determine the
type of crisis response required in order to restore an organisation‘s reputation. As a
result, for Coombs‘ (2006b) template, restoring organisational reputation is the
rationale for the selection of crisis response strategies for an organisation.
Allen and Caillouet‘s (1994) framework uses impression management as a
basis for a typology of message strategies and institutional theory as a way to explain
how these strategies could influence organisational legitimacy. The integration of
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institutional theory allows Allen and Caillouet (1994) to examine organisations as
part of a ―complex web of relationships‖. In this way, an organisation‘s legitimacy
can be influenced by an organisation‘s message and the actions and messages
enacted by its network of corporate actors. These corporate actors can place
additional accountability pressures on the focal organisation and thus affect its
ability to restore organisational legitimacy. As a result, the driver for Allen and
Caillouet‘s (1994) template, restoring legitimacy and responding to accountability
pressures from a network of corporate actors are the rationale for the selection of
message strategies for an organisation.
Oliver‘s (1991) framework is based on a typology of an organisation‘s
strategic responses to institutional pressures towards conformity. According to
Oliver (1991), organisations can respond to institutional processes on a continuum
with conformity to known standards on one end and the introduction of new
standards at the other. This framework provides an opportunity to build on Allen and
Caillouet‘s (1994) framework by examining and comparing the strategic responses
of multiple organisations. In this way, for Oliver‘s (1991) template, recognising
shifts in institutional practices (as a result of strategic responses to institutional
pressures) is the rationale for strategy selection. These rationales are set out in Figure
4.11.
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Figure 4.11 Drivers for change in strategies across alternative templates.
Based on these different yet linked rationales for change in crisis
communication, the next section of this chapter will summarise the differences in
interpretation across each template and narrative.
4.7.2 Differences in Interpretation
The rationales for change in crisis communication and strategic responses are
based on the theories behind each template. Each theory selects as important a
different context that ranges from a micro to macro perspective. It is this context that
influences the level of zoom (Nicolini, 2009) with which to view the organisations,
crisis and related events. As a result of the zoom, each template focuses on and
describes different events and offers different ways to explain crisis communication
and strategic response. The differences in interpretation across the templates relate to
both action and context as central components in process theory. These two
components will be explicated in this section of the chapter.
Zooming into Coombs‘ (2006b) framework enables a very detailed micro
view of the crisis decisions and communication of the primary organisation, Merck.
In this way, Coombs (2006b) enables a focus on the action level of the crisis. In the
Coombs
Restoring reputation
Allen & Caillouet
Responding to accountability
pressures
Oliver
Recognising shifts in
institutional practices
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months leading up to the Vioxx withdrawal, nothing in the media hinted at the crisis
about to befall Merck. By all media accounts, there were no brewing reputational
concerns and Vioxx seemed on track after being approved by the FDA for juvenile
arthritis. But 20 days after this approval, Merck took corrective action to withdraw
Vioxx from the market. This decision was taken to preserve and protect Merck‘s
reputation. The company realised it would need to build a solid rationale for this
unexpected decision, and hoped that through the combination of corrective action
and supportive crisis communication, the company could return to business-as-usual.
The Vioxx withdrawal seemed straightforward enough: company receives data that
show high risks and withdraws product to prevent risks. To explain this choice,
Merck framed the Vioxx withdrawal as being in the best interests of patients and
science, and reinforced the ethics and values of the organisation. The company set up
processes for the collection and reimbursement of unused Vioxx pills. Merck was
practising textbook crisis management and communication and yet, the crisis
continued.
Through Coombs‘ (2006b) lens, one of the reasons for the continuing crisis
related to Merck‘s historical decision-making around Vioxx. Inertia may have locked
Merck into this response pattern. Medical researchers and plaintiff lawyers
introduced to the media a range of internal emails and internal marketing materials
that suggest Merck knew of the risks associated with Vioxx and was training staff to
combat these concerns. As a result of this evidence, Merck was forced to adopt a
dual strategy that explained the Vioxx withdrawal and accounted for its past actions
in developing and marketing the drug. Merck‘s historical decisions around Vioxx
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became a major downfall for the company, and later in the case, the main
justification for plaintiffs‘ cases.
As the crisis started to shift from being a straightforward product recall to a
crisis that touched the very heart of social responsibility, Merck‘s crisis responses
remained constant. They were driven by the need to minimise the perceived damage
of the Vioxx withdrawal, restore Merck‘s reputation and protect Merck from a
potentially transforming environment. Despite a congressional inquiry into the
FDA‘s handling of Vioxx, a FDA advisory hearing on COX-2 drugs, and relentless
media attention during Vioxx litigation, there seemed to be no tipping point for
change in Merck‘s crisis response strategies. The company seemed locked into a
strategy choice in the hope that the transforming situation was losing momentum and
business would return to normal. Certainly, for periods of time, Vioxx was not on the
media‘s agenda but the media stories did not completely go away. Within this
climate, Merck‘s crisis communication served to suspend its reputation rather than
restore it.
The company finally closed the crisis when it decided to settle litigation.
Based on this operational decision, Merck moved from a diminish posture to the
rebuild posture. Although Merck may have been driven to restore its reputation early
on in the crisis, it is clear that its crisis communication decisions were constrained by
operational concerns including legal strategy.
By following Coombs‘ (2006b) approach and understanding the crisis
history, nature of relationships with stakeholders, and crisis type, Merck could not
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have anticipated the level of media interest and rolling nature of the crisis. By
following Coombs‘ (2006b) framework alone, Merck‘s crisis communication
decision-making was caught up in a process of returning its reputation to the status
quo. In this way, organisational inertia acted as a powerful force against change. This
approach would not suffice for an ongoing crisis event. Coombs‘ (2006b) framework
focuses on the immediate organisational context, precluding how the actions of other
organisations could influence or be influenced by Merck‘s crisis communication
actions and messages.
Allen and Caillouet‘s (1994) framework shares strong similarities with
Coombs‘ (2006b) approach yet offers a new perspectives to guide the re-
interpretation of Merck‘s choice of crisis communication. Where Coombs‘ (2006b)
crisis context is based on crisis type, crisis history and perceived responsibility,
Allen and Caillouet‘s (1994) framework allows for a zoom out to understand the
complex web of corporate actors. For Merck, this translated into a complex
communication environment that was reconstituted over time by the actions of both
Merck and other corporate actors.
To manage this complex crisis context, the Allen and Caillouet (1994)
narrative shows that Merck adopted a dominant message strategy around
justification. This primary message is supported by secondary messages including
excuses, ingratiation, and factual distortion. These messages came into play to help
Merck deal with the additional accountability pressures introduced by its web of
corporate actors.
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Although the actions of corporate actors served primarily to add
accountability pressures to Merck, they also created a complex crisis context for all
actors in the pharmaceutical industry. In this way, the actions of other organisations
sustained the crisis for Merck and the industry. This position was emphasised when
Pfizer decided to retain Celebrex on the market despite receiving high risk results
from a clinical trial, as detailed in section 4.4.2.4 of this chapter. As a result, Pfizer
was not only a source of accountability pressure for Merck but was also caught up as
an unexpected target of Merck‘s Vioxx withdrawal. The web of actors was indeed
complex but this narrative emphasised that emergent conditions created new
environmental conditions for all actors.
Zooming out to an even broader macro perspective, Oliver‘s (1991) template
builds on Allen and Caillouet‘s (1994) framework by providing a lens with which to
see the agency and power of each of the organisations. Although Oliver‘s (1991)
strategic responses to institutional pressures are less about the communication
strategies, they clearly represent the level of power an organisation is seeking to
influence over an environment or the level of conformity the organisation is seeking
to gain within an environment. Through Oliver‘s (1991) lens, the thesis must
deliberately focus on the environment, and in this case, an environment that is
undergoing transformative change. As a result, it is evident that the FDA‘s role is
highly significant.
In the lead up to the Vioxx withdrawal, the principal drugs under the
spotlight were anti-depressants. The FDA and related pharmaceutical companies
were under intense media scrutiny for failing to act faster on the link between anti-
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depressants and suicidal tendencies in young people. Although this is not related
directly to Merck‘s decision to withdraw Vioxx, it is arguably an invisible or cloaked
force for change in the pharmaceutical industry. The anti-depressant crisis was the
crisis that created unstable environmental conditions for Merck. Oliver‘s (1991)
perspective on institutional pressures enables the understanding of the industry
context within which individual organisations enact strategic responses. If Merck
factored in the anti-depressant crisis, that is the industry context within which it was
operating, it may have changed its decision from a Vioxx withdrawal to an action
that was more consistent with the FDA‘s practices. This may have been a way to
unlock the power of inertia.
As a result of a climate where the FDA was under siege, the Vioxx
withdrawal became a more significant event. A macro perspective shows that the
Vioxx withdrawal was caught up in a sequence of events for transformative
regulatory change. Yet while the pharmaceutical industry was in the midst of change,
the FDA continued to provide an institutional buffer to organisations that complied
with its processes and practices. For example, Pfizer drew on the institutional
protection of the FDA to protect its decision to retain Celebrex despite receiving
negative trial results. Yet, at the same time, it was also clear to see that the
organisations were less resilient in dealing with changing conditions as a new
regulatory equilibrium was established, evidenced by ongoing compromise strategy.
One of the implications that can be drawn from this position is that conforming to
institutional norms may not be the ideal response for organisations that are part of an
industry undergoing transformative change.
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Oliver‘s (1991) narrative frame also allowed the researcher to identify the
strength of opposition against Merck as the primary organisation caught up in the
crisis. Although Pfizer was also facing lawsuits against Bextra and Celebrex, the
media‘s focus was overwhelmingly on Merck and Vioxx litigation. Although Pfizer
was accountable to the plaintiffs who filed these suits, it was not held publicly
accountable by the media. As a result, there are some advantages in being the
secondary organisation involved in an ongoing and linked crisis.
Each lens offers a different way to define the crisis, the organisations
involved, and the context that relates to the crisis communication and strategic
responses. As a result, each narrative provides a different explanation or driver for
change. Coombs‘ (2006b) framework is driven by an immediate organisation-centric
context defined by the crisis history, relationship status, and type of crisis, and the
need to restore reputations and return to business. Allen and Caillouet‘s (1994)
framework is driven by the web of corporate actors who contribute to the complex
communication environment for Merck, affecting its ability to regain legitimacy.
Oliver‘s (1991) framework is driven by institutional pressures that result from a
changing environment, drawing out and constraining an organisation‘s ability to
conform to changing environmental conditions. Each one of these models is
complementary and there is a need for all three lenses in order to fully understand
and explain the crisis communication of multiple organisations that are intricately
intertwined in a four-year crisis.
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4.8 Conclusion
This chapter presents three narratives that offer alternative descriptions and
explanations for the crisis communication decisions of multiple organisations across
a four-year time frame. Specifically, the study examines a period of punctuation
triggered by a situational crisis event, and the beginnings of the return to equilibrium
for the pharmaceutical industry. As demonstrated in the narratives, constructed based
on an analysis of media coverage and organisational documents, an organisation‘s
crisis communication choices are based on the deep structures and conditions that
guide the existing period of equilibrium. That is, an organisation does not
immediately know the change-inducing potential of a crisis event.
Each narrative integrates crisis communication and actions with the context
of transformative change. Time and the crisis context influence the meaning of an
organisation‘s messages during the punctuation of equilibrium. The first narrative,
guided by Coombs‘ (2006b) situational crisis communication theory focuses on the
crisis communication and actions of Merck, the primary organisation. This narrative
depicts how Merck continually sought to restore its reputation following the Vioxx
withdrawal by consistently reinforcing a diminish message. However, by doing so,
Merck‘s actions served to suspend its reputation more than restore it.
The second narrative, guided by Allen and Caillouet‘s (1994) crisis messages
enables a broader look at the organisational context within which the crisis was
unfolding. Through this second lens, the narrative is based on the growing
complexity of links between organisations caught up in an ongoing crisis. Through
this lens, the crisis considers how other organisational actors added accountability
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pressures on Merck in a way that reinforced the complex web that linked corporate
actors (Allen & Caillouet, 1994). Because this occurred within a context of
transformative change, the nature of the links between these organisations shifted,
thus complicating the communication choices for Merck. The third narrative, guided
by Oliver‘s (1991) strategic responses to institutional pressures enabled an even
broader view of the context of transformative change. Through this lens, the
narrative depicted the level of organisational agency over its changing environment.
In showing this, Oliver‘s (1991) lens tells a story about the role of multiple
organisations caught up in a series of linked crisis events.
Although each narrative depicts crisis communication and action and change,
a deeper understanding and explanation for these choices occurs by comparing and
synthesising the differences in interpretation across all three lenses. This process is
also built around the action and context components of process theory, emphasising
the persistence of crisis communication and the features of the crisis context under
transformative change. These findings are critical to the next chapter.
Chapter Five presents the conclusions and implications of this thesis. The
contributions of this thesis to existing crisis communication research as well as
scholarship in public relations are established. The implications for practice are also
identified as well as suggestions for further research in this area.
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CHAPTER FIVE
Conclusions and implications
―Conceptual models not only fix the mesh of the nets that the analyst
drags through the material in order to explain a particular action; they
also direct the analysis to cast nets in select ponds, at certain depths, in
order to catch the fish he [sic] is after‖ (Allison & Zelikow, 1999, p.4)
This final chapter presents conclusions about the research problem and
questions, builds a conceptual model based on these conclusions, and draws
implications for theory and practice. The overall research problem guiding this thesis
asks:
How does transformative change during crisis influence corporate actors’
communication?
This research problem places the thesis in the discipline area of public
relations with a specific focus on crisis communication. The guiding theory behind
this thesis is punctuated equilibrium theory and process research methods are used to
study change.
Chapter One introduced the context for this thesis and explained how today‘s
complex problems mandate the need for new types of theoretical and practical
solutions in crisis communication. The chapter also provided a rationale for a study
that explores transformative change, representing a shift from public relations and
crisis communication research that treats change predominantly as a series of
incremental adjustments. Following from this justification, Chapter Two elaborated
the theoretical framework for this thesis by reviewing punctuated equilibrium theory
and drawing out two research questions that consider both crisis communication and
the context of the crises during transformative change:
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RQ1: What symbolic and substantive strategies persist and change as crises
develop from situational events to transformative and multiple linked events?
RQ2: What features of the crisis context influence changes in symbolic and
substantive strategies?
Guided by these research questions, Chapter Three justified the research
paradigm for the thesis and set out the process methods to answer the research
questions.
The thesis used an alternative template strategy to construct three narratives
of the crisis events that were part of the pharmaceutical industry for four years.
Chapter Four consisted of these three narratives and provided a comparative analysis
of these narratives. First, Chapter Four presented three narratives told through the
theoretical frameworks of Coombs (2006b), Allen and Caillouet (1994), and Oliver
(1991). Next, Chapter Four provided a visual map of crisis communication strategies
used by the primary and secondary organisations involved in the case study. The
chapter concluded with a comparative analysis across the templates to draw out the
importance of context, the role of multiple organisations, and transformative change.
In this final chapter, I conclude the thesis by resolving the research questions.
In section 5.1, I summarise the major findings of the thesis. Next, in section 5.2, I
present conclusions about the research questions, which form the basis of section 5.3
where I present conclusions about the research problem and develop a conceptual
model based on the conclusions. In section 5.4, I present the implications for theory
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and establish the contributions of this thesis to punctuated equilibrium theory, public
relations and crisis communication research. In section 5.5, I establish the
contributions to crisis communication and public relations practice. Sections 5.6 and
5.7 identify the limitations of the thesis and establish future research opportunities.
Section 5.8 concludes this thesis.
5.1 Summary of Findings and Theoretical Implications
This thesis adopted punctuated equilibrium theory as a theoretical framework
to explain differences in crisis communication as crisis events trigger transformative
change across an industry. This thesis builds on existing research that has focused on
crisis communication enacted by single organisations to manage a crisis and restore
organisational legitimacy and reputations. By studying complex crisis events and
crisis communication within the context of transformative change, this thesis
contributes a new understanding and rationale for crisis communication research.
The thesis explains the crisis communication processes of multiple organisations,
demonstrating the role of primary and secondary organisations within the context of
transformative regulatory change. Consequently, the findings of this thesis provide
new knowledge about crisis communication and the crisis context.
Punctuated equilibrium theory provides an essential lens through which to
explore the research problem (Murphy, 2000). Punctuated equilibrium theory
provides an opportunity to examine existing crisis response typologies within the
context of transformative change. By synthesising existing crisis response typologies
with Oliver‘s (1991) work, this study has shown how crisis communication becomes
not only a device for restoring reputation or legitimacy but goes to the heart of
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change. That is, by examining crisis communication in a longitudinal study, and
considering the actions of multiple organisations, crisis communication is shown to
be closely linked to the dismantling of the old equilibrium and the development of
conditions for the new period of equilibrium.
The intricate links between crisis communication and punctuations of
equilibrium are demonstrated by the roles and relationships among the primary and
secondary organisations. This thesis demonstrates how primary and secondary
organisations caught up in the crisis can contribute to or be supported or abandoned
by this transformative context. Specifically, the findings of this thesis add new
knowledge to crisis communication and public relations by examining the role of
buffers and ongoing contests of legitimacy triggered by corporate actors and the role
of crisis communication during transformative change.
Overall, this thesis has built on existing research in crisis communication by
offering transformative change as another perspective for change and providing
insight into the role of primary and secondary organisations during crisis and
transformative change. As well, this thesis sees crisis communication not only as the
means by which to restore reputations and organisational legitimacy and resolve
crisis events, but also as a mechanism that conducts the processes for change during
a punctuation of equilibrium.
5.2 Conclusions about Research Questions
This section builds on the implications for change presented in section 5.1 by
discussing the insights and drawing conclusions for the two research questions that
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guided this thesis. The conclusions about the research questions draw together both
the context of change and organisational actions.
5.2.1 Research Question One: Persistence of and Changes in Crisis
Communication and Action
This research question provides a way to examine the crisis communication
and actions of multiple organisations within the context of transformative change.
Further, it provides an opportunity to explore how existing crisis response typologies
(Allen & Caillouet, 1994; Coombs, 2006b), designed primarily to respond to
situational or short-term crisis events, operate within a context of transformative
change. By understanding how crisis response strategies operate within the context
of transformative change, this thesis provides insights into the role of
communication as part of the change process especially when strategies are enacted
by multiple organisational actors that operate within this context. The conclusions
about research question one are summarised in Table 5.1.
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Table 5.1
Conclusions and Contributions of Research Question One
Research question Conclusions Contributions to theory
What symbolic
and substantive
strategies persist
and change as
crises develop
from situational
events to
transformative and
multiple linked
events?
Symbolic crisis
communication strategies
persist to support
substantive action in
organisation‘s immediate
past
Symbolic crisis
communication strategies
persist to prepare for
substantive action in
organisation‘s future
Introduces a focus on process-
based research around change as
an alternative to the effectiveness
rationale that dominates existing
crisis communication literature.
Extends existing knowledge on
crisis response typologies by
showing how they can move from
restoring reputations to shaping
meaning around change by
layering current crisis response
typologies with Oliver‘s (1991)
strategic response typology.
Crisis under
transformative change
comprises rolling events
that take on both central
and peripheral events over
time and integrate
multiple corporate actors
into crisis events.
Symbolic crisis
communication strategies
adapt to local contests of
legitimacy
Introduces new definition for
crisis under transformative change
that enables understanding of
crisis communication of multiple
organisations over time
Extends existing knowledge
around the relationship between
reputation and legitimacy as
drivers for crisis communication
by showing how threats can be
localised to one product.
Sheds new light into the nature
and path of crisis communication
during transformative change.
Discussion about these conclusions is divided into two sections. Section
5.2.1.1 provides insight into the use of symbolic crisis communication to both
support and prepare for substantive strategies. Next, section 5.2.1.2 shows how
under transformative change, crises operate as both core and peripheral crisis events,
requiring organisations to adopt symbolic strategies to counter localised challenges
to organisational legitimacy. The conclusions about the relationship between
symbolic and substantive strategies go to the heart of change and are summarised at
the end of this section in 5.2.1.3.
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5.2.1.1 Symbolic Strategies Prepare for and Support Substantive Strategies
The first contributions related to research question one are based on the
introduction of time and process and result in an alternative dynamic to existing
crisis communication research and public relations theory. These contributions are
based on the conclusions of the thesis around the role of symbolic crisis
communication strategies. The thesis found that symbolic crisis communication
strategies contribute to the process of change by both preparing for and supporting
substantive strategies. The connection between symbolic and substantive strategies is
examined by considering all three narratives. By studying crises over a longitudinal
time frame, and not only as short-term or situational events, the path of crisis
communication and action takes on new meaning. The theoretical insights of
integrating time and process into an analysis of crisis and change can be seen in
relation to an additional role for crisis communication.
By adopting punctuated equilibrium theory, this thesis considers the role of
crisis communication and action within the context of transformative change and
over an extended period of time. As such, the focus of this thesis is not on the
effectiveness of crisis response strategies (as is the rationale of existing crisis
communication research) but on the process of crisis communication and change
over time. As a result of considering time and process models, this thesis both
confirms and extends existing research crisis communication and public relations in
three ways.
Firstly, the findings of this thesis confirm existing research that regards crisis
communication as a means to support an organisation‘s substantive decisions
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(Coombs, 2004a, 2006b, 2007a). That is, as the focal organisation, Merck, enacted
crisis communication to explain the crisis, caused by its withdrawal of Vioxx.
Specifically, Merck used symbolic strategies or crisis responses to demonstrate how
its substantive decision to withdraw Vioxx was consistent with organisational
practice and ethics.
Secondly, by considering time, the thesis extends existing research to show
how the purpose of crisis communication changes as the crisis event punctuates
equilibrium. During a punctuation of equilibrium, a crisis becomes more complex,
drawing in multiple actors and signalling the need for changes in the pharmaceutical
industry. The findings of this thesis both confirm existing knowledge around crisis
communication and extend it. Consistent with existing literature, this thesis showed
that the focal organisation‘s crisis response strategies escalated from diminish to deal
responses. Yet because this shift in strategy was three years in the making, the
organisation was not engaging in traditional crisis decision-making guidelines that
relate to timely adjustments based on reputational impact (Coombs, 2006b, 2007c).
In this thesis, Merck, as the primary organisation, persisted for three years
with the messages behind the restorative response strategy (Coombs, 2006b) adopted
in the initial phases of the crisis. However, the restorative strategy had little benefit
in restoring Merck‘s reputation as the crisis continued well beyond that of a
situational crisis event. The short-term restoration logic may not always be an
appropriate rationale for crisis decision-making during transformative change.
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As demonstrated in this thesis, when a crisis acts as a trigger for punctuation,
an organisation‘s crisis communication may be caught between the old and new
periods of equilibrium. That is, an organisation‘s immediate crisis communication
choices are made to restore the organisation‘s reputation based on the deep structures
or inertia that are part of the old period of equilibrium. An organisation does not
immediately know that it is moving into a punctuation of equilibrium and as a result,
finds itself in between two periods of equilibrium.
Time and the crisis context have an influence on the meaning of an
organisation‘s messages. In the early stages of the crisis and punctuation, Merck‘s
crisis communication response sought to demonstrate alignment to the old
equilibrium period. Yet, as this equilibrium was punctuated, by grafting Oliver‘s
(1991) typology, Merck‘s messages around the appropriateness of its actions in
relation to the Vioxx withdrawal also established the foundations for defensible trials
in the public opinion environment. In this way, Merck could associate the same
messages with another substantive strategy thus setting up the company for a
successful mass settlement of trials related to Vioxx. In this way, the messages
behind the restorative strategies enacted by an organisation during its initial crisis
period contributed to the ongoing of process for change for the organisation as it
moved to settle and finally close the crisis.
Thirdly, this thesis provided insight into the nature of symbolic and
substantive strategies within the context of crisis and transformative change. This
represents an extension to existing crisis response typologies in the literature (Allen
& Caillouet, 1994; Benoit, 1997; Benoit & Pang, 2008; Coombs, 2006b; Seeger et
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al., 2005). Layering the crisis communication and action responses of Coombs
(2006b), Allen and Caillouet (1994) with Oliver (1991), moves crisis communication
from being a static response to restore an organisation‘s reputation to becoming a
message that shapes legitimacy over time. This hierarchy is demonstrated in Figure
5.1.
Figure 5.1 Hierarchy of crisis communication strategies, demonstrating placement of
alternative templates on axes of agency over environment and continuum of
legitimacy and reputation outcomes.
Figure 5.1 illustrates the layering of the strategy typologies of Oliver (1991),
Allen and Caillouet (1994), and Coombs (2006b) across two axes, indicating
outcomes and integration of change and environment. The horizontal axis positions
each typology on a continuum that ranges from legitimacy to reputation outcomes.
Oliver (1991) and Allen and Caillouet‘s (1994) typologies are based on achieving
outcomes related to legitimacy and Coombs‘ (2006b) typology is based on achieving
reputation outcomes. The vertical axis positions each typology according to the
Oliver
Conform to or shape
environment
Achieve legitimacy
Allen and Caillouet
Attend to accountability
pressures
Restore legitimacy
Coombs
Resolve crisis
Restore reputation
Legitimacy Reputation
High agency Low agency
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integration of change and the environment. In this way, Oliver‘s (1991) typology sits
across both ranges whereas Coombs‘ (2006b) work sits at the low agency level,
demonstrating conformity to the environment and the restoration logic.
The theoretical insights of this hierarchy relate to the extension of the
existing rationale for crisis communication choices. While the existing literature
focuses on an effectiveness rationale, this thesis introduces an alternative perspective
around process theory. Based on this thesis, during transformative change, the role of
crisis communication is not to restore the status quo. Rather, it considers how crisis
communication strategies can shape change to achieve legitimacy under
transformative conditions.
In summary, resolving this research question generates theoretical
contributions related to crisis communication and extends the discipline area of
public relations. This thesis shows how symbolic crisis communication strategies
support substantive strategies that trigger transformative change in the
pharmaceutical industry. This finding confirms existing research on crisis
communication where organisations accept responsibility for a crisis and
communicate in order to restore stability and reputation. This thesis has also shown
how an organisation‘s persistence with crisis communication occurs because an
organisation is caught between two periods of equilibrium. Initially, an
organisation‘s crisis communication is used to return organisations to the old
equilibrium conditions. However, as the organisation realises that it is operating
within a context of transformative change, its messages can be used for another
purpose. Symbolic strategies used in initial crisis periods may also be precedents to
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substantive strategies of change. This finding extends existing research in crisis
communication. Instead of existing crisis communication that focuses on evaluating
the effectiveness of crisis responses in repairing image and reputation, this thesis
provides new knowledge to understand the persistence of crisis communication
within the context of a rolling crisis, suggesting that crisis communication decisions
are made with little regard for what is considered effective in existing studies.
5.2.1.2 Symbolic Strategies Adapt to Local Sites of Contested Legitimacy
The next contributions related to research question one are based on the
integration of time, process and multiple actors to existing crisis communication
research and public relations theory. These contributions are based on the
conclusions of the thesis around the adaptive role of symbolic crisis communication
strategies to local contests of legitimacy. The thesis found that, as the crisis changed
over time and grew in complexity, it drew in multiple crisis actors who either created
or were the focus of peripheral crisis events that related to the core and starting crisis
of the product withdrawal of Vioxx.
The integration of time, process and multiple actors was elucidated by
drawing comparisons across all narratives. In relation to research question one, this
thesis extends the existing crisis communication literature by: 1) re-defining crises as
rolling events that comprise both central and peripheral events over time, and 2)
explaining how multiple organisations respond to core and peripheral crisis events.
Studying the role and actions of multiple organisations over time sheds new light on
the nature and path of crisis communication during transformative change.
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In this thesis, punctuated equilibrium theory provides a way to renew interest
in the area of crisis definition. This has been achieved by drawing attention to the
multiple conditions, actors, and events that trigger the process of transformative
change, and by considering the implications for crisis communication. As such, the
thesis was not restricted by accepted definitions for crisis in the public relations
literature but considered crisis as it affects multiple organisations in different ways.
As a result of considering time, process, and multiple actors, this thesis
confirms and extends research in crisis communication and public relations in three
ways. Firstly, by studying a crisis event over an extended time frame, the path of the
crisis and the crisis actors that become involved in resolving it are identified and
their participation is clarified. In this thesis, the primary organisation generated the
core crisis event of a product withdrawal. While existing practice in case-based crisis
research would study the product withdrawal alone, this thesis tracked the path of the
crisis over four years. In this thesis, the product withdrawal crisis triggered a
punctuation of equilibrium and the emergence of the complex web of corporate
actors thereby generating peripheral crisis events for both the primary and secondary
organisations.
This finding confirms a study in the management literature that additional
crisis events extend crises beyond the organisation of origin (Shrivastava et al.,
1988). In the public relations literature, this contribution both confirms and builds on
existing literature that describes the role of other actors as adding pressures on the
focal organisation (Allen & Caillouet, 1994). This thesis shows that other actors such
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as competitors not only add pressure to the primary organisation but can themselves
become targets of ongoing crisis events.
This thesis both confirms and extends Ren‘s (2000) conceptual paper on
linked crisis events set in the disaster management literature. The thesis confirms
Ren‘s (2000) work by demonstrating the temporal linkage of multiple crisis events
and extends Ren‘s (2000) work by considering linked crisis events that affect
multiple organisations. This thesis shows that it is not temporal grouping alone that
distinguishes linked crisis events. Instead, crisis events can be linked to multiple
organisations through a shared source of concern. In this thesis, the shared source of
concern was a legitimacy shadow cast by Merck‘s Vioxx that extended to other
drugs in the COX-2 class. As a result, competitor dynamics provide a means to link
crisis events.
Secondly, because the context of transformative change identifies linked and
peripheral crisis events, this thesis provides an opportunity to expand current
definitions of crisis events in the public relations literature. The existing literature
defines crises as an event that threatens organisational performance (Coombs,
2007b). Instead, this definition should acknowledge that crises can be part of a
process of transformative change that affects multiple organisations within an
industry sector. Further, and as part of this addition to the definition, crises have the
potential to diversify into core and peripheral events as illustrated in Figure 5.2.
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Figure 5.2 Crises as core and peripheral events, demonstrating how a core crisis
event triggers responses from crisis actors and creates peripheral crisis events.
As illustrated in Figure 5.2, the core crisis triggers both transformative
outcomes and peripheral crisis events that draw in multiple crisis actors including
competitors. For example, in this thesis, Merck‘s decision to withdraw Vioxx
triggered transformative change in industry regulations and peripheral crises for
Merck and secondary organisations like Pfizer. Linked to defining crises and the
process of transformative change that include core and peripheral events is the role
of multiple actors or agents. This thesis extends Ren‘s (2000) conceptual work
beyond temporal linkages to consider also the networked arrangements of crisis
actors. As a result, it is important to see crises not as the focus for primary
organisations but also as the domain of secondary organisations or competitors. In
seeing this, it is also important to consider the crisis or corporate actors who add
pressure on both primary and secondary organisations. That is, actors including
medical researchers or the FDA can emerge to operate in ways that trigger additional
crisis events.
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Thirdly, because this definition for rolling crisis consisting of core and
peripheral events emerges, it also has an impact on crisis communication. This thesis
extends Allen and Caillouet‘s (1994) research by examining how the messages of
secondary organisations added accountability pressures on the primary organisation
and also how the actions of the primary organisation added accountability pressures
on secondary organisations (Allen & Caillouet, 1994). These local contests of
legitimacy are treated more clearly in the second and third narratives that consider
the complex web of corporate actors and the simultaneous involvement of primary
and secondary organisations and regulatory authorities in the pharmaceutical
industry.
Adapting symbolic crisis communication strategies to suit different crisis
events is not new in the literature. The thesis confirms this as a dynamic for change
that is consistent with existing incremental approaches in crisis communication and
public relations. However, this thesis extends existing research by showing how the
relationship between primary and secondary organisations and their environment
also affects crisis communication under transformative change. Crisis
communication has traditionally been seen as messages delivered to reassure key
stakeholders of an organisation‘s actions in relation to a generally unexpected crisis
event. As a result, the focus of crisis communication and public relations research
has been on single organisations. By extending Allen and Caillouet‘s (1994) work,
this thesis has shed light on the complex relationships between primary and
secondary organisations caught up in and connected by transformative change in the
pharmaceutical industry.
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This thesis showed that at the same time an organisation was dealing with a
core crisis, peripheral crisis events can call up and debate an organisation‘s past
actions. These peripheral crisis events can be managed through incremental or
adaptive strategies. Looking solely at Allen and Caillouet‘s (1994) visual map, it is
clear to see that the primary organisation, Merck, remained consistent with a
justification strategy to manage its core crisis, yet integrated other crisis responses
when it needed to deal with issues peripheral to the ongoing crisis. For example,
Merck issued denials in relation to claims put forward by medical editors and
researchers throughout the four-year time frame.
In particular, the thesis sheds light on competitor dynamics. The competitor
dynamic between the primary and secondary organisations is critical because it is
this emergent relationship that drives change in crisis response strategies and this site
that shows the differences in the media treatment of Merck and Pfizer. Competitor
dynamics in crisis communication is new to the public relations literature, which has
focused predominantly on the role of communication between a single organisation
and its stakeholders. This finding is also new to punctuated equilibrium theory,
which has also traditionally focused on describing and explaining transformative
change within organisations.
In summary, resolving this research question generated theoretical
contributions related to crisis communication and public relations. Specifically, the
conclusions of research question one shows that the path of a crisis during
transformative change grows from a core crisis event to a series of linked peripheral
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crisis events that draw in multiple crisis actors as both the cause and focus of these
peripheral crisis events. In this way, the impact of a crisis becomes a legitimacy issue
for multiple crisis actors over time. These conclusions extend existing research in
crisis communication and public relations that focus on the crisis communication and
actions of a single organisation. As a result of these contributions, the definition for
crisis in the public relations literature takes on new elements in alignment with the
management literature. Further, the integration of time, process and multiple actors
provides a new context for examining the crisis communication and action during
transformative change.
5.2.2 Research Question Two: Uncovering the Features of Crisis Context
Research question two provides a way to examine the context within which
the crisis communication and actions persisted and changed over the duration of the
study. Through research question two, this thesis provided new insights into the
process of transformative change across multiple corporate actors. As a result, this
thesis extends existing research that focuses on the organisational context for crisis
with factors such as an organisation‘s crisis history, stakeholders‘ perceptions and
crisis type influencing the choice of crisis communication and actions (Coombs,
1998, 2004a, 2007a; Coombs & Holladay, 1996, 2006).
The core contribution of this thesis is process-based. As the basis for the old
equilibrium deteriorates and the new equilibrium emerges, this process of insight
formation buffers organisations caught up in the rolling peripheral crisis events. This
contribution is new to the crisis communication and public relations literatures and
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extends existing knowledge in punctuated equilibrium theory and the management
literature.
This thesis provides insight into the deep structures behind crisis
communication, thus extending the organisational context dominant in existing
research. Resolving research question two generates theoretical contributions related
to crisis communication and change within the public relations discipline, and are
summarised in Table 5.2.
Table 5.2
Conclusions and Contributions of Research Question Two
Research question Conclusions Contributions to theory
What features of
the crisis context
influence changes
in symbolic and
substantive
strategies?
Crisis path comprises
contests of legitimacy and
crisis actors extend attack
on primary organisation
Crisis path comprises
contests of legitimacy and
crisis actors buffer
secondary organisation
Model of insight formation: as
processes of change unfold, the
primary organisation sustains
public focus and crisis actors
emerge to protect secondary
organisations
Crisis actors can operate as
sources of buffers or ongoing
contests for primary and
secondary organisations
The conclusions about the research question follow. These conclusions
demonstrate the value of using the lens of punctuated equilibrium theory to view
crisis communication by outlining the process of transformative change.
5.2.2.1 Model of Insight Formation Creates an Emergent Context for Crisis
This thesis generates knowledge about the context for crisis communication
across extended time frames by demonstrating the role of multiple stakeholders and
the process of insight formation as an old equilibrium dissolves and a new
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342
equilibrium emerges. In doing this, this thesis extends existing research beyond
contextual elements that are largely organisation-centric, driven by situational factors
and stakeholder concerns (Coombs, 1998, 2004a, 2007a; Coombs & Holladay, 1996,
2006).
This thesis draws on punctuated equilibrium theory‘s model of insight
formation to build the emergent context for crises under transformative change. This
task is achieved by organising the actions and roles of corporate and crisis actors
within the process of insight formation into two functions: sources that buffer
organisations and sources that provide ongoing contests of legitimacy. In doing so,
the findings of this thesis both confirm existing research where corporate actors add
accountability pressures on focal organisations (Allen & Caillouet, 1994) and extend
existing research by demonstrating how the complex web of corporate actors can
shield or buffer organisations by shaping change and therefore influence the basis for
communication and action. In this thesis, the key actors involved in process of
insight formation are the FDA as the regulatory body and the mass media, which
provide a platform from which crisis actors can voice ongoing concerns. These
processes are discussed in the remainder of this chapter section.
By adopting punctuated equilibrium theory, this thesis has shown the
significance of the processes of regulatory change in the pharmaceutical industry.
Specifically, as the focus point of regulatory change, the FDA became a critical
agent in both shaping conditions for the new equilibrium and buffering or shielding
organisations involved in the crisis. Punctuated equilibrium theory is described as a
model of insight formation that tracks the dissolution of old deep structures and the
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formation of new conditions for equilibrium (Gersick, 1991). In this thesis, as the
processes of change unfold and new conditions for equilibrium emerge, they do so in
a way that buffers organisations. The process of insight formation in relation to
regulatory practices in the pharmaceutical industry is illustrated in Figure 5.3.
Figure 5.3 The process of regulatory insights related to the FDA, demonstrating how
the Vioxx withdrawal triggered government involvement and legislative change.
As illustrated in Figure 5.3, the Vioxx withdrawal triggered a punctuation of
equilibrium and set in play the process of reducing the legitimacy or support for
existing practices and creating a space for the emergence of new regulatory ideas
(John, 2003; Jones & Baumgartner, 2005; McDonough, 2000). The process of
insight formation confirms existing studies in punctuated equilibrium theory in
organisational and political sciences.
This thesis extends existing research in punctuated equilibrium theory by
demonstrating how the process of insight formation offers a level of protection or
buffer to organisations. Specifically, this thesis has shown that the buffer effect was
either imposed on or produced by the secondary organisation caught up in the crisis,
thereby extending the competitor dynamics. For example, while the FDA and
regulatory practices in the pharmaceutical industry were under review, the secondary
organisation, Pfizer, released clinical trial results that showed its COX-2 drug
Celebrex caused the same risks as were observed in Merck‘s Vioxx. In response to
this news, Pfizer deferred the outcome of Celebrex to the FDA.
Vioxx withdrawal
Congressional inquiry into
FDA
Incremental changes by FDA to test reactions
Legislative change to
FDA
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The buffering effect was predominantly experienced by the secondary
organisation, Pfizer. This buffering effect influenced Pfizer‘s strategy choice as
demonstrated in the Oliver (1991) narrative. The buffering effect or Pfizer‘s deferral
to the FDA, locked Pfizer into a compromise strategy. The compromise strategy was
Pfizer‘s dominant choice throughout the study time frame as it negotiated a changing
environment buffered by a changing FDA. In this way, although the secondary
organisation was protected from change, it was equally less able to effect change and
shape the emerging environmental context.
The buffering effect of the process of insight formation, and especially in
relation to how this plays out between primary and secondary organisations and
regulatory authorities, is new to the public relations and crisis communication
literature. By explicating the roles of stakeholders and actors within the context of
transformative change, this thesis provides new insights into the emergent crisis
context under transformative change and extended a literature that was focused on
crisis communication exchanges between single organisations and stakeholders. This
thesis has shown how multiple corporate and regulatory actors play active roles in
taking advantage of or shaping change, and the dynamic relationship between
primary and secondary organisations and regulatory authorities. In doing so, this
thesis has revealed a buffering effect, thus extending existing research in public
relations and crisis communication around the third-party endorsement strategy
commonly used in media effects and media relations through opinion leaders.
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The mass media also played a critical role in the emergent context of crisis
communication under transformative change. Specifically, through its reporting, the
mass media acted to both buffer and promote ongoing contests of legitimacy faced
by primary and secondary organisations. The mass media buffered Pfizer when it
found itself in the same position as Merck, facing negative clinical trial results for
Celebrex, its top-selling Cox-2. In comparison to the mass media‘s treatment of
Merck, Pfizer faced limited accountability pressures. Through narratives two and
three, which allow for the consideration of the ongoing crisis event beyond the
organisation of origin, this thesis shows that the media treats differently the primary
and secondary organisations caught up in linked crisis events.
In this thesis, the role of the media becomes even more critical when
comparing its treatment of primary and secondary organisations. As the primary
organisation that generated the core crisis event, Merck received sustained media
attention throughout the four-year study. Merck‘s actions to withdraw Vioxx on the
basis of one set of negative clinical trial data set a precedent for other organisations.
This precedent was enforced by the media. However, when the secondary
organisation of Pfizer faced negative trial data and did not withdraw its product, the
media drew this inconsistency to the publics‘ attention but with significantly less
attention to its original treatment of Merck.
At the same time as buffering Pfizer, the media also provided a public
platform for ongoing contests of legitimacy that were primarily aimed at Merck.
Because Vioxx, Merck and the FDA remained interesting to the media, opportunities
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emerged for medical editors to communicate in public settings, their ongoing
concerns about the practices of pharmaceutical organisations.
By organising the actions and roles of corporate and crisis actors within the
process of insight formation into buffering and contests, this thesis highlights the
terminology implications of crisis stakeholders. Traditionally, crisis stakeholders are
viewed as individuals, groups or organisations directly affected by a focal
organisation‘s decisions. Generally, crisis stakeholders are seen as those groups or
individuals who hold perceptions of the focal organisation in relation to the crisis
event (Coombs & Holladay, 2006). Instead, this thesis demonstrates how
stakeholders such as the media can operate as crisis actors that trigger additional,
peripheral crisis events. Further, this thesis demonstrates the networked linkages
between organisations and crisis actors in relation to buffering effects.
Overall, this thesis also extends crisis communication research and
punctuated equilibrium theory by providing knowledge into how the process of
insight formation operates across multiple organisations.
5.3 Conclusions about the Research Problem
The conclusions about the research questions demonstrate how the findings
of this thesis contribute to the public relations and crisis communication literatures
and connect to discuss overall conclusions about the research problem:
How does transformative change during crisis influence corporate actors’
communication?
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This section brings together the action and context layers that were outlined
in section 5.2. It is important to explore action and context as inter-connected
concepts because, together, they create the processes to explain crisis communication
under transformative change. This section sets out how punctuated equilibrium
theory, as the theoretical framework behind this thesis, explains change in crisis
communication as crisis events trigger transformative change across multiple
organisations and extended time frames. To do so, this section integrates theories and
the extant literature established in Chapter Two and the findings presented in
Chapter Four and builds a conceptual model. The conceptual model for this thesis is
designed to draw together the three templates and build on punctuated equilibrium
theory by explaining the crisis communication of primary and secondary
organisations during the process of transformative change. The model is presented in
Figure 5.4.
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Figure 5.4 The process model of crisis communication under punctuations of equilibrium illustrates the organisation-centric context and the
emergent context for crisis under transformative change. The emergent context includes the buffers and contests that emerge based on the
processes of insight formation and media agendas.
Punctuated Equilibrium
Buffers
Secondary Organisation
Conformance strategy Restorative strategy
Primary Organisation
Contests
Crisis
Em
erg
ent C
onte
xt
Org
an
isatio
n-c
entric
co
nte
xt
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
– –
– –
– –
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The model depicted in Figure 5.4 connects crisis communication and actions to
the changing crisis context. The model illustrates two contextual levels for crisis: 1)
organisation-centric context for situational crisis events, and 2) emergent context for
crisis events that trigger transformative change. In a situational crisis event, an
organisation‘s strategy depends on the nature of the crisis and organisation-centric
contextual elements that are clearly established in the existing literature. When a
situational crisis triggers a punctuation of equilibrium, the primary organisation moves
from an organisation-centric context to an emerging context that draws in the
punctuation of equilibrium. This emergent context extends the organisation-centric
context to include features such as secondary organisations as well as the localised
contest of legitimacy and buffers from regulatory authorities. In this way, a crisis event
that triggers transformative change grows in complexity.
The crisis context influences the crisis communication and actions of
organisations. Existing literature provides clear guidance about crisis responses under
situational crisis events, depicted in this model as restorative strategy for the primary
organisation. Under transformative change, the emergent crisis context influences the
crisis communication decisions of both primary and secondary organisations. The
primary organisation, in this case responsible for the situational crisis event that
triggered the punctuation of equilibrium, must develop crisis responses to core and
peripheral crisis events. In this thesis, the primary organisation was shown to maintain a
consistent crisis response throughout the duration of the crisis as it prepared for the
return to equilibrium. At the same time, the primary organisation was shown to adapt to
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ongoing peripheral crisis events depicted as contests in the emergent context of the
model.
This model also depicts how a crisis event and punctuation can draw in
secondary organisations. A secondary organisation is one that is a direct competitor to
the primary organisation. The secondary organisation did not trigger the situational
crisis event but is directly affected by the punctuation of equilibrium. The secondary
organisation responds both to the situational crisis event and the punctuation of
equilibrium but in different ways. The secondary organisation responds to the situational
crisis event through a conformity strategy that seeks to reassure the environment of the
safety or validity of the organisation and its products. In doing so, the secondary
organisation becomes entangled with the process of insight formation that is occurring
within the emergent context where the existing equilibrium dissolves as the new
equilibrium emerges. This process of insight formation buffers the secondary
organisation from facing the sustained media attention attributed to the primary
organisation. At the same time, the process of insight formation and buffering effect
lock into place a conformity strategy where the secondary organisation‘s decisions
conform to the changing environment. In this way, while the primary organisation can
shape the new conditions of equilibrium, this thesis demonstrates that the secondary
organisation‘s strategy was primarily one of conformity.
In summary, this model extends existing models in crisis communication by
providing insight into the nature of the crisis context under transformative change
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conditions and identifying how this connects to the crisis communication and actions of
both primary and secondary organisations. Specifically, this conceptual model is
process-based, providing a path of the transformative change of crisis and actors. As
such, this thesis adds new knowledge to existing research that focuses on outcomes-
based models where effective crisis communication and actions are enacted based on the
premise of restoring organisational reputation and legitimacy, and returning
organisations to stability or the status quo. Further, existing contextual elements are
linear in nature, considering how context influences action in single causal links. Crisis
communication scholarship should move towards a more networked look at crisis and
crisis communication. As demonstrated in the conceptual model for this thesis, a
networked perspective on crisis shows how multiple crisis actors become involved as a
situational crisis event triggers transformative change. It is through this networked
perspective on crisis, demonstrated through the emergent context, that this thesis
contributes to theory development in crisis communication and public relations.
5.4 Implications for Theory
The conclusions about the research problem and questions present implications
for punctuated equilibrium theory and theories in public relations and management
disciplines. The advancement of theory in public relations requires the integration of
other discipline areas, which in turn can lead to the diffusion of public relations work
into other literatures (Broom, 2006). Punctuated equilibrium theory provides such an
opportunity for crisis communication and public relations research.
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The theoretical implications of this thesis are categorised based on their
contribution to public relations and organisational literatures. Based on the significance
of the organisational literature, the primary contribution of this thesis relates to the
interorganisational linkages or buffers that operate during transformative change.
Building to this contribution, this section will first present the following contributions to
public relations theory: 1) the integration of punctuated equilibrium theory as a
perspective on change in public relations and crisis communication research, 2) the
nature of crisis communication during punctuations of equilibrium leading to an
alternative rationale for crisis communication, and 3) the emergent context depicted by
the dynamics of primary and secondary organisations in punctuated equilibrium theory
and theories related to public relations.
Following Broom (2006), through the exploration of punctuated equilibrium
theory in the context of crisis communication, this thesis also contributes to the
management literature. As a result, the primary contribution of this thesis is the nature of
interorganisational linkages and buffers that operate during transformative change. A
second contribution to the management literature is the explication of the
communication actions of multiple organisations during transformative change.
5.4.1 Implications for Public Relations based on a New Theory for Change
This thesis extends public relations and crisis communication scholarship by
demonstrating the relevance of punctuated equilibrium theory as a framework for
change. Punctuated equilibrium theory contributes to the views of a number of public
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relations scholars who advocate for work that moves frameworks for change in public
relations beyond a preservation rationale where organisational adjustments occur to
maintain equilibrium and stability (Curtin & Gaither, 2005; Murphy, 2000; Sha, 2004;
Spicer, 1997). Limiting public relations to the role of conservation of organisational
inertia (Sha, 2004) constrains the theoretical development of the discipline.
By integrating punctuated equilibrium theory, this thesis has extended the
received view of change in the literature and offered a new rationale for public relations
theory. Under the received view, the systems and ecological theories and the excellence
studies see the central task for public relations as ―the effort to maximise the degree of
adaptation between the organisation and its social environment‖ (Everett, 2001, p. 313).
Symmetry is seen as a gradual, moving equilibrium that is negotiated between
organisations and publics (Grunig, 2000), leading to cross-sectional studies.
Instead, this thesis offers an alternative to incrementalist approaches,
demonstrating a process-driven view for public relations theory as insights and new
deep structures form over extended time frames affecting multiple organisations. In
doing so, the thesis achieves the task of connecting public relations scholarship to the
multiple types of change that populate the organisational literature.
This thesis specifically demonstrates the theoretical and empirical use of
punctuated equilibrium theory in the area of crisis communication, a key part of the
public relations discipline. The majority of existing crisis communication research is
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based on situational crisis events and restoring reputation and legitimacy outcomes
through the incremental use of crisis response strategies (Coombs, 1998, 2002, 2004a,
2006a, 2007b; Coombs & Holladay, 2002, 2004, 2006). However, a number of crisis
communication researchers have called for research that builds on the existing literature
(Gilpin & Murphy, 2006; Gilpin & Murphy, 2008; Murphy, 1996, 2000; Seeger, 2002;
Seeger et al., 2005). Murphy (2000) introduced punctuated equilibrium theory into the
public relations literature to demonstrate complex systems and is described as a ―period
of confusion in media coverage followed by the emergence of a new reputation for the
organisation that underwent the crisis‖ (Murphy, 2000, p. 453). This thesis provides an
empirical base for punctuated equilibrium and demonstrates that media attention is a
significant force behind the punctuation of equilibrium and it also articulates the process
of insight formation, the multiple actors involved, and closure of the crisis through dual
substantive and symbolic decisions.
This thesis integrates punctuated equilibrium theory and crisis communication
research, extending the existing rationale for incremental change. The thesis offers a
process-based rationale for crisis communication and public relations, linking both
context and action over extended time frames. This view differs from existing public
relations literature by viewing change as a transformative force, requiring multiple
organisations to communicate in new ways to achieve legitimacy within complex,
unstable, and unpredictable environments.
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5.4.2 Implications for Public Relations based on Crisis Communication
during Punctuations of Equilibrium
This thesis sheds light on the role of communication during punctuations of
equilibrium. In doing so, this thesis addresses a gap in the crisis communication
literature by providing new insights into the role of crisis communication across
extended time frames. Existing crisis communications research deals largely with short-
term or situational crisis events that use crisis responses to restore reputations or
legitimacy. This thesis has demonstrated how crisis communication operates outside of
the restoration and effectiveness logics when both the environment and deep structures
are changing. The theoretical contribution around crisis context is established in section
5.4.3 next.
Another theoretical contribution of this thesis is made based on the use of the
alternative template research strategy. By synthesising the interpretations across each
template, the thesis has contributed to ongoing theory development in a way that not
only confirms or extends knowledge about each template or typology but about the area
of crisis communication as a whole. This thesis is different to existing crisis
communication research in two ways. Firstly, although Coombs (1998) integrated Allen
and Caillouet‘s (1994) crisis typology into situational crisis communication theory, to
date, no one study has systematically analysed either a short-term crisis event or longer-
term crisis events using multiple typologies. Secondly, existing crisis communication
studies consider single outcomes such as reputation (Coombs, 2006b, 2007c, 2009;
Coombs & Holladay, 2002, 2006), image restoration (Benoit, 1995, 1997, 2004; Benoit
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& Pang, 2008), or legitimacy (Allen & Caillouet, 1994; Massey, 2001, 2004). Instead,
this thesis considers both reputation and legitimacy outcomes.
By synthesising the alternative templates, the thesis shows that crisis
communication under transformative change affects multiple organisations that can
passively conform to or actively shape their transforming environment. In doing so, the
thesis has responded to calls to advance the genre of crisis communication beyond
―objective phenomena‖ and standardised decision-based frameworks (Hearit &
Courtright, 2003, p. 80). Instead, the thesis has revealed insights into how multiple
actors engage in crisis communication within the context of transformative change that
is complex and unpredictable.
5.4.3 Implications for Public Relations based on the Emergent Context and
Competitor Dynamics
By exploring the actions of multiple organisations, the thesis contributes to a
greater understanding of the emergent crisis context under transformative change. In
doing so, the thesis has introduced new knowledge and perspectives to theories related
to public relations scholarship. Although the public relations literature has long
considered the importance of organisational environments (Broom, Casey, & Ritchey,
2000; Cutlip et al., 2006; Everett, 2001), it has largely studied these based on a single
organisation‘s relationship with a range of stakeholders (Bruning & Galloway, 2003;
Bruning & Ledingham, 2000; Ledingham & Bruning, 1998). Very few studies in the
public relations literature extend beyond this approach to consider competition for
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media coverage (Anderson, 2001), industry actors (F. Schultz & Raupp, 2010; Sen &
Egelhoff, 1991) or population level (Dougall, 2005). It is difficult to find studies in the
public relations literature that have treated specifically the competitive relationship
among organisations. The crisis communication literature is in a similar position with
research focused on the communication and actions of single organisations. While some
crisis communication studies argue that an organisation should consider multiple
stakeholders in crisis situations (Allen & Caillouet, 1994; Sen & Egelhoff, 1991), no
studies in crisis communication have considered the competitive dynamic.
This thesis has contributed new knowledge to scholarship in public relations and
crisis communication by demonstrating how crisis events trigger transformative change,
and how primary and secondary organisations, or competitors, respond differently. In
doing so, this thesis has extended the organisation-centric view of crisis context and
crisis communication and its perspectives beyond the relational framework to consider
networked connections among crisis actors. As a result of this thesis, an organisation‘s
crisis communication should consider the competitive forces and industry sector as key
components of change.
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5.4.4 Implications for Organisational Theory based on the Role of
Interorganisational Linkages and Buffers
Following Broom (2006), the contributions of this thesis extend beyond the
public relations literature, offering implications for organisational theory. As a result of
the significance of organisational theory, the primary contribution of this thesis relates
to the role of interorganisational linkages or buffers (see Section 5.2.2.1) adopted by
competitors during transformative change.
In the organisational studies, punctuated equilibrium theory has been used to
provide insight into the nature of competition during punctuations of equilibrium and
long periods of stability (Tushman, Newman et al., 1986; Tushman & Romanelli, 1985).
Punctuated equilibrium theory recognises that transformative change in macro-
environments and phases in product lifecycle (emergence to maturity) shift the basis of
competition in industry sectors (Tushman, Newman et al., 1986). Internal changes to
power, status and resources may also affect an organisation‘s basis for competition
(Tushman, Newman et al., 1986). Yet, the challenge for organisational leaders is to both
manage for stability and look out for and be prepared to take action in relation to
changes in competitive conditions related to transformative change (Tushman &
Romanelli, 1985). During punctuations of equilibrium, Tushman and Romanelli (1985)
argue that organisational inertia decreases and competitive vigilance increases. Despite
these predictions for competitive activity during punctuations, the empirical study by
Tushman and Romanelli (1994) does not report on the relationships among these
competitive organisations (Romanelli & Tushman, 1994).
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Through the buffering effect, this thesis extends studies in punctuated
equilibrium and organisational change by describing the relationship between primary
and secondary organisations and explaining this dynamic through punctuated
equilibrium theory‘s process of insight formation (Gersick, 1991). In the management
literature, Miner et al. (1990) proposed two types of buffers with resource buffers
insulating organisations‘ access to material resources, and legitimacy or institutional
buffers insulating organisations through legitimacy. However, because the study of
Miner et al. (1990) focused on resource buffering, this thesis has provided further
insight into how inter-organisational linkages can act as legitimacy or institutional
buffers to organisations during transformative change. This thesis provides ways to
respond to Lynn‘s (2005) calls for empirical studies to investigate the process and
outcomes of buffering strategies. Therefore, this thesis contributes to knowledge about
legitimacy-based buffers and their role across multiple organisations in the context of
crisis and transformative change.
5.4.5 Implications for Organisational Theory based on Communication
Actions during Transformative Change
A secondary contribution to the management literature relates to the extension of
knowledge of punctuated equilibrium theory. Existing studies in punctuated equilibrium
focus predominantly on the substantive decisions of organisational leaders during
punctuations of equilibrium and periods of long stability (Tushman, Newman et al.,
1986). In addition, the studies show that during punctuations, organisational leaders
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make more substantive decisions than symbolic ones (Tushman, Newman et al., 1986)
but draw on symbolic strategies as their first response (Haveman et al., 2001).
In this thesis, the examination of crisis communication provides insight into the
role of communication as a symbolic strategy during punctuations of equilibrium. The
findings of this thesis both confirm and build on existing organisational studies. Firstly,
the thesis confirms that both symbolic and substantive actions are made during
punctuations. Secondly, the thesis shows that symbolic decisions are used not only to
manage the immediate uncertainty of the punctuation but also to prepare for future
substantive decisions such as litigation. In this way, an organisation‘s symbolic
decisions are used not only as a first response (Haveman et al., 2001) but as a way to set
criteria for the legitimacy of future organisational decisions that occur during the
process of insight formation.
In summary, the primary contribution of this thesis is the role of
interorganisational linkages or buffers during the process of transformative change. This
contribution is significant to the management literature, offering new insight into
legitimacy buffers, and thereby extending existing research that has focused
predominantly on resource buffers. This new knowledge is significant for both the
management and public relations literatures because it offers insight into the network of
linkages among multiple organisations and the change agent. In addition, this thesis
contributes to the public relations and crisis communication literature by introducing the
perspective of transformative change and process models for crisis communication. As a
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result, this thesis has also developed theory to guide future crisis communication
research.
5.5 Implications for Practice
The findings of this thesis have a number of implications for the practice of crisis
communication and public relations. The crisis communication literature has strong
practical utility (Seeger et al., 1998), offering guidelines for crisis communication and
actions based on a range of crisis situations. The core crisis event in this thesis is
categorised as a product recall and is one of Newsweek‘s top product recall crisis events
("Prominent product recalls in recent history," 2010, February 13). Yet with this
notoriety comes key implications for crisis communication and public relations practice.
These implications are elaborated in the following two sections: 1) crisis communication
decision-making for primary and secondary organisations, and 2) the integration of
change into crisis management. Although these recommendations are pertinent
particularly to the pharmaceutical industry as the setting for this thesis, at an abstract
level, these implications are significant contributions to current practice in crisis
communication and management.
5.5.1 Crisis Communication Decision-Making for Primary and Secondary
Organisations
This thesis provides several key points to consider when public relations
managers and crisis teams make decisions about crisis communication or responses as
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crises shift from situational crisis events to transform multiple organisations and
environments.
5.5.1.1 Guidelines for Strategy Selection
This thesis presents several guidelines to consider for crisis communication
under transformative change based on an analysis that used three strategy typologies
across multiple organisations. In doing so, the thesis reflects on how the strategies of
Coombs (2006b) and Allen and Caillouet (1994) and strategic responses of Oliver
(1991) worked within the context of transformative change. The thesis suggests that in
practice, the best public relations managers will synthesise existing templates, drawing
on contextual changes and depending on the organisation‘s position in the initial crisis
event.
For primary organisations, Coombs‘ (2006b) typology offers a strong starting
point for managing and communicating about crisis. However, as the crisis shifts
beyond a situational event, crisis managers should ―free themselves from single crisis
centred attitudes‖ (Ren, 2000). In doing so, primary organisations should reflect on
Allen and Caillouet‘s (1994) concept around the web of corporate actors, and draw on
Oliver‘s (1991) typology of strategic responses.
As the crisis shifts, the primary organisation should pay attention to the
responses from its web of corporate actors such as competitors, investors, and regulators
(Allen & Caillouet, 1994). The primary organisation is able to be more mindful of the
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actors involved in potential peripheral crisis events. Next, the primary organisation
should consider Oliver‘s (1991) typology to examine how they can use communication
to demonstrate conformity to starting equilibrium or shape criteria for future
equilibrium.
This thesis also elaborates on the actions of secondary organisations that are
direct competitors to the primary organisation. The practical implications for secondary
organisations suggest that it is important to reflect on communication choices. In this
thesis, Pfizer acted quickly to defend the safety of its drug, reinforcing its excellent
safety record. While it is important to communicate this information, it is equally
important for secondary organisations to consider how their communication may
contribute to ongoing concern for the crisis and for their organisation.
As secondary organisations become caught up in the transformative change
process, it is important that they use Allen and Caillouet‘s (1994) framework for
corporate actors to examine whether and how they are adding accountability pressures
on the primary organisations. The thesis also shows that if secondary organisations
experience crisis events similar to the primary organisation, these decisions may be
buffered by other actors. In this way, secondary organisations should use Allen and
Caillouet‘s (1994) framework to monitor corporate actors and look out for the focus of
the transformative change; this entity may offer buffering support. However, secondary
organisations should also be mindful of the consequence of this choice of action. That is,
although the buffering effect protects the secondary organisation from ongoing scrutiny,
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it also potentially locks in a strategy choice of conformity, and limits the organisation‘s
agency and influence on the forming environment.
The guidelines for strategy choices for primary and secondary organisations are
illustrated in Table 5.3. Building on the process model of crisis communication that
integrates organisation-centric and emergent contexts (see Figure 5.4), this range of
macro strategies sits on a continuum of change and integrates the range of crisis
response options for organisations under punctuated equilibrium.
Table 5.3
Macro Strategies and Recommendations
Outcome Recommended use Link to existing crisis
response typology
Restoration (support
change)
This macro strategy is used by
organisations to support immediate
past substantive decisions that have
triggered a situational crisis event.
Draws on Coombs (2006b)
and Allen and Caillouet
(1994)
Determination (prepare
for change)
This macro strategy is used by
organisations to prepare for future
substantive decisions (that may yet be
undetermined) by reinforcing the
legitimacy of an organisation‘s actions,
and engaging in dialogue related to the
need for change.
Relates Coombs (2006b)
and Allen and Caillouet
(1994) to Oliver (1991)
Endorsement
(seek/offer protection
during change)
This macro strategy is used by
organisations (and generally secondary
organisations) that either seek or
provide a buffer to organisations
involved in the process of
transformative change.
Not treated in existing
crisis response literature.
As identified in Table 5.3, the response level of the process model of crisis
communication choices under punctuated equilibrium identifies three macro strategies
for primary and secondary organisations: restoration, determination and endorsement.
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These macro strategies comprise the existing crisis communication literature as well and
are also developed from the findings of this thesis. The macro restoration category
includes existing adaptive approaches that are designed to restore stability, reputations
or legitimacy. From a change perspective, these strategies operate to support substantive
strategies. The macro determination category of strategies is used to prepare corporate
and regulatory actors for change, reflecting a shift from the situational crisis event to an
ongoing core crisis. The macro endorsement category of strategies is designed to protect
organisations during the change process. Although this thesis suggests endorsement
strategies are most relevant to secondary organisations, they could be used by primary
organisations.
The 2010, the BP oil spill crisis provides a recent application for the findings of
this thesis. Oil industry executives were questioned by Congress about their oil response
plans with companies like ExxonMobil, Chevron, Shell and ConocoPhillips saying that
they would have taken different actions to BP (Oil execs: BP did not meet standards,
USA Today, 16 June 2010). This setting demonstrates competitor dynamics related to a
crisis setting but also demonstrates a sense of what changes are required at an
organisational and an industry level for decision-making and risk.
Further, this thesis also demonstrated the important link between communication
and legal strategy of the primary organisation. As a result, this thesis reinforced the
value of good communication between public relations and legal counsel (Lerbinger,
2006). Legal challenges are won both in the court of law and court of public opinion
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(Lerbinger, 2006). As a result, common ground between the two professions is that both
are important in crisis situations and both should be involved early (Martinelli & Briggs,
1998; Reber et al., 2001). Often during legal proceedings, companies are reluctant to
reveal too much information. During a crisis, most decisions about the release of
information are made collaboratively with the legal counsel in a leadership role
(Fitzpatrick, 1996; Fitzpatrick & Rubin, 1995; Martinelli & Briggs, 1998). This thesis
supports the importance of a collaborative relationship between public relations and
legal advisers.
5.5.1.2 Indicators of a Shift from Crisis Event to Focusing Event
The emergent crisis context provides important theoretical and practical
contributions to crisis communication. This thesis describes and explains how a
situational crisis event triggered transformational change in the pharmaceutical industry.
By considering the findings of this thesis and existing research on punctuated
equilibrium theory in policy studies, there are three elements that help differentiate
situational crisis events and focusing events: 1) conflict, 2) an unresolved crisis event,
and 3) sustained media and public attention (Alink et al., 2001; Birkland, 1998; Clair &
Dufresne, 2007; Givel, 2006; Heck, 2004; Wood, 2006). The interrelationships among
the dimensions shape the significance of the change.
Public relations managers for primary and secondary organisations involved in
crisis events should look out for these elements. In particular, organisations should
consider the visibility of the crisis event by keeping track of the amount of attention
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received by stakeholders and the mass media. Some of the key stakeholders involved in
focusing events include interest groups and activists, government and regulatory leaders,
policy entrepreneurs, mass media, or the general public (Birkland, 1998; Givel, 2006).
In the policy literature, a focusing event is described as one that gives stakeholders a
channel through which they can voice concern or anger about policy performance (Alink
et al., 2001). Further, the mass media creates high visibility, integrating other
stakeholders to create a platform for change (Clair & Dufresne, 2007; Comfort et al.,
2001). For public relations managers, identifying the elements that signal a shift from a
situational crisis event to a focusing event provides a greater ability to select appropriate
crisis responses.
In summary, this thesis shows that the current decision-making logic for practice
in crisis communication needs to change. Existing practice is oriented around a position
where crisis managers deal with crisis events in order to restore reputations and stability.
This thesis demonstrates the importance of seeing crisis and crisis communication not
only as situational events but also as part of the process of transformative change. The
Vioxx withdrawal and other more recent crisis events including the BP oil rig crisis
demonstrate the sustained power of media attention, rendering the restoration logic as
untenable. Under transformative change, crises have networked qualities and draw in
multiple actors; these influence decision-making for primary and secondary
organisations. Under these conditions, organisations should refer to Table 5.3 and
consider crisis communication not only as a means to resolve the crisis event but also as
a process that goes to the heart of change.
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5.5.2 Integration of Change in Crisis Management
Crisis management and planning are processes undertaken by organisations to
ensure crisis preparedness. One of the core aims of crisis planning is for the organisation
to control activities and perceptions that the organisation is acting in the stakeholder
interest (Heath & Palenchar, 2009).
A key feature of crisis plans are crisis scenarios that are developed based on an
organisation‘s vulnerabilities (Fearn-Banks, 2002; Mitroff, 2004; Sung, 2007). For
example, a pharmaceutical company would be likely to develop crisis scenarios related
to the production of pharmaceuticals, product tampering, product recalls, or product
withdrawals. In developing these plans, the pharmaceutical companies would examine
ways to exert control in order to influence favourable outcomes. The findings of this
thesis suggest that control may not always be achieved during transformative change. As
a result, when developing these crisis scenarios, public relations managers or consultants
should not only consider the starting conditions for a crisis event but they should
integrate the concept of transformative change into crisis plans. This can be achieved by
educating crisis teams about the importance of integrating sustained media attention and
linked crises into plans. That is, crisis scenarios should involve initial crisis events and
should consider crisis communication if crises become ongoing concerns for
organisations or industries. Because transformative change brings with it an emergent
and unpredictable context, it is also important to ensure crisis teams are skilful and able
to improvise and shift approaches as the organisation‘s environment changes.
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369
In summary, retrospective studies like this one can make valuable contributions
to current practice in crisis communication. This year, 2010, has offered a number of
cases that signal the importance of crisis management from Toyota‘s crisis events at the
beginning of the year to BP‘s oil rig crisis in April. The BP crisis saw a congressional
inquiry into the practices of all big oil companies. During one session, senators
questioned the chief executive officers of multiple oil companies about their crisis
management plans and found that the companies had similar oil response plans to
Exxon‘s plan containing nine pages on oil removal and 40 pages on responding to media
enquiries (Schmidt, 2010, 16 June). In today‘s complex environments, crisis
management and communication cannot be considered as templates but as living
documents that are unique to each organisation and crisis situation. This thesis shows
how a situational crisis event can develop in unanticipated ways to affect multiple
organisations. As such, formulaic responses are not sufficient for crisis communication
practice.
Crises can take lives, cause injuries, and cost organisations millions in fines and
reputational impacts. This thesis offers some guidelines for crisis communication under
transformative change, yet, at the same time, recognises these practical implications
must be placed in the context of responsible business practice.
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370
5.6 Limitations
As set out in Chapter Three, several limitations to this research are
acknowledged. Firstly, resources constrained the nature of the investigation, data
collection, and analysis. Ideally, and like the work of Meyer and colleagues (see A.D.
Meyer, Brooks, & Goes, 1990), being serendipitously placed within an organisation as it
was undergoing crisis would have been a preferred way to study change in crisis
communication. However, one of the pragmatic considerations in this area of research is
that punctuations of equilibrium are most easily identified in hindsight. Therefore, while
it may have been possible to participate in an organisation undergoing crisis, a task that
could occur within a short time frame, knowing whether the crisis would transform it
would be difficult to predict and have significant pragmatic limitations for the
researcher. Further, access to key organisational decision-makers including the Chief
Executive Officer, General Counsel, and Chief Research Officer may also be limited
during times of crisis.
Although consistent with existing research in the public relations and
management literatures, one of the limitations of data sources such as print media
articles and organisational documents is validity or the major difficulties of achieving
member-checking. For example, the use of these secondary sources precludes access to
organisational leaders to confirm approaches to crisis handling methodology or the
organisational knowledge of an impending punctuation of equilibrium. Primary research
could have been conducted following the completion of the alternative narratives in
2010. However, this would have occurred more than five years after the initial crisis
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
371
event. The limitations of both archival and informant measures are not new to the
literature. Several authors identify concern over divergence between informant and
archival measures of the environment (Boyd, Dess, & Rasheed, 1993; Doty,
Bhattacharya, Wheatley, & Sutcliffe, 2006; Neuman, 2006; Ventresca & Mohr, 2002),
suggesting studies avoid this situation by choosing only one type of measure (Doty, et
al., 2006). One of the causes for divergence is perceptual bias of informant measures
(Boyd, Dess, & Rasheed, 1993; Doty et al., 2006; Ventresca & Mohr, 2002).
A related challenge is found in the research and writing process where media
framing of stories and strong writing or individual bias can hide causal theories or leave
some elements implicit (Neuman, 2006). In part, these limitations were treated by using
and comparing both media articles and organisational documents and alternative
templates and actively scrutinising the data against multiple sources and interpretations,
and seeking out the differences in interpretation across these templates. By producing
three narratives to explain crisis communication during change events and subjecting
findings to competing yet inherently consistent claims and interpretations, the thesis has
sought to build strong arguments to support the emerging theory as did Kvale (as cited
in Hesse-Biber and Leavy, 2006).
Further limitations relate to the sampling decisions behind this thesis. These
decisions limit the thesis to transformative change triggered by crisis events for which
the primary organisation was responsible, and a focus on three large organisations
within one industry and during one punctuation of equilibrium. In part, this limitation is
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
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explained by the significance of the data required to investigate punctuated equilibrium.
That is, these conditions were selected precisely because of the multiple linked crisis
events affecting multiple organisations because this thesis was concerned principally
with crisis communication during transformative change. In doing so, the
generalisability of the thesis may be limited to crises, crisis communication, and
transformative change under similar conditions. Process research often navigates the
challenge of context and generalisation (Sminia, 2009), yet by linking the findings to the
crisis communication literature, this thesis and its conceptual model can also be applied
to other industry contexts and crisis events. The thesis has been motivated by Van de
Ven and Poole‘s (2005) recommendation for versatile process explanations that can be
adapted to fit different cases at different times.
5.7 Implications for Further Research
This thesis opens up opportunities for the continued investigation of crisis
communication and transformative change in public relations. Further research is
advocated: 1) into change in public relations and crisis communication, 2) about
indicators of the emergent crisis context, 3) through the introduction of power and
control and their role in the emergent crisis context, 4) using alternative methodology
and an issues management approach, 5) to confirm generalisability of study‘s findings,
and 6) in the area of organisational learning following both a crisis or transformative
change.
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373
Firstly, through punctuated equilibrium theory, this thesis provides
transformative change and process models as a new rationale for change in crisis
communication and public relations. Punctuated equilibrium theory allows the view of
crisis communication not only as an element that adjusts an organisation to incremental
change in an environment but also as a process that goes to the heart of change. Further
research should examine punctuated equilibrium theory in both crisis and non-crisis
situations in order to build more knowledge around change and its role in public
relations scholarship. Further studies could examine different time frames for change
and how that influences crisis communication and public relations, accounting for some
of the limitations of the theory. These studies could take a longer time frame than that
adopted in this thesis in order to examine the process of transformative change and
communication from an old equilibrium to a punctuation of equilibrium, and to a new
equilibrium. In this way, by studying multiple crises and multiple time frames, research
will continue to build knowledge and theory relating to the influence of process and time
on crisis communication.
Secondly, further studies about the emergent crisis context should consider the
role of secondary organisations and connections with industry actors. This thesis
considers secondary organisations as direct competitors to the primary organisations but
there may be other types of dynamics or connections. However, it would be interesting
to examine the dynamic between corporate and industry actors in different emergent
situations. Further studies in this area would provide more information around the roles
of corporate actors involved in a complex crisis. Knowledge in this area would not only
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
374
extend existing research but have implications for the practice of crisis communication.
Public relations managers could draw on process theories to differentiate between
contexts that require adaptive and non-adaptive decisions. A recent study also shows
that the commitment of organisational leaders, such as chief executive officers, to the
status quo has an impact on organisational decisions and performance (McLelland,
Liang, & Barker III, 2009). Further studies in this area could also examine the decision-
making partnership between public relations managers and organisational leaders during
transformative change.
Thirdly, and linked to the emergent context, an area for further research relates to
the exploration of the role of power and control through a discourse perspective.
Organisational discourse refers to ―the structured collections of texts embodied in the
practices of talking and writing…that bring organisationally related objects into being as
these texts are produced, disseminated and consumed‖ (Grant, Hardy, Oswick, &
Putnam, 2008, p. 3). Organisations are created and sustained through discourse, which
occurs in multiple spheres at multiple levels (Monge & Poole, 2008). In crisis
communication, discourse theory is traditionally seen through the domain of rhetoric,
that is the use of discourse for strategic purposes (Grant et al., 2008). There is
opportunity to extend beyond the rhetorical application of image restoration by
exploring the notion of power and control in contrast to conflict reduction and resolution
(Motion, 2005; Motion & Leitch, 1996). Discourse production and transformation draw
insights into the construction of power relationships between organisational actors with
transformations involving the creation of new rules (Motion & Leitch, 2007, 2009).
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Drawing on Foucault, Motion and Leitch (2007) talk about how ―change in
discourse…can be determined by mapping the displacement of boundaries, the new
positions and roles made available for speaking subjects in the discourse, new modes of
language, and new forms for circulating the discourse‖ (p. 264). Further studies that link
discourse theory, crisis communication and transformative change could provide insight
into the power relations that evolve and dissolve as new conditions and rules for
organisational legitimacy emerge.
A fourth area of further research comes from an alternative methodology, a
perspective that can be considered in multiple ways. First, researchers could be
embedded in crisis-prone organisations or industry sectors, examining the antecedents to
crisis such as issues management. The link between issues and crisis management is an
established part of the public relations literature with strong practical implications
(Heath & Palenchar, 2009; Jaques, 2007, 2009). Issues management helps organisations
identify issues in order to resolve them before they become crises (Regester & Larkin,
2008). Issues management is defined as an ―action oriented management function which
seeks to identify potential or emerging issues (legislative, regulatory, political, or social)
that may impact the organisation, and then mobilises and coordinates organisational
resources to strategically influence the development of those issues‖ (Wilson, 1990, p.
41). Issues management provides substantive managerial implications with recent
studies integrating framing theories (Darmon, Fitzpatrick, & Bronstein, 2008), and
discourse theory (de Brooks & Waymer, 2009). Issues management text books provide a
strong account of issue lifecycles, describing the changes to an issue as it progresses
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from an emerging issue to a mature state (Regester & Larkin, 2008). In doing so, these
models describe the changes to the issues context as more stakeholders become involved
and regulators take interest (Regester & Larkin, 2008). Based on the findings of this
thesis and through the integration of network theory, there is opportunity to theoretically
advance the issues management literature and provide more predictive models. In doing
so, this approach could legitimately draw on data sources that considered both
traditional and social media and captured expert commentary relayed through other
channels (Heath & Gay, 1997) thus overcoming some of the sampling limitations of the
thesis. In this way, it would be useful to observe both issues management and crisis
communication in action and provide insight into the communication decision-making
in real-time supported by retrospective case studies (Leonard-Barton, 1990).
Another alternative methodology could relate to the adoption of a grounded
theory perspective. Grounded theory is a qualitative approach that was developed to
counter positivist research approaches that aimed to test theory. Grounded theory
offered a way to develop theory when little is known or a new perspective was required.
The approach develops theory by drawing and constantly analysing data from social
research (Glaser, 1994; Glaser & Strauss, 1967). In this way, grounded theory is an
emergent perspective (Charmaz, 2008), that may enable the development of alternative
and more appropriate typologies for crisis communication choices during transformative
change.
CRISIS COMMUNICATION UNDER TRANSFORMATIVE CHANGE
377
A fifth area of research could occur across multiple industries, organisational
types, and crisis events and would confirm the generalisability of the findings of this
thesis and its conceptual and practical models. This thesis examined a starting crisis
event that was preventable (Coombs, 1998, 2007b). This type of initial crisis event is
consistent with the majority of existing crisis communication research (S. Kim et al.,
2009), yet it would be interesting to examine transformative change under starting
conditions that were outside of the organisation‘s control. In this way, it would be useful
to examine how the work of Seeger and colleagues around the discourse of renewal may
contribute to crisis communication that goes to the heart of change. Further, this thesis
also examines crises faced by large and established organisations that are publicly listed.
It would be useful to examine crisis communication and transformative change affecting
smaller organisations or organisations in their early stages of development.
Finally, punctuated equilibrium theory is a process-based model of change.
However, in the organisational sciences literature, studies in punctuated equilibrium
have also considered the performance outcomes for organisations that undergo
transformative change (Sastry, 1997). In both punctuated equilibrium and crisis
communication, organisations can learn from crisis events through either first order
learning that involves incremental updates or second order learning that requires shifts
in core assumptions and decision-making logics (Virany et al., 1992). Given
organisational learning is central to both punctuated equilibrium theory and crisis
communication research, further studies could explore organisations and industries after
crisis events to examine the outcomes to the process of transformative change.
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378
5.8 Conclusion
This thesis demonstrates the essential link between process-based research and
theory building in crisis communication. By adopting punctuated equilibrium theory to
study crisis communication under transformative change, this thesis highlights the
critical roles of time and the process of change. Through these factors, the thesis
generates new knowledge about the emergent crisis context and the roles of primary and
secondary organisations. These factors also contribute to a better understanding of
organisations‘ crisis communication and actions, demonstrating the value of
synthesising multiple crisis and strategic response typologies.
This study of crisis communication under transformative change represents an
important extension to existing scholarship in crisis communication and public relations.
In an era of complex challenges, the thesis provides new insights to guide ongoing
scholarship in and the practice of crisis communication.
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