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Corporate Social Responsibility and Crisis Communication: Nike Taiwan Jordan Crisis vs. Paolyta Bullwild Crisis

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CORPORATE SOCIAL RESPONSIBILITY AND CRISIS COMMUNICATION: NIKE TAIWAN JORDAN CRISIS VS. PAOLYTA BULLWILD CRISIS By YI-SHAN HSU A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN MASS COMMUNICATION UNIVERSITY OF FLORIDA 2006

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Copyright 2006 by Yi-Shan Hsu

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I would like to dedicate this thesis to my dear family, particularly my parents. For their permanent love and support.

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iv ACKNOWLEDGMENTS This thesis could not have been accomplished without the following people, who have given me care and support. First of all, I especially would lik e to thank my dear parents, Yung-Hung Hsu and Hsiu-Chin Huang, for their everlasting love and support. I would like to thank my dear br other, Wei-Chun Hsu, and my d ear sister, Jui-Mei Hsu, too. My beloved family gives me the belief a nd strength to overcome any difficulties. I would like to attribute special thanks to my committee chair, Dr. Juan-Carlos Molleda, for offering me valuable knowledge and guidance throughout this thesis. Also, I would like to thank my committee members, Dr Linda Childers Hon and Dr. Michael A. Mitrook, for their encouragement and support. I thank all my professors in the Colleg e of Journalism and Communications during my master’s study here in Gainesville. Special thanks go to Dr. Spir o K. Kiousis, Dr. Peg Hall, Dr. Johanna Cleary, and Dr. Kim B. Wals h-Childers. I also thank Dr. Alan Freitag from the University of No rth Carolina, Charlotte, w ho provided us a wonderful international public relations course in London. I thank Jody Hedge at the Graduate Division for all her warm help. I thank all my dear friends. I would like to specially thank my dearest friend at UF, Chin-Hsin Liu, for her sweet care and support. And thanks go to my UF friends who supported me through the thesis: Shu-Yu Lin, Marcie Wu, Claire Yeh, Marjorie Chen, Ihua Lee, Chun-Hsin Huang, Yi-Jong Tsai, Johnson Chiang, and many more.

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v TABLE OF CONTENTS page ACKNOWLEDGMENTS.................................................................................................iv LIST OF TABLES............................................................................................................vii ABSTRACT.....................................................................................................................vi ii CHAPTER 1 INTRODUCTION........................................................................................................1 2 LITERATURE REVIEW.............................................................................................4 Corporate Social Responsibi lity: Origin And History..................................................4 Corporate Social Responsibility: Ideologies................................................................5 Instrumental Theories............................................................................................6 Political Theories...................................................................................................7 Integrative Theories...............................................................................................8 Ethical Theories.....................................................................................................9 Corporate Social Responsibility And Public Relations..............................................11 Crisis Communication................................................................................................13 Crisis Communication And Public Relations.............................................................17 Corporate Social Responsibil ity And Crisis Communication....................................18 3 CASES IN TAIWAN: NIKE VS. PAOLYTA...........................................................22 4 METHODOLOGY.....................................................................................................27 Method........................................................................................................................2 7 Sampling.....................................................................................................................28 Textual Analysis..................................................................................................28 Self-Administered Survey...................................................................................29 Survey Questionnaire Construction............................................................................30 Survey Data Analysis.................................................................................................32 5 FINDINGS..................................................................................................................35 Textual Analysis.........................................................................................................35 Self-Administered Survey..........................................................................................38

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vi Examination Of Hypotheses And Research Questions..............................................40 6 DISCUSSION.............................................................................................................48 APPENDIX A SELF-ADMINISTERED SURVEY QUESTIONNAIRE.........................................55 B MULTIITEM MEASURES........................................................................................58 C FREQUENCY TABLES............................................................................................59 LIST OF REFERENCES...................................................................................................65 BIOGRAPHICAL SKETCH.............................................................................................74

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vii LIST OF TABLES Table page 5-1 Descriptive statistics of brand recognition...............................................................39 5-2 Descriptive statistics of CSR....................................................................................39 5-3 Descriptive statisti cs of CSR in crisis......................................................................40 5-4 Correlation test of CSR............................................................................................41 5-5 Correlation test of CSR in crisis...............................................................................42 6-1 Crosstabulation of whether Taiwan’s Ni ke practiced CSR in crisis and whether or not to support Taiwan’s Nike after its crisis........................................................43 6-2 Chi-Square Tests of whether Taiwan’s Nike practiced CSR in crisis and whether or not to support Taiwan’s Nike after its crisis........................................................43 7-1 Crosstabulation of whether Paolyta Co. practiced CSR in crisis and whether or not to support Paolyta Co. after its crisis.................................................................44 7-2 Chi-Square Tests of whet her Paolyta Co. practiced CSR in crisis and whether or not to support Paolyta Co. after its crisis.................................................................44 8-1 T-test for knowledgeable about Taiwan’s Nike and interest in Taiwan’s Nike regarding whether or not to support Taiwan’s Nike after its crisis..........................45 8-2 T-test for knowledgeable about Paolyta C o. and interest in Paolyta Co. regarding whether or not to support Paolyta Co. after its crisis...............................................46

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viii Abstract of Thesis Presen ted to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Mast er of Arts in Mass Communication CORPORATE SOCIAL RESPONSIBILITY AND CRISIS COMMUNICATION: NIKE TAIWAN JORDAN CRISIS VS. PAOLYTA BULLWILD CRISIS By Yi-Shan Hsu August 2006 Chair: Juan-Carlos Molleda Major Department: Journalism and Communications Few previous studies have investigated th e relationship between corporate social responsibility and crisis comm unication in terms of public relations. Thus, the primary purpose of the current research is to compare the Nike Taiwan Jordan crisis and Paolyta Bullwild crisis to examine the potential correlation between corporate social responsibility and cr isis communication. This study adopted a textual analysis us ing related English and Chinese language news articles to gain information on how th e corporations dealt with their crises. In addition, a self-administered survey wa s conducted to better understand public perceptions of corporate social responsibility and crisis communication by comparing the two crises in Taiwan. The results of the study illustrate the signifi cance of corporate social responsibility as a whole. The study also notes that cor porate social responsi bility in crisis communication is similar in different socioeconomic and cultural contexts. Most

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ix importantly, it found that the more publics perceive the corporation as practicing corporate social responsibility in a crisis, the more th ey support the corporation. Therefore, the corporation that did not prac tice corporate social re sponsibility during its crisis was unsuccessful in its crisis communication. Corporat e social responsibility is positively associated with crisis communicati on in terms of public perceptions. The study also indicates that brand recognition is helpful to crisis communication. In terms of crisis communication, the pr esent study suggests that corporations should think and act ethically by practicing co rporate social respons ibility, which has the ability to influence public perceptions in crisis communication. Ultimately, an organization cannot sustain itself legitimat ely without considering its publics and the environment.

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1 CHAPTER 1 INTRODUCTION Corporate social responsibility and cris is communication are key subjects in the field of public relations, as numerous rese archers have conducted separate studies on these focal points (Edmunds, 1977; Shrivast ava, Mitroff, Miller, & Maglani, 1988; Coombs, 1998; Ulmer & Sellnow, 2000; Knox & Maklan, 2004; Garriga & Mel, 2004; Stone, 2005). However, few studies explore th e potential correlation between corporate social responsibility and cris is communication. In view of th e lack of research regarding their correlation, this study invest igates the role of corporate so cial responsibility in crisis communication by examining Nike and Paolyt a public relations crises in Taiwan. Though Bernays (1980) pointed out early on that “public relations is the practice of social responsibility” (cited in Stone, 2005, p. 31), the majority of corporations rely on public relations for profit rath er than a sense of civic duty. Likewise, Friedman (1962, 1970) argued that “the only responsibility of business is to maximi ze profits within the rules of the game” (Wartick & Cochran, 1985, p. 759). Yet, with the onslaught of globalization, corporate social responsibility has been regarded as a key factor influencing cor porations: “Business pr actices, even those conducted a very long way from their home mark ets, can be subject to intense scrutiny and comment by customers, employees, suppliers, shareholders, and governments, as well as other groups upon whose support th e business relies” (Knox & Maklan, 2004, p. 509). Steiner and Steiner (2003) have similarly indicated that corporate social

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2 responsibility is “the duty a co rporation has to create wealth by using means that avoid harm to, protect, or enhance societal assets” (p. 126). In addition, crisis communicat ion has emerged as a consid erably significant topic in the arena of public relati ons research since it helps or ganizations diminish possible losses when faced with a crisis (Ulmer & Sellnow, 2000). Corporate social responsibility also seems to influence the effectiveness of crisis communication. Tombs and Smith (1995) noted that socially responsible cor porations are more likely to make crisisavoiding decisions. Furthermore, “many communication crises stem from CSR issues” (“Senior PR,” 2003, 5), including Johnson & Johnson's Tylenol crisis in 1982, Pepsico's syringe crisis in 1993, the Exxon Valdez oil spill crisis, and the Jack-in-the-Box crisis, among others (Stone, 2005). Thus, it is worthwhile to ex amine how corporate social responsibility affects crisis communication. The following chapters presen t a literature review and a study of Taiwan’s Nike and Paolyta, as well as the methodology, fi ndings, and a discussion of the research provided. The literature review introduces the concepts of corporate social responsibility (e.g., instrumental theories, political theories integrative theories, and ethical theories) and crisis communication. The fo llowing chapter offers a broa d analysis of the Taiwan Nike and Paolyta crises while presenting hypotheses and rese arch questions associated with the study. The methodology chapter shows how the primary research (i.e., survey) and secondary research (i.e., textual analysis ) were conducted and analyzed for this study. Analyzed data are presented in the findings chapter, while the final discussion chapter addresses how the findings were associated with corporate social res ponsibility and crisis

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3 communication. This chapter also notes limitations of the st udy, proposes suggestions for future research, and provides a conclusion to the study.

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4 CHAPTER 2 LITERATURE REVIEW Corporate Social Responsibility: Origin And History Bowen (1953) first explored the concept of corporate social res ponsibility when he asserted that “businessmen have an obliga tion to pursue those policies, to make those decisions, or to follow those lines of action wh ich are desirable in terms of the objectives and values of our society” (p. 6). Wartick and Cochran (1985) further argued that corporate soci al responsibility asserts the importance of duty and morality. “Dut y” refers to a corporation's obligation to obey societal rules because corporations also benefit from society, while “morality” references a corporation's moral obligation to consider other factors beyond the company in identifying legitimate forms of so cial conduct (Ozar, 1979; Rawls, 1971). The concept of corporate social responsi bility has varied over time with the evolution of economic and political structur es. Under the previous prevailing authority structure of economics and politics, corpora tions considered stockholders and profits their sole responsibility (Edmunds, 1977). Ho wever, three notable events shifted the concept of corporate social responsibility: the in dustrial, financial, and distributional revolutions in the Unite d States (Edmunds, 1977). Due to the Civil War, a number of enterp rises began to “incorporate” and become so-called “trusts”. These trusts faced opposition from populist and grange movements threatened by the power of trusts to manipulate commodity prices (Edmunds, 1977).

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5 Thus, the industrial revolution was spurred by the growing need for socially responsible corporations, which lead to labor laws a nd the legislation of fair trade practices. The public loss of confidence in busine ss after the Great Depression incited a financial revolution circa 1930. As Edmunds (1977) noted, severe unemployment at that time mostly resulted from business failures and consequently, “the soci al responsibility of business had been augmented to be commensu rate with its power over the livelihood of individuals” (p. 40). Thus, more labor and so cial legislations a ffecting business were passed in an effort to prevent unemployment and other potential problems. Furthermore, the public economic system was revised to reduce the power of the private economic system. The distributional re volution was born of the new balance created between the private and public economic systems. The government could now regulate prices when the private economic system was out of contro l, while the private economic system could influence the government via political c ontributions or consumer opinion (Edmunds, 1977). With the advent of consumerism and environmentalism, corporations faced new social responsibilities from the government and the public, such as environmental legislation and consumer protection meas ures. As Hess, Rogovsky, and Dunfee (2002) pointed out, “more is implicitly and explic itly expected from corporations extending beyond their economic purpose and legal responsib ilities” (cited in Tracey, Phillips, & Haugh, 2005, p. 329). Corporate Social Responsibility: Ideologies As Votaw noted, “Corporate social responsibility means something, but not always the same thing to everyon e” (cited in Garriga & Mel, 2004, p. 51). Researchers have developed a variety of different definitions and theories with regard to corporate social

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6 responsibility. For instance, social issu es management, stakeholder management, corporate accountability, co rporate citizenship, and cor porate sustainability are all different terms representing the concept of corporate social responsibility (Garriga & Mel, 2004). Referencing ideology, Carroll (1994) contende d that corporate social responsibility is “an eclectic field with loose boundarie s, multiple memberships, and differing training/perspectives; broadly rather than focu sed, multidisciplinary; wide breadth; brings in a wider range of literature ; and interdisciplinary” (p. 14). Acknowledging that it is difficult to classify the numerous theories of corporate social responsibility, some scholars still attempted to provide thei r own classifications Brummer (1991), for instance, identified six crite ria (e.g., motive, relations to profits, group affected by decisions, type of act, type of effect, expresse d or ideal interest) to classify the various theories of corporate social responsibility. This study categorizes the theories of co rporate social res ponsibility via the classification method develope d by Garriga and Mel (2004). The authors divided these theories into four groups in virtue of economic s, politics, social inte gration, and ethics: a) instrumental theories, b) political theories, c) integrative theories, and d) ethical theories. Instrumental Theories The purpose of instrumental theory is to maximize the value of shareholders (Garriga & Mel, 2004). For instance, the most famous saying in this field is, “The only responsibility of business to wards society is the maximi zation of profits to the shareholders within the legal framework and the ethical custom of the country” (Friedman, 1970, p. 32).

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7 Friedman (1962, 1970) also contended that so-called social responsibility is “unethical” because corporate resources and earnings belong to the corporation and not the society. To spend corporate resources and earnings on society c onfuses the objective of corporations and takes away the pr operty of shareholders. The only social responsibility of corporations therefore, is the economi c responsibility of producing profits. Similar to Friedman’s conceptualizati on of economic responsibility, Porter and Kramer (2002) held that “philanthropic i nvestments by members of cluster, either individually or collectively, can have a powerful effect on th e cluster competitiveness and the performance of all its cons tituents companies” (pp. 60-61). That is, organizations can invest in social and ethica l activities outside normal bus iness practices to increase competition and productivity. Moreover, Murray and Montanari (1986) point ed out that the goal of organizations is “to enhance company revenues and sales or customer relationships by building the brand through the acquisition of, and associa tion with the ethical dimension or social responsibility dimension” (cited in Garriga & Mel, 2004, p. 55). Walters (1977), however, noted that th is kind of economic responsibility is unrealistic because it “neglects the long run consequences of profit maximization and fails to identify the appropriate relationsh ip between the manager and changing political and legal conditions” (Wartick, & Cochran, 1985, p. 760). In shor t, it is myopic to ignore the other larger factors, such as the political system, a ffecting corporate productivity. Political Theories Based on Locke, Donaldson (1982) offered a distinct point of view regarding corporate social responsibility. He argued that “a sort of imp licit social contract between

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8 business and society exists. This social cont ract implies some indirect obligations of business towards society” (cited in Garri ga & Mel, 2004, p. 56). Thus, organizations operating in society agree to their responsibil ity toward society. Likewise, it is society's “consent” that allows or ganizations to operate. The concept of “corporate citizenship ” (Altman & Vidaver-Cohen, 2000) echoes Donaldson's notion of corporate social responsibility, implyi ng that corporate responsibility originates in societal rights. In addition, Wood and Logsdon (2002) asserted that “business citizen ship cannot be deemed equivale nt to individual citizenship – instead it derives from and is secondary to individual citizenship” (p. 86). Ultimately, most scholars share the comm on view of political theories that corporations should have “a st rong sense of business respon sibility towards the local community, partnerships, which are the specifi c ways of formalizing the willingness to improve the local community and for consid eration for the environment” (Garriga & Mel, 2004, p. 57). Integrative Theories Unlike instrumental and political theories, integrative theories take social demands into account. More specifically, “integrative theories are focused on the detection and scanning of, and response to, the social demands that achieve social legitimacy, greater social acceptance and prestige” (Garriga & Mel, 2004, p. 58). As Preston and Post (1981) suggested, the legitimate scope of corpor ate social responsibility is within “the framework of relevant public policy” (p. 57) Namely, corporate soci al responsibility is public responsibility. For them, the definiti on of “social responsib ility” can vary for different interest groups; however, the term “public responsibility” clearly indicates a responsibility to the public by allowing for public policy. Here, public policy includes

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9 “not only the literal text of law and regulation but also the broad pattern of social direction reflected in public opinion, emerging issues, formal legal requirements, and enforcement or implementation practices ” (Preston & Post, 1981, p. 57). Thus, corporations must take public po licy into account alongside profits. Likewise, the term “social responsiveness” focuses on corporate social involvement (Wartick, & Cochran, 1985, p. 763), which propone nts argue can subst itute for “social responsibility” since it is a more tangible concept. Social resp onsiveness means “the capacity of a corporation to respond to social pressures” (Frederick, 1978, p. 6). This term later evolved into “issue management ” which means “the processes by which the corporation can identify, evalua te, and respond to those social and political issues which may impact significantly upon it” (Wartick & Rude, 1986, p. 124). Another noteworthy concept in integrative theories is Carroll’s (1979) Corporate Social Performance (CSP) model. The three components of Carroll’s (1979) CSP model, as Garriga and Mel (2004) noted, are “a basic definition of social re sponsibility, a listing of issues in which social responsibility ex ists and a specification of the philosophy of response to social issues” (p. 60). Carroll (1979) argued that corporations have economic, legal, and ethical obligations to operate in society. Therefore, bus inesses should perform in economically, legally, and ethically re sponsible ways for the whole of society. Ethical Theories Ethical theories emphasize the importance of ethics while responding to social demands. Thus, “ethics” is the essence of corporate social responsibility. Although Carroll’s (1979) CSP model noted the signifi cance of ethical obligations, the model is classified into integrative theories rather than ethical theori es because it relies on obligation rather than morality. As noted befo re, the “enlightened self-interest” identified

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10 by Curtin and Boynton (2001) is not corporate social responsibility. Rather, “enlightened self-interest” means that “you must do we ll in order to do good” (Cutlip, Center, & Broom, 1994, p. 470). However, co rporate social responsibilit y is not merely recycling paper and using energy-efficient light bulbs in the office (Anthony, 2005). It is about sustainability. In other words, corporate social responsibility is a “m ust-do” rather than a “nice-to-do.” Mohr, Webb, and Harris (2001) suggested th at firms take society into account as well as its bottom line, arguing that corpor ate responsibility means bringing as much good as possible to society as a whole. A numb er of scholars equate corporate duty with public rights (Curtin & Boynton, 2001; H eath, 1997; Martinson, 1994, 1995-1996). More specifically, corporations should view publics as stakeholders and treat them as the end, rather than a means to an end (L’Etan g, 1996; Curtin & Boynton, 2001; Kent & Taylor, 2002). To respect the rights of all stakeholders and act socially responsibly, organizations must understand the environment (e.g., society) and identify the interests of different publics (Curtin & Boynton, 2001; Heath, 1997; Heath & Ryan, 1989, L’Etang, 1996). In addition, corporate social responsibility is vita l to the longevity of corporate relationships with different publics since an organizat ion cannot operate and develop without considering the environment, which incl udes different publics and communities, the physical environment, and society as a w hole. Often, an organization's success is determined by its ability to meet the need s and expectations of publics (L’Etang, 1994). Frankental also noted that “co rporate social responsibility is the long-term footprint in

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11 society” (cited in Starck & Kruckeber g, 2003, p. 33). If the sole purpose of building corporate relationships with publics is to generate profits, the relationship will fail. Furthermore, corporate social responsi bility is philanthropic, which means understanding and satisfying the needs of publics. For instance, nonprofits rely on corporate donations to addr ess social problems (Waddock, Bodwell, & Graves, 2002). However, to effectively implement corporat e social responsibility, corporations must recognize and consider all the publics and environments that they may affect. It is not enough to make a one-time donation of a larg e sum of money. In contrast, corporate endeavors to better understand and cooperate w ith publics to exhibit social responsibility (Waddock, Bodwell, & Graves, 2002). Most publics today want to communicate with corporations and understand their operations, since corporate actions affect the environment as a whole. Thus, organizations must balance the needs of stakeholders and profit generation to achieve social responsibility (Sarbutts, 2003). Corporate Social Responsibility And Public Relations Ethics is the primary factor determini ng professionalism in public relations, as failing to consider ethics leads to the inab ility to reflect “rea l” publics (Day, Dong, & Robins, 2001). J. Grunig and Hunt (1 984) suggested two-way symmetrical communication as a means of practicing ethi cal public relations Public relations practitioners practice two-way symmetrical communication to communicate with, rather than persuade, key publics and therefore impl ement corporate social responsibility. As Bernays (1980) noted, “public re lations is the practice of soci al responsibility” (cited in Stone, 2005, p. 31).

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12 J. Grunig and Hunt (1984) identified four additional relationship models in addition to the two-way symmetrical communication model: the press agentry model, the public information model, and the two-way asymmetr ical model. Arguing the existence of two different communication types between organiza tions and their consti tuencies, J. Grunig and White (1992) identified the “asymmetrical” and the “s ymmetrical” perspectives. Organizations that adopt th e asymmetrical perspective tend to be conservative, concentrate power in the hands of author ity, and allow subordina tes little autonomy. Organizations following the symmetrical perspective are more liberal, supporting decentralized power and autonomy for constituents. The press agentry model and the public in formation model are examples of oneway communication (Shannon & Weaver, 1949) or linear communication transmitted by the sender (encoder) to the receiver (decoder). Public re lations practitioners who employ the press agentry or public in formation models attempt to change the attitudes and behaviors of publics rather than organizati ons, thus enforcing an unequal relationship between an organization and its key publics. Though not as amiss as one-way communica tion, the two-way asymmetrical model is still asymmetrical and unethical. In the two-way asymmetrical model, an organization collects feedback from various key publics in an attempt to persuade those key publics (J. Grunig & Hunt, 1984). The organization gains f eedback from the key publics that allow it to develop persuasive messages without gi ving publics the ability to influence or negotiate change. Therefore, the relationshi p is still asymmetrical because it is unbalanced and unethical.

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13 Another asymmetrical public relations m odel presented by Sriramesh (1996) is the personal influence model. The personal infl uence model indicates that public relations practitioners develop personal re lationships with i ndividuals of interest in the media, government, or political activist groups in order to seek favor s. This model is also known as “hospitality relations” and its purpose is to build relationships with individuals who hold key decision-making powers (Sriramesh, 1996). The two-way symmetrical model is based on mutual understanding between an organization and its key publics, since each in fluences the other. The goal of two-way symmetrical communication is understanding ra ther than manipulation or persuasion (J. Grunig & Hunt, 1984). Thus, organizations and key publics are equal and actively cooperate in creating an open dialogue to affect change. As J. Grunig and Hunt (1984) suggested, effective and ethical public rela tions practitioners practice the two-way symmetrical model, building long-term relati onships with their ke y stakeholders through mutual understanding. Ultimately, social respons ibility is a key component in achieving two-way symmetri cal communication. Crisis Communication What is a crisis? One definition for a crisis is “a specific, unexpected and nonroutine event or series of even ts that create high levels of uncertainty and threaten or are perceived to threaten an organization’s hi gh priority goals” (Seeg er, Sellnow, & Ulmer, 1998, p. 233). Similarly, Shrivastava, Mitroff, Miller, and Maglani (1988) described crises as “organizationally based disaster s which cause extensive damage and social disruption, involve multiple stakeholders, and unfold through complex technological, organizational and social processes” (p. 285). In general, to be in a crisis means that an organization and its stakeholde rs are at risk of great damage. Therefore, crisis

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14 communication has emerged as a considerably important issue in the public relations’ research arena. Coombs (1998) stated that a “situation influences comm unicative choices, the crisis situation should influence the selection of crisis responses” (p. 177). In other words, communicative response in a crisis depends on the type of crisis (Lerbinger, 1997). Crises can be divided into several categor ies. According to Lerbinger’s explanation (1997), a crisis occurs either inside or outsi de of an organization and an organization has direct or indirect culpability in a crisis. Similarly, Weiner (1986) distinguished cr ises by “locus” an d “controllability”: According to Lee (2004), “Locus, in a crisis context, specifie s the location of the cause of a crisis as internal or external to the orga nization. Controllability refers to whether the prevention of a crisis is with in the control of the organiza tion” (p. 602). As such, crises occurring inside an organizat ion are always considered controllable, while crises occurring outside an organizat ion are deemed uncontrollable Crises can also include natural disasters (e.g., floods and typh oons) and human error (Ho & Kirk, 2004). There are a variety of perspectives on how to conduct crisis communication. Fink (1986) provided the chronologi cal crisis communication wh ich has four stages: the prodromal stage, the acute stage, the chroni c stage, and the resolution stage. Crisis management is easiest in the prodromal st age if the decision-maker can anticipate or detect the early warning signals of crises Following the podromal stage is the acute stage, which is “what most people have in mind when they speak of a crisis” (p. 22). According to Fink, the speed and intensity of cr ises are always determined by this stage. Next, organizations attempt to correct and reco ver from a crisis within the chronic stage.

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15 “Chronic stage can linger indefinitely. But cr isis management plans can and do shorten this phase” (p. 24). For example, timely and honest communication with key stakeholders is one way to shorten the chronic stage. The fi nal resolution stage is total crisis recovery. “This natural history approach offers a comp rehensive and cyclical view of a crisis” (Dean, 2004, p. 194). In addition, “apologia,” as its literal meani ng implies, is a basic symbolic approach of crisis communication. Ware and Linkugel (1973) noted that “Apologia examines how individuals use communication to defend their character (ima ge) from public attacks” (cited in Coombs, 1998, p. 178). Another kind of symbolic approach is “accounts.” Simply speaking, “accounts” is an explanati on of what, why, and how a crisis happened. “Accounts are statements used to explain one ’s behavior and are invoked when one’s behavior is called into ques tion, thereby threatening one’s face (image)” (Coombs, 1998, p. 179). Moreover, most research concluded that explanations should be complete, timely, and accurate (Greer & Moreland, 2003). Combining apologia and accounts, Benoit (1995) provided a classification of communication strategies to help organizations restore their image. The first strategy is “denial”“the communicator can simply deny that the incident happened or shift the blame in hopes of absolution of culpability” (Benoit, 1995, p. 75). Instead of denying it, Benoit’s second stra tegy is “evading responsibility.” This strategy is used in four situations: “(1) Defeasibility: a lack of information or control over elements within the crisis communication si tuation occurs; (2) Provocation: the action occurs in response to the in itiation of a detrimental ste p, and thus the behavior is defensive in nature; (3) Accidental: the acti on occurs inadvertently, and there are factors

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16 that mitigate the occurrence of the offensive behavior; (4) Good intentions: the wrongful activity occurs, but it was premised upon good and sincere intentions” (Fishman, 1999, p. 351). Moreover, the third strategy is “reducing offensiveness.” For instance, “to bolster, or mitigate, the negative effects on the act or by strengthening the audiences’ positive effect on the rhetor” (Benoit, 1995, p. 77), “to minimize the amount of negative affects associated with the offensive act” (Benoit, 1995, p. 78), “attacking the accuser to lessen the impact of the accusation,” or “offering to compensate the injured path” (Benoit & Brinson, 1994, p. 77). The fourth strategy is “corre ctive action” to recognize and address the source of the injury. In other words, this strategy is to “mend one’s ways” (Benoit, 1995, p. 79). Sellnow, Ulmer and Snider (1998) argued that the corrective action strategy “can expedite the organization’s effort to rebuild its legitimacy” (p. 60). Benoit’s last strategy is called “mortification,” which means th at those in crisis admit their wrongdoing, expresses regret, and seek forgiveness. Similar to Benoit’s image restoration stra tegies, Bradford and Garrett (1995) noted that corporate responses (i .e., not responding, denying, offering an excuse, half agreeing, or agreeing and accepting responsibility) to a cr isis vary with four different prevailing conditions: (a) the organization can prove that their action is ethical; (b) the organization can prove that they had no control over th e event; (c) the organi zation can prove that what was described in the media is much wo rse than the real situation; and (d) the organization takes full responsibility for the event. Among these conditions, Bradford and

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17 Garrett (1995) recognized that the “agree and accept responsibility” response is the ideal communication strategy. Likewise, Marcus and Goodman (1991) argued that there were two kinds of crisis responses: accommodative and defensiv e. “Accommodative st rategies accept responsibility, take remedial action, or both, wh ereas defensive strategies claim there is no problem or try to deny responsibility fo r the crisis” (Coombs, 1998, p. 180). Overall, these crisis communication strategies ar e located between the endpoints of accepting responsibility and denying the crisis. Crisis Communication And Public Relations Generally, successful crisis management is based on good crisis communication. Public relations also acts as the key to helping an or ganization communicate with its publics. “Public relations is an important element in almost all successful crisis management efforts” (Marra, 1998, p. 461), because it can promote effective communication during a crisis like developing communication plans, assembling a crisis team, and assigning the most credible s pokesperson (Newsom, Turk, & Kruckeberg, 2004). Most importantly, public relations help organizations develop a communication culture and communication autonomy which is vital for crisis communication (Marra, 1998). “Effective communication is essential to maintaining a positive relationship with key stakeholders such as employees, custom ers, suppliers, and shareholders” (Fishman, 1999, p. 348). Rather than exploring the techni cal role of public relations in crisis communication, Marra’s model of crisis public relations illustrates how effective public relations help organizations perform during a crisis. Wellknown public relations scholar J. Grunig (1992) noted that “excellent public relations practice requ ires more than a

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18 knowledgeable and skillful public relations practitioner or department” (p. 465). Specifically, “the underlying communication cultu re of an organizati on and the level of autonomy or power of the public relations depa rtment within an organization can easily prevent (or enhance) practitioners from im plementing the best crisis communication plan” (Marra, 1998, p. 464). Therefore, th e basis of communication culture and communication autonomy is two-way symmetr ical communication via excellent public relations that build “open and honest” rela tionships with key publics (J. Grunig, 1992). Corporate Social Responsibility And Crisis Communication In most cases, crises are inevitable (F ink, 1986; Perrow, 1984). Nevertheless, as Coombs (1999) noted, “a crisis is unpr edictable but not unexpected” (pp. 2-3). Organizations can survive a crisis and even benefit from it provided that they handle it properly and efficiently. Proactive and reactiv e crisis communicati ons are pivotal for organizations to cope with crises properly and efficiently (Crable, & Vibbert, 1985). Although it is hard to make a plan to prev ent a crisis, there are still many crisis scenarios that organizations can envision and de vise proactive crisis management in order to decrease any potential losses. Proactive cr isis management will be achieved by having appropriate spokespersons and mechanisms to define crises, identify affected publics, and offer the most proper procedures (Penrose, 2000). One noteworthy proactive crisis manageme nt technique is reputation management. As Dean (2004) noted, having a reputation for so cial responsibility prior to the crisis has been identified as an important factor influe ncing the crisis. For example, it seems that the sterling reputation of Johnson & Johnson helped manage the Tylenol crisis. In terms of reactive crisis communication, it is effective and socially responsible to communicate with the key publics affected by the crisis. As Barton suggested, there are

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19 several steps to communicating with key publics; they can “provide accurate information, show compassion, and demonstrate corporat e responsibility ” (Strother, 2004, p.291). To apply social responsibility means to act as pub lic citizens and thus fe el an obligation to contribute to society (Ho & Kirk, 2004). In other words, organizat ions considered as socially responsible are expected to act ethically. In the cont ext of social responsibility, generosity is not only a marketing function, bu t a real societal obl igation (Himmelstein, 1997). Tombs and Smith (1995) have shed light on how to employ social responsibility when faced with a crisis. They argued that practicing “democratic” forms of corporate social responsibility embodies true social responsibility. In addition, “liberal” and “paternalist” forms of corporate social res ponsibility are limited definitions of social responsibility. Liberal corporate social re sponsibility is the economic responsibility discussed above in regards to instrumental theories. In liberal corporate social responsibility, “the only corpor ate social responsibility is to conduct the business in accordance with the employer’s desires, which generally will be to make as much money as possible while conforming to the basi c rules of society” (Friedman, 1970, p. 33). According to this point of view, the firm only has to take responsibility for their shareholders and make the maximum profit for them. The paternalist form of corporate social responsibility contends that “corporations respond to more general concerns in societ y – to take on commitments over and above those placed upon them by the market, by shareholders, or by legal duties” (Tombs & Smith, 1995, p. 138). Thus, the organization will respond to current social demands and shape strategies accordingly. It is a “technocratic” perspec tive because the corporation

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20 itself decides which interested publics will be addressed. Hence, the dialogue between the corporation and key publics is tigh tly controlled by the corporation. In contrast, the democratic form of cor porate social responsib ility considers and listens to plural voices in a society rather than sole ly relying on a technocratic perspective. Beyond simply sticking to ex isting corporate norms, it takes the whole environment into account; the corporation will change with the mercurial circumstance. Corporate social responsibility is integrally related to each part of the corporation. Thus, compared to liberal and paternalist form s of corporate social responsibility, the democratic form is deemed as re al corporate social responsibility. In the same vein, Coombs (1995) noted that perceptions of stakeholders are vital for crises since how stakeholders perceive cr ises determines crisis responsibility. Based on the study by Coombs (1995), there are th ree factors influenc ing stakeholders’ perception of crisis responsibility: crisis attributions, organizati onal performance, and severity of the crisis. In terms of crisis attributions, Weiner (1986) pointed out that “when an event is negative, unexpected, or important, people ar e likely to engage in causal attribution theory” (Lee, 2004, p. 602), which leads to vari ed public opinions. Coombs and Holladay (1996) also noted that “Publics will make attr ibutions about the cau se of a crisis. The more publics attribute responsibility for the cris is to the organization, the greater the risk should be of reputational damage (a threat to legitimacy is part of the reputation)” (p. 292). Crisis attributes can be classified by ex ternal control and pe rsonal control (Coombs, 1995). The former means the severity of crises is controlled by external agents. However,

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21 the latter is determined by the organization it self. According to Coombs (1998), “stronger perceptions of external control should lessen crisis responsibility and image damage because the organization could do little or nothing to prevent the crisis. Stronger perceptions of personal contro l should increase crisis res ponsibility and image damage because the organization could have acted to prevent the crisis” (p. 182). Nevertheless, Coombs’s (1998) study showed that crisis res ponsibility appeared not to be related to external control factors but positively related to personal control factors. As for organizational performance, it is be lieved that “good” organizations more easily receive positive publicity than “bad” organizations during a crisis. Specifically, “when a crisis hits, these credits are used to offset the reputational damage generated by the crisis. Conversely, an organization with a history of poor performance such as repeated crises or shady practices, will se e the image damage amplified rather than offset” (Coombs, 1998, p. 182). Dean (2004) noted th at “reputation is ex pected to interact with firm response such that a good firm of fering an inappropriate response will remain favorably regarded by consumers, whereas a bad firm offering the same response will experience a loss of favor” (p. 198). Lastly, it is reasonable to ar gue that the severity of th e crisis makes an impact on crisis responsibility. For a crisis, severe damage (e.g., death) will bring more crisis responsibility than trivial damage. As noted above, the key to determining a fi rm’s fate in a crisis appears to depend on whether it accepts responsibility for the cris is. Crisis communication may be helpful to lessen the potentially dangerous consequen ces of a crisis and corporate social responsibility should play an important role in crisis communication.

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22 CHAPTER 3 CASES IN TAIWAN: NIKE VS. PAOLYTA Nike and Paolyta both face serious crises in Taiwan and are of great concern to the Taiwanese people. However, the way th ey handle crises and outcomes are totally different from each other. The former faile d in its crisis and the latter succeeded. Moreover, these examples show that the former did not practice corporate social responsibility in crises but the latter did. A B Figure 1 Picture of brands. A) Ni ke brand and B) Paolyta brand. Based on a report in The China Post (2004, May 27) titled “Angry reporters walk out on Nike reps,” basketball superstar Michael Jordan arrive d in Taiwan as part of his Asian promotional tour on May 21, 2004. Before Jordan’s arrival, Taiwan’s Nike division publicized his visit in their advertisements and also held a “winning the ticket of Nike” promotional event. Seven hundred lucky Jo rdan fans were selected in a drawing to

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23 attend the promotional event. To participate in th e drawing, Jordan fans had to spend a certain amount of money on Nike products and went through a competitive contest. To the contestants’ disappointment, Mich ael Jordan showed up to the promotional event for only 90 seconds. The uproar over Mich ael Jordan's brief appearance intensified when a growing number of fans accused Taiwan’s Nike of showing no remorse for its unreasonable and deceptive event arrangements. They also accused Taiwan’s Nike division of cheating them into buying its pr oducts by promising a "close encounter" with Michael Jordan during the ev ent (“Investigation,” 2004). Angry fans vented in Internet chat rooms and on bulletin boards. Some filed complaints against Taiwan’s Nike with th e Consumers' Foundation in Taiwan, which demanded an apology from Taiwan’s Nike a nd threatened a possible consumer boycott (Chen & Chen, 2004; Li, 2004). Meanwhile, Taiwan ’s Ministry of Justice investigated fraud allegations against Taiwan’s Nike i ssued by enraged fans who accused Nike of using false advertising to lure customers into purchasing th eir products (“Investigation,” 2004; Societal Center, 2004). After more than a week of controversy over Jordan’s 90-second appearance at the promotional event, Taiwan’s Nike eventually delivered a formal apology to the fans in a press conference and offered some compensation. However, the belated apology damaged not only its customer relations but also its corporate image (Di & Yang, 2004; Yang, 2004). The outcome of Paolyta’s cris is, however, was totally different. After consuming energy drinks from Paolyt a in Taiwan, five people were poisoned and one person died. These drinks were suspected to be contaminated with cyanide (“Court orders,” 2005). Paolyta immediately recalled two products, Bullwild and Paolyta-

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24 B. A total of approximately 1.68 million bottl es of Bullwild were destroyed. Paolyta’s spokesperson also noted that the company suspended production and distribution of the drink until a police investigation wa s completed (“Energy drinks,” 2005). The five victims purchased the drinks at f our convenience stores in close proximity to each other. An investigation showed that someone tampered with the drinks by lacing them with cyanide and placing them back on the shelves. The suspect even left a note saying, “I am poisonous, don’t drink me!” However, the four victims regarded it as a new slogan, so they still bought the drinks (“Energy drinks,” 2005). Paolyta’s spokesperson announced that ma nufacture of the Bullwild energy drink would resume after three weeks. There woul d be changes made to the product, but the name and ingredients would remain the same. Aside from new designs on the bottle, Bullwild drinks now featured an extra protection laye r under the bottle cap. To accomplish this, Paolyta purchased new machinery and integrated it into the production process (“DOH,” 2005). The problems were neither directly nor indirectly caused by Paolyta, but the company accepted full responsibility for the sa fety and well being of its customers and corrected the problem at a considerable expe nse. Although Paolyta's decision to recall its products caused huge financial losses, it establ ished itself as a respons ible institution and gained credibility with its consumers. Hypotheses And Research Questions Corporate social responsibil ity is one key factor to d eal with crisis communication (Strother, 2004). In light of different socioeconomic and cultural contexts in different countries (i.e., the United St ates and Taiwan), the concep ts behind corporate social

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25 responsibility and crisis co mmunication may be different. Therefore, two hypotheses are presented: H1: Communication with stakeholders, concer ns for the environment, and charity are regarded as corporate social responsibility in Taiwan. H2: The democratic form of corporate social responsibility (e.g., accepting responsibility and ethical behav ior) is regarded as soci ally responsible crisis communication in Taiwan. According to Fink (1986), crises are inevit able. In addition, Shrivastava, Mitroff, Miller, and Maglani (1988) noted that crises are “organizat ionally based di sasters which cause extensive damage and social disrupti on, involve multiple stakeholders, and unfold through complex technological, organizati onal and social processes” (p. 285). Because crises are inevitable and harmful to organizations, it is important for organizations to employ effective crisis communication. Likewise, the aforementioned discussion shows that corporate social responsibility plays an important role in crisis communication. Based on Ahluwalia, Burnkran t, and Unnava (2000), brand recognition may help decrease the negative impact experi enced by a corporation during a crisis. Dean (2004) noted that “reputation is expected to interact with firm re sponse such that a good firm offering an inappropriate response will remain favorably regarded by consumers, whereas a bad firm offering the same respons e will experience a lo ss of favor” (p. 198). Thus, the first two research questions are: RQ1: Is corporate social responsibility help ful to crisis communication with regard to public perception?

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26 RQ2: Is brand recognition helpful to crisis communication with regard to public perception? Coombs and Holladay (1996) noted that “P ublics will make attributions about the cause of a crisis. The more publics attribut e responsibility for the crisis to the organization, the greater the risk of reputational damage (a thr eat to legitimacy is part of the reputation)” (p. 292).To identify whether cr isis responsibility infl uences the image of a corporation, the final resear ch question was developed: RQ3: Does corporation socially responsible behavior in a cris is influence brand recognition with regard to public perception?

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27 CHAPTER 4 METHODOLOGY Method Based on the hypotheses and research questions, this study was conducted by primary research (i.e., survey) to gain a ge neral understanding of the perceptions of publics, and secondary research (i.e., textua l analysis) to examine how corporations respond to crises. This dual research technique (survey and te xtual analysis) ensured the accuracy and reliability of the results. With the help of surveys, this study could: “1) investigate problems in realistic settings; 2) collect data with relative ease from a variety of people; and 3) not be constrained by geogra phic boundaries” (Wimmer & Dominick, 2003, p. 168). A survey was ideal for obtaining direct and objective public reactions concerning two corporate crises in Taiwan. In addition, textual analysis was the best way to gain more complete information on how the two corporations dealt with a crisis in Taiwan. Fr om this analysis, this study obtained a wide spectrum of evidence to exam ine the two corporati ons and their crises. Overall, the primary goals of this res earch were to conduct the survey and the textual analysis through documentation. The re sults of the survey showed the publics’ attitude toward the concept of corporate so cial responsibility a nd crisis communication by comparing two corporate crises in Taiw an. A textual analysis examining the two corporations and their crises in Taiwan through a variety of information and opinions led to an objective conclusion.

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28 Sampling Textual Analysis This study gathered information about th e two corporations and their crises by means of textual analysis. Th e textual analysis provided a general knowledge of these two crises from several different sources, in cluding media outlets, academic databases, and Taiwan’s Nike and Paolyta’ Web sites. The media coverage of the two crises was generated by Taiwan, the United States, and other countries. Both English-language and Chinese-language news were included. Chinese-language news stories were colle cted from the archival news collection featuring the two crises on Yahoo! Inc. and the electronic database Factiva.com. Englishlanguage news stories, on the other hand, were collected from two major Taiwanese English news outlets (i.e., FTV English News Edition.com and TaipeiTimes.com ) and three electronic databases: LexisNexis, Ga le Group and Factiva. com. A total of 74 English-language and Chinese-langua ge news articles were gathered. News archives from FTV English News Edition.com and TaipeiTimes.com provided major English news stories about the two corporations and their crises. Some of the English news stories were collected thr ough the LexisNexis database using the terms “Nike,” “Paolyta,” and “Taiwan” with the “headline, lead paragr aph(s)” parameter in World News and General News (in the “maj or newspapers” category). Other English news stories were collected through the Info Trac OneFile databases within Gale Group using the terms “Nike,” “Jordan,” “Paolyta,” and “Taiwan” with the “key word(ke)” parameter. Factiva.com was the last database used to collect English news stories which were found using the terms “Nike,” “Jordan,” “Paolyta,” and “Taiwan” with the “key word” parameter. After preliminary screeni ng, 18 English-language news articles were

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29 yielded. The English-language news articles were distributed by news agencies and newswire stories, such as Central News Agency and Asia Africa Intelligence Wire. Chinese news stories on the two crises we re mainly gathered through Yahoo! Inc.’s archival news site. Yahoo! Inc. was chosen b ecause it is one of Taiwan’s largest Internet companies, accounting for more than 50 percent of the “searching tools” market share in Taiwan (He, 2006). In addition, Yahoo! Inc. is the most frequently visited Web site, with more than 345 million individual users each month worldwide (Yahoo! Inc., 2005). The last source of Chinese news stories was coll ected through the Factiv a.com database using the terms “Nike,” “Jordan,” “Paolyta,” and “Taiwan” with the “key word” parameter. After screening, the archived news yielded 56 Chinese-language articles, including news stories and commentaries distributed by prominent Taiwanese news outlets (e.g., ETtoday.com and Libertytimes.com ) as well as newspapers (e.g., United Daily News ). Self-Administered Survey In addition to the textual analysis, a survey was also conducted to examine the hypotheses and research questions. The surv ey method for this research was group administration, which meant that the researcher gave individual copies of a questionnaire to a group of participants. This method offe red advantages that other survey methods (e.g., mail survey or Internet survey) did not offer. For example, group administration surveys allowed the researcher to know exac tly who answered the questions and afforded a higher response rate. Most importantly, the researcher could solv e individual problems immediately and other respondents were not bothered (Wimmer & Dominick, 2003). After considering the following situati ons, this survey used a non-probability convenience sample. The focus of this study was not to generalize the population, but given the constrained resources and time, it was only possible to sample part of the

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30 Taiwanese population and draw conclusions based on the data gathered in this sample. The main purpose was to test the associati on between crisis comm unication and corporate socially responsible behavior from the two corporations in question. Thus, the population of this study was chosen from two universi ties in Taiwan: Ching Yun University and Oriental Institute of Technology. The overall sample size was 335. The researcher administered the survey in Taiwan during the Christmas break of 2005. Respondents were informed that by comple ting the survey they were giving their explicit consent for the data to be used for this research only. E ach subject responded to the same questions, which yielded more compar able data than interviews or focus groups. However, there were understandably some erro r and bias in this re search given that it utilized a non-probability convenience samp le of university students who were not representative of all Taiwanese people. Although non-probability sampling were not allowed to be used to calculate the sampli ng error, it was still useful for obtaining a general idea of the reactions of publics concerning two co rporate crises in Taiwan. Survey Questionnaire Construction First, according to Fowler (1993), a self -administered questionnaire should: 1) be clear and understandable in content, layout, and type; 2) contain closed-ended questions; and 3) have a limited number of questions. As a result, the surv ey questionnaire here mainly adopted closed-ended questions and was limited to 21 questions. The only openended question was that of “age.” Additiona lly, the questionnaire used dichotomous (e.g., yes/no), rating scales (e.g., 5-poi nt Likert scales), and seman tic differential scales (e.g., a 7-point scale with 1 = “not interested” and 7 = “very interested”) for the closed-ended questions (Wimmer & Dominick, 2003). Overal l, the survey questionnaire had been constructed to minimize any infl uence on respondents’ answers.

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31 To better understand the sp ecificity of hypotheses and research questions, this questionnaire was divided into three sections : a) respondents’ brand recognition about the corporations and their perception of corpor ate social responsibili ty; b) respondents’ perception of corporate social responsibility du ring a crisis; and c) the correlation between corporate social responsibility a nd crisis communication (see questionnaire in Appendix A). The first section was used to test respondents’ brand recognition about the corporations with these questions: 1) How knowledgeable do you believe you are about Taiwan’s Nike? 2) What is your level of in terest in Taiwan’s Ni ke? 3) Have you ever bought products made by Taiwan’s Nike be fore? 4) How knowledgeable do you believe you are about Paolyta? 5) What is your level of interest in Paolyta? 6) Have you ever bought products made by Ta iwan’s Paolyta before? These results were analyzed in combination with the results of questions in the last section with questions such as: How impor tant do you think the co rporate ethics of corporate social responsibility are in a crisis? Do you think th at Taiwan’s Nike practiced corporate social responsibility in its crisis? Will you support Taiwan’s Nike after its crisis by buying or promoting its products? Do you think that Paolyta practiced corporate social responsibility in its crisis? Will you suppor t Paolyta after its crisis by buying or promoting its products? The data collected from the analysis helped to answer RQ2. Is brand recognition helpful to crisis communicat ion with regard to public perception? and RQ3. Does corporation socia lly responsible behavior in a crisis influence brand recognition with regard to public perception?

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32 Also, hypothesis one—Communication with stakeholders, concerns for the environment, and charity are regarded as co rporate social responsibility in Taiwan—was explored through questions in the first section: 1) the corporation is socially responsible when it sponsors community development; 2) the corporation is so cially responsible when it actively participates in environmenta l protection; 3) the corporation is socially responsible when it offers public relations pr actitioners that comm unicate with the media or the public; and 4) the cor poration is socially responsib le when it provides access for publics to communicate (e.g., an email address). In the second section (i.e., Jordan’s and Bullwild’s crises), th ese questions were designed to help test hypothesis two—The democratic form of corporate social responsibility (e.g., accepting respon sibility and ethical behavio r) is regarded as socially responsible crisis communicati on in Taiwan. Questions will be asked addressing if: 1) the corporation is socially res ponsible when it explains probl ems to the public honestly and immediately; 2) the corporation is socially responsible when the public is its top priority to consider rather than its source of profit; a nd 3) the corporation is socially responsible when it takes full responsibility for the crisis event (even the final outcome shows that the crisis is not the mistake of the corporation). In the last section (i.e., after Jordan’s and Bullwild’s crises ), these questions contributed to understanding th e association between corporat e social responsibility and crisis communication, specifically with regard to first rese arch question: Is corporate social responsibility helpful to crisis co mmunication with regard to public perception? Survey Data Analysis The survey data collected were entered in to and analyzed by Statistical Package for the Social Sciences (SPSS) 13.0 for Windows. By virtue of SPSS, thes e statistical tests

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33 were performed with Cronbach’s alpha, desc riptive statistics, Independent-samples ttests, cross-tabulations, and Pearson product moment correla tion used to answer each hypothesis and research ques tion posed in the study. Using Cronbach’s alpha, this study examined the inter-correlations among items in the questionnaire. More specifically, “Cronbach’s alpha was used to assess the reliability of the scale, which provides an indication of the internal consistency of the items measuring the same construct” (Spath is, & Ananiadis, 2005, p. 201). Normally, Cronbach’s alpha is unacceptable if it is below .60; .60-.65 is undesirable; .65-.70 is minimally acceptable; .70-.80 is respectable; and .80-.90 is very good. However, if much above .90, the scale is suggested to be shor tened (DeVellis, 1991). Thus, the “acceptable” reliability scores of Cronbach’s alpha should be equal to or higher than .60. According to Trochim (2005), “Descriptive st atistics are used to describe the basic features of the data in a st udy. They provide simple summar ies about the sample and the measures. Together with simple graphics anal ysis, they form the basis of virtually every quantitative analysis of data” (n.p.). In s hort, descriptive statistics were used to summarize quantitative information from data such as mean, standard deviation, and frequency. Independent-samples t-tests were desi gned to examine whether there were significant relationships be tween two independent groups (Kirkman, 2005; Gardner, 1975). Here, the analysis used Independent-sam ples t-tests to see whether there were significant variations ( = 0.05) in mean scores between one independent variable and two or more dependent variables. If the pvalue of the Independent-samples t-tests was equal to or less than 0.05 ( 0.05), it could be concluded th at there were significant

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34 differences between the independent variable and dependent variable s. Conversely, if the p-value was more than 0.05 ( > 0.05), there were no significant differences between these variables (Hays, 1973). Moreover, accord ing to Cohen (1988), the effect size of the compared samples could be defined as follows : d = .2 is small effect, d = .5 is medium effect and d = .8 is large effect. Cross-tabulations and Pearson product mome nt correlation were also used to test the relationships between the variables. If the p-value was less than 0.05, there were significant relationships between the variable s (Steinbrenner & Bent, 1975). Additionally, for Pearson product moment co rrelation, correlation coefficients usually take on values between – 1.0 and + 1.0 where –1.0 is perfect negative correlation, 0 is no correlation, and + 1.0 is perfect positiv e correlation (Hays, 1973). The descriptive statistics, Independent-s amples t-tests, cross-tabulations, and Pearson product moment corr elation showed the results of: a) respondents’ brand recognition about the corporations and their perception of cor porate social responsibility; b) respondents’ perception of corporate social responsibilit y during a crisis; and c) the correlation between corporat e social responsibility and crisis communication.

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35 CHAPTER 5 FINDINGS Textual Analysis From Taiwan’s Nike and Paolyta Web sites, as well as related news articles about Nike and Paolyta’s crises, it was obvious th at the latter actively practiced social responsibility while the former did not. For exam ple, based on the research of Esrock and Leichty (1998), to determine whether corpora tions practice social re sponsibility on their Web sites, the investigator should look into th ese factors: “fair busin ess practices, worker health and safety, product sa fety, cultural diversity, e nvironment, charity, children, education, health, volunteerism, support of the arts, civic involvement, and quality of work life”(p. 311). Paolyta’s Web site pr ovided information about the safety and reliability of their products, their concerns fo r consumers, and their efforts to protect the environment; however, Nike’s Web site in Taiwan only offered a sales pitch. Most importantly, most news articles about Paolyta’s crisis (21 out of 28) applauded Paolyta’s socially responsible atti tudes and behaviors in handling the crisis, such as immediately recalling questionable products, Bullwild and Paolyta-B, and introducing an extra protection layer under the bottle cap in their continued products. The following comments represent the most popular opinions about Paolyta found in news articles. One news article from Asia Africa Inte lligence Wire commented that “the Consumers' Foundation applauded Paolyta's d ecision to recall its products, saying that although the company will suffer huge financia l losses, it will establish itself as a

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36 responsible institution and gain credibility w ith the consumers” (“Energy drinks,” 2005, 11). In United Evening News Lin (2005) reported that Pa olyta recalled Bullwild and Paolyta-B in order to protect the lives of consumers. For the public, this act embodied corporate social responsibility. In Economic Daily News Qiu (2005) remarked that Paolyt a dealt with its crisis in a clear and positive manner, providing the public with an honest and immediate explanation in its news conference, promisi ng to recall and destroy questionable products without delay, offering rewards (NT $2 million) to people who could help capture the suspect, and implementing safe changes in their products. Furthermore, in Electronic Commerce Times Gao (2005) noted that Paolyta exercised ideal crisis communication in its re sponse and care for th e public. According to Olive Ting, the presiden t of Era Public Relations (the second largest public relations company in Taiwan), Chen (2005) reported that a 48-hour response time is vital for effective crisis communication. Paolyta not on ly responded immediately, but also showed that the public was its top priority in recalling the dangerous products. Therefore, Paolyta’s socially responsible behavior s led to successful crisis management. On the contrary, an overwhelming number of news articles on the crisis of Nike in Taiwan (i.e., 43 out of 46 news articles) conc luded that Nike was not socially responsible and their public relations failed. Specifical ly, Nike denied its mistakes and did not explain or apologize until th e boycott statement from Consumers' Foundation in Taiwan was released. The following quotes and comme nts represent popular views in articles concerning Nike Taiwan.

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37 From Asia Africa Intelligence Wire, one news article noted that “Nike Taiwan stirred up an uproar among fans angry over Jordan's brief appearance when it initially refused to offer a formal apology” (“Nike Taiwan apologizes,” 2004, 7) and “the Consumers' Foundation, which threatened a boycott agains t all Nike products, has decided to cease fire but noted that Nike's belated apology not only damaged its customer relations but also its co rporate image” (“Nike Taiw an apologizes,” 2004, 13). Another article in Asia Africa Intelligen ce Wire argued that “the two executives, Huang Hsiang-yen and Hu Shan-ming, denied that their company had any intention of cheating customers and said they could not co ntrol Jordan's schedule in Taiwan and could not oblige Jordan to stay at the meet-andgreet function any longer” (“Nike Taiwan executives,” 2004, 2). According to Huang (2004), “Jordan's s hort appearance caused a public relations disaster for the company. Furious fans complained for days, demanding compensation from the sportswear giant. For some Taiwanes e, Jordan's cameo was a blow to Taiwan's dignity” ( 6-7). One article on the SportsNT Web site cited the reasons why Taiwan’s Nike suffered a public relations crisis, including closed, di shonest, unfriendly, unfair, discreditable, and unhelpful attitudes and beha viors toward the media and the public (Li, n.d.). On the Manager Today Web site, Chen (2005) reported that Taiwan’s Nike did not respond within the “golden” 48-hour time period, waiting one full week to admit its mistakes. The article concluded that the “arrogant” and “dishonest” behaviors of Taiwan’s Nike led to its failure to manage the crisis more effectively. Likewise, Zhao

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38 (2004) of Libertytimes.com noted that the mistakes of Taiwan’s Nike included improper communication and denial of its mistakes. These opinions made it clear that the two corporations responded to each crisis differently. The Taiwanese media generally he ld that Paolyta’s socially responsible behaviors led to successful cr isis communication. In contrast Nike Taiwan's poor public relations and irresponsible behaviors result ed in the failed crisis communication. The following section illustrates public attitudes toward socially responsible corporate behavior and crisis communication by co mparing popular perceptions of crisis management in two different Taiwanese corporations. Self-Administered Survey The survey included four questions (ques tions 10-13) asking participants about corporate social responsibility in Taiwan. Th e reliability analysis of these questions yielded .83 Cronbach’s alpha, which shows hi gh internal consistency. In addition, the reliability analysis of the three questions ( questions 14-16) regarding socially responsible crisis communication in Taiwan was .67 Cronbach ’s alpha. The reliability analysis of the three questions (questions 3-5) regarding brand recognition of Taiwan’s Nike was .63 Cronbach’s alpha. The reliability analysis of th e three questions (quest ions 6-8) regarding brand recognition of Paolyta was .64 Cronbach’s alpha. The overall scores of Cronbach’s alpha were within the acceptable range (see Appendix B). One hundred and sixty one females (48 %) and 174 males (52 %) participated in the survey. Ages of participants mainly ra nged from 19 to 21 years old (see Appendix C). In addition, 85 percent of participants answered “yes” for “bought products of Taiwan’s Nike” (see Appendix C). In accord ance with this result, the means of

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39 knowledge and interest about Taiwan’s Nike were 4.36 and 4.34, which were high in 7point scales (see Table 5-1). Table 5-1 also shows that the means of knowledge about and interest in Paolyta measured 3.77 and 3.04, which were at the middle of the 7-point scales. Consistent with these results, 60 percent of pa rticipants answered “yes” fo r “bought products of Paolyta” (see Appendix C). Table 5-1. Descriptive statis tics of brand recognition N Mean Std. Deviation Knowledgeable about Taiwan’s Nike 335 4.36 1.577 Interest in Taiwan’s Nike 335 4.34 1.651 Knowledgeable about Paolyta Co. 335 3.77 1.669 Interest in Paolyta Co. 335 3.04 1.594 In Table 5-2, the means of “How importa nt CSR is (generally speaking)” was 6.38, which was considerably high in the 7-point scales. Also, the means of the items concerning “general corporate social respons ibility in Taiwan” were, individually, “CSR should sponsor community development” (M = 4.13), “CSR should activ ely participate in environmental protection” (M = 4.31), “CSR s hould offer public relations practitioners that communicate with the media or the public” (M = 4.19), and “CSR should provide access for publics to communicate” (M = 4.11), which were all high on the 5-point Likert scales. Table 5-2. Descriptiv e statistics of CSR N Mean Std. Deviation How important CSR is (Generally speaking) 335 6.38 1.087 CSR should sponsor community development 335 4.13 .757 CSR should actively participate in environmental protection 335 4.31 .717 CSR should offer public relations practitioners that communicate with the media or the public 335 4.19 .743 CSR should provide access for pub lics to communicat e 335 4.11 .724

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40 In Table 5-3, the mean of “How import ant CSR is in a crisis” was 5.91, which was also considerably high in the 7-point scales. The means of “socially responsible crisis communication in Taiwan” were, individually, “C SR in crisis should explain problems to the public honestly and immediately” (M = 4.29) “CSR in crisis should consider the public as the top priority” (M = 4.35), and “CSR in crisis should take full responsibility” (M = 3.88), which were all high on the 5-point Likert scales. Table 5-3. Descriptive statistics of CSR in crisis N Mean Std. Deviation How important CSR is in crisis 335 5.91 1.253 CSR in crisis should explain problems to the public honestly and immediately 335 4.29 .706 CSR in crisis should consider the public as the top priority 335 4.35 .665 CSR in crisis should take full responsibility 335 3.88 .960 Examination Of Hypotheses And Research Questions Hypothesis one—Communication with stakeholders, concer ns for the environment, and charity are regarded as corporate social responsibility in Taiwan—was tested by using the Pearson product moment correla tion. The analysis indicated significant differences between “How important CSR is (generally speaking)” and the other four variables: “CSR should sponsor community development” ( r = .261, p < .000); “CSR should actively participate in environmental protection” ( r = .286, p < .000); “CSR should offer public relations pract itioners that communicate w ith the media or the public” ( r = .283, p < .000); and “CSR should provide access for the public to communicate,” ( r = .255, p < .000) (see Table 5-4). These results show that “How important CSR is (generally speaking)” strongly correlat e with “CSR should sponsor community development;” “CSR should actively particip ate in environmental protection;” “CSR

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41 should offer PR practitioners that communicate with the media or th e public;” and “CSR should provide access for the public to co mmunicate.” Accordingly, H1 is supported. Table 5-4. Correlation test of CSR Correlations 1 .261* .286* .283* .255* .000 .000 .000 .000 335 335 335 335 335 .261* 1 .632* .580* .444* .000 .000 .000 .000 335 335 335 335 335 .286* .632* 1 .718* .441* .000 .000 .000 .000 335 335 335 335 335 .283* .580* .718* 1 .519* .000 .000 .000 .000 335 335 335 335 335 .255* .444* .441* .519* 1 .000 .000 .000 .000 335 335 335 335 335 Pearson Correlation Si g (2-taile d N Pearson Correlation Si g (2-taile d N Pearson Correlation Si g (2-taile d N Pearson Correlation Si g (2-taile d N Pearson Correlation Si g (2-taile d N How important CSR is (General speaking) CSR should sponsor community development CSR should actively participate in environme n protection CSR should offer public relations practitioners th a communicate with the m e or the public CSR should provide acce s for publics to communic a How important CSR is (General speaking) CSR should sponsor community d evelopment CSR should actively participate in e nvironmental protection CSR should offer public relations practitioners that communicate w ith the media or the public CSR should provide access for publics to c ommunicate Correlation is significant at the 0.01 level (2-tailed). **. Hypothesis two—The democratic form of corporate social responsibility (e.g., accepting responsibility and ethical behavior) is regarded as socially responsible crisis communication in Taiwan—was also test ed by using the Pearson product moment correlation. The analysis indi cated significant differences between “How important CSR is in a crisis” and the other th ree variables: “CSR in crisis should explain problems to the public honestly and immediately” ( r = .348, p < .000); “CSR in crisis should consider the public as the top priority” ( r = .308, p < .000); and “CSR in crisis should take full

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42 responsibility” ( r = .242, p < .000) (see Table 5-5). In short, “How important CSR is in a crisis” is significantly relate d to the responses “CSR in cr isis should explain problems to the public honestly and immediat ely,” “CSR in crisis should consider the public as the top priority,” and “CSR in crisis should ta ke full responsibility.” Therefore, H2 is supported. Table 5-5. Correlation test of CSR in crisis Correlations 1 .348* .308* .242* .000 .000 .000 335 335 335 335 .348* 1 .649* .299* .000 .000 .000 335 335 335 335 .308* .649* 1 .390* .000 .000 .000 335 335 335 335 .242* .299* .390* 1 .000 .000 .000 335 335 335 335 Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) N How important CSR is in crisis CSR in crisis should explain problems to the public honestly and immediately CSR in crisis should consider the public as the top priority CSR in crisis should take full responsibility How important CSR is in crisis CSR in crisis should explain problems to the public honestly and immediately CSR in crisis should consider the public as the top priority CSR in crisis should take full responsibility Correlation is significant at the 0.01 level (2-tailed). **. Research question one asks if corporat e social responsibility helps crisis communication with regard to public percepti on. As shown in Table 6-1 and Table 6-2, “whether Taiwan’s Nike practiced CSR in its crisis” has a significant relationship with “whether or not to support Taiw an’s Nike after its crisis” ( 2 (1, N=335) = 65.701, p < .000). The relationship between “whether Paolyt a Co. practiced CSR in its crisis” and “whether or not to support Paolyta Co. after its crisis” was also significant ( 2 (1, N=335) =61.350, p < .000) (see Table 7-1 and Table 7-2). These results show that the public was

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43 more likely to support corporati ons that practiced CSR in a crisis. Thus, the answer to RQ1 is confirmed. Table 6-1. Crosstabulation of whether Taiwan’s Nike practiced CSR in crisis and whether or not to support Taiwan’s Nike after its crisis Whether or not to support Taiwan’s Nike after its crisis Total no yes Count 220 57 277 % within whether Taiwan’s Nike practiced CSR in crisis 79.4% 20.6% 100.0% no % within whether or not to support Taiwan’s Nike after its crisis 93.6% 57% 82.7% Count 15 43 58 % within whether Taiwan’s Nike practiced CSR in crisis 25.9% 74.1% 100.0% Whether Taiwan’s Nike practiced CSR in crisis yes % within whether or not to support Taiwan’s Nike after its crisis 6.4% 43.0% 17.3% Count 235 100 335 % within whether Taiwan’s Nike practiced CSR in crisis 70.1% 29.9% 100.0% Total % within whether or not to support Taiwan’s Nike after its crisis 100.0% 100.0% 100.0% Table 6-2. Chi-Square Tests of whether Taiw an’s Nike practiced CSR in crisis and whether or not to support Taiw an’s Nike after its crisis Chi-Square Tests 65.701b 1 .000 63.168 1 .000 60.520 1 .000 .000 .000 65.505 1 .000 335 Pearson Chi-Square Continuity Correctiona Likelihood Ratio Fisher's Exact Test Linear-by-Linear Association N of Valid Cases Value df Asymp. Sig. (2-sided) Exact Sig. (2-sided) Exact Sig. (1-sided) Computed only for a 2x2 table a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 17.31. b.

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44 Table 7-1. Crosstabulation of whether Paolyta Co. practiced CSR in cr isis and whether or not to support Paolyta Co. after its crisis Whether or not to support Paolyta Co. after its crisis Total no yes Count 35 10 45 % within whether Paolyta Co. practiced CSR in crisis 77.8% 22.2% 100.0% no % within whether or not to support Paolyta Co. after its crisis 36.5% 4.2% 13.4% Count 61 229 290 % within whether Paolyta Co. practiced CSR in crisis 21.0% 79.0% 100.0% Whether Paolyta Co. practiced CSR in crisis yes % within whether or not to support Paolyta Co. after its crisis 63.5% 95.8% 86.6% Count 96 239 335 % within whether Paolyta Co. practiced CSR in crisis 28.7% 71.3% 100.0% Total % within whether or not to support Paolyta Co. after its crisis 100.0% 100.0% 100.0% Table 7-2. Chi-Square Tests of whether Paolyt a Co. practiced CSR in crisis and whether or not to support Paolyt a Co. after its crisis Chi-Square Tests 61.350b 1 .000 58.606 1 .000 55.330 1 .000 .000 .000 61.167 1 .000 335 Pearson Chi-Square Continuity Correctiona Likelihood Ratio Fisher's Exact Test Linear-by-Linear Association N of Valid Cases Value df Asymp. Sig. (2-sided) Exact Sig. (2-sided) Exact Sig. (1-sided) Computed only for a 2x2 table a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 12.90. b.

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45 Research question two asks if brand r ecognition helps crisis communication with regard to public per ception. Independent-samples T-tests wa s used to see if a relationship between brand recognition and cr isis communication exists. Fo r the independent variable “whether or not to support Taiw an’s Nike after its crisis,” th e analysis showed significant differences for the dependent variable “Int erest in Taiwan’s Ni ke” (t(333) = -2.87, p = .004 (two-tailed), d = -.36), but no significan t differences for the dependent variable “knowledgeable about Taiwan’s Nike” (see Tabl e 8-1). It also indica ted that the effect size of the sample is moderate. Table 8-1. T-test for knowledgeable about Taiwan ’s Nike and interest in Taiwan’s Nike regarding whether or not to support Taiwan’s Nike after its crisis Group Statistics 235 4.31 1.625 .106 100 4.47 1.460 .146 235 4.17 1.714 .112 100 4.73 1.427 .143 whether or not to support Taiwan's Nike after i t no yes no yes knowledgeable about Taiwan's Nike Interest in Taiwan's Ni k N Mean Std. Deviation Std. Error Mean Table 8-1. Continued. Independent Samples Test 1.477 .225 -.869 333 .386 -.164 .188 -.534 .207 -.907 2 06.658 .365 -.164 .180 -.519 .192 2.152 .143 -2.870 333 .004 -.560 .195 -.944 -.176 -3.088 2 22.303 .002 -.560 .181 -.917 -.202 Equal varianc e assumed Equal varianc e not assumed Equal varianc e assumed Equal varianc e not assumed knowled g eable abou t Taiwan's Nike Interest in Taiwan's N F Sig. Levene's Test for Equality of Variances t df Sig. (2-tailed) Mean Difference Std. Error Difference Lower Upper 9 5% Confidence Interval of the Difference t-test for Equality of Means Similarly, for the independent variable “whe ther or not to sup port Paolyta Co. after its crisis,” the analysis presented signifi cant differences for the dependent variable “Interest in Paolyta Co.” ( t (333) = -4.583, p = .000 (two-tailed), d = -.56), but no significant differences for the dependent vari able “knowledgeable about Paolyta Co” (see

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46 Table 8-2). Thus, the effect size of the sample is large. Generally, these results show that the public was more likely to support corpor ations where they are more interested. Therefore, it is verified that brand recogni tion helps crisis comm unication in terms of public perception. Table 8-2. T-test for knowledgeable about Pa olyta Co. and interest in Paolyta Co. regarding whether or not to suppor t Paolyta Co. after its crisis Group Statistics 96 3.39 1.644 .168 239 3.93 1.657 .107 96 2.43 1.478 .151 239 3.28 1.575 .102 Whether or not to support Paolyta Co. after its no yes no yes knowled g eable abou t Paolyta Co. Interest in Paolyta C o N Mean Std. Deviation Std. Error Mean Table 8-2. Continued. Independent Samples Test .443 .506 -2.720 333 .007 -.543 .200 -.936 -2.729 176.656 .007 -.543 .199 -.936 .000 .998 -4.583 333 .000 -.857 .187 -1.225 -4.710 186.039 .000 -.857 .182 -1.217 Equal varianc e assumed Equal varianc e not assumed Equal varianc e assumed Equal varianc e not assumed knowledgeable abo u Paolyta Co. Interest in Paolyta C F Sig. Levene's Test for Equality of Variances t df Sig. (2-tailed) Mean Difference Std. Error Difference Lower 95% Confidenc e Interval of the Difference t-test for Equality of Means Research question three asks if corporate social responsibil ity in a crisis influences brand recognition with regard to public per ception. “Whether Taiwan ’s Nike practiced CSR in its crisis” does not have a signifi cant relationship with “bought products of Taiwan’s Nike” or “whether or not to support Taiwan’s Nike after its crisis.” Similarly, there were no relationships betw een “whether Paolyta Co. practiced CSR in its crisis,” “bought products of Paolyta Co.” or “whether or not to support Paolyta Co.

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47 after its crisis.” Overall, it seemed that soci ally responsible behavior in a crisis does not influence brand recognition with regard to public perception. The following chapter presents the larger im plications of the study results. It will also note the limitations of this study, offer s uggestions for future research, and provide a conclusion.

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48 CHAPTER 6 DISCUSSION Corporate social responsibil ity is significant in most cases. For instance, the means of two given survey questions about the im portance of corporate social responsibility (i.e., “How important CSR is [generally sp eaking]” and “How important CSR is in a crisis”) were considerably high (see Table 2 and Table 3). Additionally, Taiwanese news articles associated successful crisis communication with effective corporate social responsibility. United Evening News, Economic Daily News and Electronic Commerce Times all suggested that Paolyt a successfully dealt with its crisis because of its socially responsible behaviors. In contrast, The China Post, Libertytimes and Manager Today argued that Taiwan’s Nike failed in its crisis as a result of irresponsible corporate behavior. This study identified the potential as sociation between corporate social responsibility and crisis comm unication. First, H1 attempted to see how the Taiwanese perceive corporate social responsibility and whether public perceptions of CSR varied in different socioeconomic and cultural contex ts. As H1 assumed, sponsoring community development (i.e., charity), actively partic ipating in environmental protection (i.e., concerns for the environment), offering public relations practitioners that will communicate with the media or the p ublic, and providing access to public communication (i.e., communicatio n with stakeholde rs) are all features of corporate social responsibility in Taiwan (see Table 4).

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49 Also, it appeared that this concept of corporate social responsibility is similar in different socioeconomic and cultural contexts First, the Taiwanese identified the four factors listed above as indicative of cor porate social responsib ility. Moreover, the sponsoring of community development, th e active participati on in environmental protection, the promise of public relations pr actitioners who communi cate with the media and the public, and the ability to provid e access for public co mmunication are all constructed from western concepts of corporate social responsibility. It demonstrated that corpor ate social responsibility is determined by ethics. As such, ethical corporate social responsibil ity equates corporate duty with public rights (Curtin & Boynton, 2001) by treating stakeholders as a priority rather than the means to an end (Kent & Taylor, 2002). More specifica lly, to effectively implement corporate social responsibility, corpor ations must recognize and c onsider all the publics and environments they may affect. Thus, corpor ations should endeavor to better understand and cooperate with publics to exhibit social responsibility (Waddock, Bodwell, & Graves, 2002), which relies on effective co mmunication with stakeholders. Here, effective communication refers to two-way symmetrical communication (J. Grunig & Hunt, 1984). Two-way symmetrical communication re quires equality between organizations and key publics as well as act ive cooperation in crea ting an open dialog to affect change. In addition, as J. Grunig a nd Hunt (1984) suggested, effective and ethical public relations practitio ners can help organizations build long-term relationships with their key stakeholders through two-way symm etrical communication. Therefore, “public relations is the practice of social responsibility” (Berna ys, 1980, cited in Stone, 2005, p. 31).

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50 In short, organizations should note the impor tance of corporate social responsibility and integrate it into its corporate culture. Co rporate social responsibility and effective public relations are the best way to achiev e a win-win situation for organizations and publics. Consistent with the notion of “democrati c” corporate social responsibility, other factors such as honest and immediate co mmunication with the public (i.e., ethical behavior), identifying the public as the top priority, and accepting full responsibility for crises were considered significant to soci ally responsible comm unication (see Table 5). Democratic corporate social responsibility in crisis communication, as Tombs and Smith (1995) suggested, takes the whole environment into account. In other words, corporate social responsibility is integrally related to each part of the corporation. Corporations should consider the best interest of public citizens, contribute to society (Ho & Kirk, 2004), and act ethically. Moreover, the findings from the textual analysis illustrated that Paolyta practiced democratic corporate social responsibility in crisis communication, while Taiwan’s Nike exhibited poor crisis communication. Paolyta accepted its responsibility, explained the crisis to the public honestly and immediately in its ne ws conference (Qiu, 2005), and considered the public its t op priority (e.g., re calling and destroying the problematic products) (Chen, 2005). In contrast, Taiwan’s Ni ke did not accept responsibility until the boycott threat by The Consumers’ Founda tion (“Nike Taiwan apologizes,” 2004) explained the crisis in an unfriendly and dishonest ma nner (Li, n.d.), and apologized insincerely two weeks after the crisis (Zhao, 2004). As Bradford and Garrett (1995) noted, recognition of mistakes and the acceptance of responsibility are critical to effective

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51 crisis communication. The last thing a corpora tion should do in a crisis is avoid or deny deserved responsibility. The aforementioned discussion shed light on how the Taiwanese perceive corporate social responsibility and crisis communicat ion. Most importantly, this study illustrated that corporate social responsibility is helpfu l to crisis communication with regard to public perception. First, the quantitative findi ngs showed that the positive relationship between “whether Taiwan’s Nike practiced CS R in its crisis” and “whether or not to support Taiwan’s Nike after its crisis (see Table 6-1 and 6-2). Likewise, there was a positive relationship between “whether Paolyta Co. practiced CSR in its crisis” and “whether or not to support Paolyta Co. after its crisis” (see Table 7-1 and 7-2). Combining these results implies that the more the public perceives Taiwan's Nike or Paolyta as practicing CSR in a crisis, the mo re likely they are to support each company. Thus, corporate social responsibility has the ability to influence public perception. Corporate social responsibility in crisis communication is also dependent on public relations. Moreover, as Marra (1998) noted, “Public relations is an important element in almost all successful crisis management effo rts” (p. 461). With the help of excellent public relations, organizations practice tw o-way symmetrical co mmunication to build “open and honest” relationships with key pub lics (J. Grunig, 1992). P ublic relations and corporate social responsibility, therefore, are two sides of th e same coin. Indeed, Paolyta could succeed in its crisis communication on account of appropriate corporate social responsibility and public rela tions. Conversely, Taiwan’s Nike failed in its crisis communication because of its inability to act in a socially responsible manner due to its ineffective public relations.

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52 Though this study shows that corporate social responsibility is helpful in achieving successful crisis communication, it may exert a more short-term than long-term impact on corporations, particularly when the or ganization (i.e., Nike) is large and has maintained such a strong brand image globally. For instance, loyal Nike fans may still support the brand after th e crisis. This suggests that futu re research may prove necessary to understanding the influence of brand management over time. This research also attempted to explor e the correlation between brand recognition, corporate social responsibility, and crisis communication. Coombs and Holladay (1996) stated that “publics will make attributions about the cause of a crisis. The more publics attribute responsibility for th e crisis to the organizati on, the greater the risk of reputational damage (a threat to legitimacy is part of the reputa tion)” (p. 292). However, Dean (2004) noted that “reputati on is expected to interact with firm response such that a good firm offering an inappropriate res ponse will remain favorably regarded by consumers, whereas a bad firm offering th e same response will experience a loss of favor” (p. 198). The quantitative results showed that brand recognition can help crisis communication with regard to public percepti on, whereas socially re sponsible behaviors in a crisis do not seem to influence brand recognition in terms of public perception. Thus, the answer to RQ2 is positively confirmed. The variable “whether or not to support Taiwan’s Nike after its crisis” had a signifi cant and positive relationship with “interest in Taiwan’s Nike” but no correlation to “knowle dgeable about Taiwan’s Nike” (see Table 8-1). “Whether or not to support Paolyta Co. after its crisis” also had a significant and positive relationship with “interest in Paolyt a Co.” but no correlation to “knowledgeable

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53 about Paolyta Co.” (see Table 8-2). These results implied th at publics are more likely to support a company when brand recognition is high. However, my original definition of “brand recognition” no longer seemed appropriate in light of th e quantitative results of the study which suggested that “knowledgeable” is not related to “interest.” Hence, the or iginal definition of “brand recognition” should be modified to reflect those who have an interest in a given corporation but that may not necessarily be knowledgeable about that corporation. The quantitative findings led to a negative response to RQ3. Pub lic perceptions of Taiwan’s Nike and Paolyta’s practice of CSR do not affect consumer support of either company before and after their crises. Conse quently, a corporation's socially responsible behaviors in a crisis do not seem to influe nce brand recognition w ith regard to public perception. However, it is interesting to note that though both corporate social responsibility and brand recognition are helpful in crisis communication, no significant correlations exist between corporate social responsibil ity and brand recognition. This correlation may require further research. Limitations, Suggestions, And Conclusion Given the time and resources, the curre nt study applied th e non-probability convenience sample which may limit the scope of its findings. Future studies should recognize that the findings of this study do not generalize the opinions of all Taiwanese citizens. In addition, because each organization’ s social responsibility policies, programs and actions prior to the crises is unk nown, the current study cannot compare each company’s practices before and after the crises.

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54 Another limitation of this study is the potential ra nge of corporate social responsibility and crisis co mmunication responses. Within the survey questionnaire, a limited number of factors were used to describe corporate social res ponsibility and crisis communication. Thus, it is possible to take ot her factors into account. Besides, future studies can obtain more detailed and credible information from disinterested third parties on how to evaluate and describe corporate so cial responsibility a nd crisis communication. For instance, Kinder, Lydenberg, and Domi ni devised a set of corporate social responsibility performance rati ngs (Waddock & Graves, 1997). Moreover, as McLeod (2000) noted, “the lack of attention paid to social structural antecedents is one of the major obstacles to progress in audience research” (cited in Lee, 2004, p. 615). This study may neglect other factor s that affect the perception of corporate social responsibility and crisis communicat ion, such as educational background, financial capability, and crisis types. Th erefore, to further enhance va lidity, future studies should be cautious of these variables a nd conduct more precise research. Overall, this study demonstrated the positiv e relationships between corporate social responsibility and crisis co mmunication management by mean s of two corporate crises. Corporate social responsibility is essential to bridging the gap between organizations and publics, and to upholding legal and ethi cal corporate behavior in society.

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55 APPENDIX A SELF-ADMINISTERED SURVEY QUESTIONNAIRE Please circle the appropriate response to the following statements or questions. 1. Gender: MALE FEMALE 2. Age: ____________ 3. How knowledgeable do you believe you are about Taiwan’s Nike? Not knowledgeable 1 2 3 4 5 6 7 Very knowledgeable 4. What is your level of in terest in Taiwan’s Nike? Not interested 1 2 3 4 5 6 7 Very interested 5. Have you ever bought products made by Taiwan’s Nike? YES NO 6. How knowledgeable do you believe you are about Paolyta Co.? Not knowledgeable 1 2 3 4 5 6 7 Very knowledgeable 7. What is your level of interest in Paolyta Co.? Not interested 1 2 3 4 5 6 7 Very interested 8. Have you ever bought products made by Paolyta Co.? YES NO 9. How important do you think corpor ate social responsibility is? Not important 1 2 3 4 5 6 7 Very important 10. The corporation is socially responsible when it sponso rs community development. Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5

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56 11. The corporation is socially responsib le when it actively participates in environmental protection. Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5 12. The corporation is socially respons ible when it offers public relations practitioners that communicate with the media or the public. Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5 13. The corporation is socially responsible when it prov ides access for publics to communicate (e.g., an email address) Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5 Jordan’s and Bullwild’s crises 14. The corporation is socially responsible when it explains problems to the public honestly and immediately. Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5 15. The corporation is socially responsible when the public is its top priority to consider rather than its source of profit. Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5 16. The corporation is socially responsibl e when it takes full responsibility for the crisis event (even the final outcome shows t hat the crisis is not the mistake of the corporation). Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree 1 2 3 4 5 After Jordan’s and Bullwild’s crises 17. How important do you think corporate ethi cs of corporate social responsibility are in a crisis? Not important 1 2 3 4 5 6 7 Very important

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57 18. Do you think that Taiwan’s Nike practiced corporate social responsibility in its crisis? YES NO 19. Will you support Taiwan’s Nike after its crisis by buying or promoting its products? YES NO 20. Do you think that Paolyta Co. practiced corporate social responsibility in its crisis? YES NO 21. Will you support Paolyta Co. after its cr isis by buying or promoting its products? YES NO

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58 APPENDIX B MULTIITEM MEASURES General corporate social re sponsibility in Taiwan ( = .83) 1. The corporation is social ly responsible when it spons ors community development. 2. The corporation is socially responsib le when it actively participates in environmental protection. 3. The corporation is socially responsible when it offers public relations practitioners that communicate with the media or the public. 4. The corporation is socially responsib le when it provides access for publics to communicate (e.g., an email address). Socially responsible crisis communication in Taiwan ( = .67) 1. The corporation is socially responsible when it explai ns problems to the public honestly and immediately. 2. The corporation is socially responsible when the public is its top priority to consider rather than its source of profit. 3. The corporation is social ly responsible when it take s full responsibility for the crisis event (even the final outcome shows that the crisis is not the mistake of the corporation). Brand recognition of Taiwan’s Nike ( = .63) 1. How knowledgeable do you believe you are about Taiwan’s Nike? 2. What is your level of in terest in Taiwan’s Nike? 3. Have you ever bought products made by Taiwan’s Nike before? Brand recognition of Paolyta ( = .64) 1. How knowledgeable do you believe you are about Paolyta? 2. What is your level of interest in Paolyta? 3. Have you ever bought products made by Taiwan’s Paolyta before?

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59 APPENDIX C FREQUENCY TABLES Sex Frequency Percent Valid Percent Cumulative Percent Valid Female 161 48.1 48.1 48.1 Male 174 51.9 51.9 100.0 Total 335 100.0 100.0 Age Frequency Percent Valid Percent Cumulative Percent Valid 18 25 7.5 7.5 7.5 19 38 11.3 11.3 18.8 20 52 15.5 15.5 34.3 21 40 11.9 11.9 46.3 22 30 9.0 9.0 55.2 23 18 5.4 5.4 60.6 24 16 4.8 4.8 65.4 25 19 5.7 5.7 71.0 26 19 5.7 5.7 76.7 27 14 4.2 4.2 80.9 28 11 3.3 3.3 84.2 29 11 3.3 3.3 87.5 30 10 3.0 3.0 90.4 31 5 1.5 1.5 91.9 32 11 3.3 3.3 95.2 34 1 .3 .3 95.5 35 3 .9 .9 96.4 36 4 1.2 1.2 97.6 37 3 .9 .9 98.5 40 2 .6 .6 99.1 42 1 .3 .3 99.4 45 1 .3 .3 99.7 48 1 .3 .3 100.0 Total 335 100.0 100.0

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60 Knowledgeable about Taiwan's Nike Frequency Percent Valid Percent Cumulative Percent Valid Not knowledgeable 16 4.8 4.8 4.8 2 25 7.5 7.5 12.2 3 51 15.2 15.2 27.5 4 89 26.6 26.6 54.0 5 81 24.2 24.2 78.2 6 32 9.6 9.6 87.8 Very knowledgeable 41 12.2 12.2 100.0 Total 335 100.0 100.0 Interested in Taiwan's Nike Frequency Percent Valid Percent Cumulative Percent Valid Not interested 25 7.5 7.5 7.5 2 20 6.0 6.0 13.4 3 44 13.1 13.1 26.6 4 97 29.0 29.0 55.5 5 67 20.0 20.0 75.5 6 41 12.2 12.2 87.8 Very interested 41 12.2 12.2 100.0 Total 335 100.0 100.0 Bought products of Taiwan's Nike Frequency Percent Valid Percent Cumulative Percent Valid no 52 15.5 15.5 15.5 yes 283 84.5 84.5 100.0 Total 335 100.0 100.0 Knowledgeable about Paolyta Co. Frequency Percent Valid Percent Cumulative Percent Valid Not knowledgeable 38 11.3 11.3 11.3 2 40 11.9 11.9 23.3 3 69 20.6 20.6 43.9 4 76 22.7 22.7 66.6 5 57 17.0 17.0 83.6 6 35 10.4 10.4 94.0 Very knowledgeable 20 6.0 6.0 100.0 Total 335 100.0 100.0

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61 Interested in Paolyta Co. Frequency Percent Valid Percent Cumulative Percent Valid Not interested 78 23.3 23.3 23.3 2 55 16.4 16.4 39.7 3 65 19.4 19.4 59.1 4 82 24.5 24.5 83.6 5 33 9.9 9.9 93.4 6 12 3.6 3.6 97.0 Very interested 10 3.0 3.0 100.0 Total 335 100.0 100.0 Bought products of Paolyta Co. Frequency Percent Valid Percent Cumulative Percent Valid no 133 39.7 39.7 39.7 yes 202 60.3 60.3 100.0 Total 335 100.0 100.0 How important CSR is (general speaking) Frequency Percent Valid Percent Cumulative Percent Valid Not important 1 .3 .3 .3 2 4 1.2 1.2 1.5 3 2 .6 .6 2.1 4 20 6.0 6.0 8.1 5 31 9.3 9.3 17.3 6 52 15.5 15.5 32.8 Very important 225 67.2 67.2 100.0 Total 335 100.0 100.0 CSR should sponsor community development Frequency Percent Valid Percent Cumulative Percent Valid disagree 7 2.1 2.1 2.1 somewhat agree 56 16.7 16.7 18.8 agree 159 47.5 47.5 66.3 strongly agree 113 33.7 33.7 100.0 Total 335 100.0 100.0

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62 CSR should actively participate in environmental protection Frequency Percent Valid Percent Cumulative Percent Valid disagree 6 1.8 1.8 1.8 somewhat agree 32 9.6 9.6 11.3 agree 149 44.5 44.5 55.8 strongly agree 148 44.2 44.2 100.0 Total 335 100.0 100.0 CSR should offer pr practitioners that communicate with the media or the public Frequency Percent Valid Percent Cumulative Percent Valid disagree 8 2.4 2.4 2.4 somewhat agree 43 12.8 12.8 15.2 agree 163 48.7 48.7 63.9 strongly agree 121 36.1 36.1 100.0 Total 335 100.0 100.0 CSR should provide access for publics to communicate Frequency Percent Valid Percent Cumulative Percent Valid disagree 7 2.1 2.1 2.1 somewhat agree 50 14.9 14.9 17.0 agree 177 52.8 52.8 69.9 strongly agree 101 30.1 30.1 100.0 Total 335 100.0 100.0 CSR in crisis should explain problems to the public honestly and immediately Frequency Percent Valid Percent Cumulative Percent Valid disagree 5 1.5 1.5 1.5 somewhat agree 34 10.1 10.1 11.6 agree 156 46.6 46.6 58.2 strongly agree 140 41.8 41.8 100.0 Total 335 100.0 100.0 CSR in crisis should consider th e public as the top priority Frequency Percent Valid Percent Cumulative Percent Valid disagree 2 .6 .6 .6 somewhat agree 30 9.0 9.0 9.6 agree 153 45.7 45.7 55.2 strongly agree 150 44.8 44.8 100.0 Total 335 100.0 100.0

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63 CSR in crisis should take full responsibility Frequency Percent Valid Percent Cumulative Percent Valid strongly disagree 5 1.5 1.5 1.5 disagree 25 7.5 7.5 9.0 somewhat agree 72 21.5 21.5 30.4 agree 137 40.9 40.9 71.3 strongly agree 96 28.7 28.7 100.0 Total 335 100.0 100.0 How important CSR is in a crisis Frequency Percent Valid Percent Cumulative Percent Valid Not important 2 .6 .6 .6 2 3 .9 .9 1.5 3 6 1.8 1.8 3.3 4 39 11.6 11.6 14.9 5 66 19.7 19.7 34.6 6 66 19.7 19.7 54.3 Very important 153 45.7 45.7 100.0 Total 335 100.0 100.0 Whether Taiwan's Nike practiced CSR in crisis Frequency Percent Valid Percent Cumulative Percent Valid no 277 82.7 82.7 82.7 yes 58 17.3 17.3 100.0 Total 335 100.0 100.0 Whether or not to support Taiw an's Nike after its crisis Frequency Percent Valid Percent Cumulative Percent Valid no 235 70.1 70.1 70.1 yes 100 29.9 29.9 100.0 Total 335 100.0 100.0 Whether Paolyta Co. practi ced CSR in its crisis Frequency Percent Valid Percent Cumulative Percent Valid no 45 13.4 13.4 13.4 yes 290 86.6 86.6 100.0 Total 335 100.0 100.0

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64 Whether or not to support Paolyta Co. after its crisis Frequency Percent Valid Percent Cumulative Percent Valid no 96 28.7 28.7 28.7 yes 239 71.3 71.3 100.0 Total 335 100.0 100.0

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74 BIOGRAPHICAL SKETCH Yi-Shan Hsu is a master’s candidate for the Master of Arts in Mass Communication degree in August, 2006. She was born in Taiw an and received her B.A. degree in philosophy from National Chung Cheng Univers ity. She also earned a Certificate of Business Management from the National Y outh Council. Her re search interests specialized in corporate social responsibi lity, crisis communication, and international public relations.


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CORPORATE SOCIAL RESPONSIBILITY AND CRISIS COMMUNICATION: NIKE
TAIWAN JORDAN CRISIS VS. PAOLYTA BULLWILD CRISIS















By

YI-SHAN HSU


A THESIS PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF ARTS IN MASS COMMUNICATION

UNIVERSITY OF FLORIDA


2006

































Copyright 2006

by

Yi-Shan Hsu

































I would like to dedicate this thesis to my dear family, particularly my parents.
For their permanent love and support.















ACKNOWLEDGMENTS

This thesis could not have been accomplished without the following people, who

have given me care and support. First of all, I especially would like to thank my dear

parents, Yung-Hung Hsu and Hsiu-Chin Huang, for their everlasting love and support. I

would like to thank my dear brother, Wei-Chun Hsu, and my dear sister, Jui-Mei Hsu, too.

My beloved family gives me the belief and strength to overcome any difficulties.

I would like to attribute special thanks to my committee chair, Dr. Juan-Carlos

Molleda, for offering me valuable knowledge and guidance throughout this thesis. Also, I

would like to thank my committee members, Dr. Linda Childers Hon and Dr. Michael A.

Mitrook, for their encouragement and support.

I thank all my professors in the College of Journalism and Communications during

my master's study here in Gainesville. Special thanks go to Dr. Spiro K. Kiousis, Dr. Peg

Hall, Dr. Johanna Cleary, and Dr. Kim B. Walsh-Childers. I also thank Dr. Alan Freitag

from the University of North Carolina, Charlotte, who provided us a wonderful

international public relations course in London. I thank Jody Hedge at the Graduate

Division for all her warm help.

I thank all my dear friends. I would like to specially thank my dearest friend at UF,

Chin-Hsin Liu, for her sweet care and support. And thanks go to my UF friends who

supported me through the thesis: Shu-Yu Lin, Marcie Wu, Claire Yeh, Marjorie Chen,

Ihua Lee, Chun-Hsin Huang, Yi-Jong Tsai, Johnson Chiang, and many more.
















TABLE OF CONTENTS

page

A C K N O W L E D G M E N T S ................................................................................................. iv

LIST OF TABLES ......... ... ............. .. ...... ... .............. ............ .. vii

A B S T R A C T .......................................... .................................................. v iii

CHAPTER

1 IN TRODU CTION ................................................. ...... .................

2 L IT E R A TU R E R E V IE W .................................................................. .....................4

Corporate Social Responsibility: Origin And History ..............................................4
Corporate Social R responsibility: Ideologies ........................................ .....................5
Instrum ental T heories......................................... ................................. 6
P political T heories............................................... 7
Integrative T heories........... ........................................................ ................ .8
Ethical Theories................................9..................9
Corporate Social Responsibility And Public Relations ............................................11
Crisis Communication ............ ................ .... ............ ............ ............ 13
Crisis Com m unication And Public Relations ...........................................................17
Corporate Social Responsibility And Crisis Communication ..................................18

3 CASES IN TAIWAN: NIKE VS. PAOLYTA ...................................................22

4 M E T H O D O L O G Y ............................................................................ ................... 27

M e th o d ................................ ................ ................................................2 7
S a m p lin g ................................ ....................................................2 8
T extual A analysis .. .. ...... ...................................................... .. .... .... ..... 28
Self-A dm inistered Survey ............................................................................29
Survey Questionnaire Construction.......... ........................... ......... .................30
Survey D ata A naly sis .............................. ......................... ... ...... .... ...... ...... 32

5 F IN D IN G S ................................ ................................................. 35

Textual Analysi s .............. ............. ................ 35
Self-A dm inistered Survey ................................................ .............................. 38



v









Examination Of Hypotheses And Research Questions ............................................40

6 DISCU SSION ........... .......... ...... .. ......... ........... ... ..... 48

APPENDIX

A SELF-ADMINISTERED SURVEY QUESTIONNAIRE .......................................55

B M U L TIITEM M E A SU R E S............................................................. .....................58

C FREQU EN CY TA BLE S .................................................. .............................. 59

L IST O F R E F E R E N C E S ....................................................................... ... ................... 65

B IO G R A PH IC A L SK E TCH ..................................................................... ..................74
















LIST OF TABLES


Table page

5-1 Descriptive statistics of brand recognition............... ........................................... 39

5-2 D escriptive statistics of C SR ........................................................................ ... 39

5-3 D descriptive statistics of CSR in crisis ........................................... ............... 40

5-4 C orrelation test of C SR ........................................ ..............................................4 1

5-5 Correlation test of C SR in crisis ..................................................... ............. 42

6-1 Crosstabulation of whether Taiwan's Nike practiced CSR in crisis and whether
or not to support Taiwan's Nike after its crisis ..................... .............................. 43

6-2 Chi-Square Tests of whether Taiwan's Nike practiced CSR in crisis and whether
or not to support Taiwan's Nike after its crisis ..................... .............................. 43

7-1 Crosstabulation of whether Paolyta Co. practiced CSR in crisis and whether or
not to support Paolyta Co. after its crisis ...................................... ............... 44

7-2 Chi-Square Tests of whether Paolyta Co. practiced CSR in crisis and whether or
not to support Paolyta Co. after its crisis ...................................... ............... 44

8-1 T-test for knowledgeable about Taiwan's Nike and interest in Taiwan's Nike
regarding whether or not to support Taiwan's Nike after its crisis..........................45

8-2 T-test for knowledgeable about Paolyta Co. and interest in Paolyta Co. regarding
whether or not to support Paolyta Co. after its crisis ............................................46















Abstract of Thesis Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Master of Arts in Mass Communication

CORPORATE SOCIAL RESPONSIBILITY AND CRISIS COMMUNICATION: NIKE
TAIWAN JORDAN CRISIS VS. PAOLYTA BULLWILD CRISIS

By

Yi-Shan Hsu

August 2006

Chair: Juan-Carlos Molleda
Major Department: Journalism and Communications

Few previous studies have investigated the relationship between corporate social

responsibility and crisis communication in terms of public relations. Thus, the primary

purpose of the current research is to compare the Nike Taiwan Jordan crisis and Paolyta

Bullwild crisis to examine the potential correlation between corporate social

responsibility and crisis communication.

This study adopted a textual analysis using related English and Chinese language

news articles to gain information on how the corporations dealt with their crises. In

addition, a self-administered survey was conducted to better understand public

perceptions of corporate social responsibility and crisis communication by comparing the

two crises in Taiwan.

The results of the study illustrate the significance of corporate social responsibility

as a whole. The study also notes that corporate social responsibility in crisis

communication is similar in different socioeconomic and cultural contexts. Most









importantly, it found that the more publics perceive the corporation as practicing

corporate social responsibility in a crisis, the more they support the corporation.

Therefore, the corporation that did not practice corporate social responsibility during its

crisis was unsuccessful in its crisis communication. Corporate social responsibility is

positively associated with crisis communication in terms of public perceptions. The study

also indicates that brand recognition is helpful to crisis communication.

In terms of crisis communication, the present study suggests that corporations

should think and act ethically by practicing corporate social responsibility, which has the

ability to influence public perceptions in crisis communication. Ultimately, an

organization cannot sustain itself legitimately without considering its publics and the

environment.














CHAPTER 1
INTRODUCTION

Corporate social responsibility and crisis communication are key subjects in the

field of public relations, as numerous researchers have conducted separate studies on

these focal points (Edmunds, 1977; Shrivastava, Mitroff, Miller, & Maglani, 1988;

Coombs, 1998; Ulmer & Sellnow, 2000; Knox & Maklan, 2004; Garriga & Mele, 2004;

Stone, 2005). However, few studies explore the potential correlation between corporate

social responsibility and crisis communication. In view of the lack of research regarding

their correlation, this study investigates the role of corporate social responsibility in crisis

communication by examining Nike and Paolyta public relations crises in Taiwan.

Though Bemays (1980) pointed out early on that "public relations is the practice of

social responsibility" (cited in Stone, 2005, p. 31), the majority of corporations rely on

public relations for profit rather than a sense of civic duty. Likewise, Friedman (1962,

1970) argued that "the only responsibility of business is to maximize profits within the

rules of the game" (Wartick & Cochran, 1985, p. 759).

Yet, with the onslaught of globalization, corporate social responsibility has been

regarded as a key factor influencing corporations: "Business practices, even those

conducted a very long way from their home markets, can be subject to intense scrutiny

and comment by customers, employees, suppliers, shareholders, and governments, as

well as other groups upon whose support the business relies" (Knox & Maklan, 2004, p.

509). Steiner and Steiner (2003) have similarly indicated that corporate social









responsibility is "the duty a corporation has to create wealth by using means that avoid

harm to, protect, or enhance societal assets" (p. 126).

In addition, crisis communication has emerged as a considerably significant topic

in the arena of public relations research since it helps organizations diminish possible

losses when faced with a crisis (Ulmer & Sellnow, 2000). Corporate social responsibility

also seems to influence the effectiveness of crisis communication. Tombs and Smith

(1995) noted that socially responsible corporations are more likely to make crisis-

avoiding decisions.

Furthermore, "many communication crises stem from CSR issues" ("Senior PR,"

2003, 5), including Johnson & Johnson's Tylenol crisis in 1982, Pepsico's syringe crisis

in 1993, the Exxon Valdez oil spill crisis, and the Jack-in-the-Box crisis, among others

(Stone, 2005). Thus, it is worthwhile to examine how corporate social responsibility

affects crisis communication.

The following chapters present a literature review and a study of Taiwan's Nike

and Paolyta, as well as the methodology, findings, and a discussion of the research

provided. The literature review introduces the concepts of corporate social responsibility

(e.g., instrumental theories, political theories, integrative theories, and ethical theories)

and crisis communication. The following chapter offers a broad analysis of the Taiwan

Nike and Paolyta crises while presenting hypotheses and research questions associated

with the study. The methodology chapter shows how the primary research (i.e., survey)

and secondary research (i.e., textual analysis) were conducted and analyzed for this study.

Analyzed data are presented in the findings chapter, while the final discussion chapter

addresses how the findings were associated with corporate social responsibility and crisis









communication. This chapter also notes limitations of the study, proposes suggestions for

future research, and provides a conclusion to the study.














CHAPTER 2
LITERATURE REVIEW

Corporate Social Responsibility: Origin And History

Bowen (1953) first explored the concept of corporate social responsibility when he

asserted that "businessmen have an obligation to pursue those policies, to make those

decisions, or to follow those lines of action which are desirable in terms of the objectives

and values of our society" (p. 6).

Wartick and Cochran (1985) further argued that corporate social responsibility

asserts the importance of duty and morality. "Duty" refers to a corporation's obligation to

obey societal rules because corporations also benefit from society, while "morality"

references a corporation's moral obligation to consider other factors beyond the company

in identifying legitimate forms of social conduct (Ozar, 1979; Rawls, 1971).

The concept of corporate social responsibility has varied over time with the

evolution of economic and political structures. Under the previous prevailing authority

structure of economics and politics, corporations considered stockholders and profits

their sole responsibility (Edmunds, 1977). However, three notable events shifted the

concept of corporate social responsibility: the industrial, financial, and distributional

revolutions in the United States (Edmunds, 1977).

Due to the Civil War, a number of enterprises began to "incorporate" and become

so-called "trusts". These trusts faced opposition from populist and grange movements

threatened by the power of trusts to manipulate commodity prices (Edmunds, 1977).









Thus, the industrial revolution was spurred by the growing need for socially responsible

corporations, which lead to labor laws and the legislation of fair trade practices.

The public loss of confidence in business after the Great Depression incited a

financial revolution circa 1930. As Edmunds (1977) noted, severe unemployment at that

time mostly resulted from business failures and consequently, "the social responsibility of

business had been augmented to be commensurate with its power over the livelihood of

individuals" (p. 40). Thus, more labor and social legislation affecting business were

passed in an effort to prevent unemployment and other potential problems. Furthermore,

the public economic system was revised to reduce the power of the private economic

system.

The distributional revolution was born of the new balance created between the

private and public economic systems. The government could now regulate prices when

the private economic system was out of control, while the private economic system could

influence the government via political contributions or consumer opinion (Edmunds,

1977). With the advent of consumerism and environmentalism, corporations faced new

social responsibilities from the government and the public, such as environmental

legislation and consumer protection measures. As Hess, Rogovsky, and Dunfee (2002)

pointed out, "more is implicitly and explicitly expected from corporations extending

beyond their economic purpose and legal responsibilities" (cited in Tracey, Phillips, &

Haugh, 2005, p. 329).

Corporate Social Responsibility: Ideologies

As Votaw noted, "Corporate social responsibility means something, but not always

the same thing to everyone" (cited in Garriga & Mele, 2004, p. 51). Researchers have

developed a variety of different definitions and theories with regard to corporate social









responsibility. For instance, social issues management, stakeholder management,

corporate accountability, corporate citizenship, and corporate sustainability are all

different terms representing the concept of corporate social responsibility (Garriga &

Mele, 2004).

Referencing ideology, Carroll (1994) contended that corporate social responsibility

is "an eclectic field with loose boundaries, multiple memberships, and differing

training/perspectives; broadly rather than focused, multidisciplinary; wide breadth; brings

in a wider range of literature; and interdisciplinary" (p. 14). Acknowledging that it is

difficult to classify the numerous theories of corporate social responsibility, some

scholars still attempted to provide their own classifications. Brummer (1991), for

instance, identified six criteria (e.g., motive, relations to profits, group affected by

decisions, type of act, type of effect, expressed or ideal interest) to classify the various

theories of corporate social responsibility.

This study categorizes the theories of corporate social responsibility via the

classification method developed by Garriga and Mele (2004). The authors divided these

theories into four groups in virtue of economics, politics, social integration, and ethics: a)

instrumental theories, b) political theories, c) integrative theories, and d) ethical theories.

Instrumental Theories

The purpose of instrumental theory is to maximize the value of shareholders

(Garriga & Mele, 2004). For instance, the most famous saying in this field is, "The only

responsibility of business towards society is the maximization of profits to the

shareholders within the legal framework and the ethical custom of the country"

(Friedman, 1970, p. 32).









Friedman (1962, 1970) also contended that so-called social responsibility is

"unethical" because corporate resources and earnings belong to the corporation and not

the society. To spend corporate resources and earnings on society confuses the objective

of corporations and takes away the property of shareholders. The only social

responsibility of corporations, therefore, is the economic responsibility of producing

profits.

Similar to Friedman's conceptualization of economic responsibility, Porter and

Kramer (2002) held that "philanthropic investments by members of cluster, either

individually or collectively, can have a powerful effect on the cluster competitiveness and

the performance of all its constituents companies" (pp. 60-61). That is, organizations can

invest in social and ethical activities outside normal business practices to increase

competition and productivity.

Moreover, Murray and Montanari (1986) pointed out that the goal of organizations

is "to enhance company revenues and sales or customer relationships by building the

brand through the acquisition of, and association with the ethical dimension or social

responsibility dimension" (cited in Garriga & Mele, 2004, p. 55).

Walters (1977), however, noted that this kind of economic responsibility is

unrealistic because it "neglects the long run consequences of profit maximization and

fails to identify the appropriate relationship between the manager and changing political

and legal conditions" (Wartick, & Cochran, 1985, p. 760). In short, it is myopic to ignore

the other larger factors, such as the political system, affecting corporate productivity.

Political Theories

Based on Locke, Donaldson (1982) offered a distinct point of view regarding

corporate social responsibility. He argued that "a sort of implicit social contract between









business and society exists. This social contract implies some indirect obligations of

business towards society" (cited in Garriga & Mele, 2004, p. 56). Thus, organizations

operating in society agree to their responsibility toward society. Likewise, it is society's

"consent" that allows organizations to operate.

The concept of "corporate citizenship" (Altman & Vidaver-Cohen, 2000) echoes

Donaldson's notion of corporate social responsibility, implying that corporate

responsibility originates in societal rights. In addition, Wood and Logsdon (2002)

asserted that "business citizenship cannot be deemed equivalent to individual citizenship

- instead it derives from and is secondary to individual citizenship" (p. 86).

Ultimately, most scholars share the common view of political theories that

corporations should have "a strong sense of business responsibility towards the local

community, partnerships, which are the specific ways of formalizing the willingness to

improve the local community and for consideration for the environment" (Garriga &

Mele, 2004, p. 57).

Integrative Theories

Unlike instrumental and political theories, integrative theories take social demands

into account. More specifically, "integrative theories are focused on the detection and

scanning of, and response to, the social demands that achieve social legitimacy, greater

social acceptance and prestige" (Garriga & Mele, 2004, p. 58). As Preston and Post

(1981) suggested, the legitimate scope of corporate social responsibility is within "the

framework of relevant public policy" (p. 57). Namely, corporate social responsibility is

public responsibility. For them, the definition of "social responsibility" can vary for

different interest groups; however, the term "public responsibility" clearly indicates a

responsibility to the public by allowing for public policy. Here, public policy includes









"not only the literal text of law and regulation but also the broad pattern of social

direction reflected in public opinion, emerging issues, formal legal requirements, and

enforcement or implementation practices" (Preston & Post, 1981, p. 57). Thus,

corporations must take public policy into account alongside profits.

Likewise, the term "social responsiveness" focuses on corporate social involvement

(Wartick, & Cochran, 1985, p. 763), which proponents argue can substitute for "social

responsibility" since it is a more tangible concept. Social responsiveness means "the

capacity of a corporation to respond to social pressures" (Frederick, 1978, p. 6). This

term later evolved into "issue management" which means "the processes by which the

corporation can identify, evaluate, and respond to those social and political issues which

may impact significantly upon it" (Wartick & Rude, 1986, p. 124).

Another noteworthy concept in integrative theories is Carroll's (1979) Corporate

Social Performance (CSP) model. The three components of Carroll's (1979) CSP model,

as Garriga and Mele (2004) noted, are "a basic definition of social responsibility, a listing

of issues in which social responsibility exists and a specification of the philosophy of

response to social issues" (p. 60). Carroll (1979) argued that corporations have economic,

legal, and ethical obligations to operate in society. Therefore, businesses should perform

in economically, legally, and ethically responsible ways for the whole of society.

Ethical Theories

Ethical theories emphasize the importance of ethics while responding to social

demands. Thus, "ethics" is the essence of corporate social responsibility. Although

Carroll's (1979) CSP model noted the significance of ethical obligations, the model is

classified into integrative theories rather than ethical theories because it relies on

obligation rather than morality. As noted before, the "enlightened self-interest" identified









by Curtin and Boynton (2001) is not corporate social responsibility. Rather, "enlightened

self-interest" means that "you must do well in order to do good" (Cutlip, Center, &

Broom, 1994, p. 470). However, corporate social responsibility is not merely recycling

paper and using energy-efficient light bulbs in the office (Anthony, 2005). It is about

sustainability. In other words, corporate social responsibility is a "must-do" rather than a

"nice-to-do."

Mohr, Webb, and Harris (2001) suggested that firms take society into account as

well as its bottom line, arguing that corporate responsibility means bringing as much

good as possible to society as a whole. A number of scholars equate corporate duty with

public rights (Curtin & Boynton, 2001; Heath, 1997; Martinson, 1994, 1995-1996). More

specifically, corporations should view publics as stakeholders and treat them as the end,

rather than a means to an end (L'Etang, 1996; Curtin & Boynton, 2001; Kent & Taylor,

2002).

To respect the rights of all stakeholders and act socially responsibly, organizations

must understand the environment (e.g., society) and identify the interests of different

publics (Curtin & Boynton, 2001; Heath, 1997; Heath & Ryan, 1989, L'Etang, 1996). In

addition, corporate social responsibility is vital to the longevity of corporate relationships

with different publics since an organization cannot operate and develop without

considering the environment, which includes different publics and communities, the

physical environment, and society as a whole. Often, an organization's success is

determined by its ability to meet the needs and expectations of publics (L'Etang, 1994).

Frankental also noted that "corporate social responsibility is the long-term footprint in









society" (cited in Starck & Kruckeberg, 2003, p. 33). If the sole purpose of building

corporate relationships with publics is to generate profits, the relationship will fail.

Furthermore, corporate social responsibility is philanthropic, which means

understanding and satisfying the needs of publics. For instance, nonprofits rely on

corporate donations to address social problems (Waddock, Bodwell, & Graves, 2002).

However, to effectively implement corporate social responsibility, corporations must

recognize and consider all the publics and environments that they may affect. It is not

enough to make a one-time donation of a large sum of money. In contrast, corporate

endeavors to better understand and cooperate with publics to exhibit social responsibility

(Waddock, Bodwell, & Graves, 2002).

Most publics today want to communicate with corporations and understand their

operations, since corporate actions affect the environment as a whole. Thus, organizations

must balance the needs of stakeholders and profit generation to achieve social

responsibility (Sarbutts, 2003).

Corporate Social Responsibility And Public Relations

Ethics is the primary factor determining professionalism in public relations, as

failing to consider ethics leads to the inability to reflect "real" publics (Day, Dong, &

Robins, 2001). J. Grunig and Hunt (1984) suggested two-way symmetrical

communication as a means of practicing ethical public relations. Public relations

practitioners practice two-way symmetrical communication to communicate with, rather

than persuade, key publics and therefore implement corporate social responsibility. As

Bemays (1980) noted, "public relations is the practice of social responsibility" (cited in

Stone, 2005, p. 31).









J. Grunig and Hunt (1984) identified four additional relationship models in addition

to the two-way symmetrical communication model: the press agentry model, the public

information model, and the two-way asymmetrical model. Arguing the existence of two

different communication types between organizations and their constituencies, J. Grunig

and White (1992) identified the "asymmetrical" and the "symmetrical" perspectives.

Organizations that adopt the asymmetrical perspective tend to be conservative,

concentrate power in the hands of authority, and allow subordinates little autonomy.

Organizations following the symmetrical perspective are more liberal, supporting

decentralized power and autonomy for constituents.

The press agentry model and the public information model are examples of one-

way communication (Shannon & Weaver, 1949), or linear communication transmitted by

the sender (encoder) to the receiver (decoder). Public relations practitioners who employ

the press agentry or public information models attempt to change the attitudes and

behaviors of publics rather than organizations, thus enforcing an unequal relationship

between an organization and its key publics.

Though not as amiss as one-way communication, the two-way asymmetrical model

is still asymmetrical and unethical. In the two-way asymmetrical model, an organization

collects feedback from various key publics in an attempt to persuade those key publics (J.

Grunig & Hunt, 1984). The organization gains feedback from the key publics that allow it

to develop persuasive messages without giving publics the ability to influence or

negotiate change. Therefore, the relationship is still asymmetrical because it is

unbalanced and unethical.









Another asymmetrical public relations model presented by Sriramesh (1996) is the

personal influence model. The personal influence model indicates that public relations

practitioners develop personal relationships with individuals of interest in the media,

government, or political activist groups in order to seek favors. This model is also known

as "hospitality relations" and its purpose is to build relationships with individuals who

hold key decision-making powers (Sriramesh, 1996).

The two-way symmetrical model is based on mutual understanding between an

organization and its key publics, since each influences the other. The goal of two-way

symmetrical communication is understanding rather than manipulation or persuasion (J.

Grunig & Hunt, 1984). Thus, organizations and key publics are equal and actively

cooperate in creating an open dialogue to affect change. As J. Grunig and Hunt (1984)

suggested, effective and ethical public relations practitioners practice the two-way

symmetrical model, building long-term relationships with their key stakeholders through

mutual understanding. Ultimately, social responsibility is a key component in achieving

two-way symmetrical communication.

Crisis Communication

What is a crisis? One definition for a crisis is "a specific, unexpected and non-

routine event or series of events that create high levels of uncertainty and threaten or are

perceived to threaten an organization's high priority goals" (Seeger, Sellnow, & Ulmer,

1998, p. 233). Similarly, Shrivastava, Mitroff, Miller, and Maglani (1988) described

crises as "organizationally based disasters which cause extensive damage and social

disruption, involve multiple stakeholders, and unfold through complex technological,

organizational and social processes" (p. 285). In general, to be in a crisis means that an

organization and its stakeholders are at risk of great damage. Therefore, crisis









communication has emerged as a considerably important issue in the public relations'

research arena.

Coombs (1998) stated that a "situation influences communicative choices, the crisis

situation should influence the selection of crisis responses" (p. 177). In other words,

communicative response in a crisis depends on the type of crisis (Lerbinger, 1997).

Crises can be divided into several categories. According to Lerbinger's explanation

(1997), a crisis occurs either inside or outside of an organization and an organization has

direct or indirect culpability in a crisis.

Similarly, Weiner (1986) distinguished crises by "locus" and "controllability":

According to Lee (2004), "Locus, in a crisis context, specifies the location of the cause of

a crisis as internal or external to the organization. Controllability refers to whether the

prevention of a crisis is within the control of the organization" (p. 602). As such, crises

occurring inside an organization are always considered controllable, while crises

occurring outside an organization are deemed uncontrollable. Crises can also include

natural disasters (e.g., floods and typhoons) and human error (Ho & Kirk, 2004).

There are a variety of perspectives on how to conduct crisis communication. Fink

(1986) provided the chronological crisis communication which has four stages: the

prodromal stage, the acute stage, the chronic stage, and the resolution stage. Crisis

management is easiest in the prodromal stage if the decision-maker can anticipate or

detect the early warning signals of crises. Following the podromal stage is the acute

stage, which is "what most people have in mind when they speak of a crisis" (p. 22).

According to Fink, the speed and intensity of crises are always determined by this stage.

Next, organizations attempt to correct and recover from a crisis within the chronic stage.









"Chronic stage can linger indefinitely. But crisis management plans can and do shorten

this phase" (p. 24). For example, timely and honest communication with key stakeholders

is one way to shorten the chronic stage. The final resolution stage is total crisis recovery.

"This natural history approach offers a comprehensive and cyclical view of a crisis"

(Dean, 2004, p. 194).

In addition, "apologia," as its literal meaning implies, is a basic symbolic approach

of crisis communication. Ware and Linkugel (1973) noted that "Apologia examines how

individuals use communication to defend their character (image) from public attacks"

(cited in Coombs, 1998, p. 178). Another kind of symbolic approach is "accounts."

Simply speaking, "accounts" is an explanation of what, why, and how a crisis happened.

"Accounts are statements used to explain one's behavior and are invoked when one's

behavior is called into question, thereby threatening one's face (image)" (Coombs, 1998,

p. 179). Moreover, most research concluded that explanations should be complete,

timely, and accurate (Greer & Moreland, 2003).

Combining apologia and accounts, Benoit (1995) provided a classification of

communication strategies to help organizations restore their image. The first strategy is

"denial"- "the communicator can simply deny that the incident happened or shift the

blame in hopes of absolution of culpability" (Benoit, 1995, p. 75).

Instead of denying it, Benoit's second strategy is "evading responsibility." This

strategy is used in four situations: "(1) Defeasibility: a lack of information or control over

elements within the crisis communication situation occurs; (2) Provocation: the action

occurs in response to the initiation of a detrimental step, and thus the behavior is

defensive in nature; (3) Accidental: the action occurs inadvertently, and there are factors









that mitigate the occurrence of the offensive behavior; (4) Good intentions: the wrongful

activity occurs, but it was premised upon good and sincere intentions" (Fishman, 1999, p.

351).

Moreover, the third strategy is "reducing offensiveness." For instance, "to bolster,

or mitigate, the negative effects on the actor by strengthening the audiences' positive

effect on the rhetor" (Benoit, 1995, p. 77), "to minimize the amount of negative affects

associated with the offensive act" (Benoit, 1995, p. 78), "attacking the accuser to lessen

the impact of the accusation," or "offering to compensate the injured path" (Benoit &

Brinson, 1994, p. 77).

The fourth strategy is "corrective action" to recognize and address the source of

the injury. In other words, this strategy is to "mend one's ways" (Benoit, 1995, p. 79).

Sellnow, Ulmer and Snider (1998) argued that the corrective action strategy "can

expedite the organization's effort to rebuild its legitimacy" (p. 60). Benoit's last strategy

is called "mortification," which means that those in crisis admit their wrongdoing,

expresses regret, and seek forgiveness.

Similar to Benoit's image restoration strategies, Bradford and Garrett (1995) noted

that corporate responses (i.e., not responding, denying, offering an excuse, half agreeing,

or agreeing and accepting responsibility) to a crisis vary with four different prevailing

conditions: (a) the organization can prove that their action is ethical; (b) the organization

can prove that they had no control over the event; (c) the organization can prove that

what was described in the media is much worse than the real situation; and (d) the

organization takes full responsibility for the event. Among these conditions, Bradford and









Garrett (1995) recognized that the "agree and accept responsibility" response is the ideal

communication strategy.

Likewise, Marcus and Goodman (1991) argued that there were two kinds of crisis

responses: accommodative and defensive. "Accommodative strategies accept

responsibility, take remedial action, or both, whereas defensive strategies claim there is

no problem or try to deny responsibility for the crisis" (Coombs, 1998, p. 180). Overall,

these crisis communication strategies are located between the endpoints of accepting

responsibility and denying the crisis.

Crisis Communication And Public Relations

Generally, successful crisis management is based on good crisis communication.

Public relations also acts as the key to helping an organization communicate with its

publics. "Public relations is an important element in almost all successful crisis

management efforts" (Marra, 1998, p. 461), because it can promote effective

communication during a crisis like developing communication plans, assembling a crisis

team, and assigning the most credible spokesperson (Newsom, Turk, & Kruckeberg,

2004).

Most importantly, public relations help organizations develop a communication

culture and communication autonomy which is vital for crisis communication (Marra,

1998). "Effective communication is essential to maintaining a positive relationship with

key stakeholders such as employees, customers, suppliers, and shareholders" (Fishman,

1999, p. 348). Rather than exploring the technical role of public relations in crisis

communication, Marra's model of crisis public relations illustrates how effective public

relations help organizations perform during a crisis. Well-known public relations scholar

J. Grunig (1992) noted that "excellent public relations practice requires more than a









knowledgeable and skillful public relations practitioner or department" (p. 465).

Specifically, "the underlying communication culture of an organization and the level of

autonomy or power of the public relations department within an organization can easily

prevent (or enhance) practitioners from implementing the best crisis communication

plan" (Marra, 1998, p. 464). Therefore, the basis of communication culture and

communication autonomy is two-way symmetrical communication via excellent public

relations that build "open and honest" relationships with key publics (J. Grunig, 1992).

Corporate Social Responsibility And Crisis Communication

In most cases, crises are inevitable (Fink, 1986; Perrow, 1984). Nevertheless, as

Coombs (1999) noted, "a crisis is unpredictable but not unexpected" (pp. 2-3).

Organizations can survive a crisis and even benefit from it provided that they handle it

properly and efficiently. Proactive and reactive crisis communications are pivotal for

organizations to cope with crises properly and efficiently (Crable, & Vibbert, 1985).

Although it is hard to make a plan to prevent a crisis, there are still many crisis

scenarios that organizations can envision and devise proactive crisis management in order

to decrease any potential losses. Proactive crisis management will be achieved by having

appropriate spokespersons and mechanisms to define crises, identify affected publics, and

offer the most proper procedures (Penrose, 2000).

One noteworthy proactive crisis management technique is reputation management.

As Dean (2004) noted, having a reputation for social responsibility prior to the crisis has

been identified as an important factor influencing the crisis. For example, it seems that

the sterling reputation of Johnson & Johnson helped manage the Tylenol crisis.

In terms of reactive crisis communication, it is effective and socially responsible to

communicate with the key publics affected by the crisis. As Barton suggested, there are









several steps to communicating with key publics; they can "provide accurate information,

show compassion, and demonstrate corporate responsibility" (Strother, 2004, p.291). To

apply social responsibility means to act as public citizens and thus feel an obligation to

contribute to society (Ho & Kirk, 2004). In other words, organizations considered as

socially responsible are expected to act ethically. In the context of social responsibility,

generosity is not only a marketing function, but a real societal obligation (Himmelstein,

1997).

Tombs and Smith (1995) have shed light on how to employ social responsibility

when faced with a crisis. They argued that practicing "democratic" forms of corporate

social responsibility embodies true social responsibility. In addition, "liberal" and

paternalist forms of corporate social responsibility are limited definitions of social

responsibility. Liberal corporate social responsibility is the economic responsibility

discussed above in regards to instrumental theories. In liberal corporate social

responsibility, "the only corporate social responsibility is to conduct the business in

accordance with the employer's desires, which generally will be to make as much money

as possible while conforming to the basic rules of society" (Friedman, 1970, p. 33).

According to this point of view, the firm only has to take responsibility for their

shareholders and make the maximum profit for them.

The paternalist form of corporate social responsibility contends that "corporations

respond to more general concerns in society to take on commitments over and above

those placed upon them by the market, by shareholders, or by legal duties" (Tombs &

Smith, 1995, p. 138). Thus, the organization will respond to current social demands and

shape strategies accordingly. It is a technocraticc" perspective because the corporation









itself decides which interested publics will be addressed. Hence, the dialogue between the

corporation and key publics is tightly controlled by the corporation.

In contrast, the democratic form of corporate social responsibility considers and

listens to plural voices in a society rather than solely relying on a technocratic

perspective. Beyond simply sticking to existing corporate norms, it takes the whole

environment into account; the corporation will change with the mercurial circumstance.

Corporate social responsibility is integrally related to each part of the corporation. Thus,

compared to liberal and paternalist forms of corporate social responsibility, the

democratic form is deemed as real corporate social responsibility.

In the same vein, Coombs (1995) noted that perceptions of stakeholders are vital

for crises since how stakeholders perceive crises determines crisis responsibility. Based

on the study by Coombs (1995), there are three factors influencing stakeholders'

perception of crisis responsibility: crisis attributions, organizational performance, and

severity of the crisis.

In terms of crisis attributions, Weiner (1986) pointed out that "when an event is

negative, unexpected, or important, people are likely to engage in causal attribution

theory" (Lee, 2004, p. 602), which leads to varied public opinions. Coombs and Holladay

(1996) also noted that "Publics will make attributions about the cause of a crisis. The

more publics attribute responsibility for the crisis to the organization, the greater the risk

should be of reputational damage (a threat to legitimacy is part of the reputation)" (p.

292).

Crisis attributes can be classified by external control and personal control (Coombs,

1995). The former means the severity of crises is controlled by external agents. However,









the latter is determined by the organization itself. According to Coombs (1998), "stronger

perceptions of external control should lessen crisis responsibility and image damage

because the organization could do little or nothing to prevent the crisis. Stronger

perceptions of personal control should increase crisis responsibility and image damage

because the organization could have acted to prevent the crisis" (p. 182). Nevertheless,

Coombs's (1998) study showed that crisis responsibility appeared not to be related to

external control factors but positively related to personal control factors.

As for organizational performance, it is believed that "good" organizations more

easily receive positive publicity than "bad" organizations during a crisis. Specifically,

"when a crisis hits, these credits are used to offset the reputational damage generated by

the crisis. Conversely, an organization with a history of poor performance such as

repeated crises or shady practices, will see the image damage amplified rather than

offset" (Coombs, 1998, p. 182). Dean (2004) noted that "reputation is expected to interact

with firm response such that a good firm offering an inappropriate response will remain

favorably regarded by consumers, whereas a bad firm offering the same response will

experience a loss of favor" (p. 198).

Lastly, it is reasonable to argue that the severity of the crisis makes an impact on

crisis responsibility. For a crisis, severe damage (e.g., death) will bring more crisis

responsibility than trivial damage.

As noted above, the key to determining a firm's fate in a crisis appears to depend

on whether it accepts responsibility for the crisis. Crisis communication may be helpful to

lessen the potentially dangerous consequences of a crisis and corporate social

responsibility should play an important role in crisis communication.














CHAPTER 3
CASES IN TAIWAN: NIKE VS. PAOLYTA

Nike and Paolyta both face serious crises in Taiwan and are of great concern to

the Taiwanese people. However, the way they handle crises and outcomes are totally

different from each other. The former failed in its crisis and the latter succeeded.

Moreover, these examples show that the former did not practice corporate social

responsibility in crises but the latter did.


A


Figure 1 Picture of brands. A) Nike brand and B) Paolyta brand.



Based on a report in The China Post (2004, May 27) titled "Angry reporters walk

out on Nike reps," basketball superstar Michael Jordan arrived in Taiwan as part of his

Asian promotional tour on May 21, 2004. Before Jordan's arrival, Taiwan's Nike

division publicized his visit in their advertisements and also held a "winning the ticket of

Nike" promotional event. Seven hundred lucky Jordan fans were selected in a drawing to


LI.









attend the promotional event. To participate in the drawing, Jordan fans had to spend a

certain amount of money on Nike products and went through a competitive contest.

To the contestants' disappointment, Michael Jordan showed up to the promotional

event for only 90 seconds. The uproar over Michael Jordan's brief appearance intensified

when a growing number of fans accused Taiwan's Nike of showing no remorse for its

unreasonable and deceptive event arrangements. They also accused Taiwan's Nike

division of cheating them into buying its products by promising a "close encounter" with

Michael Jordan during the event ("Investigation," 2004).

Angry fans vented in Internet chat rooms and on bulletin boards. Some filed

complaints against Taiwan's Nike with the Consumers' Foundation in Taiwan, which

demanded an apology from Taiwan's Nike and threatened a possible consumer boycott

(Chen & Chen, 2004; Li, 2004). Meanwhile, Taiwan's Ministry of Justice investigated

fraud allegations against Taiwan's Nike issued by enraged fans who accused Nike of

using false advertising to lure customers into purchasing their products ("Investigation,"

2004; Societal Center, 2004).

After more than a week of controversy over Jordan's 90-second appearance at the

promotional event, Taiwan's Nike eventually delivered a formal apology to the fans in a

press conference and offered some compensation. However, the belated apology

damaged not only its customer relations but also its corporate image (Di & Yang, 2004;

Yang, 2004). The outcome of Paolyta's crisis, however, was totally different.

After consuming energy drinks from Paolyta in Taiwan, five people were poisoned

and one person died. These drinks were suspected to be contaminated with cyanide

("Court orders," 2005). Paolyta immediately recalled two products, Bullwild and Paolyta-









B. A total of approximately 1.68 million bottles of Bullwild were destroyed. Paolyta's

spokesperson also noted that the company suspended production and distribution of the

drink until a police investigation was completed ("Energy drinks," 2005).

The five victims purchased the drinks at four convenience stores in close proximity

to each other. An investigation showed that someone tampered with the drinks by lacing

them with cyanide and placing them back on the shelves. The suspect even left a note

saying, "I am poisonous, don't drink me!" However, the four victims regarded it as a new

slogan, so they still bought the drinks ("Energy drinks," 2005).

Paolyta's spokesperson announced that manufacture of the Bullwild energy drink

would resume after three weeks. There would be changes made to the product, but the

name and ingredients would remain the same. Aside from new designs on the bottle,

Bullwild drinks now featured an extra protection layer under the bottle cap. To

accomplish this, Paolyta purchased new machinery and integrated it into the production

process ("DOH," 2005).

The problems were neither directly nor indirectly caused by Paolyta, but the

company accepted full responsibility for the safety and well being of its customers and

corrected the problem at a considerable expense. Although Paolyta's decision to recall its

products caused huge financial losses, it established itself as a responsible institution and

gained credibility with its consumers.

Hypotheses And Research Questions

Corporate social responsibility is one key factor to deal with crisis communication

(Strother, 2004). In light of different socioeconomic and cultural contexts in different

countries (i.e., the United States and Taiwan), the concepts behind corporate social









responsibility and crisis communication may be different. Therefore, two hypotheses are

presented:

HI: Communication i/th stakeholders, concernsfor the environment, and charity

are regarded as corporate social responsibility in Taiwan.

H2: The democratic form of corporate social responsibility (e.g., accepting

responsibility and ethical behavior) is regarded as socially responsible crisis

communication in Taiwan.

According to Fink (1986), crises are inevitable. In addition, Shrivastava, Mitroff,

Miller, and Maglani (1988) noted that crises are "organizationally based disasters which

cause extensive damage and social disruption, involve multiple stakeholders, and unfold

through complex technological, organizational and social processes" (p. 285).

Because crises are inevitable and harmful to organizations, it is important for

organizations to employ effective crisis communication. Likewise, the aforementioned

discussion shows that corporate social responsibility plays an important role in crisis

communication. Based on Ahluwalia, Burnkrant, and Unnava (2000), brand recognition

may help decrease the negative impact experienced by a corporation during a crisis. Dean

(2004) noted that "reputation is expected to interact with firm response such that a good

firm offering an inappropriate response will remain favorably regarded by consumers,

whereas a bad firm offering the same response will experience a loss of favor" (p. 198).

Thus, the first two research questions are:

RQ1: Is corporate social responsibility helpful to crisis communication i ith regard

to public perception?









RQ2: Is brand recognition helpful to crisis communication i ith regard to public

perception?

Coombs and Holladay (1996) noted that "Publics will make attributions about the

cause of a crisis. The more publics attribute responsibility for the crisis to the

organization, the greater the risk of reputational damage (a threat to legitimacy is part of

the reputation)" (p. 292).To identify whether crisis responsibility influences the image of

a corporation, the final research question was developed:

RQ3: Does corporation socially responsible behavior in a crisis influence brand

recognition i ith regard to public perception?














CHAPTER 4
METHODOLOGY

Method

Based on the hypotheses and research questions, this study was conducted by

primary research (i.e., survey) to gain a general understanding of the perceptions of

publics, and secondary research (i.e., textual analysis) to examine how corporations

respond to crises.

This dual research technique (survey and textual analysis) ensured the accuracy and

reliability of the results. With the help of surveys, this study could: "1) investigate

problems in realistic settings; 2) collect data with relative ease from a variety of people;

and 3) not be constrained by geographic boundaries" (Wimmer & Dominick, 2003, p.

168). A survey was ideal for obtaining direct and objective public reactions concerning

two corporate crises in Taiwan.

In addition, textual analysis was the best way to gain more complete information on

how the two corporations dealt with a crisis in Taiwan. From this analysis, this study

obtained a wide spectrum of evidence to examine the two corporations and their crises.

Overall, the primary goals of this research were to conduct the survey and the

textual analysis through documentation. The results of the survey showed the publics'

attitude toward the concept of corporate social responsibility and crisis communication

by comparing two corporate crises in Taiwan. A textual analysis examining the two

corporations and their crises in Taiwan through a variety of information and opinions led

to an objective conclusion.









Sampling

Textual Analysis

This study gathered information about the two corporations and their crises by

means of textual analysis. The textual analysis provided a general knowledge of these

two crises from several different sources, including media outlets, academic databases,

and Taiwan's Nike and Paolyta' Web sites. The media coverage of the two crises was

generated by Taiwan, the United States, and other countries. Both English-language and

Chinese-language news were included.

Chinese-language news stories were collected from the archival news collection

featuring the two crises on Yahoo! Inc. and the electronic database Factiva.com. English-

language news stories, on the other hand, were collected from two major Taiwanese

English news outlets (i.e., FTV English News Edition.com and TaipeiTimes.com) and

three electronic databases: LexisNexis, Gale Group and Factiva.com. A total of 74

English-language and Chinese-language news articles were gathered.

News archives from FTV English News Edition.com and TaipeiTimes.com

provided major English news stories about the two corporations and their crises. Some of

the English news stories were collected through the LexisNexis database using the terms

"Nike," "Paolyta," and "Taiwan" with the "headline, lead paragraph(s)" parameter in

World News and General News (in the "major newspapers" category). Other English

news stories were collected through the Info Trac OneFile databases within Gale Group

using the terms "Nike," "Jordan," "Paolyta," and "Taiwan" with the "key word(ke)"

parameter. Factiva.com was the last database used to collect English news stories which

were found using the terms "Nike," "Jordan," "Paolyta," and "Taiwan" with the "key

word" parameter. After preliminary screening, 18 English-language news articles were









yielded. The English-language news articles were distributed by news agencies and

newswire stories, such as Central News Agency and Asia Africa Intelligence Wire.

Chinese news stories on the two crises were mainly gathered through Yahoo! Inc.'s

archival news site. Yahoo! Inc. was chosen because it is one of Taiwan's largest Internet

companies, accounting for more than 50 percent of the "searching tools" market share in

Taiwan (He, 2006). In addition, Yahoo! Inc. is the most frequently visited Web site, with

more than 345 million individual users each month worldwide (Yahoo! Inc., 2005). The

last source of Chinese news stories was collected through the Factiva.com database using

the terms "Nike," "Jordan," "Paolyta," and "Taiwan" with the "key word" parameter.

After screening, the archived news yielded 56 Chinese-language articles, including news

stories and commentaries distributed by prominent Taiwanese news outlets (e.g.,

ETtoday.com and Libertytimes.com) as well as newspapers (e.g., United Daily News).

Self-Administered Survey

In addition to the textual analysis, a survey was also conducted to examine the

hypotheses and research questions. The survey method for this research was group

administration, which meant that the researcher gave individual copies of a questionnaire

to a group of participants. This method offered advantages that other survey methods

(e.g., mail survey or Internet survey) did not offer. For example, group administration

surveys allowed the researcher to know exactly who answered the questions and afforded

a higher response rate. Most importantly, the researcher could solve individual problems

immediately and other respondents were not bothered (Wimmer & Dominick, 2003).

After considering the following situations, this survey used a non-probability

convenience sample. The focus of this study was not to generalize the population, but

given the constrained resources and time, it was only possible to sample part of the









Taiwanese population and draw conclusions based on the data gathered in this sample.

The main purpose was to test the association between crisis communication and corporate

socially responsible behavior from the two corporations in question. Thus, the population

of this study was chosen from two universities in Taiwan: Ching Yun University and

Oriental Institute of Technology. The overall sample size was 335.

The researcher administered the survey in Taiwan during the Christmas break of

2005. Respondents were informed that by completing the survey they were giving their

explicit consent for the data to be used for this research only. Each subject responded to

the same questions, which yielded more comparable data than interviews or focus groups.

However, there were understandably some error and bias in this research given that it

utilized a non-probability convenience sample of university students who were not

representative of all Taiwanese people. Although non-probability sampling were not

allowed to be used to calculate the sampling error, it was still useful for obtaining a

general idea of the reactions of publics concerning two corporate crises in Taiwan.

Survey Questionnaire Construction

First, according to Fowler (1993), a self-administered questionnaire should: 1) be

clear and understandable in content, layout, and type; 2) contain closed-ended questions;

and 3) have a limited number of questions. As a result, the survey questionnaire here

mainly adopted closed-ended questions and was limited to 21 questions. The only open-

ended question was that of "age." Additionally, the questionnaire used dichotomous (e.g.,

yes/no), rating scales (e.g., 5-point Likert scales), and semantic differential scales (e.g., a

7-point scale with 1 = "not interested" and 7 = "very interested") for the closed-ended

questions (Wimmer & Dominick, 2003). Overall, the survey questionnaire had been

constructed to minimize any influence on respondents' answers.









To better understand the specificity of hypotheses and research questions, this

questionnaire was divided into three sections: a) respondents' brand recognition about the

corporations and their perception of corporate social responsibility; b) respondents'

perception of corporate social responsibility during a crisis; and c) the correlation

between corporate social responsibility and crisis communication (see questionnaire in

Appendix A).

The first section was used to test respondents' brand recognition about the

corporations with these questions: 1) How knowledgeable do you believe you are about

Taiwan's Nike? 2) What is your level of interest in Taiwan's Nike? 3) Have you ever

bought products made by Taiwan's Nike before? 4) How knowledgeable do you believe

you are about Paolyta? 5) What is your level of interest in Paolyta? 6) Have you ever

bought products made by Taiwan's Paolyta before?

These results were analyzed in combination with the results of questions in the last

section with questions such as: How important do you think the corporate ethics of

corporate social responsibility are in a crisis? Do you think that Taiwan's Nike practiced

corporate social responsibility in its crisis? Will you support Taiwan's Nike after its crisis

by buying or promoting its products? Do you think that Paolyta practiced corporate social

responsibility in its crisis? Will you support Paolyta after its crisis by buying or

promoting its products? The data collected from the analysis helped to answer RQ2. Is

brand recognition helpful to crisis communication with regard to public perception? and

RQ3. Does corporation socially responsible behavior in a crisis influence brand

recognition with regard to public perception?









Also, hypothesis one-Communication with stakeholders, concerns for the

environment, and charity are regarded as corporate social responsibility in Taiwan-was

explored through questions in the first section: 1) the corporation is socially responsible

when it sponsors community development; 2) the corporation is socially responsible

when it actively participates in environmental protection; 3) the corporation is socially

responsible when it offers public relations practitioners that communicate with the media

or the public; and 4) the corporation is socially responsible when it provides access for

publics to communicate (e.g., an email address).

In the second section (i.e., Jordan's and Bullwild's crises), these questions were

designed to help test hypothesis two-The democratic form of corporate social

responsibility (e.g., accepting responsibility and ethical behavior) is regarded as socially

responsible crisis communication in Taiwan. Questions will be asked addressing if: 1) the

corporation is socially responsible when it explains problems to the public honestly and

immediately; 2) the corporation is socially responsible when the public is its top priority

to consider rather than its source of profit; and 3) the corporation is socially responsible

when it takes full responsibility for the crisis event (even the final outcome shows that the

crisis is not the mistake of the corporation).

In the last section (i.e., after Jordan's and Bullwild's crises), these questions

contributed to understanding the association between corporate social responsibility and

crisis communication, specifically with regard to first research question: Is corporate

social responsibility helpful to crisis communication with regard to public perception?

Survey Data Analysis

The survey data collected were entered into and analyzed by Statistical Package for

the Social Sciences (SPSS) 13.0 for Windows. By virtue of SPSS, these statistical tests









were performed with Cronbach's alpha, descriptive statistics, Independent-samples t-

tests, cross-tabulations, and Pearson product moment correlation used to answer each

hypothesis and research question posed in the study.

Using Cronbach's alpha, this study examined the inter-correlations among items in

the questionnaire. More specifically, "Cronbach's alpha was used to assess the reliability

of the scale, which provides an indication of the internal consistency of the items

measuring the same construct" (Spathis, & Ananiadis, 2005, p. 201). Normally,

Cronbach's alpha is unacceptable if it is below .60; .60-.65 is undesirable; .65-.70 is

minimally acceptable; .70-.80 is respectable; and .80-.90 is very good. However, if much

above .90, the scale is suggested to be shortened (DeVellis, 1991). Thus, the "acceptable"

reliability scores of Cronbach's alpha should be equal to or higher than .60.

According to Trochim (2005), "Descriptive statistics are used to describe the basic

features of the data in a study. They provide simple summaries about the sample and the

measures. Together with simple graphics analysis, they form the basis of virtually every

quantitative analysis of data" (n.p.). In short, descriptive statistics were used to

summarize quantitative information from data, such as mean, standard deviation, and

frequency.

Independent-samples t-tests were designed to examine whether there were

significant relationships between two independent groups (Kirkman, 2005; Gardner,

1975). Here, the analysis used Independent-samples t-tests to see whether there were

significant variations (a = 0.05) in mean scores between one independent variable and

two or more dependent variables. If the p-value of the Independent-samples t-tests was

equal to or less than 0.05 (a < 0.05), it could be concluded that there were significant









differences between the independent variable and dependent variables. Conversely, if the

p-value was more than 0.05 (a > 0.05), there were no significant differences between

these variables (Hays, 1973). Moreover, according to Cohen (1988), the effect size of the

compared samples could be defined as follows: d = .2 is small effect, d = .5 is medium

effect and d = .8 is large effect.

Cross-tabulations and Pearson product moment correlation were also used to test

the relationships between the variables. If the p-value was less than 0.05, there were

significant relationships between the variables (Steinbrenner & Bent, 1975). Additionally,

for Pearson product moment correlation, correlation coefficients usually take on values

between 1.0 and + 1.0 where -1.0 is perfect negative correlation, 0 is no correlation,

and + 1.0 is perfect positive correlation (Hays, 1973).

The descriptive statistics, Independent-samples t-tests, cross-tabulations, and

Pearson product moment correlation showed the results of: a) respondents' brand

recognition about the corporations and their perception of corporate social responsibility;

b) respondents' perception of corporate social responsibility during a crisis; and c) the

correlation between corporate social responsibility and crisis communication.














CHAPTER 5
FINDINGS

Textual Analysis

From Taiwan's Nike and Paolyta Web sites, as well as related news articles about

Nike and Paolyta's crises, it was obvious that the latter actively practiced social

responsibility while the former did not. For example, based on the research of Esrock and

Leichty (1998), to determine whether corporations practice social responsibility on their

Web sites, the investigator should look into these factors: "fair business practices, worker

health and safety, product safety, cultural diversity, environment, charity, children,

education, health, volunteerism, support of the arts, civic involvement, and quality of

work life"(p. 311). Paolyta's Web site provided information about the safety and

reliability of their products, their concerns for consumers, and their efforts to protect the

environment; however, Nike's Web site in Taiwan only offered a sales pitch.

Most importantly, most news articles about Paolyta's crisis (21 out of 28)

applauded Paolyta's socially responsible attitudes and behaviors in handling the crisis,

such as immediately recalling questionable products, Bullwild and Paolyta-B, and

introducing an extra protection layer under the bottle cap in their continued products. The

following comments represent the most popular opinions about Paolyta found in news

articles.

One news article from Asia Africa Intelligence Wire commented that "the

Consumers' Foundation applauded Paolyta's decision to recall its products, saying that

although the company will suffer huge financial losses, it will establish itself as a









responsible institution and gain credibility with the consumers" ("Energy drinks," 2005,

11).

In United Evening News, Lin (2005) reported that Paolyta recalled Bullwild and

Paolyta-B in order to protect the lives of consumers. For the public, this act embodied

corporate social responsibility.

In Economic Daily News, Qiu (2005) remarked that Paolyta dealt with its crisis in a

clear and positive manner, providing the public with an honest and immediate

explanation in its news conference, promising to recall and destroy questionable products

without delay, offering rewards (NT $2 million) to people who could help capture the

suspect, and implementing safe changes in their products.

Furthermore, in Electronic Commerce Times, Gao (2005) noted that Paolyta

exercised ideal crisis communication in its response and care for the public. According to

Olive Ting, the president of Era Public Relations (the second largest public relations

company in Taiwan), Chen (2005) reported that a 48-hour response time is vital for

effective crisis communication. Paolyta not only responded immediately, but also showed

that the public was its top priority in recalling the dangerous products. Therefore,

Paolyta's socially responsible behaviors led to successful crisis management.

On the contrary, an overwhelming number of news articles on the crisis of Nike in

Taiwan (i.e., 43 out of 46 news articles) concluded that Nike was not socially responsible

and their public relations failed. Specifically, Nike denied its mistakes and did not

explain or apologize until the boycott statement from Consumers' Foundation in Taiwan

was released. The following quotes and comments represent popular views in articles

concerning Nike Taiwan.









From Asia Africa Intelligence Wire, one news article noted that "Nike Taiwan

stirred up an uproar among fans angry over Jordan's brief appearance when it initially

refused to offer a formal apology" ("Nike Taiwan apologizes," 2004, 7) and "the

Consumers' Foundation, which threatened a boycott against all Nike products, has

decided to cease fire but noted that Nike's belated apology not only damaged its customer

relations but also its corporate image" ("Nike Taiwan apologizes," 2004, 13).

Another article in Asia Africa Intelligence Wire argued that "the two executives,

Huang Hsiang-yen and Hu Shan-ming, denied that their company had any intention of

cheating customers and said they could not control Jordan's schedule in Taiwan and could

not oblige Jordan to stay at the meet-and-greet function any longer" ("Nike Taiwan

executives," 2004, 2).

According to Huang (2004), "Jordan's short appearance caused a public relations

disaster for the company. Furious fans complained for days, demanding compensation

from the sportswear giant. For some Taiwanese, Jordan's cameo was a blow to Taiwan's

dignity" ( 6-7).

One article on the SportsNT Web site cited the reasons why Taiwan's Nike

suffered a public relations crisis, including closed, dishonest, unfriendly, unfair,

discreditable, and unhelpful attitudes and behaviors toward the media and the public (Li,

n.d.).

On the Manager Today Web site, Chen (2005) reported that Taiwan's Nike did not

respond within the "golden" 48-hour time period, waiting one full week to admit its

mistakes. The article concluded that the "arrogant" and "dishonest" behaviors of

Taiwan's Nike led to its failure to manage the crisis more effectively. Likewise, Zhao









(2004) of Libertytimes.com noted that the mistakes of Taiwan's Nike included improper

communication and denial of its mistakes.

These opinions made it clear that the two corporations responded to each crisis

differently. The Taiwanese media generally held that Paolyta's socially responsible

behaviors led to successful crisis communication. In contrast, Nike Taiwan's poor public

relations and irresponsible behaviors resulted in the failed crisis communication. The

following section illustrates public attitudes toward socially responsible corporate

behavior and crisis communication by comparing popular perceptions of crisis

management in two different Taiwanese corporations.

Self-Administered Survey

The survey included four questions (questions 10-13) asking participants about

corporate social responsibility in Taiwan. The reliability analysis of these questions

yielded .83 Cronbach's alpha, which shows high internal consistency. In addition, the

reliability analysis of the three questions (questions 14-16) regarding socially responsible

crisis communication in Taiwan was .67 Cronbach's alpha. The reliability analysis of the

three questions (questions 3-5) regarding brand recognition of Taiwan's Nike was .63

Cronbach's alpha. The reliability analysis of the three questions (questions 6-8) regarding

brand recognition of Paolyta was .64 Cronbach's alpha. The overall scores of Cronbach's

alpha were within the acceptable range (see Appendix B).

One hundred and sixty one females (48 %) and 174 males (52 %) participated in

the survey. Ages of participants mainly ranged from 19 to 21 years old (see Appendix C).

In addition, 85 percent of participants answered "yes" for "bought products of

Taiwan's Nike" (see Appendix C). In accordance with this result, the means of










knowledge and interest about Taiwan's Nike were 4.36 and 4.34, which were high in 7-

point scales (see Table 5-1).

Table 5-1 also shows that the means of knowledge about and interest in Paolyta

measured 3.77 and 3.04, which were at the middle of the 7-point scales. Consistent with

these results, 60 percent of participants answered "yes" for "bought products of Paolyta"

(see Appendix C).

Table 5-1. Descriptive statistics of brand recognition
N Mean Std. Deviation
Knowledgeable about Taiwan's Nike 335 4.36 1.577
Interest in Taiwan's Nike 335 4.34 1.651
Knowledgeable about Paolyta Co. 335 3.77 1.669
Interest in Paolyta Co. 335 3.04 1.594

In Table 5-2, the means of "How important CSR is (generally speaking)" was 6.38,

which was considerably high in the 7-point scales. Also, the means of the items

concerning "general corporate social responsibility in Taiwan" were, individually, "CSR

should sponsor community development" (M = 4.13), "CSR should actively participate in

environmental protection" (M = 4.31), "CSR should offer public relations practitioners

that communicate with the media or the public" (M = 4.19), and "CSR should provide

access for publics to communicate" (M = 4.11), which were all high on the 5-point Likert

scales.

Table 5-2. Descriptive statistics of CSR
Std.
N Mean .
Deviation
How important CSR is (Generally speaking) 335 6.38 1.087

CSR should sponsor community development 335 4.13 .757

CSR should actively participate in environmental protection 335 4.31 .717
CSR should offer public relations practitioners that communicate with the 335 4.19 .743
media or the public
CSR should provide access for publics to communicate 335 4.11 .724











In Table 5-3, the mean of "How important CSR is in a crisis" was 5.91, which was

also considerably high in the 7-point scales. The means of "socially responsible crisis

communication in Taiwan" were, individually, "CSR in crisis should explain problems to

the public honestly and immediately" (M = 4.29), "CSR in crisis should consider the

public as the top priority" (M = 4.35), and "CSR in crisis should take full responsibility"

(M = 3.88), which were all high on the 5-point Likert scales.

Table 5-3. Descriptive statistics of CSR in crisis
Std
N Mean S.
Deviation
How important CSR is in crisis 335 5.91 1.253
CSR in crisis should explain problems to the public honestly and immediately 335 4.29 .706
CSR in crisis should consider the public as the top priority 335 4.35 .665
CSR in crisis should take full responsibility 335 3.88 .960

Examination Of Hypotheses And Research Questions

Hypothesis one-Communication with stakeholders, concerns for the environment,

and charity are regarded as corporate social responsibility in Taiwan-was tested by

using the Pearson product moment correlation. The analysis indicated significant

differences between "How important CSR is (generally speaking)" and the other four

variables: "CSR should sponsor community development" (r = .261,p <.000); "CSR

should actively participate in environmental protection" (r = .286, p < .000); "CSR

should offer public relations practitioners that communicate with the media or the public"

(r = .283, p < .000); and "CSR should provide access for the public to communicate," (r

= .255, p < .000) (see Table 5-4). These results show that "How important CSR is

(generally speaking)" strongly correlate with "CSR should sponsor community

development;" "CSR should actively participate in environmental protection;" "CSR










should offer PR practitioners that communicate with the media or the public;" and "CSR

should provide access for the public to communicate." Accordingly, H1 is supported.

Table 5-4. Correlation test of CSR

Correlations
CSR should
offer public
relations
How CSR should practitioners CSR should
important CSR should actively that provide
CSR is sponsor participate in communicate access for
(General community environmental ith the media publics to
speaking) development protection or the public communicatee
How important CSR is Pearson 1 261* 286* 283* 255
(General speaking) Correlation 1 .8* 83* 255
Siq. (2-tailec .000 .000 .000 .000
N 335 335 335 335 335
CSR should sponsor Pearson 1 32 444
community development Correlation .6 .2* .0* 44*
Siq. (2-tailec .000 .000 .000 .000
N 335 335 335 335 335
CSR should actively Pearson 286* 632* 1 718* 44
participate in environmer Correlation .6* .* 1 .* .*
protection Siq. (2-tailec .000 .000 .000 .000
N
335 335 335 335 335

CSR should offer public Pearson* 7* 1 9*
relations practitioners the Correlation .3* .0* .718 .*
communicate with the m Sig. (2-tailec .000 .000 .000 .000
or the public N 335 335 335 335 335
CSR should provide acce! Pearson 255* 444 441* 519* 1
for publics to communica Correlation 44* .1 1
Sig. (2-tailec .000 .000 .000 .000
N 335 335 335 335 335
**.Correlation is significant at the 0.01 level (2-tailed).


Hypothesis two-The democratic form of corporate social responsibility (e.g.,

accepting responsibility and ethical behavior) is regarded as socially responsible crisis

communication in Taiwan-was also tested by using the Pearson product moment

correlation. The analysis indicated significant differences between "How important CSR

is in a crisis" and the other three variables: "CSR in crisis should explain problems to the

public honestly and immediately" (r = .348, p < .000); "CSR in crisis should consider the

public as the top priority" (r = .308, p < .000); and "CSR in crisis should take full










responsibility" (r = .242, p < .000) (see Table 5-5). In short, "How important CSR is in a

crisis" is significantly related to the responses "CSR in crisis should explain problems to

the public honestly and immediately," "CSR in crisis should consider the public as the

top priority," and "CSR in crisis should take full responsibility." Therefore, H2 is

supported.

Table 5-5. Correlation test of CSR in crisis

Correlations
CSR in crisis CSR in crisis
should explain should CSR in crisis
problems to the consider the should take
How important public honestly public as the full
CSR is in crisis and immediately top priority responsibility
How important CSR is in Pearson Correlatior 1 .348* .308* .242*
crisis Sig. (2-tailed) .000 .000 .000
N 335 335 335 335
CSR in crisis should Pearson Correlatior .348* 1 .649* .299*
explain problems to the Sig. (2-tailed)
public honestly and .000 .000 .000
immediately N
S335 335 335 335

CSR in crisis should Pearson Correlatior .308* .649* 1 .390*
consider the public as the Sig. (2-tailed) .000 .000 .000
top priority N
335 335 335 335

CSR in crisis should take Pearson Correlatior .242* .299* .390* 1
full responsibility Sig. (2-tailed) .000 .000 .000
N 335 335 335 335
**. Correlation is significant at the 0.01 level (2-tailed).


Research question one asks if corporate social responsibility helps crisis

communication with regard to public perception. As shown in Table 6-1 and Table 6-2,

"whether Taiwan's Nike practiced CSR in its crisis" has a significant relationship with

"whether or not to support Taiwan's Nike after its crisis" (X2(1, N=335) = 65.701,p <

.000).

The relationship between "whether Paolyta Co. practiced CSR in its crisis" and

"whether or not to support Paolyta Co. after its crisis" was also significant (X (1, N=335)

=61.350, p < .000) (see Table 7-1 and Table 7-2). These results show that the public was









more likely to support corporations that practiced CSR in a crisis. Thus, the answer to

RQ1 is confirmed.

Table 6-1. Crosstabulation of whether Taiwan's Nike practiced CSR in crisis and whether
or not to support Taiwan's Nike after its crisis


Whether or not to
support Taiwan's
Nike after its crisis


Total


no


no Count


57 277


% within whether Taiwan's Nike
practiced CSR in crisis

% within whether or not to support
Taiwan's Nike after its crisis
yes Count

% within whether Taiwan's Nike
practiced CSR in crisis
% within whether or not to support
Taiwan's Nike after its crisis
Count

% within whether Taiwan's Nike
practiced CSR in crisis
% within whether or not to support
Taiwan's Nike after its crisis


79.4% 20.6% 100.0%


93.6%


15


57%


43


82.7%


58


25.9% 74.1% 100.0%


6.4% 43.0% 17.3%


70.1% 29.9% 100.0%


100.0% 100.0% 100.0%


Table 6-2. Chi-Square Tests of whether Taiwan's Nike practiced CSR in crisis and
whether or not to support Taiwan's Nike after its crisis

Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df (2-sided) (2-sided) (1-sided)
Pearson Chi-Square 65.701b 1 .000
Continuity Correctiof 63.168 1 .000
Likelihood Ratio 60.520 1 .000
Fisher's Exact Test .000 .000
Linear-by-Linear Association 65.505 1 .000
N of Valid Cases 335_
a. Computed only for a 2x2 table
b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 17.31.


Whether
Taiwan's
Nike
practiced
CSR in
crisis


Total












Table 7-1. Crosstabulation of whether Paolyta Co. practiced CSR in crisis and whether or
not to support Paolyta Co. after its crisis


Whether or not to
support Paolyta Co.
after its crisis


Total


no


no Count


% within whether Paolyta Co.
practiced CSR in crisis

% within whether or not to support
Paolyta Co. after its crisis


Count


% within whether Paolyta Co.
practiced CSR in crisis

% within whether or not to support
Paolyta Co. after its crisis


77.8% 22.2% 100.0%


36.5%


4.2%


229


13.4%


290


21.0% 79.0% 100.0%


63.5% 95.8% 86.6%


Count


335


% within whether Paolyta Co.
practiced CSR in crisis


Total


28.7% 71.3% 100.0%


% within whether or not to support 100.0% 100.0% 100.0%
Paolyta Co. after its crisis


Table 7-2. Chi-Square Tests of whether Paolyta Co. practiced CSR in crisis and whether
or not to support Paolyta Co. after its crisis

Chi-Square Tests
Asymp. Sig. Exact Sig. Exact Sig.
Value df (2-sided) (2-sided) (1-sided)
Pearson Chi-Square 61.350 1 .000
Continuity Correctiorf 58.606 1 .000
Likelihood Ratio 55.330 1 .000
Fisher's Exact Test .000 .000
Linear-by-Linear Association 61.167 1 .000
N of Valid Cases 335
a. Computed only for a 2x2 table
b. 0 cells (.0%) have expected count less than 5. The minimum expected count is 12.90.


Whether
Paolyta
Co.
practiced
CSR in
crisis










Research question two asks if brand recognition helps crisis communication with

regard to public perception. Independent-samples T-tests was used to see if a relationship

between brand recognition and crisis communication exists. For the independent variable

"whether or not to support Taiwan's Nike after its crisis," the analysis showed significant

differences for the dependent variable "Interest in Taiwan's Nike" (t(333) = -2.87, p =

.004 (two-tailed), d = -.36), but no significant differences for the dependent variable

"knowledgeable about Taiwan's Nike" (see Table 8-1). It also indicated that the effect

size of the sample is moderate.

Table 8-1. T-test for knowledgeable about Taiwan's Nike and interest in Taiwan's Nike
regarding whether or not to support Taiwan's Nike after its crisis
Group Statistics
whether or not to support Taiwan's Nike after i N Mean Std. Deviation Std. Error Mean
knowledgeable about no 235 4.31 1.625 .106
Taiwan's Nike yes 100 4.47 1,460 ,146
Interest in Taiwan's Nil no 235 4.17 1.714 .112
yes 100 4.73 1.427 .143
Table 8-1. Continued.

Independent Samples Test
Levene's Test
for Equality of
Variances t-test for Equality of Means

)5% Confidenc
Interval of the
Sig. Mean Std. Error Difference
F Sic. t df (2-tailed) Difference Difference Lower Upper
knowledgeable about Equal variance 1.477 225 .869 333 386 164 188 -534 207
Taiwan's Nike assumed 477 225 -869 333 386 -164 188 -534 207
Equal variance -.907 06.658 .365 -.164 .180 -.519 .192
not assumed
Interest in Taiwan's Eq rian 2.152 .143 -2.870 333 .004 -.560 .195 -.944 -.176
assumed
Equal variance -3.088 22.303 .002 -.560 .181 -.917 -.202
not assumed


Similarly, for the independent variable "whether or not to support Paolyta Co. after

its crisis," the analysis presented significant differences for the dependent variable

"Interest in Paolyta Co." (t(333) = -4.583, p = .000 (two-tailed), d= -.56), but no

significant differences for the dependent variable "knowledgeable about Paolyta Co" (see










Table 8-2). Thus, the effect size of the sample is large. Generally, these results show that

the public was more likely to support corporations where they are more interested.

Therefore, it is verified that brand recognition helps crisis communication in terms of

public perception.

Table 8-2. T-test for knowledgeable about Paolyta Co. and interest in Paolyta Co.
regarding whether or not to support Paolyta Co. after its crisis
Group Statistics
Whether or not to support Paolyta Co. after its N Mean Std. Deviation Std. Error Mean
knowledgeable about no 96 3.39 1.644 .168
Paolyta Co. yes 239 3.93 1.657 .107
Interest in Paolyta Cc no 96 2.43 1.478 .151
yes 239 3.28 1.575 .102


Table 8-2. Continued.

Independent Samples Test
Levene's Test for
Equality of
Variances t-test for Equality of Means

95%
Confidenc
e Interval
of the
Sig. Mean Std. Error Difference
F Sig. t df (2-tailed) Difference Difference Lower
knowledgeable ab Equal variant .443 .506 -2.720 333 .007 -.543 .200 -.936
Paolyta Co. assumed
Equal variant -2.729 176.656 .007 -.543 .199 -.936
not assumed
Interest in Paolyta ( Equal varian .000 .998 -4.583 333 .000 -.857 .187 -1.225
assumed
Equal variance -4.710 186.039 .000 -.857 .182 -1.217
not assumed


Research question three asks if corporate social responsibility in a crisis influences

brand recognition with regard to public perception. "Whether Taiwan's Nike practiced

CSR in its crisis" does not have a significant relationship with "bought products of

Taiwan's Nike" or "whether or not to support Taiwan's Nike after its crisis."

Similarly, there were no relationships between "whether Paolyta Co. practiced CSR

in its crisis," "bought products of Paolyta Co." or "whether or not to support Paolyta Co.






47


after its crisis." Overall, it seemed that socially responsible behavior in a crisis does not

influence brand recognition with regard to public perception.

The following chapter presents the larger implications of the study results. It will

also note the limitations of this study, offer suggestions for future research, and provide a

conclusion.














CHAPTER 6
DISCUSSION

Corporate social responsibility is significant in most cases. For instance, the means

of two given survey questions about the importance of corporate social responsibility

(i.e., "How important CSR is [generally speaking]" and "How important CSR is in a

crisis") were considerably high (see Table 2 and Table 3).

Additionally, Taiwanese news articles associated successful crisis communication

with effective corporate social responsibility. United Evening News, Economic Daily

News, and Electronic Commerce Times all suggested that Paolyta successfully dealt with

its crisis because of its socially responsible behaviors. In contrast, The China Post,

Libertytimes, and Manager Today argued that Taiwan's Nike failed in its crisis as a result

of irresponsible corporate behavior.

This study identified the potential association between corporate social

responsibility and crisis communication. First, H1 attempted to see how the Taiwanese

perceive corporate social responsibility and whether public perceptions of CSR varied in

different socioeconomic and cultural contexts. As H1 assumed, sponsoring community

development (i.e., charity), actively participating in environmental protection (i.e.,

concerns for the environment), offering public relations practitioners that will

communicate with the media or the public, and providing access to public

communication (i.e., communication with stakeholders) are all features of corporate

social responsibility in Taiwan (see Table 4).









Also, it appeared that this concept of corporate social responsibility is similar in

different socioeconomic and cultural contexts. First, the Taiwanese identified the four

factors listed above as indicative of corporate social responsibility. Moreover, the

sponsoring of community development, the active participation in environmental

protection, the promise of public relations practitioners who communicate with the media

and the public, and the ability to provide access for public communication are all

constructed from western concepts of corporate social responsibility.

It demonstrated that corporate social responsibility is determined by ethics. As

such, ethical corporate social responsibility equates corporate duty with public rights

(Curtin & Boynton, 2001) by treating stakeholders as a priority rather than the means to

an end (Kent & Taylor, 2002). More specifically, to effectively implement corporate

social responsibility, corporations must recognize and consider all the publics and

environments they may affect. Thus, corporations should endeavor to better understand

and cooperate with publics to exhibit social responsibility (Waddock, Bodwell, & Graves,

2002), which relies on effective communication with stakeholders.

Here, effective communication refers to two-way symmetrical communication (J.

Grunig & Hunt, 1984). Two-way symmetrical communication requires equality between

organizations and key publics as well as active cooperation in creating an open dialog to

affect change. In addition, as J. Grunig and Hunt (1984) suggested, effective and ethical

public relations practitioners can help organizations build long-term relationships with

their key stakeholders through two-way symmetrical communication. Therefore, "public

relations is the practice of social responsibility" (Bernays, 1980, cited in Stone, 2005, p.

31).









In short, organizations should note the importance of corporate social responsibility

and integrate it into its corporate culture. Corporate social responsibility and effective

public relations are the best way to achieve a win-win situation for organizations and

publics.

Consistent with the notion of "democratic" corporate social responsibility, other

factors such as honest and immediate communication with the public (i.e., ethical

behavior), identifying the public as the top priority, and accepting full responsibility for

crises were considered significant to socially responsible communication (see Table 5).

Democratic corporate social responsibility in crisis communication, as Tombs and Smith

(1995) suggested, takes the whole environment into account. In other words, corporate

social responsibility is integrally related to each part of the corporation. Corporations

should consider the best interest of public citizens, contribute to society (Ho & Kirk,

2004), and act ethically.

Moreover, the findings from the textual analysis illustrated that Paolyta practiced

democratic corporate social responsibility in crisis communication, while Taiwan's Nike

exhibited poor crisis communication. Paolyta accepted its responsibility, explained the

crisis to the public honestly and immediately in its news conference (Qiu, 2005), and

considered the public its top priority (e.g., recalling and destroying the problematic

products) (Chen, 2005). In contrast, Taiwan's Nike did not accept responsibility until the

boycott threat by The Consumers' Foundation ("Nike Taiwan apologizes," 2004)

explained the crisis in an unfriendly and dishonest manner (Li, n.d.), and apologized

insincerely two weeks after the crisis (Zhao, 2004). As Bradford and Garrett (1995)

noted, recognition of mistakes and the acceptance of responsibility are critical to effective









crisis communication. The last thing a corporation should do in a crisis is avoid or deny

deserved responsibility.

The aforementioned discussion shed light on how the Taiwanese perceive corporate

social responsibility and crisis communication. Most importantly, this study illustrated

that corporate social responsibility is helpful to crisis communication with regard to

public perception. First, the quantitative findings showed that the positive relationship

between "whether Taiwan's Nike practiced CSR in its crisis" and "whether or not to

support Taiwan's Nike after its crisis (see Table 6-1 and 6-2). Likewise, there was a

positive relationship between "whether Paolyta Co. practiced CSR in its crisis" and

"whether or not to support Paolyta Co. after its crisis" (see Table 7-1 and 7-2).

Combining these results implies that the more the public perceives Taiwan's Nike or

Paolyta as practicing CSR in a crisis, the more likely they are to support each company.

Thus, corporate social responsibility has the ability to influence public perception.

Corporate social responsibility in crisis communication is also dependent on public

relations. Moreover, as Marra (1998) noted, "Public relations is an important element in

almost all successful crisis management efforts" (p. 461). With the help of excellent

public relations, organizations practice two-way symmetrical communication to build

"open and honest" relationships with key publics (J. Grunig, 1992). Public relations and

corporate social responsibility, therefore, are two sides of the same coin. Indeed, Paolyta

could succeed in its crisis communication on account of appropriate corporate social

responsibility and public relations. Conversely, Taiwan's Nike failed in its crisis

communication because of its inability to act in a socially responsible manner due to its

ineffective public relations.









Though this study shows that corporate social responsibility is helpful in achieving

successful crisis communication, it may exert a more short-term than long-term impact

on corporations, particularly when the organization (i.e., Nike) is large and has

maintained such a strong brand image globally. For instance, loyal Nike fans may still

support the brand after the crisis. This suggests that future research may prove necessary

to understanding the influence of brand management over time.

This research also attempted to explore the correlation between brand recognition,

corporate social responsibility, and crisis communication. Coombs and Holladay (1996)

stated that "publics will make attributions about the cause of a crisis. The more publics

attribute responsibility for the crisis to the organization, the greater the risk of

reputational damage (a threat to legitimacy is part of the reputation)" (p. 292). However,

Dean (2004) noted that "reputation is expected to interact with firm response such that a

good firm offering an inappropriate response will remain favorably regarded by

consumers, whereas a bad firm offering the same response will experience a loss of

favor" (p. 198).

The quantitative results showed that brand recognition can help crisis

communication with regard to public perception, whereas socially responsible behaviors

in a crisis do not seem to influence brand recognition in terms of public perception. Thus,

the answer to RQ2 is positively confirmed. The variable "whether or not to support

Taiwan's Nike after its crisis" had a significant and positive relationship with "interest in

Taiwan's Nike" but no correlation to "knowledgeable about Taiwan's Nike" (see Table

8-1). "Whether or not to support Paolyta Co. after its crisis" also had a significant and

positive relationship with "interest in Paolyta Co." but no correlation to "knowledgeable









about Paolyta Co." (see Table 8-2). These results implied that publics are more likely to

support a company when brand recognition is high.

However, my original definition of "brand recognition" no longer seemed

appropriate in light of the quantitative results of the study which suggested that

"knowledgeable" is not related to "interest." Hence, the original definition of "brand

recognition" should be modified to reflect those who have an interest in a given

corporation but that may not necessarily be knowledgeable about that corporation.

The quantitative findings led to a negative response to RQ3. Public perceptions of

Taiwan's Nike and Paolyta's practice of CSR do not affect consumer support of either

company before and after their crises. Consequently, a corporation's socially responsible

behaviors in a crisis do not seem to influence brand recognition with regard to public

perception.

However, it is interesting to note that though both corporate social responsibility

and brand recognition are helpful in crisis communication, no significant correlations

exist between corporate social responsibility and brand recognition. This correlation may

require further research.

Limitations, Suggestions, And Conclusion

Given the time and resources, the current study applied the non-probability

convenience sample which may limit the scope of its findings. Future studies should

recognize that the findings of this study do not generalize the opinions of all Taiwanese

citizens. In addition, because each organization's social responsibility policies, programs

and actions prior to the crises is unknown, the current study cannot compare each

company's practices before and after the crises.









Another limitation of this study is the potential range of corporate social

responsibility and crisis communication responses. Within the survey questionnaire, a

limited number of factors were used to describe corporate social responsibility and crisis

communication. Thus, it is possible to take other factors into account. Besides, future

studies can obtain more detailed and credible information from disinterested third parties

on how to evaluate and describe corporate social responsibility and crisis communication.

For instance, Kinder, Lydenberg, and Domini devised a set of corporate social

responsibility performance ratings (Waddock & Graves, 1997).

Moreover, as McLeod (2000) noted, "the lack of attention paid to social structural

antecedents is one of the major obstacles to progress in audience research" (cited in Lee,

2004, p. 615). This study may neglect other factors that affect the perception of corporate

social responsibility and crisis communication, such as educational background, financial

capability, and crisis types. Therefore, to further enhance validity, future studies should

be cautious of these variables and conduct more precise research.

Overall, this study demonstrated the positive relationships between corporate social

responsibility and crisis communication management by means of two corporate crises.

Corporate social responsibility is essential to bridging the gap between organizations and

publics, and to upholding legal and ethical corporate behavior in society.















APPENDIX A
SELF-ADMINISTERED SURVEY QUESTIONNAIRE

Please circle the appropriate response to the following statements or questions.

1. Gender: MALE FEMALE

2. Age:

3. How knowledgeable do you believe you are about Taiwan's Nike?

Not knowledgeable 1 2 3 4 5 6 7 Very knowledgeable

4. What is your level of interest in Taiwan's Nike?

Not interested 1 2 3 4 5 6 7 Very interested

5. Have you ever bought products made by Taiwan's Nike?

YES NO

6. How knowledgeable do you believe you are about Paolyta Co.?

Not knowledgeable 1 2 3 4 5 6 7 Very knowledgeable

7. What is your level of interest in Paolyta Co.?

Not interested 1 2 3 4 5 6 7 Very interested

8. Have you ever bought products made by Paolyta Co.?

YES NO

9. How important do you think corporate social responsibility is?

Not important 1 2 3 4 5 6 7 Very important

10. The corporation is socially responsible when it sponsors community development.

Strongly Disagree Disagree Somewhat Agree Agree Strongly Agree
1 2 3 4 5






56


11. The corporation is socially responsible when it actively participates in
environmental protection.


Strongly Disagree
1


Disagree Somewhat Agree
2 3


Agree Strongly Agree
4 5


12. The corporation is socially responsible when it offers public relations
practitioners that communicate i ith the media or the public.


Strongly Disagree
1


Disagree Somewhat Agree
2 3


Agree Strongly Agree


13. The corporation is socially responsible when it provides access for publics to
communicate (e.g., an email address)


Strongly Disagree
1


Disagree
2


Somewhat Agree


Agree Strongly Agree
4 5


Jordan's and Bullwild's crises

14. The corporation is socially responsible when it explains problems to the public
honestly and immediately.


Strongly Disagree
1


Disagree Somewhat Agree
2 3


Agree Strongly Agree
4 5


15. The corporation is socially responsible when the public is its top priority to
consider rather than its source ofprofit.


Strongly Disagree
1


Disagree Somewhat Agree
2 3


Agree Strongly Agree
4 5


16. The corporation is socially responsible when it takes full responsibility for the
crisis event (even the final outcome shows that the crisis is not the mistake of the
corporation).


Strongly Disagree
1


Disagree
2


Somewhat Agree


Agree Strongly Agree
4 5


After Jordan's and Bullwild's crises

17. How important do you think corporate ethii \ of corporate social responsibility
are in a crisis?


1 2 3 4 5 6 7


Not important


Very important







57


18. Do you think that Taiwan's Nike practiced corporate social responsibility in its
crisis?


YES


19. Will you support Taiwan's Nike after its crisis by buying or promoting its
products?


YES


20. Do you think that Paolyta Co. practiced corporate social responsibility in its
crisis?


21. Will you support Paolyta Co. after its crisis by buying or promoting its products?


YES














APPENDIX B
MULTIITEM MEASURES


General corporate social responsibility in Taiwan (a = .83)
1. The corporation is socially responsible when it sponsors community development.
2. The corporation is socially responsible when it actively participates in
environmental protection.
3. The corporation is socially responsible when it offers public relations practitioners
that communicate with the media or the public.
4. The corporation is socially responsible when it provides access for publics to
communicate (e.g., an email address).

Socially responsible crisis communication in Taiwan (a = .67)
1. The corporation is socially responsible when it explains problems to the public
honestly and immediately.
2. The corporation is socially responsible when the public is its top priority to
consider rather than its source of profit.
3. The corporation is socially responsible when it takes full responsibility for the
crisis event (even the final outcome shows that the crisis is not the mistake of the
corporation).

Brand recognition of Taiwan's Nike (a = .63)
1. How knowledgeable do you believe you are about Taiwan's Nike?
2. What is your level of interest in Taiwan's Nike?
3. Have you ever bought products made by Taiwan's Nike before?

Brand recognition of Paolyta (a = .64)
1. How knowledgeable do you believe you are about Paolyta?
2. What is your level of interest in Paolyta?
3. Have you ever bought products made by Taiwan's Paolyta before?















APPENDIX C
FREQUENCY TABLES

Sex
Valid Cumulative
Frequency Percent Percent Percent
Valid Female 161 48.1 48.1 48.1
Male 174 51.9 51.9 100.0
Total 335 100.0 100.0

Age
Valid Cumulative
Frequency Percent Percent Percent
Valid 18 25 7.5 7.5 7.5
19 38 11.3 11.3 18.8
20 52 15.5 15.5 34.3
21 40 11.9 11.9 46.3
22 30 9.0 9.0 55.2
23 18 5.4 5.4 60.6
24 16 4.8 4.8 65.4
25 19 5.7 5.7 71.0
26 19 5.7 5.7 76.7
27 14 4.2 4.2 80.9
28 11 3.3 3.3 84.2
29 11 3.3 3.3 87.5
30 10 3.0 3.0 90.4
31 5 1.5 1.5 91.9
32 11 3.3 3.3 95.2
34 1 .3 .3 95.5
35 3 .9 .9 96.4
36 4 1.2 1.2 97.6
37 3 .9 .9 98.5
40 2 .6 .6 99.1
42 1 .3 .3 99.4
45 1 .3 .3 99.7
48 1 .3 .3 100.0
Total 335 100.0 100.0









Knowledgeable about Taiwan's Nike
Valid Cumulative
Frequency Percent Percent Percent
Valid Not knowledgeable 16 4.8 4.8 4.8
2 25 7.5 7.5 12.2
3 51 15.2 15.2 27.5
4 89 26.6 26.6 54.0
5 81 24.2 24.2 78.2
6 32 9.6 9.6 87.8
Very knowledgeable 41 12.2 12.2 100.0
Total 335 100.0 100.0

Interested in Taiwan's Nike
Valid Cumulative
Frequency Percent Percent Percent
Valid Not interested 25 7.5 7.5 7.5
2 20 6.0 6.0 13.4
3 44 13.1 13.1 26.6
4 97 29.0 29.0 55.5
5 67 20.0 20.0 75.5
6 41 12.2 12.2 87.8
Very interested 41 12.2 12.2 100.0
Total 335 100.0 100.0

Bought products of Taiwan's Nike
Valid Cumulative
Frequency Percent Percent Percent
Valid no 52 15.5 15.5 15.5
yes 283 84.5 84.5 100.0
Total 335 100.0 100.0

Knowledgeable about Paolyta Co.
Valid Cumulative
Frequency Percent Percent Percent
Valid Not knowledgeable 38 11.3 11.3 11.3
2 40 11.9 11.9 23.3
3 69 20.6 20.6 43.9
4 76 22.7 22.7 66.6
5 57 17.0 17.0 83.6
6 35 10.4 10.4 94.0
Very knowledgeable 20 6.0 6.0 100.0
Total 335 100.0 100.0









Interested in Paolyta Co.
Valid Cumulative
Frequency Percent Percent Percent
Valid Not interested 78 23.3 23.3 23.3
2 55 16.4 16.4 39.7
3 65 19.4 19.4 59.1
4 82 24.5 24.5 83.6
5 33 9.9 9.9 93.4
6 12 3.6 3.6 97.0
Very interested 10 3.0 3.0 100.0
Total 335 100.0 100.0

Bou ht products of Paolyta Co.
Valid Cumulative
Frequency Percent Percent Percent
Valid no 133 39.7 39.7 39.7
yes 202 60.3 60.3 100.0
Total 335 100.0 100.0

How important CSR is (general speaking)
Valid Cumulative
Frequency Percent Percent Percent
Valid Not important 1 .3 .3 .3
2 4 1.2 1.2 1.5
3 2 .6 .6 2.1
4 20 6.0 6.0 8.1
5 31 9.3 9.3 17.3
6 52 15.5 15.5 32.8
Very important 225 67.2 67.2 100.0
Total 335 100.0 100.0

CSR should sponsor community development
Valid Cumulative
Frequency Percent Percent Percent
Valid disagree 7 2.1 2.1 2.1
somewhat agree 56 16.7 16.7 18.8
agree 159 47.5 47.5 66.3
strongly agree 113 33.7 33.7 100.0
Total 335 100.0 100.0









CSR should actively participate in environmental protection
Valid Cumulative
Frequency Percent Percent Percent
Valid disagree 6 1.8 1.8 1.8
somewhat agree 32 9.6 9.6 11.3
agree 149 44.5 44.5 55.8
strongly agree 148 44.2 44.2 100.0
Total 335 100.0 100.0

CSR should offer pr practitioners that communicate with the media or the public
Valid Cumulative
Frequency Percent Percent Percent
Valid disagree 8 2.4 2.4 2.4
somewhat agree 43 12.8 12.8 15.2
agree 163 48.7 48.7 63.9
strongly agree 121 36.1 36.1 100.0
Total 335 100.0 100.0

CSR should provide access for publics to communicate
Valid Cumulative
Frequency Percent Percent Percent
Valid disagree 7 2.1 2.1 2.1
somewhat agree 50 14.9 14.9 17.0
agree 177 52.8 52.8 69.9
strongly agree 101 30.1 30.1 100.0
Total 335 100.0 100.0

CSR in crisis should explain problems to the public honestly and immediately
Valid Cumulative
Frequency Percent Percent Percent
Valid disagree 5 1.5 1.5 1.5
somewhat agree 34 10.1 10.1 11.6
agree 156 46.6 46.6 58.2
strongly agree 140 41.8 41.8 100.0
Total 335 100.0 100.0

CSR in crisis should consider the public as the top priority
Valid Cumulative
Frequency Percent Percent Percent
Valid disagree 2 .6 .6 .6
somewhat agree 30 9.0 9.0 9.6
agree 153 45.7 45.7 55.2
strongly agree 150 44.8 44.8 100.0
Total 335 100.0 100.0









CSR in crisis should take full responsibility
Valid Cumulative
Frequency Percent Percent Percent
Valid strongly disagree 5 1.5 1.5 1.5
disagree 25 7.5 7.5 9.0
somewhat agree 72 21.5 21.5 30.4
agree 137 40.9 40.9 71.3
strongly agree 96 28.7 28.7 100.0
Total 335 100.0 100.0

How important CSR is in a crisis
Valid Cumulative
Frequency Percent Percent Percent
Valid Not important 2 .6 .6 .6
2 3 .9 .9 1.5
3 6 1.8 1.8 3.3
4 39 11.6 11.6 14.9
5 66 19.7 19.7 34.6
6 66 19.7 19.7 54.3
Very important 153 45.7 45.7 100.0
Total 335 100.0 100.0

Whether Taiwan's Nike practiced CSR in crisis
Valid Cumulative
Frequency Percent Percent Percent
Valid no 277 82.7 82.7 82.7
yes 58 17.3 17.3 100.0
Total 335 100.0 100.0

Whether or not to support Taiwan's Nike after its crisis
Valid Cumulative
Frequency Percent Percent Percent
Valid no 235 70.1 70.1 70.1
yes 100 29.9 29.9 100.0
Total 335 100.0 100.0

Whether Paolyta Co. practiced CSR in its crisis
Valid Cumulative
Frequency Percent Percent Percent
Valid no 45 13.4 13.4 13.4
yes 290 86.6 86.6 100.0
Total 335 100.0 100.0






64


Whether or not to support Paolyta Co. after its crisis
Valid Cumulative
Frequency Percent Percent Percent
Valid no 96 28.7 28.7 28.7
yes 239 71.3 71.3 100.0
Total 335 100.0 100.0
















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BIOGRAPHICAL SKETCH

Yi-Shan Hsu is a master's candidate for the Master of Arts in Mass Communication

degree in August, 2006. She was born in Taiwan and received her B.A. degree in

philosophy from National Chung Cheng University. She also earned a Certificate of

Business Management from the National Youth Council. Her research interests

specialized in corporate social responsibility, crisis communication, and international

public relations.